• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Spain's Transition to the European Union

Extracts from this document...

Introduction

Spain's Transition to the European Union Over the last 35 years Spain has developed from an agricultural and rural country into a flourishing nation with a diversified economy made up of a strong manufacturing and service sector. During the 1960's and the early 1970's the growth of the Spanish economy was 7% per annum with a per capita income of on average $500. This altered Spain's image more towards a developed nation. Spain's entrance into the European Union has largely boosted Spain's success and prosperity. After decades of dictatorship, Spain wished to achieve credibility in the political spectrum and saw EU membership as a means of solidifying its shift to democracy. Furthermore EU membership represented a new chapter in the history of Spain, making a clear distinction from the country's past. On the economic side, joining the EU meant access to the EU's agricultural market as well as potential gains from attracting foreign direct investment. Additionally Spain's decision to apply for EU membership was also driven by the large amounts of structural funds that Spain would receive once membership was granted. ...read more.

Middle

One of the party's main objectives was to make tremendous efforts in changing the situation of Spain in aims of attaining EC membership through modernization. The Gonzalez government had made an aggressive move to sell off its state-owned enterprises. This dramatically reduced Spain's public sector borrowing requirement and helped trim inflation. Spain was in the process of major national restructuring in order to create privatized newly reoriented and recapitalized enterprises that could eventually become corporations capable of world-class economic performance. In the past the majority state ownership of economic enterprises had crowded out private sector enterprises and initiative, raised costs for goods and services, and created manufacturing and service industries that were in capable of competing efficiently and effectively in international markets. Many of these state controlled enterprises date back to the 1930s. Franco had founded a massive agglomeration of state-owned commercial entities, the Instituto Nacional de Industria (INI). This hugely diverse enterprise consisted of over 150 industrial and service companies which were active in many fields such as electronics, steel, shipbuilding, aerospace and defence production and dominated for decades various sectors of the Spanish economy including manufacturing, mining, and transport. However by the 1980's INI was outdated and largely inefficient. ...read more.

Conclusion

As a result for a decade now, Spain's performance has been impressive. GDP growth increased to 2.7% in 2004 and is expected to rise to 3% in 2006, enabling a real convergence with other EU members. This is highlighted by the fact that the initially huge lag in Spain's standard of living compared with other EU countries has narrowed from 20% below the average to less than 13% during 1995 to 2003. The public debt to GDP ratio and inflation has also diminished along with reduced unemployment from 23% to 15% in 3 years. The main challenges remaining for Spain now include further reducing the public sector deficit, reforming labour laws and investment regulations. Though Spain's per capita income has to be further boosted since it is still low compared to the EU average, it is far above countries like Greece, Portugal and Ireland. Unemployment which is significantly lower than previously still remains a problem at 10.5%. And inflation which still stands above the euro area average is eroding Spain's competitiveness and must be reduced. Specifically, maintaining economic stability and competitiveness while advancing further convergence signifies a difficult task, as this demands speeding up structural reform. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    With raw materials cost increasing, the productive capacity of the economy is reduced. House price rises making it more diffcult for consumers to purchase. * Rise in mortgage rates Rising mortgage rates are expected to reduce demand and profits for Bellway.

  2. Retailing In India - A Government Policy Perspective

    Foreign owned Indian companies can own property for business purposes � Foreign investment in Real Estate business is prohibited except for integrated township development, wherein 100% FDI is allowed with prior Government approval However, the Government is focusing on resolving these problems by removing Urban Land Ceiling Act, Rent Control Legislation and reducing stamp duties.

  1. Free essay

    business aims

    Source: http://news.bbc.co.uk/1/hi/uk_politics/6472999.stm If the government wish to increase inflation it might increase taxes to reduce spending. There will be less spending and unemployment might increase. this happens the business would then have to increase its price for each product sold.

  2. Case Study: The Home Depot

    These professional clinics are for example, the demonstrations of methods and techniques of performing a job safely and efficiently. Home Depot also shifted a lot of work to be done to the night. Like shelf stocking and price tagging for example.

  1. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Scenarios such as this are ignored. There is no comparison of the current cost of drug use and the drug war to the possible benefits from legalization. Nor does Mr. McGarrell give significant proof that it is the legal nature of alcohol that is responsible for the higher use of it compared to illicit drugs.

  2. An Empirical Investigation into the Causes and Effects of Liquidity in Emerging

    The spread differential on low and high rated US corporate bonds has a significant negative relationship with capital flows. This implies that as the yield difference between the two falls, investors will turn to EMEs as an alternative investment opportunity.

  1. Describe the main economic problem which may arise in transition economies

    In a command economy the concept of rationing exists. But in a market economy rationing exists in a different way than that in a command economy. In a free market goods and services are produced for those who can afford them. Rationing exists through price mechanism and only those who are in a position to buy the goods contribute to the demand.

  2. The project objective is to investigate the practices of privatization in traditional market economies ...

    and Singtel would still receive a satisfactory rate of return on its investments (ensuring producers' interests). By 1992, the telecommunication industry, and thus Singtel has begun to mature. Also, the telecommunication infrastructure has been developed. In addition, the existence of the basic infrastructure and increasing demand brought by technological progress,

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work