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Economy of Spain

Spain's accession to the European Community--now European Union (EU)--in January 1986 required the country to open its economy to trade and investment, modernize its industrial base, improve infrastructure, and revise economic legislation to conform to EU guidelines. These measures helped the economy grow rapidly over the next 2 decades. Unemployment fell from 23% in 1986 to a low point of 8% in mid-2007. The adoption of the euro in 2002 greatly reduced interest rates, spurring a housing boom that further fueled growth. The strong euro also encouraged Spanish firms to invest in the United States, where several Spanish firms have significant investments in banking, insurance, wind and solar power, biofuels, road construction, food, and other sectors. The end of the housing boom in 2007 and the international financial crisis led to a recession that began in the second quarter of 2008. Housing sales and construction declined dramatically, and the unemployment rate was more than 20% in the first quarter of 2010, the second-highest in the European Union after Latvia. The Spanish economy grew by 0.1% in the first quarter of 2010, the first positive growth in 2 years. This was mostly attributed to an increase in public demand, while private demand dropped. GDP growth for all of 2010 was -0.1%. The budget deficit has been growing rapidly since the Zapatero government introduced high spending on public works and unemployment benefits to combat the recession, though the debt-to-GDP ratio is low due to a surplus maintained several years before 2008. The EU, IMF, and U.S. were among those that urged Spain to take the steps necessary to restore confidence in the Spanish economy. In May 2010, the Zapatero government introduced austerity reforms aimed at reducing the fiscal deficit to sustainable levels that reduced government employees' salaries, froze pension funds, and suspended public works. This legislation is designed to reduce the deficit to 7% of GDP in 2011, and Spain has pledged to reduce it to below 3% by 2013. In mid-June 2010, the government issued a decree implementing labor market reform to reduce rigidity in hiring and firing workers. Due largely to outstanding bad loans to the construction sector, Spanish regional saving banks ( cajas) have been undergoing a series of mergers to increase liquidity and put the sector on a sound footing. GDP (2010): $1.409 trillion (€1.063 trillion); seventh-largest economy in the Organization for Economic Cooperation and Development (OECD). Per capita GDP (2010): $29,876 (€22,536). GDP annual growth rate (2010): -0.1%. Natural resources: Coal, lignite, iron ore, uranium, mercury, pyrites, fluorspar, gypsum, zinc, lead, tungsten, copper, kaolin, hydroelectric power. Agriculture and fisheries (2.5% of GDP, 2010): Products --grains, vegetables, citrus and deciduous fruits, wine, olives and olive oil, sunflowers, livestock and poultry, dairy products, seafood. Industry (11.5% of GDP, 2010): Types --processed foods, textiles, footwear, petrochemicals, steel, automobiles, consumer goods, electronics. Services (2010): 65.57% of GDP. Trade (2010): Exports --$247.7 billion (€185.8 billion): automobiles, fruits, minerals, metals, clothing, footwear, textiles. Major markets --EU 67.7%, U.S. 3.51%. Imports --$317.4 billion (€238.1 billion): petroleum, oilseeds, aircraft, grains, chemicals, machinery, transportation equipment, fish, consumer goods. Major sources --EU 54.6%, U.S. 4%. Average exchange rate (2010): 1 euro=U.S. $1.326.

Geography of Spain

Location: Southwestern Europe, bordering the Bay of Biscay, Mediterranean Sea, North Atlantic Ocean, and Pyrenees Mountains, southwest of France Geographic coordinates: 40 00 N, 4 00 W Map references: Europe Area: total: 504,750 sq km land: 499,400 sq km water: 5,350 sq km note: includes Balearic Islands, Canary Islands, and five places of sovereignty (plazas de soberania) on and off the coast of Morocco-Ceuta, Melilla, Islas Chafarinas, Penon de Alhucemas, and Penon de Velez de la Gomera Area-comparative: slightly more than twice the size of Oregon Land boundaries: total: 1,919.1 km border countries: Andorra 65 km, France 623 km, Gibraltar 1.2 km, Portugal 1,214 km, Morocco (Ceuta) 6.3 km, Morocco (Melilla) 9.6 km Coastline: 4,964 km Maritime claims: exclusive economic zone: 200 nm (applies only to the Atlantic Ocean) territorial sea: 12 nm Climate: temperate; clear, hot summers in interior, more moderate and cloudy along coast; cloudy, cold winters in interior, partly cloudy and cool along coast
Terrain:
large, flat to dissected plateau surrounded by rugged hills; Pyrenees in north Elevation extremes: lowest point: Atlantic Ocean 0 m highest point: Pico de Teide (Tenerife) on Canary Islands 3,718 m Natural resources: coal, lignite, iron ore, uranium, mercury, pyrites, fluorspar, gypsum, zinc, lead, tungsten, copper, kaolin, potash, hydropower Land use: arable land: 30% permanent crops: 9% permanent pastures: 21% forests and woodland: 32% other: 8% (1993 est.) Irrigated land: 34,530 sq km (1993 est.) Natural hazards: periodic droughts Environment-current issues: pollution of the Mediterranean Sea from raw sewage and effluents from the offshore production of oil and gas; water quality and quantity nationwide; air pollution; deforestation; desertification Environment-international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: Air Pollution-Persistent Organic Pollutants, Climate Change-Kyoto Protocol, Desertification Geography-note: strategic location along approaches to Strait of Gibraltar

Government of Spain

Parliamentary democracy was restored following the 1975 death of General Franco, who had ruled since the end of the civil war in 1939. The 1978 constitution established Spain as a parliamentary monarchy, with the prime minister responsible to the bicameral Cortes (Congress of Deputies and Senate) elected every 4 years. On February 23, 1981, rebel elements among the security forces seized the Cortes and tried to impose a military-backed government. However, the great majority of the military forces remained loyal to King Juan Carlos, who used his personal authority to put down the bloodless coup attempt. In October 1982, the Spanish Socialist Workers Party (PSOE), led by Felipe Gonzalez, swept both the Congress of Deputies and Senate, winning an absolute majority. Gonzalez and the PSOE ruled for the next 13 years. During that period, Spain joined the North Atlantic Treaty Organization (NATO) and the European Community. In March 1996, Jose Maria Aznar's Popular Party (PP) won a plurality of votes. Aznar moved to decentralize powers to the regions and liberalize the economy, with a program of privatization, labor market reform, and measures designed to increase competition in selected markets. During Aznar's first term, Spain fully integrated into European institutions, qualifying for the European Monetary Union, and participated, along with the United States and other NATO allies, in military operations in the former Yugoslavia. President Aznar and the PP won reelection in March 2000, obtaining absolute majorities in both houses of parliament. After the terrorist attacks on the U.S. on September 11, 2001, President Aznar became a key ally in the fight against terrorism. Spain backed the military action against the Taliban in Afghanistan and took a leadership role within the European Union (EU) in pushing for increased international cooperation on terrorism. The Aznar government, with a rotating seat on the UN Security Council, supported the intervention in Iraq. Spanish parliamentary elections on March 14, 2004 came only 3 days after a devastating terrorist attack on Madrid commuter rail lines that killed 191 and wounded over 1,400. With large voter turnout, PSOE won the election and its leader, Jose Luis Rodriguez Zapatero, took office on April 17, 2004. Carrying out campaign promises, the Zapatero government immediately withdrew Spanish forces from Iraq but has continued to support Iraq reconstruction efforts. The Zapatero government has supported coalition efforts in Afghanistan, including maintaining troop support for 2004 and 2005 elections, supported reconstruction efforts in Haiti, sent troops to UNIFIL in Lebanon, and cooperated on counterterrorism issues and many other issues of importance to the U.S. Zapatero was re-elected for a second term as President on March 9, 2008. Zapatero announced in April 2011 that he will not run for re-election in 2012. Local Government The 1978 constitution authorized the creation of regional autonomous governments. By 1985, 17 regions covering all of peninsular Spain, the Canaries, and the Balearic Islands had negotiated autonomy statutes with the central government. In 1979, the first autonomous elections were held in the Basque and Catalan regions, which have the strongest regional traditions by virtue of their history and separate languages. Since then, autonomous governments have been created in the remainder of the 17 regions. The central government continues to devolve powers to the regional governments, which will eventually have full responsibility for health care and education, as well as other social programs. Terrorism The Government of Spain is involved in a long-running campaign against Basque Fatherland and Liberty (ETA), a terrorist organization founded in 1959 and dedicated to promoting Basque independence. ETA targets Spanish security forces, military personnel, Spanish Government officials, politicians of the Popular Party and the Socialist Party (PSOE), and business people and civilian institutions that do not support ETA. The group has carried out numerous bombings against Spanish Government facilities and economic targets, including a car bomb assassination attempt on then-opposition leader Aznar in 1995 in which his armored car was destroyed but he was unhurt. The Spanish Government attributes over 800 deaths to ETA terrorism since its campaign of violence began. In recent years, the government has had more success in controlling ETA, due in part to increased security cooperation with French authorities. In November 1999, ETA ended a cease-fire it declared in September 1998. Following the end of that cease-fire, ETA conducted a campaign of violence and has been blamed for the deaths of some 50 Spanish citizens and officials. Each attack has been followed by massive anti-ETA demonstrations around the country, clearly demonstrating that the majority of Spaniards, including the majority of Spain's Basque populace, have no tolerance for continued ETA violence. In March 2006, ETA declared another cease-fire, which it ended in June 2007 as a number of bombings and assassinations continued. In December 2007, two undercover Spanish police officers were killed in Capbreton, in France's southwestern region, by suspected ETA gunmen. Days before Spain's general elections in March 2008, former councilman Isaias Carrasco was murdered outside of his home by an ETA gunman. It was seen by many as a political move by ETA to try and influence the elections. Ignacio Uria Mendizabal, head of the Altuna y Uria company, was assassinated on December 3, 2008. The company was involved in the construction of a high-speed rail network in the region, a project opposed by ETA. The government pursues a vigorous counterterrorist policy and has worked closely with its international allies to foil several suspected ETA attacks. In May 2008, Francisco Javier Lopez Pena, the political-military head of ETA, was arrested in Bordeaux. In November 2008, French authorities arrested reputed ETA military chief Miguel De Garikoitz Aspiazu Rubina, alias "Txeroki", closely followed by the arrest of his successor on December 8, 2008. These arrests struck a severe blow to the leadership of ETA. France and Spain have stepped up cooperation to crack down on ETA since a special accord was signed in January 2008 allowing Spanish agents to operate in southwestern France. Radical Islamic terrorists are known to operate cells in Spain. On March 11, 2004, only 3 days before national elections, 10 bombs were detonated on crowded commuter trains during rush hour. Three were deactivated by security forces and one was found unexploded. Evidence quickly surfaced that jihadist terrorists were responsible for the attack that killed 191 people. Spanish investigative services and the judicial system have aggressively sought to arrest and prosecute suspected Al Qaeda-linked members and actively cooperate with foreign governments to diminish the transnational terrorist threat. A Spanish court convicted 18 individuals in September 2005 for their role in supporting Al Qaeda, and Spanish police disrupted numerous Islamist extremist cells operating in the country. The trial against 29 people for their alleged participation in the Madrid March 11, 2004 terrorist attack started in February 2007. One of the 29 was absolved during the trial. The prosecutor asked for sentences as high as 30,000 years of jail for some of them. In October 2007 three of the suspects were convicted of murder for their roles in the 2004 attack and received over 42,000 years in prison. Overall, 21 of 28 defendants were found guilty of some offense for their role in the bombings. In July 2008 the Spanish Supreme Court announced the acquittal on appeal of four of the 21 convicted defendants. The Supreme Court also upheld the lower court's acquittal of the suspected mastermind of the attacks, agreeing with the lower court's decision that because he had already been sentenced in Italy for belonging to a terrorist organization he could not be tried for the same crime twice. In a separate case, the Supreme Court overturned 14 of the 20 convictions, and reduced four other sentences, of a cell sentenced in February 2008 for plotting to truck-bomb the National Court. In January 2008, Spanish authorities in Barcelona arrested 14 people believed to be connected to a Pakistani terrorist cell allegedly sympathetic to Al Qaeda. The group, potentially linked to Islamic terrorist activities, was believed to be on the verge of a terrorist bombing campaign against Barcelona's transportation network and possibly other targets in Europe. An informant working for the French intelligence services notified Spanish authorities of the pending attack. In 2009, ETA marked its 50th anniversary with a series of high-profile and deadly bombings. On July 29, ETA detonated an explosive-laden, stolen van outside a Civil Guard barracks in Burgos. The blast injured more than 60 Civil Guards, spouses, and children. The following day, ETA murdered two Civil Guards in Mallorca with a car bomb. ETA had claimed its first victim of the year weeks earlier when it used a car bomb on June 19 to assassinate a national police officer in the Basque Region. Also in 2009, the Basque regional government underwent a change of administration. The Socialist Party, under Patxi Lopez's regional leadership, assumed power as the first non-Basque nationalist government to administer the Basque country since the restoration of democracy in Spain 3 decades earlier. Lopez's administration implemented a more unequivocal counterterrorism policy to confront ETA. Meanwhile, Spain was pleased to see that the European Court of Human Rights in June upheld Spain's 2003 ban on the political party Batasuna for its ties to ETA. Principal Government Officials Chief of State, Commander in Chief of the Armed Forces--King Juan Carlos I President of the Government (Prime Minister)--Jose Luis Rodriguez Zapatero Minister of Foreign Affairs--Trinidad Jimenez Ambassador to the United States--D. Jorge Dezcallar Spain maintains an embassy in the United States at 2375 Pennsylvania Avenue NW, Washington, DC 20037 (tel. 202-728-2340) and consulates in many larger U.S. cities. Type: Constitutional monarchy (Juan Carlos I proclaimed King November 22, 1975). Constitution: 1978. Branches: Executive--president of government nominated by monarch, subject to approval by democratically elected Congress of Deputies. Legislative--bicameral Cortes: a 350-seat Congress of Deputies (elected by the d'Hondt system of proportional representation) and a Senate. Four senators are elected in each of 47 peninsular provinces, 16 are elected from the three island provinces, and Ceuta and Melilla elect two each; this accounts for 208 senators. The parliaments of the 17 autonomous regions also elect one senator as well as one additional senator for every 1 million inhabitants within their territory (about 20 senators). Judicial--Constitutional Tribunal has jurisdiction over constitutional issues. Supreme Tribunal heads system comprising territorial, provincial, regional, and municipal courts. Subdivisions: 47 peninsular and three island provinces; two enclaves on the Mediterranean coast of Morocco (Ceuta and Melilla) and three island groups along that coast--Alhucemas, Penon de Velez de la Gomera, and the Chafarinas Islands. Political parties: Spanish Socialist Workers Party (PSOE), Popular Party (PP), and the United Left (IU) coalition. Key regional parties are the Convergence and Union (CIU) in Catalonia and the Basque Nationalist Party (PNV) in the Basque country.

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History of Spain

Spain's Iberian Peninsula has been settled for millennia. In fact, some of Europe's most impressive Paleolithic cultural sites are located in Spain, including the famous caves at Altamira that contain spectacular paintings dating from about 15,000 to 25,000 years ago. The Basques, Europe's oldest surviving group, are also the first identifiable people of the peninsula. Beginning in the ninth century BC, Phoenicians, Greeks, Carthaginians, and Celts entered the Iberian Peninsula. The Romans followed in the second century BC and laid the groundwork for Spain's present language, religion, and laws. Although the Visigoths arrived in the fifth century AD, the last Roman strongholds along the southern coast did not fall until the seventh century AD. In 711, North African Moors sailed across the straits, swept into Andalusia, and within a few years, pushed the Visigoths up the peninsula to the Cantabrian Mountains. The Reconquest--efforts to drive out the Moors--lasted until 1492. By 1512, the unification of present-day Spain was complete. During the 16th century, Spain became the most powerful nation in Europe, due to the immense wealth derived from its presence in the Americas. But a series of long, costly wars and revolts, capped by the defeat by the English of the "Invincible Armada" in 1588, began a steady decline of Spanish power in Europe. Controversy over succession to the throne consumed the country during the 18th century, leading to an occupation by France during the Napoleonic era in the early 1800s and led to a series of armed conflicts throughout much of the 19th century. The 19th century saw the revolt and independence of most of Spain's colonies in the Western Hemisphere: three wars over the succession issue; the brief ousting of the monarchy and establishment of the First Republic (1873-74); and, finally, the Spanish-American War (1898), in which Spain lost Cuba, Puerto Rico, and the Philippines to the United States. A period of dictatorial rule (1923-31) ended with the establishment of the Second Republic. It was dominated by increasing political polarization, culminating in the leftist Popular Front electoral victory in 1936. Pressures from all sides, coupled with growing and unchecked violence, led to the outbreak of the Spanish Civil War in July 1936. Following the victory of his nationalist forces in 1939, General Francisco Franco ruled a nation exhausted politically and economically. Spain was officially neutral during World War II but followed a pro-Axis policy. Therefore, the victorious Allies isolated Spain at the beginning of the postwar period, and the country did not join the United Nations until 1955. In 1959, under an International Monetary Fund stabilization plan, the country began liberalizing trade and capital flows, particularly foreign direct investment. Despite the success of economic liberalization, Spain remained the most closed economy in Western Europe--judged by the small measure of foreign trade to economic activity--and the pace of reform slackened during the 1960s as the state remained committed to "guiding" the economy. Nevertheless, in the 1960s and 1970s, Spain was transformed into a modern industrial economy with a thriving tourism sector. Its economic expansion led to improved income distribution and helped develop a large middle class. Social changes brought about by economic prosperity and the inflow of new ideas helped set the stage for Spain's transition to democracy during the latter half of the 1970s. Upon the death of General Franco in November 1975, Franco's personally designated heir Prince Juan Carlos de Borbon y Borbon assumed the titles of king and chief of state. Dissatisfied with the slow pace of post-Franco liberalization, he replaced Franco's last Prime Minister with Adolfo Suarez in July 1976. Suarez entered office promising that elections would be held within one year, and his government moved to enact a series of laws to liberalize the new regime. Spain's first elections since 1936 to the Cortes (Parliament) were held on June 15, 1977. Prime Minister Suarez's Union of the Democratic Center (UCD), a moderate center-right coalition, won 34% of the vote and the largest bloc of seats in the Cortes. Under Suarez, the new Cortes set about drafting a democratic constitution that was overwhelmingly approved by voters in a national referendum in December 1978.

People of Spain

Spain's population density, lower than that of most European countries, is roughly equivalent to New England's. In recent years, following a longstanding pattern in the rest of Europe, rural populations are moving to cities. Urban areas are also experiencing a significant increase in immigrant populations, chiefly from North Africa, South America, and Eastern Europe. Spain has no official religion. The constitution of 1978 disestablished the Roman Catholic Church as the official state religion, while recognizing the role it plays in Spanish society. According to the National Institute of Statistics (April 2010), 73.2% of the population are Catholic, 2.3% belong to another religion, 14.6% are agnostic, and 7.6% are atheists. Educational System About 70% of Spain's student population attends public schools or universities. The remainder attends private schools or universities, the great majority of which are operated by the Catholic Church. Compulsory education begins with primary school or general basic education for ages 6-14. It is free in public schools and in many private schools, most of which receive government subsidies. Following graduation, students attend either a secondary school offering a general high school diploma or a school of professional education (corresponding to grades 9-12 in the United States) offering a vocational training program. The Spanish university system offers degree and post-graduate programs in all fields--law, sciences, humanities, and medicine--and the superior technical schools offer programs in engineering and architecture. Nationality: Noun --Spaniard(s). Adjective --Spanish. Population (National Institute of Statistics (INE), January 1, 2011): 47,150,819. Ethnic groups: Distinct ethnic groups within Spain include the Basques, Catalans, and Galicians. Religion: Predominantly Roman Catholic (approx. 75%); Protestant and Islamic faiths also have a significant presence. Languages: Spanish (official) 74%, Catalan-Valencian 17%, Galician 7%, Basque 2%. Education: Years compulsory --to age 16. Literacy (INE, third quarter 2008)--97.6%. Work force (first quarter 2011): 18.2 million. Unemployment rate (first quarter 2011): 21.29%.
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