Wayzata World Factbook 1995/World Factbook - 1995 Edition - Wayzata Technology (1995).iso/mac/text/Build/orig BACKGR/BNOT0095.TXT

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National Trade Data Bank
ITEM ID     : ST BNOTES SPAIN
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - SPAIN

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1992
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | SPAIN

US DEPARTMENT OF STATE
BACKGROUND NOTES:  SPAIN

Official Name:  Kingdom of Spain

PROFILE
Geography
Area:  504,750 sq. km. (194,884 sq. mi.) including the Balearic and
Canary Islands; about the size of Arizona and Utah combined.
Cities:  Capital-Madrid (pop. 3.1 million in 1987, the most recent
official Spanish estimate).  Other cities-Barcelona (1.7 million, 1987),
Valencia (732,491, 1987), Seville (655,435, 1987), Zaragoza (575,317,
1987), Bilbao (382,413, 1987), Malaga (566,330, 1987). Terrain: High
plateaus and mountains.  Climate:  Seasonably variable, dry;
temperate in northwest.


People
Nationality:  Noun-Spaniard(s).  Adjective-Spanish.  Population: 39
million (1990 est.).  Annual growth rate:  0.3%.  Density:  202/sq. mi.
Ethnic group:  Mediterranean and Germanic composite.  Religion:
Predominantly Roman Catholic.  Languages:  Spanish (official),
Catalan 17%, Galician 7%, Basque 2%.  Education:  Compulsory to
age 16; literacy-97%.  Work force (14.8 million, 1989):
Agriculture-16.7%; industry-24.8%; construction-7.4%;
services-51.1%.


Government
Type:  Constitutional monarchy (Juan Carlos I proclaimed king
November 22, 1975).  Branches:  Executive-prime minister nominated
by monarch, subject to approval by democratically elected Congress
of Deputies.  Legislative-bicameral Cortes:  Congress of Deputies,
350 seats elected by the d'Hondt system of proportional
representation; Senate, 4 senators elected in each of 47 peninsular
provinces and 16 from the 3 island provinces; Ceuta and Melilla elect
2 each (total 208).  The 17 autonomous regions also appoint 1
senator and 1 additional senator for each 1 million inhabitants within
their territory (about 20).  Judicial-Constitutional Tribunal has
jurisdiction over constitutional issues.  Supreme Tribunal heads
system comprising territorial, provincial, regional, and municipal
courts.  Subdivisions:  47 peninsular, 3 island provinces; 2 enclaves
on the Mediterranean coast of Morocco (Ceuta and Melilla); and 3
island groups along that coast-Alhucemas, Pelon de Velez de la
Gomera, and the Chafarinas Islands.  Political parties:  Spanish
Socialist Workers Party (PSOE), Popular Party (PP), Social and
Democratic Center (CDS), and three communist parties, the largest
of which is the Spanish Communist Party (PCE) grouped in the
United Left coalition (IU).  Key regional parties are the Convergence
and Union (CIU) in Catalonia and the Basque National Party (PNV)
in the Basque country.  Central government budget (1988):
Revenues-$67.9 billion.  Expenditures-$77.5 billion.  Defense:  9.1%
of FY 1988 budget.  Flag:  Two red horizontal bands separated by
a wider yellow band; the national coat of arms, centered, shows the
royal seal framed by the Pillars of Hercules (the two promontories on
either side of the eastern end of the Strait of Gibraltar).


Economy
GDP (1989):  $380 billion.  1990 projected:  $489 billion.  Annual
growth rate (1989):  4.9%.  Per capita GDP (1989):  $9,708.  1990
projected:  $12,442.  Natural resources:  Coal, lignite, iron ore,
uranium, mercury, pyrites, fluorspar, gypsum, zinc, lead, tungsten,
copper, kaolin, hydroelectric power.  Agriculture (5.3% of GDP):
Products-grains, vegetables, citrus and deciduous fruits, wine, olives
and olive oil, sunflowers, livestock.  Industry (30.3% of GNP):
Types-processed foods, textiles, footwear, petrochemicals, steel,
automobiles, consumer goods, electronics.  Trade (1989):
Exports-$45 billion:  automobiles, fruits, minerals, metals, clothing,
footwear, textiles.  Major markets-EC 67%, US 7%.  Imports-$71
billion:  petroleum, oilseeds, aircraft, grains, chemicals, machinery,
transportation equipment, fish.  Major sources-EC 57%, US 9%.
Official exchange rate (as of 9/90):  98 pesetas = US $1.  Fiscal
year:  Calendar year.

Membership in International Organizations
UN and its specialized agencies, North Atlantic Treaty Organization
(NATO), Western European Union (WEU), European Community
(EC), European Organization for Economic Cooperation and
Development (OECD), Conference on Security and Cooperation in
Europe (CSCE), INTELSAT, World Tourism Organization
(WTO-headquartered in Madrid), and the Council of Europe.


PEOPLE
Spain's population density, lower than that of most European
countries, is roughly equivalent to New England.  In recent years,
following a long-standing pattern in the rest of Europe, rural
populations are moving to cities.

Spain has no official religion.  The constitution of 1978 disestablished
the Roman Catholic Church, while recognizing the role it plays in
Spanish society.  More than 90% of the population are nominally
Catholic.


Educational System
Spain's overall student population in 1986-87 was 10,746,172.  Of
these, 70% attended public schools or universities.  The remainder
(3,205,314) attended private schools or universities (35,545), the
great majority of which are operated by the Catholic Church.

Compulsory education begins with primary school or general basic
education (EGB) for ages 6-14 and is free in public schools and in
many private schools, most of which receive government subsidies.
Following EGB graduation, students attend either a secondary school
offering a general high school diploma or a School of Professional
Education (corresponding to grades 9-11 in the United States)
offering a vocational training program.  The Spanish university
system offers degree programs in law, sciences, humanities, and
medicine, and the Superior Technical Schools offer programs in
engineering and architecture.


Regional and Municipal Government
The 1978 constitution authorized the creation of regional
autonomous governments.  By 1985, 17 regions covering all of
peninsular Spain, the Canaries, and the Balearic Islands had
negotiated autonomy statutes with the central government.  In 1979,
the first autonomous elections were held in the Basque and Catalan
regions, which have the strongest regional traditions by virtue of their
history and separate languages.  Since then, autonomous
governments have been created in the remainder of the 17 regions.


HISTORY
From the ninth century BC to 700 AD, Phoenicians, Greeks,
Carthaginians, and Celts entered the Iberian peninsula, followed by
the Romans, who arrived in the second century BC.   Spain's
present language, religion, and laws stem from the Roman period.
Although the Visigoths arrived in the fifth century AD, the last Roman
strongholds along the southern coast did not fall until the seventh
century.  In 711 AD, North African Moors sailed across the straits,
swept into Andalusia, and, within a few years, pushed the Visigoths
up the peninsula to the Cantabrian Mountains.  The
Reconquest-efforts to drive out the Moors-lasted until 1492, the year
Columbus made his voyage to the New World.  By 1512 the
unification of present-day Spain was complete.

In the 16th century, Spain became the most powerful nation in
Europe, due to the immense wealth derived from the Americas.
Subsequently, a series of long, costly wars and revolts, capped by
the defeat by the English of the "Invincible Armada" in 1588, caused
the steady decline of Spanish power in Europe.  Controversy over
succession to the throne consumed the country during the 18th and
19th centuries leading to occupation by France in the early 1800s.

The 19th century saw the revolt and independence of most of the
American colonies; three wars over the succession issue; the brief
ousting of the monarchy and establishment of the First Republic
(1873-74); and, finally, the Spanish-American War (1898), in which
Spain lost Cuba, Puerto Rico, and the Philippines to the United
States.  A period of dictatorial rule (1923-31) ended with the
establishment of the Second Republic.  It was dominated by
increasing political polarization, culminating in the leftist Popular Front
electoral victory in 1936.  Pressures from all sides, coupled with
growing and unchecked violence, led to the outbreak of the Spanish
Civil War in July 1936.

Following the victory of his nationalist forces in 1939, Gen. Francisco
Franco ruled a nation exhausted politically and economically.  Spain
was officially neutral during World War II but followed a pro-Axis
policy.  The victorious Allies isolated Spain at the beginning of the
postwar period, and the country did not join the United Nations until
1955.

Spain's economy began to recover in the 1950s, but large-scale
modernization and development did not occur until the 1960s.


GOVERNMENT AND POLITICAL CONDITIONS
Upon the death of Gen. Francisco Franco in November 1975, Prince
Juan Carlos de Borbon y Borbon, Franco's personally designated
heir, assumed the titles of king and chief of state.  Dissatisfied with
the slow pace of post-Franco liberalization, in July 1976, the King
replaced Franco's last prime minister with Adolfo Suarez.  Suarez
entered office promising that elections would be held within one year,
and his government moved to enact a series of decree laws to
liberalize the new regime.
Spain's first elections to the Cortes (parliament) since 1936 were held
on June 15, 1977.  Prime Minister Suarez's Union of the Democratic
Center (UCD), a moderate center-right coalition, won 34% of the vote
and the largest bloc of seats in the Cortes.

Under Suarez, the new Cortes set about drafting a democratic
constitution which was overwhelmingly approved by voters in a
December 1978 national referendum.

The democratic constitution established Spain as a parliamentary
monarchy, with the prime minister responsible to the bicameral
Cortes elected every 4 years.  After the constitution entered into
force at the end of 1978, Prime Minister Suarez called for new
national elections.  The elections of March 1979 gave Suarez's UCD
a large plurality but the coalition of parties backing Suarez soon
began to disintegrate.  In January 1981, Suarez resigned, and the
King nominated Leopoldo Calvo Sotelo to replace him.  On February
23, while the Congress of Deputies was voting on the Calvo Sotelo
nomination, rebel elements among the security forces seized the
congress and tried to impose a military-backed government.
However, the great majority of the military forces remained loyal to
King Juan Carlos, who used his personal authority to put down the
coup.  The bloodless coup attempt was over in 18 hours.  On
February 25, the Congress of Deputies reconvened to approve Calvo
Sotelo's nomination as prime minister.

In October 1982, the Spanish Socialist Worker's Party (PSOE), led by
Felipe Gonzalez Marquez swept both the Congress of Deputies and
Senate, winning an absolute majority; the government was reelected
in June 1986.
On December 14, 1988, the two largest labor union confederations,
the Socialist-affiliated General Workers Union and the communist-led
Confederation of Workers Commissions, sponsored a successful
1-day nationwide work stoppage.   The general strike was seen as
an expression of labor union dissatisfaction with the governing
PSOE's leadership as well as a move to highlight specific union
grievances.  It marked a widening split between the labor unions and
the Socialist government.  The strike was interpreted as a sign that
the government had lost some support, especially among blue-collar
workers, a sector of the electorate traditionally pro-socialist.

Prime Minister Gonzalez again called for a general election in
October 1989.  Although the PSOE retained control of the Senate the
party lost ground, both to the Popular Party on the right and the
Communist-led United Left.  On December 4, 1989, the Spanish
parliament approved King Juan Carlos' nomination of Felipe
Gonzalez as prime minister for a third term.

The year 1992 promises to be a banner year in Spain.  The summer
Olympics are scheduled for Barcelona.  A world's fair, Expo 92, will
be held in Seville.  There will be nationwide celebrations to mark the
500th anniversary of Columbus' discovery of America and to
celebrate the contribution of Jewish and Arab cultures to Spain.
Also, Madrid has been designated the cultural capital of Europe for
1992.


Terrorism
The government of Spain is involved in a long-running campaign
against Basque Fatherland and Liberty (ETA), a terrorist organization
founded in 1959 and dedicated to promoting Basque independence.
ETA regularly targets Spanish government officials, members of the
military and security forces, and moderate Basques for
assassination.  The group has carried out numerous bombings
against Spanish government facilities and economic targets.  In
recent years, the Spanish government has had more success in
controlling ETA due in part to increased security cooperation with
French authorities.

In early 1989, the Spanish government held a series of meetings in
Algeria with ETA representatives in an attempt to reach an
agreement ending the campaign of terrorism.  However, the talks
broke down and ETA resumed its terrorist operations with a series
of bombings on April 7, 1989, effectively ending a 3-month cease-fire.
The spring and summer of 1990 saw another significant wave of
terrorist operations, with ETA and the radical leftist group GRAPO
claiming responsibility for bombings against various public
installations throughout the country.


ECONOMY
The late 1950s marked an important turning point in Spain's modern
economic history.  Beginning in 1959, under an IMF stabilization
plan, the country liberalized trade and capital flows, particularly
foreign direct investment.  In the 3 years following implementation of
the plan, real growth in gross domestic product exceeded 10%, and
from 1965-1974 Spain's 7% average annual real growth was the
second fastest in the industrialized world.  Spain was transformed
into a modern industrial economy with a thriving tourism sector.  The
economic expansion led to improved income distribution, and helped
develop a large middle class.  Social changes brought about by
economic prosperity and the inflow of new ideas helped set the
stage for Spain's transition to democracy during the latter half of the
1970s.

Despite the success of economic liberalization, Spain remained the
most closed economy in Western Europe, judged by the small
measure of foreign trade to economic activity.  Moreover, the pace
of reform slackened during the 1960s as the state remained
committed to "guiding" the economy.  Considerable public
investments were made in heavy industries such as shipbuilding and
steel.  As one of the industrial world's most energy import-dependent
economies, Spain was hard hit by the oil price shocks of 1973 and
1979.  During the mid-1970s Spain was also undergoing a political
transition to democracy.  Political uncertainties associated with the
transition kept the country from implementing policies to adjust to the
oil price shocks.  From 1975-79 foreign borrowing doubled, and the
peseta was allowed to appreciate 35% to offset the impact of the oil
price rise on domestic prices and incomes.  At a time when
economic conditions warranted a moderation of labor costs because
of trade loss, labor conflicts proliferated and real wages climbed
rapidly.

After 1975, Spain suffered 9 years of double-digit inflation.  Real
economic growth slowed dramatically to an annual average of 1.6%.
In the face of economic and political uncertainty investment fell.
Employment contracted by over 2 million jobs from 1975-1985, and
the unemployment rate rose from 4% to 22%.

Government Policy
When the PSOE took office in late 1982, the Spanish economy was
in deep crisis.  Balance-of-payments problems were chronic, with the
current account deficit at 2.3% of GDP.  Inflation was 14% and the
unemployment rate 16.5%.  The government deficit reached 5.6% of
GDP.  Perhaps as serious, the economy suffered from structural
rigidities in labor and capital markets, which greatly exacerbated the
crisis.

The first priority of the socialist government was to reduce the
external imbalance and to control inflation.  Its methods were
orthodox stabilization measures:  a tightening of monetary policy,
sharp devaluation of the peseta, some reduction in the public deficit,
and a move toward wage moderation.  The adjustment program
began to bear fruit in terms of lower inflation and a current account
surplus, so that austerity measures were eased after 1984.

At the same time, the government developed programs for significant
structural economic reforms leading to industrial restructuring,
greater labor market flexibility and changes in social security
financing.  While the structural reform process is ongoing, especially
since Spain joined the European Community (EC) in 1986, the
progress achieved has gone a long way toward accommodating the
economy to EC membership and to sustain relatively strong
economic growth over the long term.

 Industrial Reconversion.  Several inefficient and uncompetitive
industries were part of the structural problems afflicting the Spanish
economy.  A law on reconversion and reindustrialization was
approved in 1984 to strengthen these industries.  The law provided
public funds, subsidized credits, and loan guarantees to help affected
firms rationalize employment and modernize capital in sectors
including appliances, certain machinery and capital equipment,
electronics, telecommunications, fertilizers, steel, shipbuilding and
textiles, which employed more than 280,000 workers.  Although the
reconversion program extends until 1991 in some sectors, by the
end of 1988 over 90% of the 89,000 superfluous jobs targeted had
been cut, and 83% of the projected cost had been spent on the
program.

Labor.  Labor market rigidities are another serious structural
problem.  In particular, the Spanish system of job security, which
makes it difficult to lay off workers without substantial indemnities,
tends to discourage firms from hiring, exacerbating the
unemployment problem.  In 1984, labor agreed to legal changes
which permitted hiring for new positions under temporary contracts.
Such contracts may extend up to 3 years before an employer incurs
an indefinite commitment to the employee.  Since 1984, the vast
majority of new hirings have occurred under the temporary hiring
provision.  Unemployment in 1989 declined more than 2% to 17.3%,
but as the momentum of economic expansion slows, job creation is
expected to slow as well.


Current Performance
By 1985, economic reforms and significant improvement in the terms
of trade associated with a fall in oil prices contributed to a rebound
in employment, investment, and economic growth.  Since then, the
economy has experienced a strong, investment-led expansion.
Investment, averaging nearly 16% per annum in real terms in
1986-88, has been stimulated by a sharp recovery in business
profitability, growing foreign investor interest in Spain, and rising
domestic business confidence.  GDP growth averaged 4.7% per
annum over the same period, rising to over 5% 1987-88 and 4.9% in
1989.  Following the slow down which commenced in late 1989,
projected growth for 1990 is 4.1%. The expansion must continue with
above average growth rates through the turn of the century in order
to achieve the government's primary economic objectives of
eliminating the serious problem of unemployment and raising the
Spanish standard of living to the level of more advanced European
economies.

While Spain expects to grow moderately faster than the rest of
Europe over the longer term in order to catch up, the government
considers the current rate of growth, almost 5% in real terms in 1989,
to be too strong.  After initial success in the battle to lower inflation,
strong demand pressure contributed to an acceleration of inflation in
1988 and 1989, which the government attempted, unsuccessfully, to
check with a tighter monetary policy.  The subsequent rise in interest
rates caused an appreciation of the peseta, which exacerbated a
growing trade deficit.

Spain's trade deficit was the industrial world's third largest in
1988-89, but it is not an immediate problem because economic
growth is investment-led, and rapid growth in foreign investment
assures adequate financing.  Nevertheless, the government has
become concerned over the speed of deterioration in the trade
account, as well as the threat high domestic inflation poses to
Spain's international competitiveness.  Consequently, it tightened
monetary policy further in mid-1989 and slapped on credit controls
in order to cool the "heated" pace of economic activity and thereby
assure a more moderate, but more sustainable rate of growth over
the long term.

One of the current problems is that the political dialogue over
economic policy among government, business, and labor has
weakened.  Reacting to the sharp increase in profits business has
enjoyed during the current expansion, labor has become impatient
to share in the benefits and is more critical of the official emphasis
on economic growth vs. redistribution.  The dispute has prevented
renewal of an economic and social agreement, such as those signed
by government, business, and labor prior to 1987, in order to
establish guidelines for wage moderation in collective bargaining.


Spain and the European Community
The government's economic policies must also advance the process
of integration into the European Community.  Spain's decision to join
the EC  in 1986 represented a broadly supported political
determination to identify Spain with Western European democracy
and free market policy.  The economic consequences mean that
Spain must continue to open its economy, upgrade infrastructure,
and adapt economic legislation to EC norms.  Spain has been
successful in most cases.  Strong economic growth has greatly
eased this process of integration.  The coincidence of Spain's
transition period with the implementation of the EC single market
adds to the challenge of integration and increases the prospects for
long term economic advantages as a result of the decision to join the
EC.

Since joining the EC, Spanish trading patterns have shifted
dramatically.  Imports from the EC increased to 58% of the total in
1990-from 37% in 1985.  The share of Spanish exports going to EC
countries rose to 67% in 1989, up from 52% in 1985.  The US share
in Spain's trade declined sharply.  The import share is recovering
(9% for 1989, up from 8.3% in 1987).  The 1989 exports share was
7.4%, down from 8% in 1987.  The United States continues to
maintain a large trade surplus with Spain ($6.5 billion exports vs. $3.3
billion imports in 1989).  EC participation in foreign investment in
Spain has climbed significantly to 55% of registered new foreign
direct investment, while the US share has slipped even as US
investment in absolute terms has steadily increased.

With Spain's economic future now closely linked to the European
Community and Spain's integration into the EC proceeding smoothly,
the Spanish government has become one of the community's most
committed advocates of deeper European integration.  In June 1989,
at the end of a successful 6 months in the EC presidency, the
government agreed to commit the peseta to stabilization within the
European monetary system's (EMS) exchange rate mechanism, as
a first step toward eventual European monetary integration.  The firm
commitment to integration, however, leaves the Spanish government
little margin to diverge from an orthodox mix of economic policies.
In particular, participation in the EMS requires Spain to expand its
range of economic policies by increasing fiscal discipline and
reducing reliance on monetary policy.


Industry
Spain's leading industries are automobiles, steel, chemicals, shoes
and leather goods, clothing, and rubber products.  Tourism is also
a major industry as well as a vital source of foreign exchange.  With
50 million foreign visitors per year, Spain is one of the world's leading
tourist countries.  Most visitors are Europeans attracted to Spain's
Mediterranean coast.  Tourism receipts were up slightly, from $16.2
billion to $18 billion in 1990, despite a 4% drop in tourist entries.

Basic industries such as iron and steel, shipbuilding, machine tools,
and metalworking are located in the north on the Atlantic coast, in
the areas of Bilbao, Santander, Oviedo, and La Coruna/Ferrol, as
well as in the south near Cadiz.  Industries such as electronics,
textiles, and plastics have gravitated to the Catalonia region around
Barcelona.  Madrid is the financial capital, the administrative center
for corporate headquarters, and a nexus for light industry and high
technology.  Government coordinated efforts have dispersed some
industry into southern Spain and other less industrialized areas, in
conjunction with regional development and diversification programs
which now benefit from EC development funds.

A long-term objective of the Spanish government is to increase the
efficiency of state commercial enterprises such as the national
railroad (RENFE) and the state-owned holding company, the Instituto
Nacional de Industria (INI), which suffer from heavy losses.  INI was
responsible for an earlier period of heavy industrialization in steel
production, shipbuilding, civil aviation, defense industries, and many
other areas.  More recently, INI has been heavily involved in the
process of industrial reconversion.  Current plans for INI call for an
end to government subsidies after 1992.  The Spanish government
has also moved to privatize a number of unprofitable public
enterprises and others not essential to its commercial strategy.  In
some cases minority participation in public enterprises, such as the
state petroleum company, has been sold through shares to the
public.


Foreign Investment
Foreign investment has been important to Spain's industrialization.
This is especially so in the automotive sector, where the investments
of Ford in Valencia and General Motors in Zaragoza and Cadiz have
contributed to making Spain the world's sixth largest automobile
exporter.  Since Spain joined the EC, foreign investment regulations
have been liberalized to satisfy EC standards, and foreign investment
in new and established plants has increased dramatically.
Volkswagen's purchase of the Spanish automobile manufacture
SEAT from the government was one of the most significant foreign
investments.  Net foreign investment rose 11% between 1989 and
1990 from $15 billion to $16.7 billion.  The United States accounted
for 4% of the 1989 total, down from 22% in 1985.


Agricultural Production and Trade

Although it has declined in relative importance in the overall Spanish
economy in recent decades, agriculture still accounts for more than
6% of GDP, 13% of total employment, and 17% of total export value.
Harsh terrain and limited rainfall have contributed to the traditionally
low productivity of Spanish agriculture.  However, the significant
expansion of irrigation and other technological advances in recent
years has resulted in considerable gains in productivity, although
Spain still lags behind most other European countries.

Agricultural productivity and the ability to compete with other nations
has taken on renewed importance following Spain's accession to the
EC.  After a transition period of up to 10 years, Spain will be fully
integrated into the EC's common agricultural policy, and agricultural
trade will be permitted to flow freely between Spain and other EC
countries.  The relatively inefficient Spanish livestock sector suffers
from competition from EC imports but Spanish fruit and vegetable
producers should benefit from greater access to northern European
markets.

Crop growing comprises nearly 60% of the value of Spain's total
agricultural production.  Grains are the most important crop,
accounting for 7.8 million hectares of the 20.1 million cultivated.
Other major crops are olives and winegrapes, with 2.1 and 1.5 million
hectares, respectively.  Livestock and poultry production account for
the remaining 40% of agricultural production value.  Per capita meat
consumption is about 86 kilograms per year, with pork comprising
about 52% of the total.

Spain is one of the most important markets for US agricultural
products, with imports in 1989 totaling $862 million.  Corn and
sorghum have been especially important US exports to Spain.  The
EC's failure to adequately compensate the United States for the loss
of these exports as a result of Spanish accession to the community
precipitated a major trade dispute.  A negotiated settlement obligates
Spain to import 2 million tons of corn and 300,000 tons of sorghum
from non-EC countries per year through 1990.  Other important
Spanish agricultural imports from the United States are soybeans,
tobacco, forest products, corn gluten feed, and cotton.  Spain's
principal agricultural exports are citrus fruits, other fresh and
processed fruits and vegetables, wines, and olive oil.


FOREIGN RELATIONS
After the return of democracy to Spain following the death of  Gen.
Franco in 1975, Spain's foreign policy priorities were to break out of
the diplomatic isolation of the Franco years and universalize its
diplomatic relations, to enter the EC, and to define its security
relations with the West.

Important developments in all these areas took place in 1986.  With
the normalization of diplomatic relations with Israel and Albania,
Spain virtually completed the process of universalizing its diplomatic
relations.  The only country with which it now does not have
diplomatic relations is North Korea.  Spanish entry into the EC was
officially accomplished on January 1, 1986, completing a sometimes
difficult process of negotiations over several years.  With the March
1986 referendum on NATO membership, Spain reconfirmed its 1982
decision to become the 16th member of the NATO alliance, under
specified conditions.

Spain's EC membership is now an important part of its foreign policy.
Even on many international issues beyond Western Europe, Spain
prefers to coordinate its efforts with its EC partners through the
European political cooperation mechanism.

Spain has maintained its special identification with Latin America.  Its
policy emphasizes the concept of Hispanidad, a mixture of linguistic,
religious, ethnic, cultural, and historical ties binding Spanish-speaking
America to Spain.  Spain has been an effective example of transition
from authoritarianism to democracy, as shown in the many trips that
the Spain's king and prime ministers have made to the region.  Spain
maintains economic and technical cooperation programs and cultural
exchanges with Latin America, both bilaterally and within  the EC.

Spain also continues to focus attention on North Africa, especially on
Morocco.  This concern is dictated by geographic proximity and long
historical contacts, as well as by the two Spanish enclave cities of
Ceuta and Melilla on the northern coast of Africa.  While Spain's
departure from its former colony of Western Sahara ended direct
Spanish participation, Spain maintains an interest in the peaceful
resolution of the conflict brought about by decolonization.  Spain has
gradually begun to broaden its contacts with sub-Saharan Africa and
consistently speaks out against apartheid in South Africa.  Spain has
a particular interest in its former colony of Equatorial Guinea, where
it maintains a large aid program.

In its relations with the Arab world, Spain frequently supports Arab
positions on Middle East issues.  The Arab countries are a priority
interest for Spain because of oil and gas imports and because
several Arab nations have substantial investments in Spain.

Spain has been successful in managing its relations with its two
European neighbors, France and Portugal.  The accession of Spain
and Portugal to the EC has helped ease some of their periodic trade
frictions by putting them into an EC context.  Bilateral cooperation
against Basque ETA terrorism has also given a boost to
Franco-Spanish relations.  Ties with the United Kingdom are
generally good, although the question of Gibraltar remains a sensitive
issue.  The two countries agreed in 1984 to discuss all subjects,
including sovereignty, in their talks on the future of the British colony.
This has led to a relaxation of border controls and greater movement
of people and goods.


US-SPANISH RELATIONS
Spain and the United States have a long history of official relations
and are now closely associated in many fields.  This association has
been cemented in recent years by the exchange of high-level visitors.
President Reagan visited Spain in May 1985, and Spanish Prime
Minister Felipe Gonzalez visited Washington in June 1983 and
October 1989.  The King and Queen of Spain have visited the United
States officially on numerous occasions, most recently in 1987 when
they visited the American southwest.  Crown Prince Felipe visited the
United States in September 1989.

In addition to US and Spanish cooperation in NATO, defense and
security relations between the two countries are regulated by a 1988
agreement on defense cooperation (ratified in May 1989).  Under this
agreement, Spain authorizes the United States to use certain facilities
at Spanish military installations.  The principal facilities used by the
United States under the agreement are at Spanish air force
installations in Zaragoza and Moron (near Seville), and at the naval
base at Rota in southern Spain.  By May 1992, the United States will
transfer from Spain its 401st Tactical Fighter Wing at Torrejon Air
Base outside Madrid.

In addition to the bilateral defense agreement, the two countries
cooperate in several other important areas.  Under an agreement
which will remain in force until 1994 (and is subject to renewal at that
time), the US National Aeronautics and Space Administration (NASA)
and the Spanish National Aerospace Institute (INTA) jointly operate
tracking stations in the Madrid area in support of earth orbital, lunar,
and planetary exploration missions.  The Madrid tracking station is
one of the three largest tracking and data acquisition complexes
supporting NASA operations.  A separate agreement on scientific
and technological cooperation is currently under
 negotiation.

An agreement on cultural and educational cooperation was signed
on June 7, 1989.  A new element, support from both the public and
private sectors, gives a different dimension to the programs carried
out by the joint committee for cultural and educational cooperation.
These joint committee activities complement the binational Fulbright
program for graduate students, postdoctoral researchers,   and
visiting professors, which, in 1989, became the largest in the world.
Besides assisting in these exchange endeavors, the US Embassy
also conducts a program of official visits between Spain and the
United States.

Principal Government Officials
Chief of State, Commander in Chief of the Armed Forces-King Juan
Carlos I
President of the Government (Prime Minister)-Felipe Gonzalez
Marquez
Minister of Foreign Affairs-Francisco Fernandez Ordonez
Ambassador to the United States-Jaime de Ojeda  y Eiseley
Spain maintains an embassy in the United States at 2700 15th Street
NW, Washington, DC 20009 (tel. [phone]) and consulates in
many larger US cities.

In summer 1991, a new chancery will open at 2375 Pennsylvania
Avenue, NW, Washington, DC  20037.


Principal US Officials
Ambassador - Joseph Zappala
Deputy Chief of Mission - Edward A. Casey, Jr.

Chief, Office of Defense Cooperation - Brig. Gen. Antonio
Maldonado, USAF
Counselor for Administrative Affairs - Perry W. Linder
Counselor for Agricultural Affairs - Richard T. McDonnell
Counselor for Commercial Affairs - Robert Kohn
Counselor for Consular Affairs - Michael L. Hancock
Counselor for Economic Affairs - Pierce K. Bullen
Counselor for Political Affairs - Walter S. Clarke
Counselor for Politico-Military Affairs - Martin McLean
Counselor for Public Affairs - Jacob Gillespie
Defense Attache - Capt. Carmine Tortora, USN
Drug Enforcement Agency Attache - David Herrera
Federal Aviation Agency Representative - Robert J. Bernard
Labor Attache - Robert Hare
NASA Representative - John F. South
Regional Security Officer - Stanley Bielinski, Jr.

Science Attache - Robert Morris
Consul General, Barcelona - Ruth A. Davis
Consul, Bilbao - Heather Hodges

The US Embassy is located at Serrano, 75, 28006 Madrid (tel.
34-1-577-4000; fax [phone]). Consulate General, Barcelona,
Via Layetana, 33 (tel. [phone]; fax [phone]).  Consulate
Bilbao, Avenida del Ejercito, 11 - 3rd floor, Duesto, Bilbao, 12 (tel.
34-4-475-8300; fax [phone]).


TRAVEL NOTES
Customs:  US citizens are permitted to enter Spain without visas as
temporary visitors for business, tourism, or transit.  Bearers of US
diplomatic and official passports must have appropriate visas
regardless of the nature of the visit.

Climate and clothing:  Clothes suitable for the Washington, DC,
climate are recommended.  Slacks are worn in public, but not shorts.
Sweaters and raincoats are advisable.

Health:  Sanitary conditions and facilities meet European standards.
Health requirements change, check latest information.

Telecommunications:  Local and long-distance telephone services
are readily available.  Government telegraph offices handle all
telegrams.  Madrid is six time zones ahead of eastern standard time.

Transportation:  Public transportation is inexpensive and widely used.
Taxis are numerous and fares are reasonable. Air and rail facilities
serve most cities in Spain, with connections to major cities in Europe.
Rental cars are available, with or without a driver.  Major highways
are good.  Gasoline prices are among the highest in Europe.



Published by the United States Department of State --  Bureau of
Public Affairs  -- Office of  Public Communication  --  Washington, DC
--  January 1991  --  Editor:  Susan Holly
Department of State Publication 7800 -- Background Notes Series
--  This material is in the public domain and may  be reprinted
without permission; citation of this source is appreciated.

For sale by the Superintendent of Documents, US Government
Printing Office, Washington, DC  20402.