Economy of Spain
Rank	12th (nominal) / 13th (PPP)
Currency	1 Euro = 100 eurocent
Fiscal year	Calendar year
Trade organizations	EU, WTO and OECD
Statistics
GDP	€1.051 trillion ($1.41 trillion) (4th term 2010)[1]
GDP growth	+0.7% (2011)[2]
GDP per capita	$32,120 (PPP) (2011)[3] $32,875 (nominal) (2011)[3]
GDP by sector	agriculture (2.3%), energy (2.3%), industry (11.7%), construction (10.0%), services (66.6%) (December 2009)[1]
Inflation (CPI)	3,2% (June 2011)[2]
Population below poverty line	2.8% (2011)
Gini coefficient	0,28 (Very Good)(2011)
Labour force	23.1 million (2011)[2]
Labour force by occupation	services (70.7%), industry (14.1%), construction (9.9%), agriculture, farming and fishing (4.5%), energy (0.7%) (September 2009)[1]
Unemployment	24.3% (April 2012)[4]
Average gross salary	2,376 € / 3,136 $, monthly (2011) 28,512 € (37,623 $) yearly([5] 1
Average net salary	1,827 € / 2,412 $, monthly (2011) 21,924 € (28,944 $) yearly ([5]
Main industries	metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, Tourism,[6][7] textiles and apparel (including footwear), food and beverages.
Ease of Doing Business Rank	44th[8]
External
Exports	€248.9 billion ($341.6 billion) F.O.B. (2009)[1]
Export goods	Machinery, motor vehicles, chemicals, shipbuilding, foodstuffs, electronic devices, pharmaceuticals and medicines, other consumer goods
Main export partners	France 18.3%, Germany 10.6%, Portugal 8.7%, Italy 8%, U.K. 6.7%, U.S. 4.2% (2008)
Imports	€270.4 billion ($371.1 billion) (October 2009)[1]
Import goods	Fuels, chemicals, semifinished goods, Machinery and equipment, foodstuffs, consumer goods, measuring and medical control instruments
Main import partners	Germany 14.5%, France 11.1%, Italy 7.4%, China 6.2%, U.K. 4.5%, Netherlands 4.4% (2008)
FDI stock	$649.9 billion (31 December 2009 est.)
Gross external debt	$2.166 trillion (30 June 2010)
Public finances
Public debt	63.4% of GDP (2010 est.)
Revenues	$515.8 billion (2010 est.)
Expenses	$648.6 billion (2010 est.)
Credit rating	Standard & Poor's:[9] AA (Domestic) AA (Foreign) AAA (T&C Assessment) Outlook: Stable[10] Moody's:[10] Aa1 Outlook: Stable Fitch:[10] AA+ Outlook: Stable
Foreign reserves	$34.375 billion (April 2011)[11]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars

The economy of Spain is the twelfth-largest economy in the world, based on nominal GDP comparisons, and the fifth-largest in Europe.^[12] It is regarded as the world's 23th most developed country. Until 2008 the economy of Spain had been regarded as one of the most dynamic within the EU, attracting significant amounts of foreign investment.^[13]

Spain's economy had been credited with having avoided the virtual zero growth rate of some of its largest partners in the EU.^[14] In fact, the country's economy had created more than half of all the new jobs in the European Union over the five years ending 2005.^[15] Between 2008 and 2012 this process was rapidly reversed, characterized by the fact that almost a quarter of Spain's workforce is currently unemployed.^[16]

Recent developments[link]

After a strong recovery from the global recession of the early 1990s, Spain experienced a property boom from 1997 to 2007. At its peak in 2007, construction had expanded to a massive 16% of the total gross domestic product of the country and 12% of total employment.

According to calculations by the German newspaper Die Welt, Spain's economy had been on course to overtake countries like Germany in per capita income by 2011.^[17] However, the downside of the real estate boom was a corresponding rise in the levels of personal debt; as prospective homeowners had struggled to meet asking prices, the average level of household debt tripled in less than a decade. This placed especially great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages that now often exceed the value of the property.^[18]

A European Commission forecast had predicted Spain would enter a recession by the end of 2008.^[19] According to Spain’s Economy Minister, “Spain faces its deepest recession in half a century”.^[20] Spain's government forecast the unemployment rate would rise to 16% in 2009. The ESADE business school predicted 20%.^[21]

Due to its own economic development and the recent EU enlargements up to 28 members (2007), Spain had a GDP per capita of (105%) of EU average per capita GDP in 2006, which placed it slightly ahead of Italy (103%). As for the extremes within Spain, three regions in 2005 were included in the leading EU group exceeding 125% of the GDP per capita average level: Basque Autonomous Community leading with Madrid and Navarre, and one was at the 85% level (Extremadura.^[22] According to the growth rates post 2006, noticeable progress from these figures happened until early 2008, when the global financial crisis' burst Spain's property bubble.^[23]

The centre-right government of former prime minister José María Aznar had worked successfully to gain admission to the group of countries launching the euro in 1999. Unemployment stood at 7.6% in October 2006, a rate that compared favorably to many other European countries, and especially with the early 1990s when it stood at over 20%. Perennial weak points of Spain's economy include high inflation,^[24] a large underground economy,^[25] and an education system which OECD reports place among the poorest for developed countries.^[26] However, the property bubble that had begun growing in 1997, fed by historically low interest rates and an immense surge in immigration, imploded in 2008, leading to a rapidly weakening economy and soaring unemployment.

Growing reduction of European Union funds[link]

This unreferenced section requires citations to ensure verifiability.

Capital contributions from the EU, which contributed significantly to economic empowerment Spanish since joining the EEC, decreased considerably in recent 20 years due to economic standardization in relation to other countries and the effects of EU enlargement. On the one hand, agricultural funds the Common Agricultural Policy of the European Union (CAP) is spread across more countries (the Eastern Europe countries have a significant agricultural sector), on the other, the structural and cohesion funds have declined inevitably due to the Spanish economic success (since their income has progressed strongly in absolute terms) and due to the incorporation of less developed countries, lowers the average income per capita (or GDP per capita), so that Spanish regions relatively less developed, have come to be in the European average or even above it. Spain gradually becomes net contributor of funds for less developed countries of the Union.

2008–2011 financial crisis[link]

Spain continued on the path of economic growth when the ruling party changed in 2004, maintaining robust GDP growth during the first term of prime minister José Luis Rodríguez Zapatero, even though some fundamental problems in the Spanish economy were now becoming clearly evident. Among these, according to the Financial Times, was Spain's rapidly growing trade deficit, which had reached a staggering 10% of the country's GDP by the summer of 2008,^[27] the "loss of competitiveness against its main trading partners" and, also, as a part of the latter, an inflation rate which had been traditionally higher than the one of its European partners, back then especially affected by house price increases of 150% from 1998 and a growing family indebtedness (115%) chiefly related to the Spanish Real Estate boom and rocketing oil prices.^[28]

The Spanish government official GDP growth forecast for 2008 in April was 2,3%. This figure was successively revised down by the Spanish Ministry of Economy to 1.6.^[29] This figure looked better than those of most other developed countries. In reality, this rate effectively represented stagnant GDP per person due to Spain's high population growth, because of a high rate of immigration. Retrospective studies by most independent forecasters estimate that the rate had actually dropped to 0.8% instead,^[30] far below the strong 3% plus GDP annual growth rates during the 1997-2007 decade. Then, during the third quarter of 2008 the national GDP contracted for the first time in 15 years and, in February 2009, it was confirmed that Spain, along other European economies, had officially entered recession.^[31]

In July 2009, the IMF worsened the estimates for Spain's 2009 contraction, to minus 4% of GDP for the year (close to the European average of minus 4.6%), besides, it estimated a further 0.8% contraction of the Spanish economy for 2010, the worst prospect amid advanced economies.^[32] The estimation of the IMF was proven to be somewhat too pessimistic, as Spain's GDP sank less than that of most advanced economies in 2009 and by the first quarter of 2010 had already emerged from the recession.

In 2008 the total Spanish public debt (government debt) relative to the total GDP was well below the European Union average, and in fact the government budget was in surplus, but the financial situation rapidly deteriorated with the onset of the recession.

Spanish banking system[link]

The Spanish banking system has been credited as one of the most solid of all western banking systems in coping with the ongoing worldwide liquidity crisis, thanks to the country's conservative banking rules and practices. Banks are required to have high capital provisions and to demand various guarantees and securities from intending borrowers. This has allowed the banks, particularly the geographically and industrially diversified large banks like BBVA and Santander, to weather the real estate deflation better than expected. Indeed, these banks have been able to capitalise on their strong position to buy up distressed banking assets elsewhere in Europe and in the United States.^[33]

Nevertheless, with the unprecedented deepening of the country's housing crisis, smaller local savings banks ("caja") are known to have delayed the registering of bad loans, especially those backed by houses and land, to avoid declaring losses. This has occurred despite the fact that these credits are backed by the borrower's present and future assets.^{[citation needed]}

CCM (Caja Castilla la Mancha), is still the only local savings bank to have suffered a run by depositors. The central bank Banco de España (equivalent of the US Federal Reserve) forcibly took over CCM to prevent its financial collapse.^[34] PricewaterhouseCoopers estimated an imbalance between CCM's assets and debts of €3,500 million, not counting the industrial corporation. One of the investment mistakes this bank had indulged in during the height of the property boom was the funding of the airport Ciudad Real Central Airport at Ciudad Real. It turned out that no airline wanted to operate from there, resulting in a financial fiasco (as well as wasting a lot of land and ruining vistas). There were still further errors leading to the present situation. On May 22, 2010, the Banco de España took over another "caja", CajaSur, as part of a national program to put the country's smaller banks on a firm financial basis.^[35]

The 2010 Euro debt crisis[link]

In the first weeks of 2010, renewed anxiety about the excessive levels of debt in some EU countries and, more generally, about the health of the euro has spread from Ireland and Greece to Portugal, and to a lesser extent in Spain and Italy.

Many economists recommended a battery of policies to control the surging public debt caused by the recessionary collapse of tax revenues, combining drastic austerity measures with higher taxes. Some senior German policy makers went as far as to say that emergency bailouts should include harsh penalties to EU aid recipients such as Greece.^[36] It has been noted that the Spanish government budget was in surplus in the years immediately before the GFC and that its debt was not considered excessive.

At the beginning of 2010, Spain's public debt as a percentage of GDP was still less than those of Britain, France or Germany. However, commentators pointed out that Spain's recovery was fragile, that the public debt was growing quickly, that troubled regional banks may need large bailouts, growth prospects were poor and therefore limiting revenue and that the central government has limited control over the spending of the regional governments. Under the structure of shared governmental responsibilities that has evolved since 1975, much responsibility for spending had been given back to the regions. The central government found itself in the difficult position of trying to gain support for unpopular spending cuts from the recalcitrant regional governments.^[37]

On May 23, 2010, the government announced further austerity measures, consolidating the ambitious plans announced in January.^[38]

As of September 2011, Spanish banks hold a record high of 142 billion Euros of Spanish national bonds. December 2011 bond auctions are "very likely to be covered" according to JPMorgan Chase.^[39]

Employment crisis[link]

As for employment, a longtime weakness of the Spanish economy, after having completed large improvements over the second half of the 1990s and during the 2000s (decade), which put a few regions on the brink of full employment, Spain suffered a severe setback from October 2008, when it saw its unemployment rate surging to 1996 levels. During the period October 2007-October 2008 Spain had its unemployment rate climbing 37%, exceeding by far the unemployment surge of past economic crises like 1993. In particular, during the month of October 2008, Spain feared its worst unemployment rise ever recorded and,^[40] so far, the country is suffering Europe's biggest unemployment crisis.^[41]

By July 2009, it had shed 1.2 million jobs in one year and was to have the same number of jobless as France and Italy combined.^[42] Spain's unemployment rate hit 17.4% at the end of March, with the jobless total having doubled over the previous 12 months, when two million people lost their jobs; with the oversized building and housing related industries contributing greatly to the rising unemployment numbers.^[43] In this same month, Spain for the first time in its history had over 4,000,000 people unemployed,^[44] an especially shocking figure even for a country which had become used to grim unemployment data.^[43] Although rapidly slowing, immigration continued throughout 2008 despite the escalating unemployment crisis, worsening the situation.^[45] In 2009 some established immigrants began to leave, although many that did continued to maintain homes in Spain due to poor conditions in their country of origin.^[46]

Some critics say the Spanish labor market is too rigid, preventing employers from removing unproductive employees and putting upward pressure on unemployment as employers are wary of taking risks on new hires.^[47] Others, however, note the lack of protection afforded workers attached to temporary contracts, which facilitate lay-offs and mass unemployment, especially among young workers. ^[48]

Prices[link]

Due to the lack of own resources, Spain has to import all of its fossil fuels. In a scenario of record prices this means adding much pressure to the inflation rate. In June 2008 the inflation rate reached a 13-year high at 5.00%. Then, with the dramatic decrease of oil prices that took place in the second half of 2008 plus the manifest bursting of the real estate bubble, concerns quickly shifted over to the risk of deflation, as Spain recorded in January 2009 its lowest inflation rate in 40 years, followed shortly afterwards, in March 2009 by a negative inflation rate for the first time since the gathering of these statistics started.^[49][50]

Energy[link]

A large windfarm in Spain.

The Comisión Nacional de la Energía (National Energy Commission) is the regulatory body for energy systems, created by Law 34/1998, of 7 October of the Hydrocarbons Sector, and developed by Royal Decree 1339/1999, of 31 July, which approved its regulations. The National Energy Commission has been assigned to the Ministry of Industry, Tourism And Trade.^[51]

Economic ties[link]

Spanish exports in 2006

Since the 1990s some Spanish companies have gained multinational status, often expanding their activities in culturally close Latin America. Spain is the second biggest foreign investor there, after the United States. Spanish companies too have expanded into Asia, especially China.^[52] This early global expansion is a competitive vantage over its competitors and European neighbors. The reason may primarily due to the booming interest toward Spanish language and culture in Asia, but also a corporate culture that learned to take risks in unstable markets.

Spanish companies lead fields like renewable energy (Iberdrola is the world's largest renewable energy operator^[53]), technology companies like Telefónica, Abengoa, Movistar, Hisdesat, Gamesa, Indra, train manufacturers like CAF, Talgo, petroleum companies like Repsol and infrastructure, with six of the ten biggest international construction firms specialising in transport being Spanish, like Ferrovial, Acciona, ACS, OHL and FCC.^[54]

Exports grow steadily[link]

Graphical depiction of Spain's product exports in 28 color coded categories.

With growth of 17.4% to 185.799 million euros in sales, the export sector has recovered to pre-crisis levels, according to data released by the Ministry of Industry. With a contribution of 1.1% to Gross Domestic Product (GDP), the export sector has brought stability to the Spanish economy. The improvement in exports including emerging countries, has allowed the trade deficit is not increased because of rising global energy prices. The year 2011, Spain is among the countries with overall export growth, according to OECD forecasts. The international institution puts Spain in fifth place in the ranking, with estimated exports of goods and services 9.9%. Spain is placed after Germany and Slovakia, which will increase its sales abroad by 10.4%. ^{[55] [56] [57]}

Spain's trade deficit shrank in October 2011, 1.9% to 3.632 million euros, announced the Ministry of Economy. The Spanish exports grew 11.5% compared to October 2010, to reach 19.394 million euros, the statement said. The increases were highest in exports of capital goods, which rose 14.8% over the first ten months of 2010 and the automotive sector, up 14.3% in a year. Spain recorded a trade surplus in trade with the European Union (EU), of 3,043 million euros in the first ten months of the year. While domestic consumption shrank, its exports continued to grow despite the global slowdown. ^[58]

Sectors of the economy[link]

Tourism[link]

During the last four decades Spain's foreign tourist industry has grown into the second biggest in the world and was worth approximately 40 billion Euros, about 5% of GDP, in 2006.^[59] The total value of foreign and domestic tourism came to nearly 11% of the country's GDP and provided employment for about 2 million people.^[60]

Automobile industry[link]

The automobile industry in Spain is a large employer in the country, employing 9% of the total workforce in 2009 and contributing to 3.3% of the Spanish GDP, despite the decline due to the economic recession of the past couple of years. In 2009, Spain was in the top ten of the largest automobile producer countries in the world.^[61]

Apart from its domestic brand SEAT, which is the major contributor to the automotive sector of the country, and Santana Motor, many suppliers and foreign car and truck makers - like Volkswagen, Nissan, Daimler Mercedes-Benz, Ford, Renault, GM/Opel, PSA Peugeot/Citroën, Iveco,... etc. - have facilities and plants in Spain today developing and producing vehicles and components, not only for the domestic market but also for export,^[62] with the contribution of the automobile industry in 2008 rising up to the second place with 17,6% out of the country's total exports.^[63]

See also[link]

	Spain portal
	Economics portal

• List of sovereign states by public debt

References and notes[link]

External links[link]

Statistical resources[link]

• Banco de España (Spanish Central Bank); features the latest and in depth statistics
• Statistical Institute of Andalusia
• National Institute of Statistics
• Statistical Institute of Catalonia
• Statistical Institute of Galicia
• OECD's Spain country Web site and OECD Economic Survey of Spain

Further reading[link]

• Article: Investing in Spain by Nicholas Vardy - September 2006. A global investor's discussion of Spain's economic boom.
• The Pain in Spain: On May Day, Nearly 1 in 5 are Jobless by Andrés Cala, The Christian Science Monitor, May 1, 2009
• Alternatives to Fiscal Austerity in Spain from the Center for Economic and Policy Research, July 2010
• O'Neill, Michael F.; McGettigan, Gerard (2005), "Spanish biotechnology: anyone for PYMEs?", Drug Discovery Today, News and Comment (London: Elsevier) 10 (16): 1078–1081, 15 August 2005, DOI:10.1016/S1359-6446(05)03549-X, ISSN 1359-6446 

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Kingdom of Spain Reino de España
Flag Coat of arms
Motto: "Plus Ultra" (Latin) "Further Beyond"
Anthem: "Marcha Real" (Spanish) "Royal March"
Location of  Spain  (dark green) – in Europe  (green & dark grey) – in the European Union  (green)  —  [Legend]
Capital (and largest city)		Madrid 40°26′N 3°42′W / 40.433°N 3.7°W / 40.433; -3.7
Official language(s)		Spanish[a]
Recognised regional languages		Basque, Catalan/Valencian, Galician and Occitan
Demonym		Spanish, Spaniard
Government		Unitary parliamentary constitutional monarchy
-	King	Juan Carlos I
-	Prime Minister	Mariano Rajoy
Legislature		Cortes Generales
-	Upper house	Senate
-	Lower house	Congress of Deputies
Formation		15th century
-	Traditional date	569 (ascension to the throne of Liuvigild)
-	Dynastic	1479
-	De facto	1516
-	De jure	1715
-	Nation state	1812
-	Constitutional democracy	1978
Area
-	Total	504,030 km2 (51st) 195,364 sq mi
-	Water (%)	1.04
Population
-	2010 estimate	46,030,109[1] (27th)
-	Density	93/km2 (106th) 231/sq mi
GDP (PPP)		2011 estimate
-	Total	$1.413 trillion[2]
-	Per capita	$30,625[2]
GDP (nominal)		2011 estimate
-	Total	$1.495 trillion[2]
-	Per capita	$32,360[2]
Gini (2005)		32[3]
HDI (2011)		0.878[4] (very high) (23rd)
Currency		Euro (€) (EUR)
Time zone		CET (UTC+1)
-	Summer (DST)	CEST (UTC+2)
		Except the Canary Islands which observe UTC+0 (WET) (UTC+1 during summer time)
Date formats		dd.mm.yyyy (Spanish; CE)
Drives on the		right
ISO 3166 code		ES
Internet TLD		.es[b]
Calling code		34

Spain (ⁱ/ˈspeɪn/ SPAYN; Spanish: España, pronounced: [esˈpaɲa] ( listen)), officially the Kingdom of Spain (Spanish: Reino de España),^[c][5] is a sovereign state and a member of the European Union located in southwestern Europe on the Iberian Peninsula. Its mainland is bordered to the south and east by the Mediterranean Sea except for a small land boundary with the British Overseas Territory of Gibraltar; to the north and north east by France, Andorra, and the Bay of Biscay; and to the northwest and west by the Atlantic Ocean and Portugal.

Spanish territory also includes the Balearic Islands in the Mediterranean, the Canary Islands in the Atlantic Ocean off the African coast, and two autonomous cities in North Africa, Ceuta and Melilla, that border Morocco. Furthermore, the town of Llívia is a Spanish exclave situated inside French territory. With an area of 504,030 square kilometres (194,610 sq mi), it is the second largest country in Western Europe and the European Union after France, and the fourth largest country in Europe after Russia, Ukraine and France.

Because of its location, the territory of Spain was subject to many external influences since prehistoric times and through to its dawn as a country. Spain emerged as a unified country in the 15th century, following the marriage of the Catholic Monarchs and the completion of the reconquest, or Reconquista, of the Iberian peninsula in 1492. Conversely, it has been an important source of influence to other regions, chiefly during the modern era, when it became a global empire that has left a legacy of over 500 million Spanish speakers today, making it the world's second most spoken first language.

Spain is a democracy organised in the form of a parliamentary government under a constitutional monarchy. It is a developed country with the twelfth largest economy in the world by nominal GDP, and very high living standards, including the tenth-highest quality of life index rating in the world, as of 2005. It is a member of the United Nations, European Union, NATO, OECD, and WTO.

Etymology[link]

The true origins of the name España and its cognates "Spain" and "Spanish" are disputed. The ancient Roman name for Iberia, Hispania, may derive from poetic use of the term Hesperia to refer to Spain, reflecting the Greek perception of Italy as a "western land" or "land of the setting sun" (Hesperia, Εσπερία in Greek) and Spain, being still further west, as Hesperia ultima.^[6]

It may also be a derivation of the Punic Ispanihad, meaning "land of rabbits" or "edge", a reference to Spain's location at the end of the Mediterranean; Roman coins struck in the region from the reign of Hadrian show a female figure with a coney at her feet.^[7] There are also claims that España derives from the Basque word Ezpanna meaning "edge" or "border", another reference to the fact that the Iberian peninsula constitutes the southwest of the European continent.^[6]

The humanist Antonio de Nebrija proposed that the word Hispania evolved from the Iberian word Hispalis, meaning "city of the western world". Jesús Luis Cunchillos argues that the root of the term span is the Phoenecian word spy, meaning "to forge metals". Therefore i-spn-ya would mean "the land where metals are forged".^[8]

History[link]

The Iberian peninsula enters written records as a land populated largely by the Iberians, Basques and Celts. After an arduous conquest, the peninsula came under the rule of Rome. During the early Middle Ages it came under Germanic rule but later, it was conquered by Moorish invaders from North Africa. In a process that took centuries, the small Christian kingdoms in the north gradually regained control of the peninsula. The last Moorish kingdom fell in the same year Columbus reached the Americas. A global empire began which saw Spain become the strongest kingdom in Europe and the leading world power for a century and a half and the largest overseas empire for three centuries.

Continued wars and other problems eventually led to a diminished status. The Napoleonic invasions of Spain led to chaos, triggering independence movements that tore apart most of the empire and left the country politically unstable. Prior to the Second World War, Spain suffered a devastating civil war and came under the rule of an authoritarian government, whose rule oversaw a period of stagnation but that finished with a powerful economic surge. Eventually democracy was peacefully restored in the form of a parliamentary constitutional monarchy. In 1986, Spain joined the European Union, experiencing a cultural renaissance and steady economic growth.

Prehistory and pre-Roman peoples[link]

Altamira Cave paintings,^[9] in Cantabria.

Archaeological research at Atapuerca indicates the Iberian Peninsula was populated by hominids 1.2 million years ago.^[10] Modern humans first arrived in Iberia, from the north on foot, about 32,000 years ago.^[11] The best known artifacts of these prehistoric human settlements are the famous paintings in the Altamira cave of Cantabria in northern Iberia, which were created about 15,000 BCE by cro-magnons.^[9]

Archaeological and genetic evidence strongly suggests that the Iberian Peninsula acted as one of several major refugia from which northern Europe was repopulated following the end of the last ice age.

The two main historical peoples of the peninsula were the Iberians and the Celts. The Iberians inhabited the Mediterranean side from the northeast to the southeast. The Celts inhabited the Atlantic side, in the north, center (Celtiberian), northwest and southwest part of the peninsula. Basques occupied the western area of the Pyrenees mountain range and adjacent areas.

In the south of the peninsula appeared the semi-mythical city of Tartessos (c.1100 BC), whose flourishing trade in items made of gold and silver with the Phoenicians and Greeks is documented by Strabo and the Book of Solomon. Between about 500 BC and 300 BC, the seafaring Phoenicians and Greeks founded trading colonies along the Mediterranean coast. The Carthaginians briefly exerted control over much of the Mediterranean side of the peninsula, until defeated in the Punic Wars by the Romans.^[12]

Roman Empire and the Gothic Kingdom[link]

Roman Theatre of Mérida, Badajoz.

A votive crown of Recceswinth (653–672)

During the Second Punic War, an expanding Roman Empire captured Carthaginian trading colonies along the Mediterranean coast from roughly 210 BC to 205 BC. It took the Romans nearly two centuries to complete the conquest of the Iberian peninsula, though they had control of much of it for over six centuries. Roman rule was bound together by law, language, and the Roman road.^[13]

The cultures of the Celt and Iberian populations were gradually romanized (Latinized) at differing rates in different parts of Hispania. Local leaders were admitted into the Roman aristocratic class^[d][12] Hispania served as a granary for the Roman market, and its harbors exported gold, wool, olive oil, and wine. Agricultural production increased with the introduction of irrigation projects, some of which remain in use. Emperors Hadrian, Trajan, Theodosius I, and the philosopher Seneca were born in Hispania.^[e] Christianity was introduced into Hispania in the 1st century CE and it became popular in the cities in the 2nd century CE.^[12] Most of Spain's present languages and religion, and the basis of its laws, originate from this period.^[13]

The weakening of the Western Roman Empire's jurisdiction in Hispania began in 409, when the Germanic Suevi and Vandals, together with the Sarmatian Alans crossed the Rhine and ravaged Gaul until the Visigoths drove them into Iberia that same year. The Suevi established a kingdom in what is today modern Galicia and northern Portugal. As the western empire disintegrated, the social and economic base became greatly simplified: but even in modified form, the successor regimes maintained many of the institutions and laws of the late empire, including Christianity.

The Alans' allies, the Hasdingi Vandals, established a kingdom in Gallaecia, too, occupying largely the same region but extending farther south to the Duero river. The Silingi Vandals occupied the region that still bears a form of their name –Vandalusia, modern Andalusia, in Spain. The Byzantines established an enclave, Spania, in the south, with the intention of reviving the Roman empire throughout Iberia. Eventually, however, Hispania was reunited under Visigothic rule.

Muslim Iberia (711–1492)[link]

The Alhambra, Granada.

In the 8th century, nearly all of the Iberian Peninsula was conquered (711–718) by largely Moorish Muslim armies from North Africa. These conquests were part of the expansion of the Umayyad Islamic Empire. Only a small area in the mountainous north-west of the peninsula managed to resist the initial invasion.

Under Islamic law, Christians and Jews were given the subordinate status of dhimmi. This status permitted Christians and Jews to practice their religions as people of the book but they were required to pay a special tax and to be subject to certain discriminations.^[14][15]

Conversion to Islam proceeded at a steadily increasing pace. The muladies (Muslims of ethnic Iberian origin) are believed to have comprised the majority of the population of Al-Andalus by the end of the 10th century.^[16][17]

La Giralda, the bell tower of Seville Cathedral

The Muslim community in the Iberian peninsula was itself diverse and beset by social tensions. The Berber people of North Africa, who had provided the bulk of the invading armies, clashed with the Arab leadership from the Middle East.^[f] Over time, large Moorish populations became established, especially in the Guadalquivir River valley, the coastal plain of Valencia, the Ebro River valley and (towards the end of this period) in the mountainous region of Granada.^[17]

Córdoba, the capital of the caliphate, was the largest, richest and most sophisticated city in western Europe. Mediterranean trade and cultural exchange flourished. Muslims imported a rich intellectual tradition from the Middle East and North Africa. Muslim and Jewish scholars played an important part in reviving and expanding classical Greek learning in Western Europe. The Romanized cultures of the Iberian peninsula interacted with Muslim and Jewish cultures in complex ways, thus giving the region a distinctive culture.^[17] Outside the cities, where the vast majority lived, the land ownership system from Roman times remained largely intact as Muslim leaders rarely dispossessed landowners, and the introduction of new crops and techniques led to a remarkable expansion of agriculture.^{[citation needed]}

In the 11th century, the Muslim holdings fractured into rival Taifa kingdoms, allowing the small Christian states the opportunity to greatly enlarge their territories.^[17] The arrival from North Africa of the Islamic ruling sects of the Almoravids and the Almohads restored unity upon the Muslim holdings, with a stricter, less tolerant application of Islam, and saw a revival in Muslim fortunes. This re-united Islamic state, experienced more than a century of successes that partially reversed Christian gains.

Fall of Muslim rule and unification[link]

Loarre Castle, Huesca

The Reconquista ("Reconquest") was the centuries-long period of expansion of Iberia's Christian kingdoms. The Reconquista is viewed as beginning with the Battle of Covadonga in 722, and was concurrent with the period of Muslim rule on the Iberian peninsula. The Christian army's victory over Muslim forces led to the creation of the Christian Kingdom of Asturias along the northwestern coastal mountains. Shortly after, in 739, Muslim forces were driven from Galicia, which was to eventually host one of medieval Europe's holiest sites, Santiago de Compostela and was incorporated into the new Christian kingdom. Muslim armies had also moved north of the Pyrenees, but they were defeated by Frankish forces at the Battle of Poitiers, Frankia. Later, Frankish forces established Christian counties on the southern side of the Pyrenees. These areas were to grow into the kingdoms of Navarre, Aragon and Catalonia.^[18] For several centuries, the fluctuating frontier between the Muslim and Christian controlled areas of Iberia was along the Ebro and Duero valleys.

Ávila city walls

The breakup of Al-Andalus into the competing taifa kingdoms helped the long embattled Iberian Christian kingdoms gain the initiative. The capture of the strategically central city of Toledo in 1085 marked a significant shift in the balance of power in favour of the Christian kingdoms. Following a great Muslim resurgence in the 12th century, the great Moorish strongholds in the south fell to Christian Spain in the 13th century—Córdoba in 1236 and Seville in 1248—leaving only the Muslim enclave of Granada as a tributary state in the south.^[19]

In the 13th and 14th centuries, the Marinids Muslim sect based in North Africa invaded and established some enclaves on the southern coast but failed in their attempt to re-establish Muslim rule in Iberia and were soon driven out. The 13th century also witnessed the Crown of Aragon, centred in Spain's north east, expand its reach across islands in the Mediterranean, to Sicily and even Athens.^[20] Around this time the universities of Palencia (1212/1263) and Salamanca (1218/1254) were established. The Black Death of 1348 and 1349 devastated Spain.^[21]

Burgos Cathedral

In 1469, the crowns of the Christian kingdoms of Castile and Aragon were united by the marriage of Isabella I of Castile and Ferdinand II of Aragon. 1478 commenced the completion of the conquest of the Canary Islands and in 1492, the combined forces of Castile and Aragon captured the Emirate of Granada, ending the last remnant of a 781-year presence of Islamic rule in Iberia. The Treaty of Granada guaranteed religious tolerance toward Muslims.^[22] The year 1492 also marked the arrival in the New World of Christopher Columbus, during a voyage funded by Isabella. That same year, Spain's Jews were ordered to convert to Catholicism or face expulsion from Spanish territories during the Spanish Inquisition.^[23] A few years later, following social disturbances, Muslims were also expelled under the same conditions.^[g][24]

As Renaissance New Monarchs, Isabella and Ferdinand centralized royal power at the expense of local nobility, and the word España, whose root is the ancient name Hispania, began to be commonly used to designate the whole of the two kingdoms.^[24] With their wide-ranging political, legal, religious and military reforms, Spain emerged as the first world power.

Imperial Spain[link]

The Spanish Empire's historical influence

The unification of the crowns of Aragon and Castile laid the basis for modern Spain and the Spanish Empire.^[25] Spain was Europe's leading power throughout the 16th century and most of the 17th century, a position reinforced by trade and wealth from colonial possessions. It reached its apogee during the reigns of the first two Spanish Habsburgs – Charles I (1516–1556) and Philip II (1556–1598). This period saw the Italian Wars, the revolt of the comuneros, the Dutch revolt, the Morisco revolt, clashes with the Ottomans, the Anglo-Spanish war and wars with France.^[26]

The Spanish Empire expanded to include great parts of the Americas, islands in the Asia-Pacific area, areas of Italy, cities in Northern Africa, as well as parts of what are now France, Germany, Belgium, Luxembourg, and the Netherlands. It was the first empire of which it was said that the sun never set.

This was an age of discovery, with daring explorations by sea and by land, the opening-up of new trade routes across oceans, conquests and the beginnings of European colonialism. Along with the arrival of precious metals, spices, luxuries, and new agricultural plants, Spanish explorers brought back knowledge from the New World, and played a leading part in transforming the European understanding of the globe.^[27] The cultural efflorescence witnessed is now referred to as the Spanish Golden Age. The rise of humanism, the Protestant Reformation and new geographical discoveries raised issues addressed by the influential intellectual movement now known as the School of Salamanca.

A 17th century galleon

In the late 16th century and first half of the 17th century, Spain was confronted by unrelenting challenges from all sides. Barbary pirates under the aegis of the rapidly growing Ottoman empire, disrupted life in many coastal areas through their slave raids and renewed the threat of an Islamic invasion.^[28] This at a time when Spain was often at war with France.

The Protestant Reformation schism from the Catholic Church dragged the kingdom ever more deeply into the mire of religiously charged wars. The result was a country forced into ever expanding military efforts across Europe and in the Mediterranean.^[29]

By the middle decades of a war- and plague-ridden 17th century Europe the Spanish Habsburgs had enmeshed the country in the continent-wide religious-political conflicts. These conflicts drained it of resources and undermined the European economy generally. Spain managed to hold on to most of the scattered Habsburg empire, and help the imperial forces of the Holy Roman Empire reverse a large part of the advances made by Protestant forces, but it was finally forced to recognise the separation of Portugal (with whom it had been united in a personal union of the crowns from 1580 to 1640) and the Netherlands, and eventually suffered some serious military reverses to France in the latter stages of the immensely destructive, Europe-wide Thirty Years War.^[30]

El Escorial, central Spain.

In the latter half of the 17th century, Spain went into a gradual relative decline, during which it surrendered a number of small territories to France. However it maintained and enlarged its vast overseas empire, which remained intact until the beginning of the 19th century.

The decline culminated in a controversy over succession to the throne which consumed the first years of the 18th century. The War of Spanish Succession was a wide ranging international conflict combined with a civil war, and was to cost the kingdom its European possessions and its position as one of the leading powers on the Continent.^[31]

During this war, a new dynasty originating in France, the Bourbons, was installed. Long united only by the Crown, a true Spanish state was established when the first Bourbon king, Philip V, united the crowns of Castile and Aragon into a single state, abolishing many of the old regional privileges and laws.^[32]

The 18th century saw a gradual recovery and an increase in prosperity through much of the empire. The new Bourbon monarchy drew on the French system of modernising the administration and the economy. Enlightenment ideas began to gain ground among some of the kingdom's elite and monarchy. Military assistance for the rebellious British colonies in the American War of Independence improved the kingdom's international standing.^[33]

Napoleonic rule and its consequences[link]

Second of May 1808: the people revolt against the Bonapartist regime.

In 1793, Spain went to war against the new French Republic, which had overthrown and executed its Bourbon king, Louis XVI. The war polarised the country in an apparent reaction against the gallicised elites. Defeated in the field, peace was made with France in 1795 and it effectively became a client state of that country; In 1807, the secret treaty of Fontainebleau between Napoleon and the deeply unpopular Godoy led to a declaration of war against Britain and Portugal. French troops entered the kingdom unopposed, supposedly to invade Portugal, but instead they occupied Spanish fortresses. This invasion by trickery led to the abdication of the ridiculed Spanish king in favour of Napoleon's brother, Joseph Bonaparte.

This foreign puppet monarch was widely regarded with scorn. The 2 May 1808 revolt was one of many nationalist uprisings against the Bonapartist regime across the country.^[34] These revolts marked the beginning of what is known to the Spanish as the War of Independence, and to the British as the Peninsular War.^[35] Napoleon was forced to intervene personally, defeating several badly coordinated Spanish armies and forcing a British army to retreat. However, further military action by Spanish guerrillas and armies, and Wellington's British-Portuguese forces, combined with Napoleon's disastrous invasion of Russia, led to the ousting of the French imperial armies from the Spain in 1814, and the return of King Ferdinand VII.^[36]

The French invasions devastated the economy, and left Spain a deeply divided country prone to political instability. The power struggles of the early 19th century led to the loss of all of its colonies in the Americas (which stretched from Las Californias to Patagonia), with the sole exception of Cuba and Puerto Rico.

Spanish–American War (1898)[link]

Amid the instability and economic crisis that afflicted Spain in the 19th century there arose nationalist movements in the Philippines and Cuba. Wars of independence ensued in those colonies and eventually the United States became involved. Despite the commitment and ability shown by some military units, they were so mismanaged by the highest levels of command that the Spanish–American War, fought in the Spring of 1898, did not last long. "El Desastre" (The Disaster), as the war became known, helped give impetus to the Generation of 98 who were already conducting much critical analysis concerning the country. It also weakened the stability that had been established during Alfonso XII's reign.

Spanish Civil War (1936–39)[link]

The 20th century brought little peace; Spain played a minor part in the scramble for Africa, with the colonisation of Western Sahara, Spanish Morocco and Equatorial Guinea. The heavy losses suffered during the Rif war in Morocco helped to undermine the monarchy. A period of authoritarian rule under General Miguel Primo de Rivera (1923–1931) ended with the establishment of the Second Spanish Republic. The Republic offered political autonomy to the Basque Country, Catalonia and Galicia and gave voting rights to women.

Francisco Franco and US President Eisenhower, Madrid, 1959

The Spanish Civil War (1936–39) ensued. Three years later the rebel Nationalist forces, led by General Francisco Franco, emerged victorious with the support of Nazi Germany and Fascist Italy. The Republican side was supported by the Soviet Union, Mexico and International Brigades, including the American Abraham Lincoln Brigade, but it was not supported officially by the Western powers due to the British-led policy of Non-Intervention.

The Civil War claimed the lives of over 500,000 people^[37] and caused the flight of up to a half-million citizens.^[38] Most of their descendants now live in Latin American countries, with some 300,000 in Argentina alone.^[39] The Spanish Civil War has been called the first battle of the Second World War.^{[by whom?]}

Spain under Franco (1939-75)[link]

The Spanish State established by Franco was nominally neutral in the Second World War, although sympathetic to the Axis. The only legal party under Franco's post civil war regime was the Falange Española Tradicionalista y de las JONS, formed in 1937; the party emphasised anti-Communism, Catholicism and nationalism. Given Franco's opposition to competing political parties, the party was renamed the National Movement (Movimiento Nacional) in 1949.

After World War II Spain was politically and economically isolated, and was kept out of the United Nations. This changed in 1955, during the Cold War period, when it became strategically important for the U.S. to establish a military presence on the Iberian peninsula as a counter to any possible move by the Soviet Union into the Mediterranean basin. In the 1960s, Spain registered an unprecedented rate of economic growth in what became known as the Spanish miracle, which resumed the much interrupted transition towards a modern economy.

Post Franco (1975-)[link]

Spanish Constitution of 1978.

With Franco's death in November 1975, Juan Carlos succeeded to the position of King of Spain and head of state in accordance with the law. With the approval of the new Spanish Constitution of 1978 and the restoration of democracy, the State devolved much authority to the regions and created an internal organization based on autonomous communities.

In the Basque Country, moderate Basque nationalism has coexisted with a radical nationalist movement led by the armed organisation ETA. The group was formed in 1959 during Franco's rule but has continued to wage its violent campaign even after the restoration of democracy and the return of a large measure of regional autonomy.

On 23 February 1981, rebel elements among the security forces seized the Cortes in an attempt to impose a military backed government. King Juan Carlos took personal command of the military and successfully ordered the coup plotters, via national television, to surrender.

On 30 May 1982 Spain joined NATO, following a referendum. That year the Spanish Socialist Workers Party (PSOE) came to power, the first left-wing government in 43 years. In 1986 Spain joined the European Community; what became the European Union. The PSOE was replaced in government by the Partido Popular (PP) after the latter won the 1996 General Elections; at that point the PSOE had served almost 14 consecutive years in office.

On 1 January 2002, Spain ceased to use the peseta as currency replacing it with the euro, which it shares with 15 other countries in the Eurozone. Spain has also seen strong economic growth, well above the EU average; however, well publicised concerns issued by many economic commentators at the height of the boom that the extraordinary property prices and high foreign trade deficits of the boom were likely to lead to a painful economic collapse were confirmed by a severe property-led recession that struck the country in 2008/9.^[40]

A series of bombs exploded in commuter trains in Madrid, Spain on 11 March 2004. After a five month trial in 2007 it was concluded the bombings were perpetrated by a local Islamist militant group inspired by al-Qaeda.^[41] The bombings killed 191 people and wounded more than 1800, and the intention of the perpetrators may have been to influence the outcome of the Spanish general election, held three days later.^[42]

Though initial suspicions focused on the Basque group ETA, evidence soon emerged indicating possible Islamist involvement. Because of the proximity of the election, the issue of responsibility quickly became a political controversy, with the main competing parties PP and PSOE exchanging accusations over the handling of the aftermath.^[43] At 14 March elections, PSOE, led by José Luis Rodríguez Zapatero, obtained a plurality, enough to form a new cabinet with Rodríguez Zapatero as the new Presidente del Gobierno or Prime Minister of Spain, thus succeeding the former PP administration.^[44]

The bursting of the Spanish property bubble in 2008 led to the 2008–2012 Spanish financial crisis.

Geography[link]

Bossòst, Lérida, a Pyrenean town

At 504,782 km² (194,897 sq mi), Spain is the world's 51st-largest country. It is some 47,000 km² (18,000 sq mi) smaller than France and 81,000 km² (31,000 sq mi) larger than the U.S. state of California. Mt. Teide (Tenerife, Canary Islands) has the highest mountain peak of Spain and the third largest volcano in the world from its base.

Spain lies between latitudes 26° and 44° N, and longitudes 19° W and 5° E.

El Sardinero beach, Santander, Cantabria

On the west, Spain borders Portugal; on the south, it borders Gibraltar (a British overseas territory) and Morocco, through its exclaves in North Africa (Ceuta, Melilla, and Peñón de Vélez de la Gomera). On the northeast, along the Pyrenees mountain range, it borders France and the tiny principality of Andorra. Along the Pyrenees in Gerona, a small exclave town called Llívia is surrounded by France.

Islands[link]

Spain also includes the Balearic Islands in the Mediterranean Sea, the Canary Islands in the Atlantic Ocean and a number of uninhabited islands on the Mediterranean side of the Strait of Gibraltar, known as Plazas de soberanía, such as the Chafarine islands, the isle of Alborán, Alhucemas, and the tiny Isla Perejil. The little Pheasant Island in the River Bidasoa is a Spanish-French condominium.

Islander population:^[45]

Mt. Teide, Tenerife, Canary Islands is the tallest mountain in Spain

Palma de Mallorca, Balearic Islands

Mountains and rivers[link]

Mainland Spain is a mountainous country, dominated by high plateaus and mountain chains. After the Pyrenees, the main mountain ranges are the Cordillera Cantábrica, Sistema Ibérico, Sistema Central, Montes de Toledo, Sierra Morena and the Sistema Penibético whose highest peak, the 3,478 m high Mulhacén, located in Sierra Nevada, is the highest elevation in the Iberian peninsula, while the highest point in Spain is the Teide, a 3,718 m high active volcano in the Canary Islands. The Meseta Central is a vast plateau in the heart of peninsular Spain.

There are several major rivers in Spain such as the Tagus, the Ebro, the Duero, the Guadiana and the Guadalquivir. Alluvial plains are found along the coast, the largest of which is that of the Guadalquivir in Andalusia.

Climate[link]

Köppen climate classification of Spain

Three main climatic zones can be separated, according to geographical situation and orographic conditions:^[46][47][48]

• The Mediterranean climate, characterized by dry and warm summers. According to the Köppen climate classification, it is dominant in the peninsula, with two varieties: Csa and Csb.
• The semiarid climate (Bsh, Bsk), located in the southeastern quarter of the country, especially in the region of Murcia and in the Ebro valley. In contrast with the Mediterranean climate, the dry season extends beyond the summer.
• The oceanic climate (Cfb), located in north quarter of the country, especially in the region of Basque Country, Asturias, Cantabria and partly Galicia. In contrary to the Mediterranean climate, winter and summer temperatures are influenced by the ocean, and have no seasonal drought.

Apart from these main types, other sub-types can be found, like the alpine climate in the Pyrenees and Sierra Nevada, and a typical subtropical climate in the Canary Islands.

Governance[link]

HM Juan Carlos I King of Spain.

The Spanish Constitution of 1978 is the culmination of the Spanish transition to democracy. The constitutional history of Spain dates back to the constitution of 1812. Impatient with the pace of democratic political reforms in 1976 and 1977, Spain's new King Juan Carlos, known for his formidable personality, dismissed Carlos Arias Navarro and appointed the reformer Adolfo Suárez as Prime Minister.^[49][50] The resulting general election in 1977 convened the Constituent Cortes (the Spanish Parliament, in its capacity as a constitutional assembly) for the purpose of drafting and approving the constitution of 1978.^[51] After a national referendum on 6 December 1978, 88% of voters approved of the new constitution.

As a result, Spain is now composed of 17 autonomous communities and two autonomous cities with varying degrees of autonomy thanks to its Constitution, which nevertheless explicitly states the indivisible unity of the Spanish nation. The constitution also specifies that Spain has no state religion and that all are free to practice and believe as they wish.

As of November 2009, the government of Spain keeps a balanced gender equality ratio. Nine out of the 18 members of the government are women. Under the administration of José Luis Rodríguez Zapatero, Spain has been described as being "at the vanguard" in gender equality issues and also that "[n]o other modern, democratic, administration outside Scandinavia has taken more steps to place gender issues at the centre of government".^[52] The Spanish administration has also promoted gender-based positive discrimination by approving gender equality legislation in 2007 aimed at providing equality between genders in Spanish political and economic life (Gender Equality Act).^[53][54] However, in the legislative branch, as of July 2010 only 128 of the 350 members of the Congress are women (36.3%).^[55] It places Spain 13th on a list of countries ranked by proportion of women in the lower house. In the Senate, the ratio is even lower, since there are only 79 women out of 263 (30.0%).^[56] The Gender Empowerment Measure of Spain in the United Nations Human Development Report is 0.794, 12th in the world.^[57]

Branches of government[link]

Mariano Rajoy, Prime minister.

Spain is a constitutional monarchy, with a hereditary monarch and a bicameral parliament, the Cortes Generales. The executive branch consists of a Council of Ministers of Spain presided over by the Prime Minister, nominated and appointed by the monarch and confirmed by the Congress of Deputies following legislative elections. By political custom established by King Juan Carlos since the ratification of the 1978 Constitution, the king's nominees have all been from parties who maintain a plurality of seats in the Congress.

The legislative branch is made up of the Congress of Deputies (Congreso de los Diputados) with 350 members, elected by popular vote on block lists by proportional representation to serve four-year terms, and a Senate (Senado) with 259 seats of which 208 are directly elected by popular vote and the other 51 appointed by the regional legislatures to also serve four-year terms.

• Head of State
  • King Juan Carlos I, since 22 November 1975
• Head of Government
  • Prime Minister of Spain (Spanish Presidente del Gobierno literally President of the Government): Mariano Rajoy Brey, elected 20 November 2011.
    • Deputy Prime Minister and Minister for the Presidency: Soraya Sáenz de Santamaría.
• Cabinet
  • Council of Ministers (Spanish Consejo de Ministros) designated by the Prime Minister.

Spain is organizationally structured as a so-called Estado de las Autonomías ("State of Autonomies"); it is one of the most decentralized countries in Europe, along with Switzerland, Germany and Belgium;^[58] for example, all Autonomous Communities have their own elected parliaments, governments, public administrations, budgets, and resources. Health and education systems among others are managed regionally, and in addition, the Basque Country and Navarre also manage their own public finances based on foral provisions. In Catalonia and the Basque Country, a full fledged autonomous police corps replaces some of the State police functions (see Mossos d'Esquadra, Ertzaintza, Policía Foral and Policía Canaria).

Administrative divisions[link]

The Spanish State is integrated by 17 autonomous communities and 2 autonomous cities, both groups being the highest or first-order administrative division in the country. Autonomous communities are integrated by provinces, of which there are 50 in total, and in turn, provinces are integrated by municipalities. In Catalonia, two additional divisions exist, the comarques (sing. comarca) and the vegueries (sing. vegueria) both of which have administrative powers; comarques being aggregations of municipalities, and the vegueries being aggregations of comarques. The concept of a comarca exists in all autonomous communities, however, unlike Catalonia, these are merely historical or geographical subdivisions.

Autonomous communities and autonomous cities[link]

Galicia

Navarre

Madrid

La Rioja

Aragon

Catalonia

Valencia

Castile
–La Mancha

Extremadura

Portugal

Castile
and León

Asturias

Cantabria

Basque Country

Murcia

Andalusia

Ceuta

Melilla

France

Balearic
Islands

Canary
Islands

Mediterranean Sea

Bay of Biscay

Atlantic
Ocean

Andorra

Atlantic
Ocean

25px

Gibraltar (UK)

Autonomous communities are the first level administrative division in the country. These were created after the 1979 and current constitution came into effect in recognition of the right to self-government to the "nationalities and regions of Spain".^[59] Autonomous communities were to be integrated by adjacent provinces with common historial, cultural, and economical traits. This territorial organization, based on devolution, is known in Spain as the "State of Autonomies".

The basic institutional law of each autonomous community is the Statute of Autonomy. The Statutes of Autonomy establish the name of the community according to its historical identity, the limits of their territories, the name and organization of the institutions of government and the rights they enjoy according the constitution.^[60]

The government of all autonomous communities must be based on a division of powers comprising:

• a Legislative Assembly whose members must be elected by universal suffrage according to the system of proportional representation and in which all areas that integrate the territory are fairly represented;
• a Government Council, with executive and administrative functions headed by a president, elected by the Legislative Assembly and nominated by the King of Spain;
• a Supreme Court of Justice, under the Supreme Court of the State, which head the judicial organization within the autonomous community.

Catalonia, Galicia and the Basque Country, which identified themselves as "nationalities" were granted self-government through a rapid process. Andalusia also took that denomination in its first Statute of Autonomy, even though it followed the longer process stipulated in the constitution for the rest of the country. Progressively, other communities in revisions to their Statutes of Autonomy have also taken that denomination in accordance to their historical regional identity, such as the Valencian Community,^[61] the Canary Islands,^[62] the Balearic Islands,^[63] and Aragon.^[64]

The autonomous communities have wide legislative and executive autonomy, with their own parliaments and regional governments. The distribution of powers may be different for every community, as laid out in their Statutes of Autonomy, since devolution was intended to be asymmetrical. Only two communities—the Basque Country and Navarre—have full fiscal autonomy. Aside of fiscal autonomy, the "historical" nationalities—Andalusia, the Basque Country, Catalonia, and Galicia—were devolved more powers than the rest of the communities, amongst them the ability of the regional president to dissolve the parliament and call for elections at any time. In addition, the Basque Country, Catalonia and Navarre have police corps of their own: Ertzaintza, Mossos d'Esquadra and the Policía Foral respectively. Other communities have more limited forces or none at all, like the Policía Autónoma Andaluza^[65] in Andalusia or the BESCAM in Madrid.

Nonetheless, recent amendments to existing Statutes of Autonomy or the promulgation of new Statutes altogether, have reduced the asymmetry between the powers originally granted to the "historical nationalities" and the rest of the regions.

Finally, along with the 17 autonomous communities, two autonomous cities are also part of the State of Autonomies and are first-order territorial divisions: Ceuta and Melilla. These are two exclaves located in the northern African coast.

Provinces and municipalities[link]

Provinces of Spain.

Autonomous communities are subdivided into provinces (provincias), which served as their territorial building blocks. In turn, provinces are integrated by municipalities (municipios). The existence of both the provinces and the municipalities is guaranteed and protected by the constitution, not necessarily by the Statutes of Autonomy themselves. Municipalities are granted autonomy to manage their internal affairs, and provinces are the territorial divisions designed to carry out the activities of the State.^[66]

The current provincial division structure is based—with minor changes—on the 1833 territorial division by Javier de Burgos, and in all, the Spanish territory is divided into 50 provinces. The communities of Asturias, Cantabria, La Rioja, the Balearic Islands, Madrid, Murcia and Navarre are the only communities that are integrated by a single province, which is coextensive with the community itself. In this cases, the administrative institutions of the province are replaced by the governmental institutions of the community.

Foreign relations[link]

European Union membership, 1986

After the return of democracy following the death of Franco in 1975, Spain's foreign policy priorities were to break out of the diplomatic isolation of the Franco years and expand diplomatic relations, enter the European Community, and define security relations with the West.

As a member of NATO since 1982, Spain has established itself as a participant in multilateral international security activities. Spain's EU membership represents an important part of its foreign policy. Even on many international issues beyond western Europe, Spain prefers to coordinate its efforts with its EU partners through the European political cooperation mechanisms.

Spain has maintained its special identification with Latin America. Its policy emphasizes the concept of an Iberoamerican community, essentially the renewal of the historically liberal concept of hispanoamericanismo, or Hispanism as it is often referred to in English, which has sought to link the Iberian peninsula with Latin America through language, commerce, history and culture.

Territorial disputes[link]

Spain claims Gibraltar, a six square km Overseas Territory of the United Kingdom in the southernmost part of the Iberian Peninsula. Then a Spanish town, it was conquered by an Anglo-Dutch force in 1704 during the War of the Spanish Succession on behalf of Archduke Charles, pretender to the Spanish throne.

Port of Melilla

The legal situation concerning Gibraltar was settled in 1713 by the Treaty of Utrecht, in which Spain ceded the territory in perpetuity to the British Crown^[67] stating that, should the British abandon this post, it would be offered to Spain first. Since the 1940s Spain has called for the return of Gibraltar. The overwhelming majority of Gibraltarians strongly oppose this, along with any proposal of shared sovereignty.^[68] UN resolutions call on the United Kingdom and Spain, both EU members, to reach an agreement over the status of Gibraltar.^[69][70]

However, the Spanish claim makes a distinction between the isthmus that connects the Rock to the Spanish mainland on the one hand, and the Rock and city of Gibraltar on the other. While the Rock and city were ceded by the Treaty of Utrecht, Spain asserts that the "occupation of the isthmus is illegal and against the principles of International Law".^[71] The United Kingdom relies on de facto arguments of possession by prescription in relation to the isthmus,^[72] as there has been "continuous possession [of the isthmus] over a long period".^[73]

Another claim by Spain is about the Savage Islands, not recognized by Portugal.

Spain claims the sovereignty over the Perejil Island, a small, uninhabited rocky islet located in the South shore of the Strait of Gibraltar. The island lies 250 meters just off the coast of Morocco, 8 km from Ceuta and 13.5 km from mainland Spain. Its sovereignty is disputed between Spain and Morocco. It was the subject of an armed incident between the two countries in 2002. The incident ended when both countries agreed to return to the status quo ante which existed prior to the Moroccan occupation of the island. The islet is now deserted and without any sign of sovereignty.

Besides the Perejil Island, the Spanish-held territories claimed by other countries are two: Morocco claims the Spanish cities of Ceuta and Melilla and the plazas de soberanía islets off the northern coast of Africa; and Portugal does not recognise Spain's sovereignty over the territory of Olivenza.

Emblem of Spanish Armed Forces

Military[link]

The armed forces of Spain are known as the Spanish Armed Forces (Spanish: Fuerzas Armadas Españolas). Their Commander-in-chief is the King of Spain, Juan Carlos I.^[74]

The Spanish Armed Forces are divided into three branches:^[75]

• Army (Ejército de Tierra)
• Navy (Armada)
• Air Force (Ejército del Aire)

Economy[link]

Madrid: Cuatro Torres Business Area

Barcelona: finance centre

Valencia: finance centre

Spain's capitalist mixed economy is the twelfth largest worldwide and the fifth largest in the European Union, as well as the Eurozone's fourth largest.

The centre-right government of former prime minister José María Aznar worked successfully to gain admission to the group of countries launching the euro in 1999. Unemployment stood at 7.6% in October 2006, a rate that compared favorably to many other European countries, and especially with the early 1990s when it stood at over 20%. Perennial weak points of Spain's economy include high inflation,^[76] a large underground economy,^[77] and an education system which OECD reports place among the poorest for developed countries, together with the United States and UK.^[78]

However, the Spanish property bubble that begun building from 1997, fed by historically low interest rates and an immense surge in immigration, imploded in 2008, leading to a rapidly weakening economy and soaring unemployment. By the end of May 2009, unemployment reached 18.7% (37% for youths).^[79][80]

Before the current crisis, the Spanish economy was credited for having avoided the virtual zero growth rate of some of its largest partners in the EU.^[81] In fact, the country's economy created more than half of all the new jobs in the European Union over the five years ending 2005, a process that is rapidly being reversed.^[82] The Spanish economy has been until recently regarded as one of the most dynamic within the EU, attracting significant amounts of foreign investment.^[83]

The most recent economic growth benefited greatly from the global real estate boom, with construction representing an astonishing 16% of GDP and 12% of employment in its final year.^[84]

According to calculations by the German newspaper Die Welt in 2007, Spain was on course to overtake Germany in per capita income by 2011.^[85] But the collapse of the housing boom in 2008 brought this to an end. According to the IMF, the PPP GDP per capita of Spain had, by 2010, slipped to USD 29,830; this compared to Germany at 36,081, UK 35,059, France 33,910, Italy 29,480, Greece 28,496, and Portugal 23,262.^[86]

Research about quality of life by the Economist Intelligence Unit's quality of life survey placed Spain as the country among the top 10 best quality of life in the world for 2005, ahead of other economically and technologically advanced countries like France, Germany, the United Kingdom and South Korea.^[87]

Before the collapse of the real estate boom there had been a corresponding rise in the levels of personal debt as prospective home owners struggled to meet asking prices. The average level of household debt tripled in less than a decade. This placed great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages.^[88]

The 2008/2009 credit crunch and world recession manifested itself in Spain through a massive downturn in the property sector. Fortunately, Spain's banks and financial services avoided the more severe problems of their counterparts in the USA and UK, due mainly to a stringently enforced conservative financial regulatory regime. The Spanish financial authorities had not forgotten the country's own banking crisis of 1979 and an earlier real-estate-precipitated banking crisis of 1993. Indeed, Spain's largest bank, Banco Santander, participated in the UK government's bail-out of part of the UK banking sector.^[89]

A European Commission forecast predicted Spain would enter a recession by the end of 2008.^[90] According to Spain’s Finance Minister, “Spain faces its deepest recession in half a century”.^[91] Spain's government forecast the unemployment rate would rise to 16% in 2009. The ESADE business school predicted 20%.^[92] In 2012, it had already risen to an astonishing 23.3%.^[93]

Tourism[link]

During the last four decades the Spanish tourism industry has grown to become the second biggest in the world, worth approximately 40 billion Euros, about 5% of GDP, in 2006.^[84][94] Today, the climate of Spain, historical and cultural monuments and its geographic position together with its facilities make tourism one of Spain's main national industries and a large source of stable employment and development. The Spanish hotel star rating system has requirements much more demanding than other European countries, so at a given rating Spanish accommodations worth higher.^[95]

PS10 Seville solar power tower

Energy[link]

Spain is one of the world's leading countries in the development and production of renewable energy. In 2010 Spain became the solar power world leader when it overtook the United States with a massive power station plant called La Florida, near Alvarado, Badajoz.^[96][97] Spain is also Europe's main producer of wind energy. In 2010 its wind turbines generated 42,976 GWh, which accounted for 16.4% of all the energy produced in Spain.^{[98][99][100]} On November 9, 2010, wind energy reached an instantaneous historic peak covering 53% of mainland electricity demand^[101] and generating an amount of energy that is equivalent to that of 14 nuclear reactors.^[102] Other renewable energies used in Spain are hydroelectric, biomass and marine (2 power plants under construction).^[103]