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AN INTRODUCTORY COURSE ON SPANISH LAW AND ECONOMICS

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AN INTRODUCTORY COURSE ON SPANISH LAW AND ECONOMICS COORDINADOR

AUTORES

Pablo de Diego Ángeles

Manuel Díaz Martínez Pablo de Diego Ángeles Eva Mª Domínguez Pérez Cristina Elías Méndez Miryam de la Concepción González Rabanal Nuria González Rabanal Mónica Herranz Ballesteros José Núñez Fernández Martin Kearns

AN INTRODUCTORY COURSE ON SPANISH LAW AND ECONOMICS

(Coordinador)

Pablo De Diego Ángeles (Autores)

Valencia, 2014

Copyright ® 2014 Todos los derechos reservados. Ni la totalidad ni parte de este libro puede reproducirse o transmitirse por ningún procedimiento electrónico o mecánico, incluyendo fotocopia, grabación magnética, o cualquier almacenamiento de información y sistema de recuperación sin permiso escrito de los autores y del editor. En caso de erratas y actualizaciones, la Editorial Tirant lo Blanch publicará la pertinente corrección en la página web www.tirant.com (http://www. tirant.com).

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Índice PREFACE................................................................................................. 13

Chapter 1 SECTOR ANALYSIS OF THE SPANISH ECONOMY 1.1. THE IMPORTANCE OF POLITICAL AND ECONOMIC HISTORY IN THE FUNCTIONING OF THE SPANISH ECONOMY....................................................................................... 20 1.2. GOOD AND SERVICES: SECTORS OF ECONOMIC ACTIVITY.............................................................................................. 21 1.2.1. Primary industry: agriculture........................................... 22 1.2.1.1. Recent Developments....................................... 22 1.2.2.2. A descriptive economic analysis of the agricultural subsector.................................................. 24 1.2.1.3. An economic analysis of the livestock subsector.................................................................... 28 1.2.1.4. The situation in the fishing subsector................ 28 1.3. THE SECONDARY SECTOR: INDUSTRY................................ 32 1.3.1. The recent development of Spanish industry................... 33 1.3.2. The construction (building) subsector............................. 35 1.3.3. The Energy subsector...................................................... 36 1.4. THE THIRD SECTOR: SERVICES............................................ 40 1.4.1. The service sector in Spain.............................................. 41 1.4.2. The Tourism subsector.................................................... 42

Chapter 2 THE ECONOMIC FRAMEWORK OF SPANISH LAW IN ITS CONSTITUTIONAL CONTEXT THE GENERAL LEGAL PROTECTIONS PROVIDING FOR THE BASIC ECONOMIC RELATIONS OF INDIVIDUALS. THE INTERACTION OF THE PUBLIC AND PRIVATE ECONOMIES UNDER THE CONSTITUTION 2.1. THE SPANISH ECONOMY. INTRODUCTION. THE ECONOMIC FRAMEWORK OF SPANISH LAW............................. 48 2.2. THE CONSTITUTION AS AN INSPIRATIONAL STRUCTURE IN THE ECONOMIC LEGAL FRAMEWORK.................... 50 2.2.1. Basic features of employment regulations and social security.................................................................................. 52 2.2.2. Commerce, Competition and Consumer Protection......... 54

Índice

2.2.2.1. Domestic trade................................................. 54 2.2.2.2. Protection of competition................................. 56 2.3. THE PUBLIC SECTOR ECONOMY AS A LIMIT, SUBSTITUTE AND SUBSIDIARY OF THE PRIVATE SECTOR................. 57 2.3.1. Public sector finance; the regulation of public revenue and costs................................................................................ 60 2.3.2. The financial, banking and borrowing sector in Spain..... 62 2.3.3. The general budget for the State and the various public administrations............................................................... 63 2.3.4. The regulation of state and public sector accounts based on the public budget........................................................ 65

Chapter 3 SPANISH PUBLIC LAW IN THE CONTEXT OF THE EUROPEAN UNION. CONSTITUTIONAL STATE LAW. TERRITORIAL ORGANIZATION 3.1. METHODOLOGICAL PREMISES............................................ 68 3.2. THE CONSTITUTION AS THE SUPREME SOURCE OF LAW 69 3.3. A SOCIAL AND DEMOCRATIC STATE SUBJECT TO THE RULE OF LAW.......................................................................... 71 3.4. DOGMATIC PART: THE SYSTEM OF RIGHTS AND LIBERTIES........................................................................................... 72 3.5. THE ORGANIC PART.............................................................. 76 3.5.1. The Head of State. The Parliamentary Monarchy............ 77 3.5.2. The Government and the Administration........................ 79 3.5.3. Parliament....................................................................... 84 3.5.4. Judicial Power................................................................. 93 3.5.5. The Constitutional Court................................................ 95 3.6. TERRITORIAL ORGANIZATION: THE AUTONOMOUS STATE........................................................................................ 101 3.6.1. The Autonomous Communities....................................... 102

Chapter 4 THE FUNDAMENTALS OF PRIVATE LAW IN THE SPANISH LEGAL SYSTEM 4.1. A SHORT INTRODUCTION TO: CIVIL AND COMMERCIAL LAW, CODIFICATION AND UNIFICATION. PUBLIC AND PRIVATE LAW.................................................................. 108 4.1.1. Civil and Commercial law, codification and unification... 108 4.1.2. Private and Public Law.................................................... 110 4.2. GLOBALIZATION AND PRIVATE LAW.................................. 110 4.3. THE FUNDAMENTALS OF CIVIL LAW.................................. 111

Índice

4.3.1. 4.3.2. 4.3.3. 4.3.4. 4.3.5. 4.3.6.

Sources and legislation.................................................... 111 Areas of Civil Law.......................................................... 112 General and specific legislation........................................ 112 General and specific legal rules........................................ 113 Compulsory and default rules......................................... 114 Some recent developments in the Spanish Civil law: conflict resolution through arbitration and mediation........... 114 4.4. THE BASICS OF COMMERCIAL LAW.................................... 115 4.4.1. Commercial Transactions................................................ 115 4.4.2. The Sources of Commercial Law..................................... 116 4.4.3. The “market” and Commercial Law................................ 117 4.4.4. Subjects of the market and Commercial Law.................. 117 4.4.4.1. Objects of trade in the market.......................... 118 4.4.4.2. The commercial courts..................................... 120 4.4.4.3. The Sectors that comprises Commercial Law.... 121

Chapter 4 (II) MAIN FEATURES OF SPANISH PRIVATE INTERNATIONAL LAW 4.II.1. PRESUMPTIONS AND OBJECTIVES OF PRIVATE INTERNATIONAL LAW................................................................... 126 4.II.2. THE SECTORS THAT REGULATE INTERNATIONAL PRIVATE LAW............................................................................. 126 4.II.3. SPANISH PRIVATE INTERNATIONAL LAW....................... 128 4.II.4. THE CLASSIFICATION OF SPANISH PRIVATE INTERNATIONAL LAW........................................................................ 128 4.II.4.1. Introduction............................................................. 128 4.II.4.2. State jurisdiction and the legal basis for the rules governing private international cases............................ 128 4.II.5. THE STRUCTURE (CONFIGURATION) OF SPANISH INTERNATIONAL PRIVATE LAW............................................ 129 4.II.5.1. Different sources: domestic legislation, international and European Union Regulations............................. 130 4.II.5.2. The elements that contributed to the creation of the Spanish system of Private International Law: other factors and the known sources of private origin....... 138

Chapter 5 INTRODUCTION COURSE TO SPANISH CRIMINAL LAW 5.1. THE CONCEPT OF CRIMINAL LAW...................................... 140 5.1.1. The Criminal law from a formal and objective perspective.................................................................................... 140 5.1.2. The Criminal law from a subjective perspective.............. 145

Índice

5.1.3. The aims of the Criminal Law......................................... 145 5.1.4. The aims of Criminal Law within the Spanish legal system.................................................................................. 146 5.2. THE BOUNDARIES OF CRIMINAL LAW................................ 149 5.2.1. Introduction.................................................................... 149 5.2.2. The formal boundaries.................................................... 149 5.2.2.1. The subjective boundary................................... 150 5.2.2.2. The objective boundary: the legality principle.. 151 5.3. THE MATERIAL BOUNDARIES.............................................. 157 5.3.1. The principle of fact........................................................ 157 5.3.2. The principle of exclusive protection of interests that allow the peaceful coexistence of individuals (harmfulness principle)................................................................. 158 5.3.3. The minimum and fragmentary criminal intervention principle.......................................................................... 159 5.3.4. The personal responsibility principle............................... 160 5.3.5. The proportionality principle.......................................... 161 5.3.6. The humanity and dignity principle................................. 162 5.4. THE LEGAL CONCEPT OF CRIMINAL BEHAVIOUR: ELEMENTS AND STRUCTURE AND CONSEQUENCES ACCORDING TO THE SPANISH CRIMINAL CODE........................... 163 5.4.1. The legal concept of criminal behaviour.......................... 163 5.4.1.1. Human behaviour............................................ 163 5.4.1.2. “Actus Reus” and “Mens Rea”......................... 164 5.4.1.3. The objective aspect also known as “actus reus”................................................................. 164 5.4.1.4. The subjective aspect: “Mens rea”.................... 165 5.4.2. Lack of justification......................................................... 166 5.4.3. Guiltiness........................................................................ 166 5.4.4. Punishability................................................................... 167 5.4.5. Imposition of a penalty................................................... 169

Chapter 6 AN OUTLINE STUDY OF SPANISH PROCEDURAL LAW 6.1. CONCEPT AND ESSENTIAL DEFINITIONS........................... 171 6.2. THE RULES OF PROCEDURE: CONCEPTS AND CLASSES... 172 6.3. THE PROCEDURAL STRUCTURE........................................... 174 6.3.1. The declaratory process................................................... 175 6.3.1.1. Opening arguments.......................................... 175 6.3.1.2. Evidential Phase............................................... 176 6.3.1.3. Findings and sentence....................................... 177 6.3.1.4. Appeals............................................................ 177 6.3.2. Execution........................................................................ 178

Ă?ndice

6.3.3. Preventive measures........................................................ 179 6.4. TYPES OF PROCESS................................................................. 180 6.4.1. Ordinary, summary and special procedures..................... 181 6.4.2. An outline of procedural areas........................................ 181 6.4.2.1. Criminal Procedure.......................................... 182 6.4.2.2. Constitutional Procedure.................................. 184 6.4.2.3. Administrative Procedure................................. 185 6.4.2.4. Civil Procedure................................................. 186 6.4.2.5. Employment Law Procedure............................. 188

PREFACE I have been involved, in one way or another, with the Erasmus Program —involving student and teacher exchange— since 1994. This has mainly been through the law school of the Spanish Open University (UNED, where I have held the position of Vice-Dean since 2004), as well as part of the degree program in business administration offered by the Madrid Chamber of Commerce that is taught in conjunction with an academic conglomerate of colleges in Germany, France, Holland, Italy, and the United Kingdom (from 1994 to 2003). Over this period I have had the opportunity to welcome hundreds of students (and dozens of teachers), all of whom have shared a positive expectation to either study or develop their careers in another country. When UNED decided to create the Teaching Innovation Network in 2012, we came to realise (after signing an agreement to create a team with other academics at the UNED’s Law School) that Erasmus students from the various countries would like to have an introduction to what they were going to study in Spain, probably at the outset in English, while their level of Spanish improved during the course of their Erasmus sponsored stay as well as their knowledge of Spanish law and economics gleaned in the course of their classes and studies here in Spain. This proposed introduction, would therefore have to contain some basic material with regard to Spanish law and economics which covers my area of expertise as a professor at the UNED Law School. It is also undoubtedly the case that the development of material in English is ever increasing in all European Universities (the UNED for its part offers some courses in English as part of the degree programs it offers). As a matter of fact, I have currently been overseeing a course that can be imparted both in English and Spanish, on Budgets and Governance in the European Union, as part of the Master Degree UNED program on the European Union over the 2012/2013 academic year. In addition, English is one of the compulsory languages required for working in the Government Institutions of the European Union (in addition to French and German). Although only a few of us are able to work directly in English, we have had

Preface

the good fortune to be able to rely on the accurate translation work undertaken by Martin Kearns, an Irish lawyer living in Spain, and author of Legal English1, who teaches in our courses of English for Law organized sometimes at the UNED’s Law School. This introduction to Spanish public economics and law is intended to give the reader an overall familiarity with the basic principles at work in this area through the medium of the English language (understanding the text requires a minimum B1 level of English in accordance with the European frame of reference). The material is divided into the following sections namely: Spanish economic structure; the Spanish constitutional economic framework; Spanish public law; Spanish private law (stressing the role of commercial law as being the “law of the market” since the text has an important economic component); in addition to a brief review of Spanish private international law. It concludes with an overview of Spanish criminal and procedural law. Each individual author is responsible for the contents of the section they have contributed and have included therein the most pertinent material that they consider relevant; thus, my job as coordinator has been, above all else, to provide a general overview of the project’s objectives. The chapter on Spanish economic structure has been written by Professors Miryam González Rabanal PhD., and Nuria González Rabanal PhD. The former has been a professor at the Law School of the UNED (Department of Applied Economics and Public Management) for twenty-five years and the latter is a professor at the thriving University of León. Their invaluable cooperation is based on the fact that contemporary Spanish economic and political history cannot be explained without making reference to its productive reality; this has been historically marked by the decline in relevance of the primary sector and the growth of the tourist sector. In addition, Spanish economy has experienced what economic doctrine refers to as the “real estate bubble”, characterized by generous loan facilities (that were considered limitless) that have facilitated an expansion in construction projects throughout Spain. The chapter will provide readers with an overview of the features that have characterized

Legal English. (2007) Edition by COLEX, Madrid, Spain.

Preface

recent developments in the agricultural, livestock and fishing industry (the primary sector); as well as with regard to industry, construction, energy and tourism, with an emphasis on the most recent data in each area as well as proffering an explanation of the factors that can shed light on performance of these sections of the Spanish economy, in particular with regard to construction and tourism. I have contributed the chapter on the Spanish economic constitutional framework, in the light of the new Constitution whose drafting provided a new framework for the economy of a country recovering from dictatorship. The chapter succinctly refers to the constitutional regulation of the material relevant to the public and private sectors of the Spanish economy such as: the equitable redistribution of income and wealth; economic growth; stability; full employment; social security; employment conditions. Regulation of basic aspects of commerce, competition, and consumer protection are also covered. In addition a brief analysis is provided of economic performance in the public sector; the financial system (banking and loans): a brief discussion of the revenue system; and a somewhat more in-depth study of the basic budgetary issues (including the topic of budgetary stability, now the subject of specific Constitutional regulation (Article 135) to comply with Spain’s signing the Treaty on Stability, Cooperation and Governance in the Economic and Monetary Union, March 2, 2012). In this field, Professor Tutor D. Juan Francisco Justel Antón, local teacher of Public Finance in the study center of our university (UNED) in Zamora (Castilla-León region), has given me very wise advice about the way to focus the Public Sector economic activity from the point of view of its Constitutional and legal frame (including the basic lines of the economic environment of the Spanish law). I want to thank him for his advice and clever suggestions on my written text. Professor Cristina Elías Méndez, PhD., Department of Constitutional Law at UNED is Principal of the School of Legal Practice within the Law School. She has contributed a valuable chapter on Spanish Public Law focused on basic constitutional issues such as: the separation of powers and the legal holders of such powers in Spain; overall aspects connected with the functioning of the Public Administration; and, above all else, territorial organization in Spain, given its idiosyncratic structure into a number of Autonomous

Preface

Regions. In a succinct and rigorous fashion, Professor Elías effectively addresses all these issues. Professor Eva Domínguez Pérez, PhD., is a Professor in the UNED’s Commercial Law Department. She has contributed a chapter providing a broad focus on Private Law. Following a short description of the basics of Civil law and the codification problems that have arisen in the field of Private law as a whole, she goes on to describe the new challenges in this area, especially with regard to commercial law that along with other areas of the law has had to adapt itself to the new realities of the market. What defines modern commercial law is the subject’s ability to expand its field of application, reaching far beyond the domain of the individual entrepreneur and the commercial establishment, to include the trader in non-commercial traffic, as well as those active in the market outside the strict notions of what amounts to a commercial establishment. Proof of which is the general character of bankruptcy law, that is applicable to all classes of debtor, or the new systems of signing contracts based on the general principles of contract law, that also include issues and arrangement for contracting parties who are not physically present. Competition is another area of the law that has also experienced fundamental changes applicable to anyone who participates in the market —be they a businessman/ woman or not— and the new orientation of this legal sector namely the protection of competition per se. Finally, evidently the consumer’s participation in the market must be regulated by law, and this in turn has generated an abundant regulatory legacy that, provides the basis for the consumer’s legal rights. Clearly such changing circumstances have posed new challenges for commercial law which it has attempted to address, and these answers are discussed in the present book. Professor Mónica Herranz Ballesteros, PhD., Professor in the Department of International Private Law discusses the main features of Spanish private international law in chapter 4, part II. Her focus, from a Spanish point of view, is on the regulation of international private relations. Though it remains true that the object of International Private Law has not changed in its main aspects, nevertheless a more in depth study of the subject reveals a much more complex reality. Thus, this chapter demonstrates how changes in this field are projected both in terms of techniques and sources. The approach in this chapter finds its inspiration in the plural-legislative reality of Spain, and the in-

Preface

cremental contribution made by different sources of regulation. The chapter provides an analysis of the impact International Private Law is having on the Spanish legal system, paying particular attention to the European regulation applicable to the legal relationships that are the object of this branch of legislation. In chapter five, Professor José Núñez Fernández, PhD., Associate Professor in Criminal Law in UNED, discusses Criminal Law in Spain and attempts to explain some of the fundamental concepts on which the Spanish system of Criminal law is based. To this end, the author highlights the constitutional principles that both inspire and impose boundaries to the State’s punitive power. In addition, an analysis is provided of some specific aspects of criminal behaviour and the consequences arising therefrom. Since Professor Núñez has worked and studied in the UK, this chapter was written in English. Last, but not least, the chapter six has been written by Professor Manuel Díaz Martínez, PhD., Professor of Procedural Law (in fact, he obtained his “Professorship” in 2012, after a long period of accreditation. Professor Díaz Martínez is not only a Professor PhD. (Profesor Titular) but also holds the accreditation of Catedrático (Full Professor in Spain). Thus the author has an extensive knowledge in this area of the law, and has done an excellent job in managing to succinctly summarise the vast field of Spanish Procedural Law into a comprehensive summary of less than thirty pages. In addition to my above mentioned colleagues at the UNED I feel obliged to thank Manuel for his leadership and coordination with regard to this project. May, I express my profound thanks to all my colleagues who have assisted in the production of this book. José Núñez, the Associate Professor of Criminal Law has indicated to me that he has come across several legal professionals who were very interested in reading material on Spanish law written in English. It is our hope that this book will address their needs. Finally with regard to the goal of this book: may I stress that it is for all students, young and old alike, coming to the UNED (bearing in mind that each year the UNED Madrid campus receives many students from Italy, Germany, Romania, etc., who attend our courses on both law and economics) or coming to other Universities in Spain to enjoy an Erasmus period in their Faculties of Law. It is our earnest wish

Preface

that these pages provide you with a suitably succinct, introductory overview with regard to the basics of Spanish law and economics. After your stay (and having by then achieved a greater command of Spanish), we hope you will be the best ambassadors regarding the usefulness of this book. Welcome to Spain.

Pablo de Diego ﾃ］geles (PhD. in Law) Book coordinator Assoc. Professor (Profesor Titular) in the Department of Applied Economics and Public Management at the UNED Law School (Universidad Nacional de Educaciﾃｳn a Distancia) July 2013

Chapter 1

SECTOR ANALYSIS OF THE SPANISH ECONOMY Prof. Dr. Miryam de la Concepción González-Rabanal1 Prof. Dr. Nuria G. Rabanal2 Abstract This chapter is focused on the analysis of the importance of political and economic history in the functioning of the Spanish Economy. In order to make a deep study of this topic, the different economic sectors are studied: good and services, agriculture, fishing, livestock, industry, construction, energy, and services (with special reference to tourism). Keywords Economic Sectors in Spain; Gross domestic product (GDP): Gross Value Added (GAV): Moncloa Pacts; Stabilization plan; Inferior goods; Exclusive economic zones. CONTENT: 1.1. THE IMPORTANCE OF POLITICAL AND ECONOMIC HISTORY IN THE FUNCTIONING OF THE SPANISH ECONOMY. 1.2. GOOD AND SERVICES: SECTORS OF ECONOMIC ACTIVITY. 1.2.1. PRIMARY INDUSTRY: AGRICULTURE. 1.2.1.1. Recent Developments. 1.2.1.2. A descriptive economic analysis of the agricultural subsector. 1.2.1.3. An economic analysis of the livestock subsector. 1.2.1.4. The situation in the fishing subsector. 1.3. THE SECONDARY SECTOR: INDUSTRY. 1.3.1. The recent development of Spanish industry. 1.3.2. The construction (building) subsector. 1.3.3. The Energy subsector. 1.4. THE THIRD SECTOR: SERVICES. 1.4.1. The service sector in Spain. 1.4.2. The Tourism subsector.

Department of Economics and Public Management. Universidad Nacional de Educación a Distancia (UNED). Associate Professor (Profesor Titular). Department of Economics and Statistics. Universidad de León. Profesora de Economía Española y Europea.

Miryam de la Concepción González-Rabanal - Nuria G. Rabanal

1.1. THE IMPORTANCE OF POLITICAL AND ECONOMIC HISTORY IN THE FUNCTIONING OF THE SPANISH ECONOMY In order to understand the current climate of a country’s economy, it is essential to be aware of its political and economic past. In the case of Spain, looking back over recent economic events allows us to understand the reasons for Spain’s current economic situation. Thus, it is always essential to provide a contemporary historical reference when attempting to come to terms with all sectors of the Spanish economy. In general, the end of the Spanish Civil War is a good starting point for a historical and economic review, as it provides two important sets of circumstances: • Firstly, the late thirties and early forties saw changes of great importance in the international scene. The outbreak of World War II determined the European economic model, and Spain was not isolated from these changes. Indeed the fall in industrial production and specialization in the arms industry affected a Spain still in the process of rebuilding itself both politically and economically. • Secondly, the end of the Spanish Civil War saw the imposition of a military dictator lead by General Francisco Franco that championed a political and economic structure based on domestic production, self-reliance, and economic independence while at the same time blocking imports. For forty years, the dictatorship, in its various phases, put its stamp on a Spain isolated from Europe with a production model far remote from its optimal potential. The model was characterized by producing low quality products, plagued by an inferior technological level in its means of production, and which possessed of less in regards to an international outlook. Though this phase of the dictatorship had also witnessed an opening up to the international market with the Stabilization Plan of 1959, only with the passing of the dictator, the stage was finally set for a process of transition to democracy. The return of democracy saw Juan Carlos I crowned as King of Spain and the passing of the current Spanish Constitution of 1978. This undoubtedly turbulent period at all levels saw unprecedented econom-

Sector analysis of the spanish economy

ic, political and institutional upheavals that eventually culminated in the so-called “Moncloa Pacts”. Beyond doubt these agreements represented a consensus between all the competing social and political forces of the time to lay the ground work for change from a closed economy to an open one based on democratic principle sand market forces. The transition phase was followed by successive democratic governments, whose respective ideologies have influenced the economic policy model followed since that period. However, it must be borne in mind that the democratic era experienced a major boost at the economic level from Spain’s entry into the EU. This membership allowed access to the European market and saw Spain benefit from European funding in important sectors such as agriculture, fisheries, energy, and industry, among others. The significance of the change brought about by Spanish membership of the EU has been evident in all economic sectors. FURTHER READING – FUENTES QUINTANA, Enrique: Los Pactos de La Moncloa y La Constitución de 1978, ed. Círculo de Lectores: Galaxia Gutenberg, 2004., pp. 163-238. – G. RABANAL, N. y GONZÁLEZ RABANAL, M.C.: El entorno económico actual, Madrid, Thomson, 2003. – GUINDOS JURADO, Luis D.: La Política Económica Española En El Marco De La Unión Económica y Monetaria, ed. Círculo de Lectores: Galaxia Gutenberg, 2004 pp. 905-950. – RALLO ROMERO, Antonio, GUZMÁN CUEVAS, Joaquín y SANTOS CUMPLIDO, Francisco J.: Curso De Estructura Económica Española. Madrid: Pirámide, 2001. – SIMÓN SEGURA, Francisco: Manual De Historia Económica Mundial y De España. 1st ed. Centro de Estudios Ramón Areces, 1990. – VELARDE FUERTES, Juan: La Economía Española Ante El Siglo XXI. Círculo De Empresarios, 1990, no. 1, pp. 451-466.

1.2. GOOD AND SERVICES: SECTORS OF ECONOMIC ACTIVITY The circular flow of income theory allows us to see how relationships are established between economic factors and real and financial currents in the economy. These economic currents give rise to markets for goods and services. Therefore it is desirable, in order to appreciate

Miryam de la Concepción González-Rabanal - Nuria G. Rabanal

the characteristics of each sector, to review and group activities based on their common characteristics. The most common classification is the distinction between: primary industry or agriculture, secondary or industrial, and the thirdly the services sector.

1.2.1. Primary industry: agriculture For the purposes of defining the primary sector as laid down by FAO (Food and Agriculture Organization) the following agricultural activities namely (agriculture, livestock, forestry and hunting) are included along with fishing. This distinction is important when analyzing data or sectors, given that if we are speaking about “agriculture in the broadest sense” —this would include livestock, for example—, or “agriculture in the strict sense” in which case this would be limited to crops.

1.2.1.1. Recent Developments In general, when studying agriculture in Spain recent developments should be grouped under three headings: • The traditional agricultural model: in this stage, as the result of a self-sufficient model, there is a dualism in the structure of ownership of farms and distribution. It is a period characterized by great social polarization: with a small number of landowners accumulating most of the income generated and a large peasant population who can barely make a sufficient income. The work force in this period were unskilled, possessed of few qualifications and came cheap. Consequently, operating guidelines were labor intensive with low investment in the land. This led to a market model where supply and demand were very small given the small size of agricultural markets, low-income level, low levels of consumption, and impoverished diets. • The agriculture of development: that commenced with the introduction of the Stabilization Plan brought about changes in the Spanish agricultural model. Effects that arose from the opening up of the Spanish economy to new markets and which were reflected not only in the social sphere, but also in agricultural markets.

Sector analysis of the spanish economy

A surge in the labor market due to the demand for agricultural goods which in turn saw: – The gradual introduction of social protection systems in the award of contracts. – Reduced discrimination between industrial and agricultural workers, allowing the field laborer to become an agricultural worker. – Increased popularity of the notion that manual work linked to the care and exploitation of land be replaced by mechanical means. Important changes in demand also came about: – With a shift in demand away from inferior goods in favor of other products. – Driven by changes in the composition of demand itself, i.e. in diet. – Favoring the creation of income based on livestock. There are also changes in supply resulting in this being more diversified, broad, and specialized. • Agriculture after Spain’s accession to the EU saw accession to the European project and witnessed an increased separation between the rural world and agriculture. This in turn involved a significant increase in productivity and agricultural production along with higher levels of domestic and foreign protectionism. All of which contributed to the growth of agricultural surpluses and the appearance of a degree of liberalization. The implementation of the Common Agricultural Policy (CAP) brought about the introduction of a new rural model based on two objectives: namely territorial and environmental balance. To achieve this, measures were introduced aimed at encouraging diversification and the enhancement of endogenous growth through the agricultural sector, while retaining the most productive farms and promoting economic alternatives that favored territorial equality and stability for the population in rural areas. The CAP has brought benefits to both producers and consumers alike. For producers it has risen production on a larger scale, and allowed rapid dissemination of knowledge and technical progress in the field, along

Miryam de la Concepción González-Rabanal - Nuria G. Rabanal

with the new products. Consumers, on the other hand, now enjoy greater market access and product variety along with o Northern Spain dominated by small landholdings and more a lack of technicalcompetitive prices and improved market stability.

economic development (typical of agriculture based on a subsistence

economy). 1.2.2.2. A descriptive economic analysis of the agricultural subsector o The arid south ofinSpain characterized by large devoted to crop sand The hallmark of agriculture Spain is its diversity. Thisareas manifests itself, not only inwide diverse but also in a richthat variety of differscaleclimates, socioeconomic imbalances are reflected in high levels of ent soils. There are three types of agriculture: employment and illiteracy among the agricultural population. – Northern Spain dominated by small landholdings and a lack of technical-economic development (typical of agriculture based o The transition zone of central Spain that combines features of the two on a subsistence economy). above.of Spain characterized by large areas devoted – The arid south to crop sand wide scale socioeconomic imbalances that are reflected in high levels of unemployment and illiteracy among the agricultural population. charts below show the current of the sector and allow – The The transition zone of central Spainsituation that combines features of us to draw the two someabove. interesting conclusions about the general state of the primary sector in The charts below show current farm situation of the and alSpain: general landthe distribution, numbers, andsector employment trends. low us to draw some interesting conclusions about the general state of the primary sector in Spain: general land distribution, farm numbers, and employment trends.