Economy of Spain

GDP

Main article: Spain's GDP

Financial system

Non-financial debt

2022: Aggregate non-financial debt

National debt

Main article: State Debt of Spain

Foreign exchange reserves: $52.3 billion

Budget

2023:20% increase in defence spending to €12.3 billion

Spain's coalition government approved a draft state budget for 2023 on October 4, 2022, according to which 12.3 billion euros will be allocated for defense, according to the government's report. This is 20.5% higher than in 2022, when 9.7 billion was allocated for defense.

However, in the end, political allies came to the conclusion that it is necessary to fulfill the obligations made by Prime Minister Pedro Sanchez to the European Union and NATO. According to them, Spain's military spending should reach 2% of GDP in 2029.

At the same time, 58.5% of all funds of the new budget will be directed to social spending.

"Six out of ten euros are allocated for social spending, a total of 267.7 billion, 274.4 billion, including European funds, which is also the highest figure ever recorded under these items," the government website says.

Traditionally, most of this social spending will be allocated to pension payments: 190.6 billion euros, which is 11.4% more than in 2022. There will also be a 6.6% increase in education spending and a 6.7% increase in health care, especially strengthening primary health care and mental health.

2022: Introduction of a new tax on banks to save the budget

In July 2022, it became known that the Spanish Government is preparing a temporary 5% tax fee for banks. Reuters sources say it will take on net interest income and bank fees. Due to this tax, the Spanish authorities expect to raise 1.5 billion euros to combat the impact of inflation.

Spanish Prime Minister Pedro Sanchez said the temporary bank tax would be in place in 2023 and 2024.

2021: EU support program after COVID-19 pandemic

EU The Next Generation program - 750 billion euros (915 billion) dollars in grants and loans aimed at stimulating economic recovery - will begin in June 2021, with Southern countries receiving the lion's share. Europe

According to Bloomberg Economics, the program will allocate funding equivalent to almost 1% of the eurozone's GDP annually from 2022 to 2024, with spending gradually increasing from the second half of 2021.

2013: 7.1% budget deficit

Spain's budget deficit in 2013, taking into account financial assistance provided to Spanish banks, amounted to 7.1% of GDP. This is the final data announced in April 2014 by the European statistical agency Eurostat.

Thus, Spain ranks fourth in Europe in this indicator. Slovenia came first with 14.7% of GDP, Greece came second with 12.7%, and Ireland came third with 7.2%.

Excluding aid to Spain's financial sector, the budget deficit was 6.6%^[1].

Inflation

Main article: Inflation in Spain

Key rate

Banks

Main article: Banks in Spain

Credit rating

2014

In February 2014, the rating agency Moody's increased Spain's credit rating by one notch - from the level of "Baa3" to "Baa2." The rating forecast has been improved to "positive."

Moody's explains its decision by positive changes in the Spanish economy, successfully carried out reforms, and the recovery of the country's financial sector. In particular, the agency distinguishes transformations in the pension system, in the labor market. All this, according to analysts, is able to provide Spain with even greater economic growth in the medium term.

2013

In June 2012, Moody's reduced the rating by three steps at once - to the level of 'Baa3'.

In June 2013, Standard & Poor's confirmed Spain's sovereign rating at "BBB-." The forecast is "negative." The S&P press release notes that the preservation of the rating at this level is due to the diversification of the Spanish economy and economic reforms carried out by the country's authorities. On the other hand, the pressure on the rating is exerted by high unemployment and other consequences of the crisis. Agency analysts do not exclude a rating reduction within 12-16 months in the event of a significant deterioration in the economic situation in the country.

"We

believe that Spain continues to confidently follow the path of comprehensive reforms - budgetary and structural," S&P said in a statement

.

In early December 2013, Moody's improved its Spanish rating outlook from "negative" to "stable."

Foreign investment

Main article: Foreign investment in Spain

Investment abroad

2022: U.S. private equity cuts

Provincial budgets

2012: Catalonia asks for help

In mid-May 2012, Catalonia asked the government for help. It turned out that in the near future the provinces need to refinance 13 billion euros, and there is not a penny in the treasury. Meanwhile, Catalonia is the most developed region in the country, and its GDP is almost a quarter of the Spanish-wide. All this did not prevent the emergence of a severe budget crisis, which will now have to be somehow resolved by Madrid.

Spain is a highly decentralized country. This is especially true for financial relationships. Therefore, the small debt of the federal government does not mean that everything is in order with state obligations in the country. This only suggests that a significant part of the debts hang on the budgets of the regions.

And if rich and prosperous Catalonia is asking for help, things are really bad. In total, in 2012, the regions will have to refinance 35.7 billion euros, and according to the first information (which in Spain very often have to be adjusted upward) the deficit is more than 15 billion^[2]

2013: Autonomy debt sets record at €193bn

In the second quarter of 2013, the debt of Spanish autonomies reached 193,296 billion euros, which is 14.84% more than in the same period last year. This figure was the highest ever.

The most significant debts in relation to GDP were recorded in Valencia (29.4%), Catalonia (26.2%) and Castile - La Mancha (28.9%). The regional average is 18.9%. The smallest amount of debt was in the Canary Islands (11.7%), in Madrid (12.1%) and Asturias (12.2%).

In Catalonia, Valencia, Madrid and Andalusia, the most significant part of the debt of autonomous governments is concentrated - 53.6% of the total. Thus, the size of the debt of Catalonia reaches 51.779 billion euros, Valencia - 29.235 billion euros, Madrid - 22.663 billion and Andalusia - 21.251 billion. In the case of the latter autonomy, debt accounts for 15.2% of its GDP.

They are followed on the list by Castile - La Mancha (10.385 billion euros), Galicia (9.397 billion euros), Basque Country (8.279 billion), Castile and Leon (8.022 billion), Balearic Islands (5.889 billion) and Aragon (5.133 billion).

The rating closes the Canary Islands (4.839 billion), Murcia (4.801 billion), Navarre (3.23 billion), Asturias (2.683 billion), Extremadura (2.494 billion), Cantabria (2.112 billion) and Rioja (1.104 billion).

Among local administrations, the most serious debt was discovered from the Madrid City Hall - 7.389 billion euros. It is followed by Barcelona City Council with a figure of 1.129 billion^[3].

2014: Debt buildup

In 2014, the regional governments of Spain increased their debt by 27 billion euros, while at the end of 2014 the total debt level amounted to 236 billion euros, which is equivalent to 22.4% of GDP^[4]

As the publication El Economista warns, Spain consists of many small Greeks. The fact that the weakest regions from an economic point of view are hotbeds of corruption also does not help to resolve the problem. Valencia, for example, which is Spain's most corrupt region, was fined by Brussels for "manipulating the budget."

Debt in the second quarter of 2014 grew in 11 autonomous communities. The largest part of it falls on Catalonia, Valencia, Madrid and Andalusia (64.9% of the total).

• So, in Catalonia, it is 61.863 billion euros,
• in Valencia - 34.782 billion,
• in Andalusia - 26, 548 billion and
• in Madrid - 25.018 billion euros.
• They are followed by Castile-La Mancha (12.341 billion),
• Galicia (9.911 billion),
• Basque country (9.524 billion),
• Castile and Leon (9.393 billion),
• Balearic Islands (7.586 billion),
• Murcia (6.367 billion),
• Aragon (6.131 billion),
• Canary Islands (5.462 billion),
• Asturias (3.402 billion),
• Navarre (3.366 billion),
• Extremadura (2.904 billion),
• Cantabria (2.356 billion) and
• Rioja (€1.306 billion).

Among local governments, the largest debtor was the Madrid City Hall with an amount of 6.923 billion euros. In the case of Barcelona, ​ ​ this figure is 1.011 billion.

2015: Valencia is an anti-leader in terms of the ratio of public debt and GDP

According to the results of 2015, the five regions where public debt turned out to be the most impressive in relation to GDP included:

• Valencia (41%) - debt 41.752 billion euros,
• Castile - La Mancha (35%),
• Catalonia (35%) - debt 72.274 billion euros,
• Balearic Islands (30%) and
• Murcia (27%).

The smallest debt was recorded in:

• Madrid (13%) - debt 27.645 billion euros,
• Basque Country (14%),
• in the Canaries (15%),
• in Rioja (17%) and
• Asturias (18%)^[5].

The total public debt of the Spanish autonomies in 2015 rose to 261.268 billion euros, which is 24% of the total public debt. Over the year, this figure grew by 10.3%. 66% of the debt falls on Catalonia, Valencia, Andalusia and Madrid (72.274, 41.752, 31.365 and 27.645 billion euros, respectively). Rioja (1.435 billion), Cantabria (2.69 billion), Navarre (3.321 billion), Extremadura (3.576 billion) and Asturias (3.876 billion) have the least debt.

Restrictions on cash settlements

The Spanish government sees the possibility of defeating the shadow economy and money laundering in limiting cash settlements. The recently adopted law (February 2014) establishes the maximum limits for payments in "real money": 2.500 euros, if the payer is a resident of Spain and 15,000 - if the private person is not a resident of the Iberian kingdom.

Exceeding these limits is punishable by a fine of up to 25% of the total transaction amount. Moreover, not only the one who pays can be punished, but also the one who accepts the money. Each employee of state-owned enterprises is charged with the obligation to declare a violation of this law known to them. If the notification of non-compliance with the accepted norms of cash settlements was received by the tax department from one of the participants in the operation, the report is exempted from liability (including financial).

Penalties and prosecution of violators may take place if the application to the tax authorities is received no later than three months after the date of the transaction.

According to the head of the tax ministry Cristobal Montoro, as the ABC emphasizes, with the existing turnover of funds in the shadow market in Spain, receipts from fines for violating the rules of payments for operations may amount to 22.5 billion per year^[6].

Stock market

2024: Issuer capitalization 55% of GDP

Electronic Payment Systems

2020:61% of Internet users prefer cashless payment

Crowd funding

Main article: Crowdfunding in Spain

Energy carriers

Gas imports

2024: Russia takes second place in gas supplies to Spain

If earlier Spain practically did not import Russian gas, now it has become the second largest source of imports, second only to Algeria. France and Belgium also import almost record volumes of Russian LNG. However, there are signs that many of these molecules are entering a well-known market: Germany.

2023: Spain becomes EU's biggest buyer of Russian LNG

In 2023, 72,690 gigawatt-hours (GWh) of Russian liquefied natural gas (LNG) were delivered to Spain, which is 35% more than a year earlier, when the indicator was measured at 53,859 GW. Such data in January 2024 was published by the Spanish energy company Enagas.

As noted by the Prime agency, Spain in 2023 became the main buyer of Russian LNG in the EU. At the same time, the latter accounted for 18.3% of LNG imports to Spain, which is the third indicator after Algeria (29.2%) and the United States (21.1%). In 2022, the United States was leading in the supply of liquefied natural gas to the Spanish market.

In December 2023, Russia ranked second in terms of liquefied natural gas supplies, Spain (20% share), behind only Algeria, but ahead of the United States.

Russian Ambassador to Madrid Yuri Klimenko confirmed that Spain became the most important buyer of Russian LNG in the European Union in 2022-2023.

Despite regular calls by the Spanish authorities for national energy companies to reduce purchases of Russian gas, our country remains in the top three suppliers of blue fuel to Spain. I believe that the answer to the question of Spain's interest in gas supplies from Russia lies on the surface. From an economic point of view, it is simply unprofitable for the Spaniards to break a large long-term contract signed with our country, Klimenko said.

Spain is actively positioning itself as a major gas hub capable of resolving the European energy crisis caused by a reduction in Russian gas supplies. Thus, the country is one of the states European Union with the most diversified list of natural gas suppliers. In 2023, 17 countries acted as gas exporters to Spain.^[7]

2022

Increase in gas imports from Russia by 45%

Gas exports from Russia to Spain grew by 45% from January to December 2022 compared to the same period last year - data from the Spanish energy company Enagas.

​ Algeria and Spain agree to revise gas prices through Medgaz gas pipeline

In October 2022, Algeria's state-owned oil and gas company Sonatrach and the Spanish energy group Naturgy held talks in the Algerian capital, following which an agreement was signed providing for a revision of the price parameters of contracts for the supply of natural gas through the Mediterranean Sea through the Medgaz underwater gas pipeline in light of the development of the market situation.

Purchase of 226 thousand tons of diesel from Russia in July

Importers in Spain carried out the largest purchase of diesel fuel from Russia in July 2022. Spain imported 226 thousand tons of diesel from the Russian Federation in July. We are talking about the largest purchase in a month since December 2009. The publication clarifies that this happened in the midst of Russia's special operation in Ukraine and at a time when the European Union is trying to reduce commercial relations with the Russian Federation. Sources in the industry note that diesel from Russia at the time of purchase was almost 10% cheaper than from other suppliers.

Gas supply shut down via Algiers-Spain gas pipeline shut down due to technical incident

On July 27, 2022, it was announced that the gas supply through the Algiers-Spain gas pipeline was stopped due to a technical incident, according to Algerian state-owned company Sonatrach.

Russia came in second place in terms of gas supplies to Spain

In June 2022 Russia , it replaced it Algeria Spain as the second largest supplier of natural gas in after flows from the North African country declined amid diplomatic disagreements.

The U.S. remains the largest supplier, covering 30% of demand.

2021: Algeria halts gas supplies to Spain via Morocco

In November 2021, Algeria closed the Maghreb-Europe gas pipeline, which went to Spain through Morocco, leaving only a "direct" Medgaz pipe in operation.

2018: First batch of LNG from Russia

On June 21, 2018, Gas Natural Fenosa announced the arrival in Spain of the first batch of liquefied natural gas from the Russian Yamal Peninsula.

The first batch of LNG delivered by the Fyodor Litke tanker to the port of Mugardos Municipality (La Coruña Province, Galicia Autonomous Community) is part of a long-term contract previously awarded by Gas Natural Fenosa and the Russian company Yamal LNG.

The annual volume of LNG supplies under the contract until 2041 will be 3 billion cubic meters. m, or 8% of annual gas consumption in Spain^[8].

Among the officials who met the first batch of LNG in Spain were Director General of Energy Planning Jose Maria Egea, Ambassador Russia to Spain Yuri Korchagin, Russian Government Delegate for Economic and Commercial Affairs Galina Kurochkina and Business Development Director "" Novatek Andrei Popov.

2015: Algeria accounts for 62% of imported gas

As of early 2015, Algeria accounted for 62% of all natural gas imported by Spain. This is stated in the report of the Spanish Corporation for Strategic Reserves and Petroleum Products. African energy accounts for 64% of all gas consumed by Spain. 17% are supplied by Europe and Eurasia, 10% by the Middle East, and 9% by America.

Gasoline price

Power

2023

State contributions to pay for energy by citizens and companies reached 3% of GDP

Lithuanian Green Genius sells portfolio of solar parks in Spain to Swedish OX2

In January 2023, Green Genius said it had sold a 152MW portfolio of solar parks in Spain to a Swedish OX2. The amount of the transaction was not disclosed.

2022

Second place in the EU for energy generation by nuclear power plants

Share of solar and wind power - 32.9%

Rise in electricity prices due to pressure on Russia

from

The rise in electricity prices leads to a reduction in steel production

In early March 2022, steel plants throughout Europe are cutting production due to rising electricity prices that occurred after the imposition of sanctions against Russia against the backdrop of a special operation by the Russian Armed Forces in Ukraine.

Metal producers from Spain to Germany are starting to slow or completely stop production as rising costs make production unsustainable, even as steel prices are at record levels.

2021

Oil is the main source of energy in the country

Rise in electricity prices by 200%

Europe never paid as much for electricity as in 2021. The average cost of electricity in, Germany, and by France Spain Britain the end of 2021 reached a record level, rising by more than 200%.

2020: Average energy consumption per capita

and

Transport infrastructure

2021: Average train speed - 199.4 km/h

Airports

In 2013, Spanish airports received 187.36 million passengers, 129 million of whom were foreigners. In terms of the number of foreigners, the airports of Spain broke their own record, but the total number of passengers decreased by 7 million people compared to 2012^[9].

Business in Spain

Main article: Business in Spain

Startups in Spain

Main article: Startups in Spain

Tourism

• Tourism in Spain
• Hotel business in Spain (bars, restaurants, hotels)

Information Technology

IT market

• Spain IT Market
• IT companies in Spain
• The video game industry in Spain

Internet and social networks

2024: Spain introduces digital passports to view porn

In early July 2024, it became known that the Spanish authorities introduced special digital "passports" for watching porn. Each time you try to visit sites with materials for adults, citizens of the country will have to confirm their age. Read more here.

2022: Spain sent to prison for the first time for online fakes

The Supreme Court of Catalonia passed the first sentence in Spain for spreading fakes on social networks. This became known in November 2022. Read more here.

2019: Number of_users_Facebook

Video Surveillance (Spanish Market)

2022: More than 2 thousand CCTV cameras on the roads

Semiconductor manufacturing

Main article: Semiconductors (Spanish market)

Communication

Main article: Communication (Spanish market)

Agriculture

Main article: [[]] Spanish agriculture

Winemaking

• Wines of Spain

Fishing industry

In 2014, Spain exported 157 thousand tons of canned fish and seafood. This is more than any other country in Europe, according to the National Association of Canned Fish and Shellfish Producers. Canned tuna accounts for 67% of all exports. For squid and cuttlefish - another 16%. In the fishing industry in Spain, 25 thousand workers are employed^[4].

Food industry

2021: Cheese production - 11.6 kg per capita

Pyrotechnics

Foreign trade

Main article: Exports and imports of Spain

Retail

Retail chains:

• Mercadona
• Dia

2023: Retail growth due to slow exit after COVID-19 pandemic and low inflation

In the first eight months of 2023, Spain saw retail growth of 7.7% YoY. Such an increase is associated with the base effect due to the greatest damage after quarantine during the COVID-19 crisis among large countries in Europe, plus low inflation due to greater energy isolation from gas and coal.

2018: Mercadona is the largest retail chain

R&D

2020: R&D spending - $19.3 billion

Family economics

Cost of living in Spain

Main article: Cost of living in Spain

At the end of 2014, the price level in Spain for goods and services of everyday demand was slightly lower than the average for EU countries.

Read more in the Eurostat report.

Labour market

2023: Slump in 15 to 64-year-olds

2022: Proportion of workers aged 65 or over - less than 5%

2019: Average labor productivity - $56.31 per hour

2015: More than 3.9% of workers work 60 or more hours a week

Unemployment

Main article: Unemployment in Spain

Salaries in Spain

Main article: Salaries in Spain

Pensions

2023: Minimum retirement age is 66 years and 2 months

Wealthy class in Spain

2022: 11,685 ultra-rich

Ultra high-net-worth individuals, UHNWI are individuals with a net worth of at least USD 30 million in 2018 dollars.

2013

The level of financial well-being of Spanish families, that is, the difference between their savings and available loans, at the end of 2013 for the first time since the beginning of the crisis in 2006 exceeded the mark of 1 trillion euros. This figure amounted to 1.044 trillion euros.

According to the Bank of Spain, the level of financial well-being of Spanish families in 2013 increased by 25.6% - at the end of 2012 it amounted to 831.473 billion euros. The volume of assets of citizens - cash, shares, deposits, etc. - by the end of 2013 reached 1.891 billion euros, which is 9.1% more than a year earlier. This figure was the highest since 2007.

As of October 2013, the number of wealthy Spaniards is still growing. According to a report prepared by the Swiss bank, it ranked Credit Suisse Spain eighth in the world in terms of growth in the number of people who increased their fortune to 1 million dollars or more (740,121 euros). If in mid-2012 there were 355 thousand dollar millionaires in the country, then as of October 2013 this figure is 402 thousand.

Experts call the main reason for this phenomenon an increase in the exchange value of shares, in which wealthy Spaniards invest most often. Over the past year, it has grown by 16.2%. Even the decline in real estate prices (-7.9%) did not prevent the fortunes of 1% of the country's rich citizens from growing in mid-2013. Credit Suisse analysts believe that in many ways the significant growth of last year will compensate for the serious losses of the previous period.

Contrary to Treasury Secretary Montoro's claims, data from the National Institute of Statistics (INE) suggests a major drop in wages: it has decreased by about 5% over the past year. The average annual wage in Spain does not exceed 15,500 euros. However, some sectors have clearly suffered from the crisis to a lesser extent - senior leaders of companies that are part of the IBEX 35 group began to earn 7.6% more - about 562,000 euros per year.

Poverty in Spain

Main article: Poverty in Spain

Real estate

• Real estate in Spain

Car market

• Cars in Spain

Consumption

2023: Pork is the most consumed type of meat

2022: Cut vegetarian share to 2.1%

2019

Pork is the most consumed type of meat

Beer consumption in liters per year per person

2018

Per capita tea consumption per kg per year

Milk consumption in liters per year per person

Alcohol market

Winemaking

Main article: Wines of Spain

2022: 8th in the world in terms of beer production

2019: Spain - among the countries with the cheapest alcohol in the EU

In 2019, the European Statistical Agency Eurostat analyzed the prices of alcoholic beverages in EU countries. Spain was among the countries with the most affordable alcohol.

Each country was assigned a certain number of points, which should be compared with the average price index - 100. For example, in Finland, where alcohol is the most expensive in the European Union, this figure is 182. The top three countries with the highest prices also included Ireland (177) and Sweden (152).

In Spain, this figure is 84, which makes the country one of the most attractive for drinkers. And the cheapest alcohol is in Bulgaria and Romania (74 points each).

2018:18 years - minimum age to purchase alcoholic beverages

Economic history

1980s: A Wonderful Transfiguration

In the early 1980s, Spain was a poor agrarian country with an archaic economy. In some places, the notorious "remnants of the Middle Ages" and subsistence farming were preserved. A significant part of the Spaniards were forced to look for a better share in more successful countries, such as France, Germany and Switzerland^[2] of ^[2]

However, membership in the European Union helped to radically change the situation. Generous assistance from Brussels and the opening of European markets supported industry, subsidies ensured the rise and modernization of agriculture. Finally, a flood of tourists poured into the country, and with them billions of deutschmarks, francs, pounds, and then euros.

1993: Economic crisis

One of the most difficult moments in Spain's economic history came in 1993.

The rapid development of the Japanese financial bubble in 1990, with the aggravating consequences of the Gulf War, which greatly affected oil prices, significantly affected inflation and in the early 1990s placed the economies of developed countries at a stage of crisis.

Due to large government spending on large events of world importance, such as the 1992 University Exhibition in Seville (with the construction of a developed transport infrastructure - the Madrid-Seville high-speed railway and highway), the 1992 Olympic Games in Barcelona and the Ispasat project (Spanish satellite operator), the consequences of the crisis came to Spain a little later. After such large-scale investment enterprises on the part of the Government, headed by Felipe Gonzalez, a large debt was registered in public accounts, and the unemployment rate, which was already high at that time due to the suspension of production, increased even more.

In the second trimester of 1992, Spain's GDP index contracted by 1.1%. The growth of the domestic gross product remained negative or zero indicators and only in the third trimester reached + 0.9%.

The constant decline in production gave rise to a significant unemployment rate, which increased from 16% to 24% (for example, by the end of November 1993, the number of unemployed Spanish citizens was 3,545,950), an unforeseen decline in profits and deposits from commercial organizations, approaching 30 trillion pesetas of public debt, a GDP index of 68%, and a budget deficit exceeding GDP by 7%.

Macroeconomic indicators Spain
Year	GDP	Unemployment
1990	+3,8 %	16,1 %
1991	+2,5 %	16,93 %
1992	+0,9 %	20,3 %
1993	-1,03 %	23,9 %
1994	+2,4 %	24,1 %
1995	+2,8 %	22,9 %
1996	+2,4 %	22,1 %
1997	+3,9 %	20,6 %

The crisis was complicated by the worst drought in the 20th century in Spain, the most difficult moment of which occurred in 1995. This period of absence of any precipitation was most reflected in the central part of the peninsula, especially in Andalusia, where most municipalities experienced a sharp decrease in water supply, and at the same time huge losses in the agricultural sector.

On May 13, 1993, on Black Thursday, the Spanish Government was forced to again announce the devaluation of the peseta, this time by 8%. In nine months, this was the third decrease in the value of the national currency: the previous ones fell on September 16, 1992 and on November 21 of the same year by 5% and 6%, respectively. The September devaluation occurred on the so-called "Black Wednesday" of 1992, on the same day Britain, Italy and Portugal depreciated their state currencies, with the first two forced to withdraw money from the European Exchange Rate Mechanism.

The zeal with which Spain's economic and financial representatives fought for the peseta's value in money markets, according to official data from the Bank of Spain, turned into a loss of 3.2 billion. On the same day, the National Institute of Statistics published the Survey of the Economically Active Population for the First Trimester 1993: there were 3.300,270 unemployed in Spain. This meant that since 1991, when the first signs of the crisis appeared, Spain's economy has lost 750,000 workers. This unemployment rate placed Spain at the head of the countries of the European Economic Community in relation to the unemployed citizens to the economically active population. The National Institute of Statistics this "black Thursday" said that inflation growth, despite a slight slowdown, will not stop.

At this stage, the crisis had another unpleasant distinctive feature: the budget deficit by that time had already grown by 1.7 trillion pesetas, while the expected increase for the entire year was 1.4 trillion. To close the budget hole, the state spends another 1.5 billion pesetas, in other words, 7.037 million pesetas a day, starting January 1.

On October 8, 1993, the Council of Ministers adopted the Financial Law, according to which it was possible to reduce the amount of unemployment benefits for citizens who did not have children from 100% to 75% of the minimum wage.

In 1994, unemployment reached its maximum level - 24.1%; since then, employment has begun to increase.

1995: Economic recovery begins

The 1994 recession with a GDP index of 2.4% for Spain was left behind, replacing 1995 with 2.8%. Over the years, 400,000 people have been employed in the country, the unemployment rate has dropped to 22%.

Nevertheless, the Government had to face a new problem - social security spending, which included unemployment benefits, pension and medical benefits. In 1995, for the first time, Spain's social insurance system experienced a deficit, registering an amount of expenses exceeding revenues. To solve the problem, on April 6, 1995, the Congress of Deputies signed the Toledo Pact, which proposed a series of reforms to the social insurance system, including the termination of funding from a single source of pensions and health care, and the latter was supposed to use state budget funds.

However, on October 26, 1995, at a meeting of Congress, the state budget for 1996 could not be approved: Convergence and the Union voted against its adoption, violating the agreement on cooperation in the field of legislation previously concluded with the Spanish Socialist Workers Party. Having not reached the agreement, the size of the new state budget was left the same - approved for the current year. It should be noted that it was after this meeting that Filipe Gonzalez, realizing the loss of support for Parliament, was forced to postpone the upcoming elections, postponing their date to March 3, 1996.

The Toledo Pact came into force too late - only in 1997; and during the 1996, the social security crisis continued, despite the fact that GDP growth by 2.4% was recorded that year and almost half a million jobs were created. In December 1996, the newly elected Government of Jose Maria Aznara resorted to private financing of additional pension payments by the end of the year.

1997: The end of the crisis and the heyday of the economy

In order to avoid a repetition of the events of previous years, the Government of Jose Maria Aznar on July 15, 1997 created the Social Insurance Reserve Fund - a "piggy bank of pensions" to collect the surplus noted annually in the social insurance system. The functioning of the system itself became less problematic after the entry into force of the Toledo Pact, since health costs, which until then accounted for 15% of its costs, were no longer included in the list of monetary obligations for which it was responsible.

Since 1997, Spain has been experiencing a continuous period that lasted more than 10 years, which was characterized by the rapid heyday of the economy with growth indicators that consistently exceeded the average for Europe. Changes to the economic development model were developed by the Minister of Economy from the People's Party, Rodrigo Rato. Unlike the previous Government's active public investment program, the People's Party implemented projects to privatize state-owned companies (such as Argentaria, Telefonica, Endessa, Repsol) and create a large number of jobs. Employment was made possible by the development of the construction industry, which, however, gave rise to private sector debt and real estate speculation - the main causes of the 2008 economic crisis.

2000s: Real estate bubble

Back in the 1980s, a phenomenon called the "Spanish real estate boom" started. Similar phenomena existed at that time in most developed or semi-developed countries of the world, but Spain became a unique case. From 1985 to 2007, property prices more than tripled. The initial rise gave impetus to the mortgage lending system, and it, in turn, began to unwind the growth spiral even more. Loans, often subsidized by the state, helped the vast majority of Spaniards acquire their homes (renting housing in the country is a very rare phenomenon). "Villa in Spain" has become a mandatory attribute of success for both an English banker and a Russian businessman or official.

The construction boom has dragged other sectors of the economy along. The banking sector, whose assets amounted to trillions of euros, has flourished especially. Credit organizations opened in the most remote villages, and living on debt became a normal sign of middle-class membership. But it wasn't just finances that limited the case. Take, for example, the sphere of road construction. In the 1970s, you could say something good about Spanish roads only out of political correctness, in 2012 the car network in the country is one of the most advanced and highly developed on the continent.

Everything went perfectly well, and even short-term economic recessions in the early and mid-2000s could not shake this success story within an entire country. By 2007, in terms of GDP per capita, Spain was equal to the key players in the eurozone - Germany and France. In confidence that development is progressive and eternal, the Spanish authorities have constantly softened the requirements for the banking sector, injecting more fuel into the engine of the economic boom. Later, by the way, it became known that almost all members of the country's parliament were medium and large real estate investors, while others owned 20 houses or more.

2008-2009: Property price collapse, unemployment 20%

Disappointment came with the onset of the 2008 global financial crisis. Like around the world, property prices have collapsed. Interest among completely overstocked customers in buying houses has fallen.

The same processes also affected the non-residential real estate sector, so that tens and hundreds of thousands of projects across the country were discontinued and frozen "until better times." The construction sector has stood up.

The crisis dealt a terrible blow primarily to the labor market. In a matter of months, the number of unemployed in the country doubled and by 2009 reached (for the first time in the history of the country) 4 million people. We are talking, note, only about officially registered unemployment, which in no country fully reflects the picture in the market. The unemployment rate passed 20 percent and became the highest in the developed world. Among young people, every second lost his job.

But the financial sector at first survived all this. Mass bankruptcy and nationalization were avoided - but only due to the fact that the country's government helped the financiers to shove their problems "under the carpet." Banks, with the permission of regulators, extended bad loans, continued to hold long-term non-working assets as promising.

2010-2012: Financial System Crisis

The first signals followed back in 2010, when the so-called "kahi," regional savings banks began to experience the most serious difficulties. It turned out that they are literally head over heels in bad loans, and meanwhile they accounted for most of the deposits of the Spaniards. The acute crisis was somehow hushed up by a large-scale program of unification and absorption of these banks, but in the end, instead of many small sick places, they got several large ones.

On November 25, 2012, El Pais wrote that the total amount of aid that the EU will provide to Spanish banks will amount to 40-42.5 billion euros. Of these, 37 billion will be spent on the recapitalization of nationalized banks, 2.5 billion dollars will be directed to the capital of Sareb, the remaining 2-3 billion euros can be spent on helping other financial organizations. The first 35 billion euros, according to the publication, will be sent to Madrid in mid-December 2012 in exchange for large-scale layoffs in nationalized banks.

For more information on the Spanish banking system, see the article "Banks in Spain."

Cooperation with Russia

Main article: Cooperation between Russia and Spain

Notes