Spain: A Slow Recovering Economy

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Spain is a member of the European Union (EU), the Organization for Economic Cooperation and Development (OECD), and the World Trade Organization (WTO). It has a mixed capitalist economy and is the 14th largest economy in the world. The currency of Spain is the euro. The economy is dependent on tourism, the export of semi manufactured goods, automobiles, fruits, renewable energy, and manufacturing.


Spain is a member of the European Union (EU), the Organization for Economic Cooperation and Development (OECD), and the World Trade Organization (WTO). It has a mixed capitalist economy and is the 14th largest economy in the world. The currency of Spain is the euro. The economy is dependent on tourism, the export of semi manufactured goods, automobiles, fruits, renewable energy, and manufacturing.

The High and Low of the Economy

Spain recovered from the global recession of the early 1990s and this recovery helped the government improve their GDP and Spain’s unemployment rates began to systematically decrease. The country entered the Eurozone to establish a more stable budget and to be part of something larger or special. The inclusion into the EU saw an upsurge in economic growth before the historic crash in 2008 as public debt grew rapidly and unsustainably.Since then the country has been on a slow recovery but with unemployment rates still at 24% though.

Spain has been battling this unemployment plague for a long time. The government has introduced certain measures to rationalize public spending and to create more jobs but they refused to drop their socialized health care and high taxes they impose on themselves. The stock market indices have fallen in proportion to the first quarter of this year.Spain spends close to 19% of its income importing fuels (the country does not have any fossil fuel domestic sources) which only adds to its inflation. It also imports food and machinery. Over 50 percent of Spain’s total exports comprise of finished products, automobiles, ships, pharmaceutical preparations, and electronics.

The country also happens to be the world’s third largest exporter of wine, fruits, and vegetables. A trade surplus is being predicted this year.Spain has also benefited from renewable energy, commercialization, and its first class infrastructure. It relies on solar and wind energy and has setup huge solar power plants and windmills. Nearly 10% of the Spanish power requirement is propelled by wind power. Spain is also said to be the first country to have a commercial solar energy power tower.

Tourism

The environment of Spain, its geographic location, spectacular beaches, assorted panoramic scenery, deep history, lively culture and solid infrastructure, has made it a large international tourist destination. Tourism contributes to about 6% to its GDP.

Infrastructure and Automotive Industry

Spain is doing pretty well in the areas of civil engineering and sea trade. Manufacturing and industrial production rates have increased by 1% over the last quarter.  Spain is also the eighth largest producer of cars in the world, with brands such as GTA Spano, SEAT, and Sunred. The automotive industry contributes close to 3% of the national income and employs close to 9% of the population.

Spanish Armed Forces

The Spanish Armed Forces include their army, navy, and air force. They are actively involved in peace keeping duties for the UN and NATO, Eurocorps, and the European Union Battle Groups. As a cost cutting measure, the country’s defense minister has announced a reduction in the military budget by 3.2% which only hurts Spain though according to military experts. Spain, and other European countries, do not spend enough money on their national defense. In fact, they do not even satisfy NATO requirements. Spain wants to spend this money on new ventures but what is more important than having a decent national defense?

Economic Outlook

Spain has potential but their economy will not improve until they adopt more business friendly policies. The state of Texas has provided the world with what works. Low taxes, moderate regulations, strong tort reform laws, and a stable government has proven to be a winner. Spain may have some outstanding and stunning beaches but until it drops its socialistic tendencies, it will lag behind other countries and appear unimpressive on any financial balance sheet.

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