Spain: Economic and Political Outline

Economic Overview

Although Spain has achieved an economic leap in the last two decades and has risen to be amongst 20 of the world's most significant economies, its recovery has been difficult. The growth factors, which were at the root of its economic growth have been weakened by the 2009 financial crisis, which affected strongly the real-estate sector and weakened the banking system. in 2011, the expected recovery did not manifest - to the contrary, growth slowed down and it seems that in 2012 the economy will fall back into recession.

The government inherited a very difficult situation: public debt increased, the sovereign debt rating of Spain was lowered, and despite the previously implemented measures, markets have remained wary because of the risk represened by the ongoing debt crisis in the eurozone.

The government has decided to act decisively and announced a very strict austerity plan:  budget cuts (especially in the health education sector), a hiring freeze in public service jobs, a plan for support the banking system through mergers, support for businesses, and higher taxes.

Already holding the European record in 2009, Spanish unemployment rate continued to increase in 2011, reaching record highs: more than one fifth of the workforce is unemployed, including almost half of those under 25 years of age. As a consequence of the present crisis and uncertainty, the Spanish migration balance has again become negative.

Main Sectors of Industry

Agriculture contributes around 3% of the Spanish GDP. The country produces wheat, sugar beet, barley, tomatoes, olives, citrus fruits, grapes and cork. It is the world's largest producer of olive oil and the world's third largest producer of wine. It is the largest producer of lemons, oranges and strawberries. Spain has limited mineral resources.

The manufacturing industry is dominated by textiles, industrial food processing, iron and steel, naval machines and engineering. The new sectors such as relocation of the production of electronic components, information technology and telecommunications provide a high growth potential.

Tourism represents Spain's largest source of income and the country has become the number two tourist destination in the world, thereby stimulating export of goods and services. The tertiary sector contributes to two thirds of the GDP.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

70.2/100

Position:

Mostly free

World Rank:

31/179

Regional Rank:

18/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Treasury Department
Ministry of Industry, Tourism and Commerce
Ministry of Environment, rural and marine environment

Statistical Office

National Statistical Institute

Central Bank

Bank of Spain
European Central Bank

Stock Exchange

Spanish stock markets

Other Useful Resources

Directorate general of macroeconomic analysis and international economy

Main Online Newspapers

Daily newspaper Expansion
Daily newspaper Cinco Días

Economic Portals

Invertia

Political Outline

Type of State

Kingdom. Constitutional monarchy based on a parliamentary democracy.
Power is highly decentralized; the autonomous communities have a high level of legislative, executive and fiscal autonomy (Basque country and Navarre, own taxes).

Executive Power

The King is the Head of the State and the commander-in-chief of the army; his role is mostly ceremonial. Following legislative elections, the leader of the majority party or the majority of the coalition is appointed Prime Minister by the Sovereign then elected by the parliament for a 4 year tenure. The Prime Minister is the head of the government. He is also called the President of the Government. He holds executive power which includes the execution of the law and the management of the routine affairs of the country. The Council of Ministers is appointed by the king on the recommendation of the Prime minister. There is also a Council ofState which enjoys the role of the supreme consulting body of the government. But its recommendations are not binding.

The President of each Autonomous Community is from the majority party of the majority coalition winning elections of the Parliaments of the Regions which take place every 4 years. the President forms a government whose «ministers» are appointed under the title «consejeros» and seconded by a cabinet and director generals, etc. who are in charge of each Department heading the sectors for which the Autonomous Community has jurisdiction in substitution of the Spanish State (single administration).

Legislative Power

The legislative power is bicameral. The Parliament, called Cortes Generales, is made up of:
- The Senate which has 264 seats. Its role is that of representing the territories (Autonomous Communities and Departments). The senators are elected by universal suffrage for 4 years.
- Congress of Deputies which has a minimum of 300 seats and a maximum of 400 (currently 350). The deputies are elected by universal suffrage for 4 years from departmental constituencies. There are alloted one minimum representation and the remaining is proportional to their population. To avoid splitting up which is harmful to the stability of the Chamber, the D’Hondt system is applied.
The executive wing of the government depends directly or indirectly on the parliament's support, often expressed by a vote of confidence. The legislative power belongs to the governement and the two houses of parliament at the same time. The Prime Minister does not have the authority to dissolve the parliament directly, but he can recommend its dissolution to the king. The Spanish citizens enjoy considerable political rights.
The 17 Autonomous Communities also have a legislative power exercised by their monocameral Parliament within the limit of jurisdictions fixed by each of their Statutes.

Main Political Parties

Although Spain has a multi-party system, there are above all two dominant parties. The regional parties can be powerful within the Autonomous Communities, which makes them essential to form coalition governments. The two most important parties of the country are: the PSOE (Spanish Workers Socialist Party), a democratic socialist party, and the second oldest party, and the PP (People's Party), which is the largest liberal conservative party of Spain. The other important parties are:
- The IU (United Left), a coalition of left parties around PCE (Spanish Communist Party);
- The CiU (Convergence and Union), a conservative and nationalist party based in Catalonia, which supports market economy;
- Le PNV (Basque Nationalist Party), a centre-right political party based in Basque Country.

Current Political Leaders

King: Juan Carlos I (since November 1975), heriditary.
President of the government and Prime Minister: Mariano RAJOY (since december 2011), PP.

Next Election Dates

Senate: March 2012
House of Deputies: November 2015

Indicator of Freedom of the Press

World Rank:

39/179

Evolution:

same place compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).