known for armadas and conquistadores, Spain’s torrid GDP
growth as of late doubles its EU colleagues through a
mainly service based economy. Around 65 percent of
Spain’s economy consists of service industries, compared
to 17 percent in the industrial sector and 13 percent in
construction. Through email correspondence with The
European Weekly Online, the Spanish Embassy’s
Economic and Commercial Spokesman, Alberto Nadal Belda,
answered several pertinent questions regarding Spain’s
In your own
analysis: is Spain currently experiencing a period of
economic growth? If you believe it is currently
experiencing growth, why do you believe this growth is
occurring and what sectors of the economy remain the
most vital to this growth?
experiencing an unprecedented economic growth
unparalleled among big European countries. It’s real GDP
change has been well above the European average for
about a decade, growing at nearly 4 percent in 2006,
after the 3.5 percent of 2005. Job creation has been
strong and the unemployment rate fell from almost 23
percent in 1995 to 8.5 percent in 2006. In some years,
half of the job creation in Europe has occurred in
Spain, even though Spain only represents 8 percent of
European total population.
economic success is due to a perfect mix of internal and
hand, Spain largely benefited from entering the EU in
1986 and opening its economy. The financial stability
granted by the Euro system and the inflow of structural
aid from Brussels allowed Spain to improve its
infrastructure and benefit from the low interest rates
to boost the national demand.
other hand, Euro-aids and openness alone cannot explain
the uniqueness of Spanish growth, as Spain outperformed
many other European countries in similar conditions.
Structural reforms in the 90’s have been fundamental to
boost the economy, including liberalization of strategic
markets and the privatization of inefficient state-owned
companies. Besides balancing government budget and,
above all, the tax reforms that have lowered the fiscal
burden to the smallest level in Europe have created a
positive environment that allowed the Spanish economy to
grow so robustly. Finally, reforms in the labor market
have contributed to a dramatic rise the employment rate
that has sustained the economic activity. Nowadays,
Spain has one of the most efficient and flexible labor
markets in Europe.
recent government policies helped aid economic growth?
[Government] Structural reforms have been crucial to the
economic growth that Spain has experienced.
Liberalization of markets and privatization have
contributed to the restructure of the Spanish economy
in a more modern and efficient way. This has contributed
to a new phenomenon in the country’s industry: the
internationalization of Spanish firms. Since 1996, more
and more businesses have had the capacity and vision of
expanding their operations abroad, especially, but not
only, in Latin America. The foreign direct investments (FDI)
coming from Spain have been in such strategic sectors as
telecommunication, civil engineering and banking, and
are a clear sign of the competitiveness of the Spanish
industry and service-provider sector.
governmental policies have had a positive impact on all
aspects of what is now a modern and dynamic European
economy. Among them, it’s important to highlight the
achievement of balance of the government budget in the
first place. Spain is now one of the few countries in
Europe that runs a budget surplus.
have foreign investors played in Spain’s economic
growth? What countries and corporations have invested
substantially in Spain’s economy?
Direct Investments have been strong in strategic sectors
such as biotech, renewable energy, water treatment and
desalination, industrial technology and aerospace
investment has played an important role in the Spanish
economy. In the last 40 years, the FDI have certainly
contributed to introduce new technology and capitals to
the country, as well as improve the entrepreneurial
spirit in the country.
is necessary to notice that FDI are very different in
nature nowadays to what they were thirty years ago.
Earlier FDI were directed to Spain in search of cheap
labor to produce goods for re-export to Europe. Now, FDI
come to Spain to find strategic partners to the Spanish
and world markets.
you characterize Spain’s consumer sentiment?
The rise in
consumption in the last fifteen years has been a
fundamental factor in explaining Spanish economic growth
on the demand side. What lies behind this is an
unprecedented debt capacity of Spanish households, which
for the first time in recent history have had the
opportunity to think for the long run. Debt costs have
gone down to the European standards, while ten years ago
the market risk premium on a mortgage could be 400 basis
you describe Spain’s relationship with other European
Union members and its role in the union?
among the most Euro-enthusiastic countries in the
European Union and it is well involved in the decision
making process. The Spanish economy is certainly the
most active in the EU and it’s fully integrated in the
Union’s trade activity. As a matter of fact, Europe
represents 75 percent of Spanish exports.
role of Spain in the EU goes beyond trade. Spain leads
the building process of Europe and also has the specific
role of bringing Latin America closer to Europe, due to
its cultural affinity with the Spanish speaking
countries in the Americas alongside Spain’s growing
economic interests in the region.
challenges are in sight for Europeans, and Spain is
fully engaged in attaining such important goals. These
goals include a common European policy on immigration, a
new energy strategy and an environmental protection
provided by the Spanish Embassy in Washington, D.C.