The most common and most likely answer to this crossword clue is the 8 letter word SPANIARD
I've seen this crossword clue in The Sunday Telegraph
S
P
A
N
I
A
R
D
More clues leading to the result SPANIARD
- European resort, sewer coming up beneath it
- European channels screening a programme initially rejected
- European bridge, one over a road
- Spring tax returns for Picasso?
- One at home in Madrid perhaps — and Paris, surprisingly
- As Sánchez drops rising, inside political adviser
- Paris and, possibly, Madrid is where one’s capital is
- Citizen from elsewhere is in Paris, and excited
- Spiny rock plant from Barcelona, say
- European to cross Iowa road
Buddy explains!
The straight part
We know that "Madrid is where one’s capital is" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case madrid is where one’s capital is = spaniard.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.