Business PME Business PME is a gate of free information bound for the companies in the United States of America. This website offers thousands of contents as well as a companies directory. The group’s other BtoB websites   --  Professional Networking Saturday March 13th 2010 Search
articles
Search
companies

Economy of Spain



Despite currently being the 9th world economy, Spain inherited a regulated economy from Francoism as this died out by 1975.


 


Francoism initiated in the 60's a set of deregulating moves away from its initial total control of the economy; these, along with large infrastructure projects, resulted in the paramount economic growth almost overnight which came to be known as the "Spanish Miracle".


 


However, by Franco's death and the dawn of the present day constitutional monarchy, interventionism was still widespread: basic products like bread and sugar had their prices fixed by the government. Large public firms controlled all sectors seen as strategic. State monopoly was common (e.g.: Telephone, tobacco, television, petrol, etc.). Shops had fixed opening and closing times and were not free to open all day, all week. Banking was controlled. Both passive and active interest rates were fixed by the government. All these rigidities and more were made obvious by the 1973 oil crisis, which terminated the previous expansion cycle and unleashed a roughly 10 years period of severe industrial crisis (1975-1985), growing unemployment and reducing convergence with Europe. This blow stressed the need to modernize the economy and doing so by trying to join the European Community.


 


Spain's accession to the European Community, now European Union (EU), in January 1986 forced the country to open its economy, modernize its industrial base and revise economic legislation to conform to EU guidelines. In doing so, and helped back with large amounts of funds received from the European Regional Development Fund, Spain greatly improved infraestructures, increased GDP growth, reduced the public debt to GDP ratio, reduced unemployment from 23% to 10%, and reduced inflation to under 3%.


Current issues

Following peak growth years in the late 1980s, the Spanish economy entered into recession in mid-1992. The economy recovered during the first Aznar administration (1996-2000), driven by a return of consumer confidence and increased private consumption. Unemployment is at 8.7% (December 2005), which represents a significant improvement from the 80's levels and a better rate than the one of Germany or France. Devaluations of the peseta during the 1990s made Spanish exports more competitive, but the strength of the euro since its adoption has raised recent concerns that Spanish exports are being priced out of the range of foreign buyers. However, this has been offset by the facilitation of trade among the euro nations.


 


The Spanish economy is credited for having avoided the virtual zero growth rate of some of its largest partners in the EU (namely France and Germany) by the late 90's and beginning of the 21st century in a process which started with former Prime Minister Aznar's liberalization and deregulation reforms aiming to reduce the State's role in the market place. On 1,997 Spain started an economic cycle -which keeps going as of 2006- marked by an outstanding economic growth, with figures around 3%, often well over this rate.


 


This has narrowed steadily the economic gap between Spain and its leading partners in the EU over this period. Hence, the Spanish economy has been regarded lately as one of the most dynamic within the EU, even able to replace the leading role of much larger economies like the aforementioned, thus subsequently attracting significant amounts of foreign investment.


 


The fundamental challenges for the Spanish economy at the present moment are its trade deficit and lowering an inflation rate which is traditionaly higher than the one of its European partners.

Copyright 2008 - France BtoB from Wikipédia
• Industry with a Natural Monopoly
• Joseph M. Juran
• Thomas Williams of Llanidan
• The Factory system
• Black Wednesday
• Economy of Spain
• Natural monopoly