What kind of economy does spain have

Of all the OECD capitalist countries with strong economies, Spain was the only one without a democratic government. The existence of free-market capitalism without democratic legitimacy made Spain an anomaly a deviation from the common rule in a world where the economic transition from command to free-market economy was expected to take place only after the political transition from authoritarian to democratic rule.

King Juan Carlos, Franco's successor, inherited Spain's robust economy and fascist legacy after Franco's death in He began moving the country towards democracy shortly after ascending to power. Spain's newfound freedom on the political front opened up further opportunities for labor and business, including the legalization of trade unions in One of the key initiatives of this transition period was the formulation of the Moncloa Pacts that same year.

The Moncloa Pacts endeavored to bring Spain fully into the free-market system through the moderation of wages and the elimination of favoritism between the government and specific businesses.

The Pacts favored the consolidation of a market economy and recognized that business activities should be pursued within the free-market framework. They also laid the framework for a more comprehensive policy on unemployment and pension benefits, previously lacking under Franco.

These political and economic reforms—which included the creation of a Constitution in , as well as various other legislative agreements guaranteeing the functioning of democratic institutions—placed Spain squarely on footing with other Western European capitalist states by Contrary to generally-accepted socialist economic policies, the Party worked to increase privatization and competition within Spanish markets during its year rule.

The time period is oftentimes referred to as the post-consolidation period of Spanish politics. Economic policies pursued by PSOE included privatization of state companies which belonged to the National Industry Institute in and the passing of legislation to end the state telecommunications monopoly in The Party also liberalized the energy sector by allowing Repsol's pipeline network to be used by competing suppliers wishing to transport gas in In the s, the PSOE moved even further from socialist policy through a series of budget cuts aimed at decreasing the role of government in health and human services.

In and in cuts to the pension system were made by decreasing payments to both contributory and non-contributory programs; by , the average maximum allowable payment from a public pension measured in constant pesetas was approximately 10 percent less than the value in Based on reforms to the education service, several secondary schools with falling enrollments were closed between and ; the percentage of the yearly budget devoted towards education fell from almost 9 percent in to approximately 5 percent by In , PSOE pursued health reform, and the closing of several urban and rural hospitals resulted in a shortage of hospital beds.

The PSOE mandated that users of the National Health Service Insalud pay for prescription costs referred to as the medicamentazo , as well as some aspects of non-emergency treatment.

The PSOE instituted similar cuts and deregulation in its approach to labor issues. In early , the PSOE decreed that minimum wages would fall by almost 5 percent in real terms from the year before. In , the PSOE sought almost full deregulation of the labor market by passing legislation rescinding many of the rights, benefits, and guarantees of the Workers' Statute.

As a result, less expensive contract types were introduced in the labor market, rules governing salaries of all workers were modified, workers could be more easily unilater-ally fired without state interference, indemnity benefits were decreased, a worker was no longer guaranteed basic working conditions such as a hour work week, fewer workers became eligible for unemployment insurance benefits, and basic functional and geographical mobility rights were rescinded. This overall policy pursued by the Socialists has been followed more recently by further liberalization, deregulation, and privatization by the Partido Popular Popular Party, or PP that has ruled since Some neo-liberal critics suggest that more liberalization, including that of deregulating the labor market, is still required in order to make the economy competitive.

The reasons behind Spain's liberal economic policies are most clearly rooted in its membership in the European Union EU. While membership opened up a host of opportunities in the greater European markets, it also came with strict regulations that required significant adjustments of member countries to ensure standardization with EU's Economic and Monetary Union EMU.

Major Economies. South-Eastern Europe. Sub-Saharan Africa. Central America. Monetary and Financial Sector. Precious Metals. Region Reports. Country Reports. Annual Subscriptions. Spain Economic Outlook October 26, The recovery likely carried over into Q3, with consumer confidence, economic sentiment and PMI readings hinting at solid dynamics.

That said, a still-subdued tourism sector, weak retail sales and downbeat industrial production in July-August call for caution. The Spanish business sector is highly internationalized. Partnerships with local companies offer excellent opportunities to enter other markets.

Foreign multinationals established in Spain are responsible for approximately Exports of goods and services by Geographical Destination. Export of commercial services excluding Tourim by country of destination. Foreign investments in Spain do not require previous approval, as a general rule, with the exception of investments in activities that affect public security, public order and public health. We use our own and third-party cookies exclusively for internal and analytical purposes.

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