Germany, who lost to Spain in the 2008 final, are the only team at these European championships to have a 100 per cent record after three wins in Group B on the back of ten wins from ten in their qualifying campaign before the finals.
Having defeated Republic of Ireland 4-0 in Group C and drawn 1-1 with Italy, world champions Spain finished top of the pool with a nervy 1-0 win over Croatia on Monday needing an 88th-minute goal from Jesus Navas to claim victory.
"I have watched Spain twice and they are absolutely world-class with the combinations they have," said the 52-year-old Low with Germany and Spain on either side of the draw and only now able to meet in the 1 July final.
"They have just suffered the same fate as many other teams here, you have opponents sitting very deep and trying to disrupt your rhythm. You can still rely on Spain to pull off some kind of goalscoring move. They have fantastic players, [Andres] Iniesta, for example, is a product of a great footballing culture. Spain always were, and remain, the favourite to win the tournament."
Low says compact defences have been a feature so far and said Germany's devil-may-care attacking style they showed in 3-2 and 3-0 wins over Brazil and the Netherlands respectively last year is, for now, a thing of the past.
"You can play happy-go-lucky football against Brazil in a friendly, but definitely not in a tournament like this," said Low whose team was beaten 5-3 by Switzerland in Basel at the end of May in a friendly. "I have said many times you need to find the right balance between a strong attack and a strong defence.
"Look at the five goals we conceded against Switzerland, that was a warning sign I had to read. As the tournament can mean six games, if you go to the final, we really have to be solid in defence. Look at all our opponents. Holland, for example, usually look to keep the ball as far away from their own defence as possible, but yet even the Dutch retreated into their own half at times."
Low said Germany has stayed true to his desire to see attacking football, but the tight defences the Germans have encountered at the finals has meant a more patient approach.
"You end up with more possession and control playing the ball wide, but that is the consequence of opponents sitting deep," said Low. "In all our games we have shown our ability to create chances by getting into finishing positions, so attack remains at the centre of our footballing philosophy."