Spain, officially the Kingdom of Spain, is a sovereign state largely located on the Iberian Peninsula in southwestern Europe, with archipelagos in the Atlantic Ocean and the Mediterranean Sea, and several small territories on and near the North African coast. Its mainland is bordered to the south and east by the Mediterranean Sea except for a small land boundary with Gibraltar; to the north and northeast by France, Andorra, and the Bay of Biscay; and to the west and northwest by Portugal and the Atlantic Ocean. Along with France and Morocco, it is one of only three countries to have both Atlantic and Mediterranean coastlines. Spanish territory includes two archipelagos: the Balearic Islands, in the Mediterranean Sea, and the Canary Islands, in the Atlantic Ocean off the African coast. It also includes two major exclaves, Ceuta and Melilla, in continental North Africa; and the islands and peñones (rocks) of Alborán, Alhucemas, Chafarinas, and Vélez de la Gomera. Spain is a democracy organized in the form of a parliamentary government under a constitutional monarchy. It is a middle power and a developed country with the world's fourteenth largest economy by nominal GDP and sixteenth largest by purchasing power parity. It is a member of the United Nations (UN), the European Union (EU), the Council of Europe (CoE), and the Organization of Ibero-American States (OEI), the North Atlantic Treaty Organization (NATO), the Organization for Economic Co-operation and Development (OECD), the World Trade Organization (WTO) and many other international organizations.
By the late 1980s, the Spanish banking system had been undergoing sweeping changes for some time. Its structure was largely a throwback to the post-Civil War period of the Franco era when Spanish private banks played a leading role in financing the development of the industry. As financial backers of the Nationalist cause, they had won Franco's confidence and gratitude, and they were given a relatively free hand during the reconstruction period. With the adoption of an economic policy that emphasized self-sufficiency and barred foreign investment capital and banking competition, their role was strengthened. It has been estimated that, by 1965, the five leading private banks controlled over 50 percent of Spain's capital. Their influence extended not only to the private sector but also to such autonomous institutions as INI and the state railroads. Subsequently, as the industry grew stronger, many of the banks' equity holdings were sold to the public through stock exchanges. The banks, however, continued to play a vital role in providing new funds for industry.
Supervision of all Spanish financial institutions rested with the Ministry of Economy, Finance, and Commerce. Subordinate to this ministry, and responsible for overseeing the country's banking system, was the country's central bank, the Bank of Spain. Formed in 1847, and granted the sole right to issue currency in 1874, the bank was nationalized by the Bank Reform Law of 1962. In addition to supervising the rest of the banking system and setting reserve requirements, it carried out the government's monetary policy through open market operations, and it oversaw foreign exchange along with the Directorate General for Foreign Transactions. In 1977 the Bank of Spain had helped set up the Deposit Guarantee Fund, which protected deposits in troubled banking institutions. Although in the second half of the 1980s Spain had about 100 private banks--a quarter of which were industrial banks--the field had long been dominated the Big Seven, seven large commercial institutions: Banco Espanol de Credito or, as it was more commonly known, Banesto; Banco Central; Banco de Bilbao; Banco Popular Espanol; Banco de Santander; Banco de Vizcaya; and Banco Hispano Americano. By the 1980s, these banks had direct or indirect control of approximately 80 percent of the country's banking resources.
Analysts expected the increasing financial liberalization of the Spanish banking system to affect the status and the functions of the country's public banks. The freeing of funds tied up in government-required investments would eliminate the "privileged circuits" through which funds at low-interest rates were normally channeled into such investments. In mid-1988 legislation was being prepared that would redefine the role of publicly owned banks by converting them into subsidiaries of the ICO and by forcing them to finance themselves at market rates. To assist them in adapting to these new circumstances, a period of gradual adjustment lasting if fifteen years was being considered, during which they could continue to depend on financing from the Ministry of Economy, Finance, and Commerce.
|Agriculture||Wheat, barely, vegetables, tomatoes, olives, sugar beets, fruits, lemons & cork.|
|Manufacture||Textile, metal, chemicals, ships, automobiles, machine tools, clay, footwear, pharmaceuticals & medical equipment.|
|Services (Including financial)||71.2% (2013 estimate)|
|BBVA-Banco Bilbao Vizcaya||Banking|
|Repsol YPF||Oil & gas|
|Gas Natural Fenosa||Natural gas|
Bolsa de Madrid (Madrid Stock Exchange) is the largest and most international of Spain's four regional stock exchanges (the others are in Barcelona, Valencia, and Bilbao) that trade shares and convertible bonds and fixed income securities, and both government and private-sector debt. Bolsa de Madrid is owned by Bolsas y Mercados Españoles. The Bolsa de Madrid was officially founded in 1831. In 1993, the Bolsa de Madrid switched to all-electronic trading for fixed-income securities. As required by Spanish law, it is managed and operated by the Sociedad Rectora de la Bolsa de Valores de Madrid S.A., a corporation organized under the laws of the Kingdom of Spain. The membership of the Madrid Stock Exchange consists of 41 major financial institutions and 12 established securities dealers.
The re-organization of Spain's financial market under the national umbrella of the Spanish Stock Market includes the Bolsas, the derivatives markets, and fixed-income markets. Trading is linked through the electronic Spanish Stock Market Interconnection System (SIBE), which handles more than 90% of transactions; all fixed-income assets are traded through SIBE. The Madrid Stock Exchange General Index (IGBM) is the exchange's principal index and represents the construction, financial services, communications, consumer, capital/intermediate goods, energy, and market services sectors.
The 2008–15 Spanish financial crisis, also known as the Great Recession in Spain or the Great Spanish Depression began in 2008 during the world financial crisis of 2007–08. In 2012 it made Spain a late participant in the European sovereign debt crisis when the country was unable to bail out its financial sector and had to apply for a €100 billion rescue package provided by the European Stability Mechanism (ESM).
The main cause of Spain's crisis was the collapse of an enormous housing bubble and the accompanying unsustainably high GDP growth rate. The ballooning tax revenues from the booming property investment and construction sectors kept the Spanish government's revenue in surplus, despite strong increases in expenditure, until 2007. The Spanish government supported the critical development by relaxing supervision of the financial sector and thereby allowing the banks to violate International Accounting Standards Board standards. The banks in Spain could hide losses and earnings volatility, mislead regulators, analysts, and investors, and thereby finance the Spanish real estate bubble. The results of the crisis were devastating for Spain, including a strong economic downturn, a severe increase in unemployment, and bankruptcies of major companies.
Even though some fundamental problems in the Spanish economy were already evident far ahead of the crisis, Spain continued the path of unsustainable property led growth when the ruling party changed in 2004. In these early times Spain, had already a huge trade deficit, a loss of competitiveness against its main trading partners, an above-average inflation rate, house price increases, and a growing family indebtedness. During the third quarter of 2008 the national GDP contracted for the first time in 15 years, and, in February 2009, Spain (and other European economies) officially entered a recession. The economy contracted 3.7% in 2009 and again in 2010 by 0.1%. It grew by 0.7% in 2011. By the 1st quarter of 2012, Spain was officially in recession once again. The Spanish government forecast a 1.7% drop for 2012.
The provision of up to €100 billion of rescue loans from Eurozone funds was agreed by Eurozone finance ministers on 9 June 2012. As of October 2012, the so-called Troika (European Commission, ECB, and IMF) is in negotiations with Spain to establish an economic recovery program required for providing additional financial loans from ESM. In addition to applying for a €100 billion bank recapitalization package in June 2012, Spain negotiated financial support from a "Precautionary Conditioned Credit Line" (PCCL) package. If Spain applies and receives a PCCL package, irrespectively to what extent it subsequently decides to draw on this established credit line, this would at the same time immediately qualify the country to receive "free" additional financial support from ECB, in the form of some unlimited yield-lowering bond purchases.
The turning point for the Spanish sovereign debt crisis occurred on 26 July 2012, when ECB President Mario Draghi said that the ECB was "ready to do whatever it takes to preserve the euro". Announced on 6 September 2012, the ECB's Outright Monetary Transactions (OMT) program of unlimited purchases of short-term sovereign debt put the ECB's balance sheet behind the pledge. Speculative runs against Spanish sovereign debt were discouraged and 10-year bond yields stayed below the 6% level, approaching the 5% level by the end of 2012.
In 1962, Salvador de Madariaga, founder of the Liberal International and the College of Europe, met in the congress of the European Movement in Munich with members of the opposition to Franco's regime inside the country and in the exile. There were 118 politicians from all factions. At the end of the meetings a resolution in favor of democracy was made. 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.
(Dictator of Spain)
Juan Carlos I
The peseta was the currency of Spain between 1869 and 2002. Along with the French franc, it was also a de facto currency used in Andorra (which had no national currency with legal tender). The name of the currency comes from pesseta, the diminutive form of the word peça, which is a Catalan word that means piece or fraction. The first non-official coins, which contained the word "peseta" were made in 1808 in Barcelona. Traditionally, there was never a single symbol or special character for the Spanish peseta. Common abbreviations were "Pt", "Pta", "Pts" and "Ptas", and even using superior letters: "Ptas". The peseta was introduced in 1869 after Spain joined the Latin Monetary Union in 1868. The Spanish Law of June 26, 1864, decreed that in preparation for joining the Latin Monetary Union (set up in 1865), the peseta became a subdivision of the peso with 1 peso duro = 5 pesetas. The peseta replaced the escudo at a rate of 5 pesetas = 1 peso duro = 2 escudos.
In 1869 and 1870, coins were introduced in denominations of 1, 2, 5, 10, 20 and 50 céntimos, and 1, 2 and 5 pesetas. The lowest four denominations were struck in copper (replaced by bronze from 1877), with the 20, 50 céntimos, 1 and 2 pesetas struck in .835 silver and the 5 pesetas struck in .900 silver. 5 and 10 céntimos coins were quickly nicknamed as perra chica (small dog) and perra gorda (fat dog) respectively, as people they were unable to recognize the shape of the lion in them, mistaking it for a dog. The 5-peseta coin was nicknamed duro (hard). 5-peseta coins were called duros by every generation until the withdrawal of the peseta in 2002. Gold 25-peseta coins were introduced in 1876, followed by 10 pesetas in 1878. In 1889, 20-peseta coins were introduced, with the production of the 25 pesetas ceasing. In 1897, a single issue of gold 100 pesetas was made. Production of gold coins ceased in 1904, followed by that of silver coins in 1910. The last bronze coins were issued in 1912. The first 1-peseta coins bearing the portrait of Francisco Franco were issued in 1947. Cupro-nickel 5 pesetas followed in 1949. In 1949, holed cupro-nickel 50 céntimos were introduced, followed by aluminium-bronze 21? 2 pesetas in 1954, cupro-nickel 25 and 50 pesetas in 1958 and smaller aluminum 10 and 25 céntimos in 1959. Silver 100 pesetas were issued between 1966 and 1969, with aluminum 50 céntimos introduced in 1967. A 2 pesetas coin was also introduced featuring a map of Spain, though this denomination never became popular. More importantly, nickel brass 100 pesetas were introduced. The redesign centered around the 1982 World Cup and depicted football (soccer) related themes on the 1, 5, 25, 50, and 100 pesetas. Shortly afterward, the large cupro-nickel 100 pesetas by a smaller aluminum-bronze coin, which also replaced the 100 pesetas banknote. cupro-nickel 10 pesetas was introduced in 1983, a denomination that had previously not been issued for many decades.
In 1874, the Bank of Spain (Banco de España in Spanish) introduced notes for 25, 50, 100, 500 and 1,000 pesetas. Except for the 250-peseta notes only issued in 1878, the denominations produced by the Central Bank of Spain did not change until the Civil War, when both the Republicans and Nationalists issued Bank of Spain notes. In 1936, the Republicans issued 5 and 10 pesetas notes. The Ministry of Finance (Ministerio de Hacienda) introduced notes for 50 céntimos, 1 and 2 pesetas in 1938, as well as issuing stamp money (consisting of postage or revenue stamps affixed to cardboard disks) in denominations of 5, 10, 15, 20, 25, 30, 40, 45, 50 and 60 céntimos.
The first Nationalist Bank of Spain issues were made in 1936, in denominations of 5, 10, 25, 50, 100, 500 and 1,000 pesetas. 1- and 2-peseta notes were added in 1937. From the mid-1940s, denominations issued were 1, 5, 25, 50, 100, 500 and 1,000 pesetas. The 1, 5, 25 and 50 pesetas were all replaced by coins by the late 1950s. In 1978, 5,000-peseta notes were introduced. The 100-peseta note was replaced by a coin in 1982, with 1,000-peseta notes introduced in 1983, 200 pesetas in 1984 and 10,000 pesetas in 1987. The 200- and 500-peseta notes were replaced by coins in 1986 and 1987.
|National Song||"Marcha Real"|
|GDP / GDP Rank||$1686.89 Billion USD|
|GDP Growth Rate||3.2 percent|
|GDP Per Captial||$36415.96 (PPP)|
UTC (CET (UTC 0 to +1) WET)
UTC+1 (CEST (UTC+1 to +2) WEST)
68% Roman Catholic
2% other religion
Monarch- Felipe VI
Prime Minister- Pedro Sánchez
|Website||Go to the web|
|Public Debt||99.3 percent of GDP|
|Unemployment Rate||19.4 percent|
|Labor Force (Occupation)||-|