Spain Industry

The most important industrial branches in Spain are car manufacturing, energy production, oil and chemical industry and the food industry. The traditional industrial areas are found in the Basque Country and Asturias, where heavy industry such as iron and steel production dominated, and in Catalonia, where the textile industry has led the development.

Production is still largely concentrated in these regions, but important industries are now also in the Madrid area, where much of the light industry is found, along the Mediterranean coast and in Andalusia in the south. There is a varied industry around Barcelona. The automotive industry is located in several different locations, including in the southern city of Seville. Spain was previously the EU’s largest car exporter after Germany, but car exports fell during the 2008 economic crisis.

• According to ABBREVIATIONFINDER, ES stands for the country of Spain in geography.

Industry’s contribution to GDP decreased during the financial crisis. In 2014, when one could still see a slight rise, it accounted for just under 23 percent of GDP, then fell to just over 16 percent three years later. The crisis, which was particularly deep in the important construction sector, led to shrinking production and forced thousands of companies into bankruptcy. The metropolitan regions of Madrid, Barcelona and Valencia, as well as the southern parts of the country and the Canary Islands saw the most bankruptcies.

In the past, however, the industry accounted for a smaller proportion of the economy than the EU average, partly because Spain has a larger share of SMEs than the rest of the EU. Relatively low productivity, together with ever-increasing production costs, has made Spanish companies difficult to compete internationally. About one third of industrial production is exported, mainly to other EU countries. Spain is trying to meet the problems by investing in new industries such as renewable energy, environmental technology and the development of electric cars.

Extensive privatization of state-owned companies was already begun by the Socialist government in 1985. It then continued at a faster pace during the bourgeois government (1996–2004), which sold out parts of the steel company Aceralia, the electricity company Endesa, the oil and chemical company Repsolsamt airline Iberia.

• COUNTRYAAH: List of top trading partners of Spain. Includes countries that imported most shipments from and exported most goods to the country.

Following Spain’s EU accession in 1986, many foreign large companies established themselves in Spain, mainly in the automotive industry. In the 2000s, foreign-owned industry began to shrink as foreign investment decreased as a result of fierce competition from low-wage countries in Asia and Eastern Europe. Among other things, car factories have been forced to strike again. The country’s textile, leather and shoe industry has also declined due to foreign competition.

In Spain, however, there are a number of successful multinational companies, such as the bank Santander, the transport companies Ferrovial, Albertis and ACS, some of the world’s largest renewable energy companies (Acciona, Iberdrola and Gamesa), the clothing chain Inditex (including the Zara stores), the telecom operator Telefónica and the steel company Acerinox.

Tourism

Spain is one of the world’s most popular tourist countries. Tourism contributes over a tenth of the country’s gross domestic product (GDP) and with an equal share of employment. The largest revenues come from charter tourism, but metropolitan visits, ecotourism and sports activities are attracting more and more and spread more throughout the year. Most tourists come from the UK, Germany, France and the Nordic countries.

The big cities have managed to market themselves as a destination for architecture and art enthusiasts. Spain has a large number of buildings and environments on the UN body UNESCO World Heritage List. Some popular tourist destinations in Spain are Mallorca, the Canary Islands, Costa Brava and Costa del Sol, as well as Catalonia with the country’s second largest city, Barcelona.

The Spanish coastlines have been largely built up and in many areas the tourism industry has completely taken over. Many foreign tourists also choose to stay for longer periods and buy property in the country.

Tourism was also hit by the international recession of 2008, but recovered faster than other sectors. In 2011, almost 57 million tourists came to Spain, an increase of just over 7 percent compared to the previous year. In 2011, Spain was favored by the Democratic uprising in North Africa (“the Arab Spring”), which led to more tourists choosing Spain over North Africa.

The turmoil in the popular tourist country of Turkey in 2016 contributed to even more tourists than before applying to Spain. In 2017, the influx continued, with 9 per cent more visitors than 2016. Spain then became the world’s most visited country after France.

Barcelona was the city that attracted the most tourists, 9 million in 2016. In some places, for example in Palma de Mallorca, mass tourism has become so extensive that residents have protested, despite the large revenue that tourism provides.

As one of many ways to reduce the budget deficit in the strained economy, Spain raised airport taxes from July 1, 2012. The increase was different depending on which airport you were traveling from but on average it was 19 percent. Several tourist resorts have also introduced a tourist tax of around one euro a day.

Tourism accounts for about 14 percent of GDP and an approximately equal share of employment.

For Swedes too, Spain is a popular tourist destination and many Swedes settle in the country for extended periods. Some towns have a large Swedish population, such as Fuengirola and Torrevieja. In these areas there are Swedish churches, schools and local magazines in Swedish.

FACTS – TOURISM

Number of foreign visitors per year

75 315 000 (2016)

tourist revenue

60605 000 000 US dollars (2016)

The share of tourist income from exports

14.9 percent (2016)

2012

December

The king’s son-in-law is accused of corruption

King Juan Carlos’s son-in-law is suspended from official royal orders following allegations of involvement in a corruption scandal. The son-in-law denies crime, but the deal is embarrassing for the royal family, which has lost in popularity in recent years.

The budget is approved

The Spanish Parliament votes through the 2013 budget, while protesters protest against austerity.

Catalonia decides on a referendum

In Catalonia, a political settlement is concluded to hold a 2014 referendum on independence for the region. The agreement between CiU and ERC also means that Nationalist leader Artur Mas becomes Catalan president.

November

Healthcare workers strike in protest against cuts and privatizations

Health care workers strike for two days and hold a large demonstration in Madrid against the government’s cuts in health care and plans for privatization of a number of hospitals.

Success for ERC in the Catalan regional elections

In the elections to the regional parliament in Catalonia, the Nationalist Assembly and Unity (CiU) goes back, while the left-wing radical party ERC moves forward. Both parties want a referendum on Catalan independence from Spain, but the election result means weakening nationalist leader Artur Mas.

Vomiting is stopped for two years

The banks decide on a two-year halt for evictions of homeowners who cannot pay their loans and who have “extremely extreme needs”. Since an eviction-threatened woman in the Basque country has died, the public outrage has led the government to discuss changed eviction laws. About 400,000 people are estimated to have lost their homes in the wake of the financial crisis.

October

PP advances in regional elections

The election in Galicia will be an unexpected success for Prime Minister Mariano Rajoys People’s Party (PP), which strengthens its majority in the regional parliament. But in the Basque country the Basque nationalists prevail.

Spain’s credit rating is lowered

Spanish banks are reported to have close to € 180 billion in bad credit which they risk never getting back. The credit rating is downgraded for the Spanish central government as well as for five regions as well as Madrid and Barcelona. It is also announced that the population is declining in all regions of the country, and that approximately 930,000 people have emigrated in just over 20 months.

September

Dozens injured in protest against government cuts

September 15th

Tens of thousands of people from different parts of the country gather for a demonstration in Madrid against government cuts, where police use rubber bullets and batons. About 60 protesters and police are injured and at least 20 people are arrested. The 2013 budget is presented with savings and tax increases totaling 40 billion euros.

Catalan national day celebration manifestation for independence

The annual National Day celebration in Catalonia, La Diada, gathers one and a half million participants, which is many more than usual. The celebration turns into a demonstration for Catalan independence and a protest against the central government’s decision on tax increases. Many Catalans believe that the region gives more than it gets back and requires the region itself – not the state – to collect all taxes, which Basque and Navarre are entitled to.

Andalusia is asking for emergency loans

The Andalusian region is also indebted and asks the central government for emergency loans.

August

Catalonia requests emergency loans

The region of Catalonia, which accounts for one fifth of the country’s GDP, is requesting emergency loans from the state of EUR 5 billion to pay interest and repayments on its loans of EUR 40 billion. The government creates an emergency fund of EUR 18 billion for the regions.

Lower wages and pensions in the government’s savings package

The Government presents details in its savings package, which is now valued at EUR 102 billion, including tax increases, pension reductions, reduced unemployment benefits and extended employment in the public sector. A little over a fifth of the sum must be taken in through VAT increase. As a part of reducing the budget deficit, the government is canceling the paperless healthcare for free, which many doctors object to.

July

86 politicians and officials are convicted of corruption

The trial in Caso Malaya (Malayan Falls), Spain’s largest corruption legacy ever, concludes in Malaga. Local politicians and officials in Marbella are suspected of embezzling municipal funds and receiving bribes to grant building permits in, for example, protected areas, award public contracts and more. First, 95 people (politicians, civil servants, entrepreneurs and lawyers) were charged with seizing a total of 670 million euros from the municipality’s funds. During the trial, nine of them are released. The other 86 are waiting for their verdicts to come this fall. The main defendant, Juan Antonio Roca, who was responsible for the city planning in Marbella, faces 30 years in prison and fines.

Regions ask for financial assistance

The Valencia and Murcia regions are heavily indebted and are asking the Spanish government for help in meeting their spending, as tax revenues have fallen in the wake of the real estate crisis and GDP decline.

Crisis support is paid out in advance

Eurozone finance ministers decide that Spain will issue 30 billion of crisis aid to the banks as early as July, as requested. Spain has been postponed from 2013 to 2014 with the requirement to reduce the budget deficit to less than 3 percent.

June

Unemployment rises to 25 percent

Spain’s unemployment rate reaches close to 25 percent during the second quarter, the highest figure since 1976. Unemployment among young people aged 16-24 years is 51 percent.

Spain receives EU loans to rescue banks

Spain asks the EU for a loan of EUR 100 billion in loans intended for Spanish banks threatened by large loan losses. The eurozone finance ministers give the sign of the loan

May

Protests against cuts

Striking teachers, students and other Spaniards in the tens of thousands protest the government’s cuts in funding for the education system.

April

Spain goes into recession

Figures for the first quarter of the year show that Spain’s GDP declined by 0.3 percent compared to the previous quarter. This is the second consecutive quarter of decline, and thus the economy is in recession.

March

Protests against new labor laws

Hundreds of thousands of people in some 60 cities protest in union-led demonstrations against the government’s labor market reforms, which, critics say, risk exacerbating unemployment. At the end of the month, a general strike is being carried out against the reforms, cuts and unemployment. For example, air, train and bus traffic are affected.

Record high budget deficit 2012

Spain’s hard-pressed economy is expected to shrink by 1.7 percent in 2012. The Government therefore estimates that the budget deficit will be 5.8 percent of GDP instead of the 4.4 percent demanded by the European Commission. However, according to Prime Minister Mariano Rajoy, the goal is still to reach a 3 per cent budget deficit in 2013.

February

Judge Garzón is sentenced for illegal interception

The known judge Baltasar Garzón is declared by the Supreme Court guilty of illegally intercepting calls between prison interns and their legal representatives in a corruption case. Garzón is prohibited from practicing legal force for eleven years and is fined. The rash leads to protests outside the court. In the same month, Garzón is cleared of charges that he exceeded his powers when he ordered investigations into disappearances that occurred during the Franco era in 2008, including investigations of mass graves (this was prohibited in a 1977 amnesty law).

Students object to cuts

Tens of thousands of students demonstrate in several major cities against cuts in education, while youth unemployment in the country reaches almost 50 percent and total unemployment is expected to rise to nearly 25 percent during the year. In Barcelona, ​​the protests become violent.

ETA apologizes

The political branch of the Basque separatist guerrilla ETA’s political branch Izquierda Abertzale apologizes for the insensitivity shown to the pain that ETA’s deed caused people during four decades of armed struggle.

Public servants in Madrid protest against savings

Around 10,000 public servants are protesting in Madrid against regional budget savings, which include increased working hours and lower sickness benefits.

January

Former Franco minister dies

The last survivor of General Franco’s co-workers, as well as the founder of the Conservative People’s Party, Manuel Fraga Iribarne, dies at 89 years old. Fraga was Minister of Information and Tourism during Franco’s dictatorship. He then helped formulate the new constitution and founded the Folkalliance (now PP) in 1976. Fraga dominated politics in his home province of Galicia until 2005 and was politically active until the fall of 2011.