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Eduardo Fernandez Ferrero, a Spainish native who currently [May 2011] lives in San Francisco, has completed a study of his home country government's economic policies as compared to the MIEPA list of policies as outlined above. The study on Spain is shown below. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2011. Used herein with permission]
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Comparison of Spain's economic policies to MIEPA criteria as prepared by native student of Spain, Mr. Eduardo Fernandez Ferrero, studying in the US in May of 2011.
RATING SUMMARY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100 % 2 4.0 12.0 15.0 80 3 4.0 12.0 15.0 80 4 4.0 12.0 15.0 80 5 4.0 12.0 15.0 80 6 4.0 12.0 15.0 80 7 4.0 12.0 15.0 80 8 5.0 15.0 15.0 100 9 3.0 9.0 15.0 60 10 4.0 12.0 15.0 80 11 5.0 15.0 15.0 100 12 3.0 6.0 10.0 60 13 5.0 10.0 10.0 100 14 4.0 8.0 10.0 80 15 4.0 8.0 10.0 80 16 4.0 8.0 10.0 80 17 4.0 8.0 10.0 80 18 5.0 10.0 10.0 100 19 4.0 8.0 10.0 80 20 3.0 6.0 10.0 60 21 3.0 6.0 10.0 60 22 5.0 10.0 10.0 100 23 5.0 10.0 10.0 100 24 4.0 8.0 10.0 80 25 4.0 8.0 10.0 80 26 4.0 8.0 10.0 80 27 3.0 6.0 10.0 60 28 4.0 8.0 10.0 80 29 2.0 2.0 5.0 40 30 5.0 5.0 5.0 100 31 4.0 4.0 5.0 80 32 4.0 4.0 5.0 80 33 4.0 4.0 5.0 80 34 3.0 3.0 5.0 60 TOTAL 136.0 296.0 365.0 81.1% ===== ====== ===== =====Return to MIEPA's Home Page
INDIVIDUAL POLICIES - Eduardo Fernandez Ferrero
1. Freedom from internal control: 5.0
Spaniards have legally the same rights to commence a new business, the same rights on the labor market and the same job opportunities no mattering the gender. Citizens of Spain can move and put in practice business activities without the permission of the country and without breaking the law. We can say that Spain is fairly free when it comes to business activities and related matters.
2. Freedom of speech: 4.0
Spain was under dictatorship until 1975, when society was not allowed to express their ideas freely and without the risk of being penalized. Now a days Spain enjoys a political and social freedom of speech where the media has practically no restrictions. Only the channels owned by the government are the ones that have the tendency to support the current government. Since Spain became parliamentary, the nation has been free and the freedom of speech freedom is defended and put into practice.
Source besides personal: http://www.es.amnesty.org/noticias/noticias/articulo/la-libertad-de-expresion-en-peligro-1/
3. Effective, fair police force: 4.0
Back in the day when Franco the fascist leader was in control, police was meant to direct and to force citizens to behave the government’s way. Now in time of democracy police make the citizens feel protected and help them to defend their rights. In Spain there is two different types of police units; there are national corps and autonomous corps. National units take care of major issues and are ruled and organized by the central government. Autonomous units are more involved with the community and offer the local business and households safety and protection of their interest.
Sources besides personal: http://sites.google.com/site/inteligenciacriminalistica/Home/sistseguesp
4. Private property: 4.0
In Spain private property is respected and protected by law and by the Constitution. Article #33 of the Spanish Constitution states that “it is recognized the right to private property and to inheritance… and nobody will be thwarted of his or her goods and rights unless there is a just cause, either of public utility or social interest”. On the other hand we need to keep in mind that squatters and vagabonds are sometimes inevitable to keep out of abandoned properties. In these cases polices or other authorities will take action and force them to leave.
5. Commercial banks: 4.0
Spain has a large selection of commercial banks, which serve most citizens and companies facilitating them commercial activity and employment. The majority of these banking systems offer different kind of services and business operations, including interacting with banks branches outside the country. All commercial banks participate in financial business activities and private projects by subscribing and purchasing fixed-interest debt securities. Bank entities lend money to enterprises, private customers and citizens facilitating job creating.
6. Communication systems: 4.0
Spaniards have access to an extensive network of communications facilities. Newspapers, magazines, telephones, TV, fax, radio stations and Internet are easily accessible all over the nation with the exception of rural areas in the countryside of Spain. CIA states that there are about 38 million of main telephone lines, almost 25 million cellular phones and over a hundred ISPs (Internet Service Provider). This numbers will increase with time and will lead Spain to a more develop country when it comes to technology. Telefonica is one the largest telecommunications firms in Europe. Locally it has the monopoly of a big majority of all infrastructures, making it the most powerful in the nation. Spain is not as advance as other countries in terms of communications but it provides the essential and required infrastructure to assist and promote business and education.
7. Transportation: 4.0
There are a large number of public and private transportation companies in Spain. Big size cities and cities that are not as big have efficient and popular variety of transportation systems that provides competitive and suitable fares to travel in and out the nation.. The country has 126 airports, which 82 out of those take national and international flights. Spain has a great deal of ports, freeways (90% of them are public) and train networks due to its graphical condition, which facilitate things and benefits the commerce and the business situation in terms of transportation.
8. Education: 5.0
In Spain just like in the USA there is at least a university or a college in every region of the country. The percentage of students that receive an education higher than high school is 67% but only a 32% end up graduating or finishing their studies. There are public and private institutions where you could obtain what in the USA would be called a Bachelor’s Degree. There are also technical schools where people could get the something similar to an Associates Degree would be in the USA. The educational system in Spain is generally harder and more complete than the one in the USA. The majors are more specialized due there is no general education requirement, focusing only on the pure major. This give student a noticeable advantage and a higher chance to get a better job.
9. Social Mobility: 3.0
Spain has not a very extend variety of ethnicities due to the low level of immigration. Society in Spain is not divided in terms of ethnicity, but class differentiation is still present. High levels of education, like in any other country, is one of the few ways if not the only one for people from these lower classes to raise their quality of life. However, this kind of education is almost inaccessible for people belonging to the lower class. Although there are many public universities in the country, not everyone have the same opportunities to receive the same level of education. People that had a more prestigious level of education like a Masters Degree are more likely to get a better job and thus have more privileged standards of life. On the other hand, people who don’t come from an upper class of society have a really hard time trying to obtain this level of education because they have to work to be able to pay for it and therefore promote social mobility.
Source (besides personal): http://dialnet.unirioja.es/servlet/articulo?codigo=766206
10. Freedom from outside control: 4.0
In Spain there was no agency, police corps, or countries that controlled citizens until the unification with the European Union. Spaniards were under control only by those laws stated by the Spanish Government, who was elected by citizens democratically, and the Constitution that was established in 1978. Nowadays the country is free from control of laws of any country that doesn’t belong to the E.U. Spanish representatives delegate sovereignty for certain matters to independent institutions which represent the interests of the Union and its citizens. Due to matters that these independent institutions represent, Spain could not be considered entirely free, although the Spanish Government and its citizens have decided to delegate this sovereignty.
11. Foreign currency transactions: 5.0
Before joining the European Union the “Peseta” was the currency of Spain. Nowadays the Euro is the official and only currency used in Spain and in every country of the union except the U.K. Every business and bank of all the countries in the E.U (again besides the U.K)* does its transactions with Euros. This represent a big plus for business owners.
* They decided to keep the British Pound instead because it’s a higher currency.
12. Border control: 3.0
One of the main issues regarding border control in Spain is that it has become “the land of the opportunities” for a considerable number of people from Africa. The majority of them come from Morocco (north of Africa) and Senegal (West Africa) in an illegal way of course. They come with the intentions of achieving a better way of life and higher opportunities but they have no legal status. The Spanish government does not use strong precautions to avoid massive immigration. When immigrants make it to Spain they have not any kind of documentation to work sometimes are exposed to exploitation. Nowadays with the current crisis that the country is going through plus the high rates of unemployment thing are even hard for immigrants coming from Africa. This forces them to work in construction or some other kind of physical job that doesn’t require any of language skills. Many immigrants have to rob or get involved in the drug and black market, which eventually promotes racism within the Spanish society.
13. Currency: 5.0
The “Euro” is the domestic currency of Spain. The “Banco de España” is the central bank of Spain and the responsible for issuing this currency; there is no other bank that issues a different currency in Spain. Back in 2000 when we had the “Peseta” as domestic currency the French and the German had stronger currencies than Spain, which made their economy stronger. Now the Euro is the official currency in all countries that belong to the E.U. This facilitates commerce among all these countries, which make the Spanish economy become stronger.
14. Cultural, language homogeneity: 4.0
In Spain a big majority of the population are Spaniard, white and catholic citizens. However, Spain is not entirely homogeneous. Although countries like the U.S, France or the United Kingdom are less homogeneous due that the have higher immigrating rates, besides some ethnicities settled down many generations ago. We can find different kind of cultures in Spain. For instance we should mention the internationally known Basque culture, the Catalan culture, the Galician culture, but there are also others not as known because they are not that big. These are called micro cultures, for example the gipsy culture in the south of the country that was historically influenced by the Moslem culture. But even though there are different cultures within the Spanish framework, almost everybody speaks and understands Spanish. Overall Spain is considered a homogeneous country, where people don’t have any cultural or language barrier to understand each other or treat each other.
15. Political effectiveness: 4.0
In case of natural disaster the different political organs act generally effectively, but since they are independent some may be more efficient than others.
Municipalities and provinces have their own political organs and make their own decisions regarding health system, education and infrastructure. Regions in Spain have their own political bodies as well as areas of autonomy that they manage independently. Political duties are spread between autonomous communities and municipal governments in order to fulfill the needs of small and concrete regions of the country where the central government could not manage as efficiently by itself.
16. Institutional stability: 4.0
Although democracy is still young in Spain and there was a period of delicate transition after the dictatorship, challenged by several intents by the military to take over again, Spain enjoys political and social stability, and all the political parties remain stable. The legal system is also stable. On the other hand, the educational system has changed several times in the last decade. This has a negative impact on students making things harder for them to succeed in their academic and professional careers. Health care system is also a bit unsecure. After the current government was elected less money is put towards social security and health care, which makes it unstable and unreliable
17. Honest government: 4.0
In 2010 Spain was rated by the international agency of transparency with a 6.9 in a scale from 0 to 9 referring an honest government. Politicians in Spain, as well as in other countries in the E.U, are elected in a democratic society because they have convinced a majority of its citizens they are going to help and improve the community and its services. The problem lies on how the government accomplishes its promises. No politician is able to make use of corruption without being revealed sooner or later by other parties. Similarly, the political and social pressures prevent politicians to make an abusive use of their power to fulfill their wishes or personal interests. Politicians in Spain still have too many interests in private businesses and companies, but I would not consider Spain a country with a corrupt government.
18. Common laws: 5.0
The Constitution, established in 1978, states all the set of laws which apply to every Spanish citizen. In Spain the legal system is a civil law system, which means that laws are never created by decisions of the court. These constitutional laws make no distinction among Spanish citizens. The constitution is the major exponent of legality, which is a system of civil law. The Supreme Court is also highly considered as a source of interpretation and application of the law, and their decisions are only challenged if they do not conform to the case law. In case of absence of legislation and custom, general principles are applied. However, not every Spaniard have the same possibilities when we refer to justice, citizens and make use of these laws that protect the rights of all and every individual in Spain.
19. Central bank: 4.0
The Bank of Spain (Banco de España) is the ultimate leader for banks and other lending institutions operating in Spain. This is also the central issuing bank of Spain and its general functions are: to implement the monetary and exchange policy set forth by the government; provide payment services with respect to the national debt; to administer Spain's foreign currency reserves; and control international payments to or from Spanish residents with the assistance the credit institutions operating in Spain. Today the Banco de España is independent from the Government and is recognized as a central bank with full responsibility for the regulation and supervision of the financial system.
As an integral part of the European System of Central Banks (ESCB), the Banco de España shall follow the guidelines and instructions emanating from the European Central Bank (ECB).
The Banco de España defines and implements the Community’s monetary policy; conducts currency exchange operations and holding and managing the States’ official currency reserves; promotes the sound working of payment systems in the euro area; and issues legal tender banknotes. The Banco de España manages the commercial banks in the country as well as the currency of the country independently of political control, but it actually works as an economic advisor of the government and prepares and publishes the reports and studies it considers necessary.
Sources: http://www.bde.es/homee.htm. Banco de España.
20. Domestic budget management: 3.0
In order to join the European Monetary Union, there are five economic conditions stated at the treaty of Maastricht that must be fulfilled. The first economic criterions’ concerns the price stability of the nation. An effective way of calculating price stability is use to analyze the inflation rate for each one of the nations. This rate must not exceed 1.5% of this regulation value. The second criterion is considered very important and involves the long-term interest rates of the nations. Therefore, a nation must have a long-term interest rate below 9.8%. The third condition regards the stability of currencies. Currencies are not allowed to fluctuate more than a 2.5% on an upper and lower boundary of the ECU. Spanish currency (the euro) has not devaluated more than 2.5, and thus qualify for this condition. The fourth economic condition that the nation states have to satisfy concerns the national average budget deficit. The treaty states that the national average budget deficit must not exceed 3% of a nation's GDP. The fifth condition states that public cumulative debt must not exceed 60% of the national GDP. Spain is not up to these expectatives.
21. Government Debt: 3.0
According to official data, the Spanish government has a debt of the 73.4% of its GDP. Although this percentage is still kind of high, the government has been decreasing this number over the last 3 years. Spain was able to reduce the spending if its GDP on public debts to an 11%. Privatization of different companies is mainly what help decrease debts, but not everyone thinks the same way. Some people think it may benefit the country now but in the future the total spending in debts will increase again.
22. Economic statistics: 5.0
In Spain, statistics are accurate, accessible and reliable sources of information that offer opportunities to businesses and promote the commerce in the country. The statistical data comes from the central bank, different departments from the government and the national institute of statistics. Here we can obtain accurate and useful information of any matter or subject. Theses data is completely subjective and based on official and recorded statistical information.
23. Protection of public health and safety: 5.0
Spain is aware that waste management is becoming one of the main problems of the modern world. The Spanish government is committed to improve current disposal methods such as landfill, incineration, chemical and effluent treatment, but also on recycling, waste minimization, clean technologies, waste monitoring, public and corporate awareness, and general education. Spain is considered an active country in terms of waste management. “ENRESA” is the major waste management company in the nation. Established in 1984, “ENRESA” is in charge of all the radioactive waste management of the country. Spain is also well known as a healthy country due to the public health is covered by the national public health system and everyone has access to better opportunities. The quality of the food is very high due to all the natural resources of the country and the strict controls the food is exposed to. Spain is privileged for having one of the best lifestyles in Europe; its climate is ranked among the healthiest in the world according to the World Health Organization (WHO).
24. High wage Policies: 4.0
Workers in Spain don’t receive high minimum wages for their labor, and wages are low compared with the top countries in the E.U. Their salaries are enough to fulfill their basic needs. Internal laws regulate basic working conditions and agreements such as salary, benefits and working hours. Spanish workers receive two annual extra payments in addition to the fixed salary. Employs have the right by law of having a weekly-uninterrupted rest break for one and a half days. There is a minimum period vacation of thirty days per year sated by law. All workers have the right to join unions for the promotion and defense of their social and economic rights.
25. Environmental Protection: 4.0
The influence of green parties in Spain, such as “Iniciativa-Els Verds”, has increased due to the sensitivity towards the environment politically and socially. Environmental awareness has increased in the past few years also caused by the strong influence of countries such as Denmark, Germany and France among other European countries. Since Spain joined the European Union these influences have increased and the nation had to start considering on adopting higher standards regarding protection of the environment. The Spanish Government got involved in environmental international agreements and treaties related to environmental issues, such as Conventions on Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands and Whaling. Recycling is one of the issues that could be improved to protect the environment. Recycling campaigns promote and are constantly pushing people to recycle and have a higher awareness of the impact our garbage has on the environment. Also, factories in Spain are submitted to stricter inspections and legally enforced to have higher standards for recycling and protection to the environment. According to recent official data, Spaniards are becoming more aware and sensitive towards protecting the environment and the positive effect that recycling has.
26. Strong Army: 4.0
Since Spain belongs to the EU and its members signed a policy that states that any country or any member can declare war to any other member and that all members would defend each other in case one of them was attacked by a foreign country that is not a members of the EU, it is called the European Security and Defense Policy (ESDP). For this particular reason, and although Spain may not have a really strong Army in comparison with other countries, Spain’s Army is not solely its own, it is bigger than that.
Back in the day Spain force their male citizens when they reach the age of 18 years old to serve in the military for a period of time not shorter than 12 months. At the present time things are a little different thought, the government of Spain has a private army where Spaniards have a choice and are not obligated to join. This model was adopted from countries like Denmark or the U.S. one of the main reasons why the government doest want that much involvement from citizens in the military activities is because the signing of several international security agreements with other countries since 1982, which provide the country a bigger feeling of security and safety. These agreements have helped Spain to spend less money in military purposes.
According to official records, Spain invests in military supplies 1.1% of its GDP, which is an amount of $6 billion, not much in comparison with other European countries or even less in comparison with USA. Nowadays Spain doesn’t have to worry about any serious conflict, although if that were the case, other countries would assist militarily.
Sources (besides personal): http://www.globalfirepower.com. http://www.photius.com/countries/spain/national_security/spain_national_security_army.html
27. Foreign Trade Impact: 3.0
We can say that Spain’s economy is to 47 percent depended on its foreign trade.
According to the data collected in 2009, Spain’s trade exceeded in imports. Spain bought more than sold. The total value of the exports was $220 billion (€158 billion): automobiles, fruits, minerals, metals, clothing, footwear, textiles Spain exported to major markets such as other countries of the EU (69%) and U.S. (4%). The imports were valued$290 billion (€208 billion): money spent in petroleum, oilseeds, aircraft, grains, chemicals, machinery, transportation equipment, fish, consumer goods among others.
Sources: http://www.state.gov/r/pa/ei/bgn/2878.htm. http://www.cepr.org/pubs/bulletin/dps/dp1238.htm
28. Protection of foreign currency earning enterprises: 4.0
In order to promote exports earnings the government offers assistance to Spanish enterprises helping them to support their exports and their implantations in foreign countries. To be able to do so, the Spanish institute of exterior commerce (ICEX) designs programs of promotion and investment supporting the current Spanish supply and the foreign markets demand.
Spain exports $1.461 trillion of its GDP, approximately 20%. The exports are mainly automobiles, fruits, minerals, metals, clothing, footwear, textiles etc and its major markets are Germany, the United Kingdom, France, Portugal, Italy and the United States.
Exports are one of the big foundations of the Spanish economy and without them we will have a trade deficit, which would have a huge negative impact in the country’s economy.
29. Management of Foreign Currency Budget: 2.0
Today, the balance of imports and exports in Spain was still shows deficit, being -$33.4 billion. When Spain first entry into the European community the country had to deal with restrictions on international capital flows. Initial trade deficits and real exchanges rate appreciation were followed by trade surpluses and real exchange rate depreciation. Spanish economy went through a consumption and investment boom that lasted until 1992. Spanish peseta appreciated against the currencies of Spain’s major European trading partners. Since 1993 the transfer of both money and goods within the EU, according to the Amsterdam Treaty, was liberalized
Source: http://www.cia.gov/cia/publications/factbook/. CIA’s country briefing. Data of access: 12/10/01.
http://www.icex.es. Instituto Español de Comercio Exterior. Data of access: 10/19/01
30.Layers of Collective Action: 5.0
After Francisco Franco died in the 1975, a general election in 1977 convened the constitutent cortes for the purpose of drafting and approving the constituion. The constitution was approved by the Cortes Generales on October 31, 1978, and by the Spanish people in a referendum on December 6, 1978. ; it recognizes and guarantees the right to self-government of the nationalities and regions of which it is composed and the solidarity among them all. As a result, Spain is now composed entirely of 17 Autonomous Communities and two autonomous cities with varying degrees of autonomy, to the extent that, even though the Constitution does not formally state that Spain is a federation (nor a unitary state), actual power shows, depending on the issue considered, widely varying grades of decentralization.
Sources: http://en.wikipedia.org/wiki/Constitution_of_Spain http://www.scielo.oces.mctes.pt/pdf/aso/n189/n189a02.pdf
31. Pro-business Climate: 4.0
Competitive factors in Spain despite the economic crisis are globalization of markets, well-developed infrastructures, and good business strategies. However the report also points out that Spain lacks in research and development investment and flexibility in the job markets.
Another report – Global Technology Report for 2008 and 2009 – ranks Spain at 34th position, three positions down from the previous year. This study emphasizes Spain has not been as competitive in the information technology market as other countries. This report highlights Spain would profit by paying more attention to innovations in the fields of energy, mobility, health and environment.
At the moment, income tax favors both foreign and local companies. Special beneficial tax rates apply to companies entering the market.
32 Government Enterprises: 4.0
Spain had a recovery of government enterprises in the 20th century, its consolidation following the Second World War and the large-scale privatizations in the last decade of the century. It shows that Spanish public business sector is among the smallest inEurope. At the same time, the public sector in Spain is very much manufacturing inclined due to the frailty of its public financial enterprises.
33 International Security Agreements: 4.0
In October 1982, after the return of democracy, Spain joined the European Union (EU), which provided the EU with a common security policy called the European Security and Defense Policy (ESDP). The ESDP main purpose is to frame a common defense policy, as provided for the Treaty on European Union. However, in its present condition it deals with military as well as non-military crisis management. The main objective of ESDP is to sustain the EU's Common Foreign and Security Policy (CFSP), being the CFSP's arm in the security field.
On may 30th of 1982 Spain joined NATO (North Atlantic Treaty Organization), but refused to participate in the integrated military structure. The government maintained Spanish forces under Spanish command and did not accept to have troops deployed outside of Spain for long periods of time. . Nevertheless, Spanish forces would still be able to operate with other NATO forces in an emergency.
Spain entirely participated in the political instances of the Organization. Spain’s reservations gradually diminished and at the nomination of Dr Javier Solana as NATO’s first Spanish Secretary General (1995-1999), the Spanish Parliament endorsed the country’s participation in the integrated military command structure (1996).
34 Protection of Domestic Enterprises from Government Mandated Costs: 3.0
In Spain, domestic enterprises have to follow the Law of Prevention of Risks at Work, which was reformed in November 8, 1995. The law establishes the general structure of health and safety at work. It regulates the main obligations or duties of employers, employees, manufacturers, suppliers of machinery and equipment regarding the prevention of risks. This law also stipulates that detailed health and safety measures are to be laid down by official regulations. Spanish enterprises have to economically compensate their employees if they decide to lay them off, which guarantees the employers' some security. Businesses are also subject to a 35% corporate tax (CT) and VAT (value added tax), which includes the supply of goods and the provision of services and imports.
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