Spain: country overview
Spain's mixed capitalist economy is the 13th largest in the world, and its per capita income roughly matches that of Germany and France.
Year of EU entry: 1986
Member of Schengen area:Yes
Political system: Constitutional monarchy
Capital city: Madrid
Total area: 504 782 km²
Population: 45.8 million
Currency: euro
Listen to the official EU language: Spanish
Country overview
High plateaux and mountain ranges such as the Pyrenees and the Sierra Nevada dominate mainland Spain. Running from these heights are several major rivers such as the Ebro, the Duero, the Tagus and the Guadalquivir. The Balearic Islands lie offshore in the Mediterranean while the autonomous Canary Islands are to be found off the African coast.
Spain is a constitutional monarchy, with a hereditary monarch and a parliament with two chambers: the Cortes . The 1978 constitution values linguistic and cultural diversity within a united Spain. The country is divided into 17 autonomous communities (regions) which all have their own directly elected authorities. In Catalonia, the Basque Country and Galicia, the regional languages have official status alongside the national Spanish language, which is also called Castilian.
Spain's service and manufacturing sectors are strong, while agriculture (especially fruit and vegetables, olive oil and wine) and tourism are also very profitable.
Economy overview
However, after almost 15 years of above average GDP growth, the Spanish economy began to slow in late 2007 and entered into a recession in the second quarter of 2008. GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and by another 0.1% in 2010, before turning positive in 2011, making Spain the last major economy to emerge from the global recession. The reversal in Spain's economic growth reflected a significant decline in construction amid an oversupply of housing and falling consumer spending, while exports actually have begun to grow. Government efforts to boost the economy through stimulus spending, extended unemployment benefits, and loan guarantees did not prevent a sharp rise in the unemployment rate, which rose from a low of about 8% in 2007 to over 20% in 2011. The government budget deficit worsened from 3.8% of GDP in 2008 to 9.2% of GDP in 2010, more than three times the euro-zone limit. Madrid cut the deficit to 8.5% of GDP in 2011, a larger deficit than the 6% target negotiated between Spain and the EU. Spain's large budget deficit and poor economic growth prospects have made it vulnerable to financial contagion from other highly-indebted euro zone members despite the government's efforts to cut spending, privatize industries, and boost competitiveness through labor market reforms. Spanish banks' high exposure to the collapsed domestic construction and real estate market also poses a continued risk for the sector. The government oversaw a restructuring of the savings bank sector in 2010, and provided some $15 billion in capital to various institutions. Investors remain concerned that Madrid may need to bail out more troubled banks. The Bank of Spain, however, is seeking to boost confidence in the financial sector by pressuring banks to come clean about their losses and consolidate into stronger groups.
Useful links
The Commission's Representation in Spain
European Parliament office in Spain
Spanish Government
Tourist information