Spain Administration, Law and Economy

Spain, Kingdom on the Iberian Peninsula, with (2020) 47.3 million residents; The capital is Madrid.

Administration

There are 17 autonomous communities (regions) that encompass 50 provinces, the special areas of Ceuta and Melilla and 8,122 municipalities.

State organization in Spain

Law

The legal system is essentially based on Roman law with Castilian influences; Another characteristic is the historically based continued validity of individual regional private rights (formal rights), as they are still today, among others. are compiled and trained in so-called »Compilaciones«. Important areas of law were codified according to the French model, for example in the Código de Comercio (Commercial Code) of 1829/85 and in the Código civil (Civil Code) of 1888/89.

The traditionally strong influence of the Catholic Church – especially on family law – is on the wane. In 1980 a labor law was passed (re-promulgation 1995), which regulates not only collective but also individual labor law. The penal code, which came into force in 1996, replaces the Código penal of 1848 and is heavily inspired by German law.

At the head of the organization of the judicial administration is the independent General Council of the Judiciary (Consejo General del Poder Judicial), whose 20 members are elected by the Cortes and appointed by the King. A constitutional court with 12 judges appointed by the king on the proposal of both houses of the Cortes and the government for 9 years decides on the constitutionality of laws, on disputes over jurisdiction between the central state and autonomous communities as well as on constitutional complaints from individuals.

The court structure is three-tiered. At the national level, the Supreme Court (Tribunal Supremo) is assisted in special matters by a high court (Audiencia Nacional), at the level of the autonomous communities and provinces, higher courts and regional courts (Tribunales Superiores de Justicia de las Comunidades Autónomas or Audiencias Provinciales) are set up. The lower level of jurisdiction consists of professionally oriented courts and local courts (juzgados).

Economy

The economic development of Spain during the Franco regime was characterized by its extensive international isolation. At the center of the economic policy orientation was self-sufficiency by means of a rigid state interventionism. The nationalization of key industries such as the metal and food industry pursued the goal of replacing important imported goods with domestic products (so-called import substitution). In addition, the state set agricultural prices and the allocation of raw materials for industry. The consequences of this policy were bad investments, corruption and bureaucratic delays, with the result that the prosperity of the Spanish population steadily declined in spite of dismissal protection for workers and state-guaranteed wages.

The isolationist economic policy ended with the 1959 Stability Plan. Structural reforms in the public sector and pushes of modernization such as relaxed import restrictions or the approval of foreign direct investments introduced a profound change in the original agricultural state. The main objective of economic policy was to increase economic growth through intensive industrialization, especially along the Atlantic coast between La Coruña and San Sebastián (Iron and steel production, aluminum smelting, mechanical engineering and shipbuilding) as well as in the densely populated agglomerations of Madrid (electrical engineering, motor vehicles and chemistry) and Barcelona (mechanical engineering, motor vehicles, chemistry). With GDP growth rates in the double-digit range, the period between 1960 and 1974 is also known as the Spanish economic miracle.

The oil price shocks of 1973 and 1979/80 led to sharply rising inflation rates and high unemployment: Spain found itself in an economic crisis. In addition, labor-intensive value creation such as the textile industry migrated to the growing emerging countries. Only political structural reforms such as flexibilization of labor law and decentralization of economic policy, as well as Spain’s accession to the EU in 1986, spurred the economic dynamism again. With the further expansion of the welfare state in the areas of health, education and public administration, the process of modernization and expansion of the service sector continued. The 1990s began with brief phases of recession (1992/93) before economic policy measures such as reducing public debt and further privatization in the public sector introduced a phase of moderate economic growth in order to ensure stable compliance with the EU convergence criteria.

As a member of the Eurozone, economic development in the 2000s benefited from the stable currency and price developments in the common currency area. The low interest rate environment also favored a loan-financed real estate boom. In 2007 the construction sector reached the highest level in the EU with over 14% of GDP. When house prices plummeted with the financial and economic crisis in 2007 and private loans could no longer be serviced due to numerous job losses, Spain entered a phase of severe economic depression. In 2013, every fourth economically active person was considered unemployed, and almost 28% of the population were at risk of poverty. As a result of government stimulus programs Public debt exploded (2014: 123% of GDP) and reached one of the highest levels in the EU. Meanwhile the process of tertiaryisation of the economy continued. As usual for a modern, service-oriented industrialized country, the agricultural sector only contributed 3%, industry 24% and the service sector 73% to Spanish GDP in 2019.