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Main | Archive | Issue 2/2007

Spain-Russia: Agreed Approach to Vital Issues
Column: Russia - Spain



In connection with the 30th anniversary of the re-establishment of diplomatic relations between the Soviet Union-Russia and Spain, Ambassador Extraordinary and Plenipotentiary of the Kingdom of Spain to Russia, Francisco Javier Elorza Cavengt, answers some questions put to him by Diplomat.

Your Excellency, what is your assessment of the progress made in politics, economics and culture the last 30 years?
I think the situation has drastically changed for both Spain and Russia. As for my own country, I recall the year 1977 when the drafting of a new democratic constitution was underway in a very trying period in Spain as it again would became a state governed by law and would again be a free society. We not only had to give the Constitution a legal basis again and draft new legislation but also change the economic and social structures, creating new rules of the game and admitting such new players to political and public life as independent trade unions, associations of entrepreneurs and all kinds of other associations that could be given a free hand. The building of a state governed by law called for immense work in order to enable the judicial, legislative and executive branches of the government and the media to be in their appropriate place in creating a new political game with separation of powers and with constitutional and legal guarantees.

Moreover, we needed to do something about the second oil crisis that caused Spains relative impoverishment and unemployment which exceeded 25 percent as well as an inflation rate of 30 percent a year. Thanks to their determination, the Spanish people once again overcame all the difficulties through negotiations and signing the Moncloa Pact. The process not only involved all political parties (both the ruling and opposition parties) but also all economic and public organizations (trade unions, associations of entrepreneurs and a variety of other associations).

The situation has changed radically. Spain is eighth in the world in terms of GDP with an annual per capita income of 23.1 thousand (2005), which is practically half the per capita income of the population of the 27 EU member countries. We owe these changes to democracy and the law-governed state brought about by the 1978 Constitution. It made peace, stability and this countrys economic and social progress a reality. It is the result of the activity not of any single party or social group but of all the Spanish people together with political players who displayed huge responsibility. Take, for instance, the radical tax reform that was undertaken, strange as it might seem, by a government of the democratic center-the first democratic government headed by Adolfo Suarez, the prime minister elected under the above-mentioned Constitution. From a very low income tax that was practically not levied on physical persons during Francos dictatorship, a transition was made to a system under which the minimum income tax on the highest annual income was 56 percent, while the maximum tax income reached 70 percent in combination with the property tax-that also contributed to Suarez popularity with the Spanish Cortes.

Spains entry into the European Union on January 1, 1986, was important to that process. At the moment of the accession, the per capita income in Spain was a mere 73 percent of the average income of 10 states that were EC members at the time. Our entry into the EC liberalized the Spanish economy while creating a new space for economic prosperity that Spaniards made excellent use of during the following two decades. That enabled us to go over to the euro and be one of the founding states of the single European currency zone.

In the last three years, Spains economic growth rate has annually reached 3.7 percent, which is more than two times the average figure of the EC. That has contributed to reaching a per capita income that is the average income of the EU. Over the last six years, 60 percent of the jobs created in the European Union are thanks to Spain. As to housing construction (600,000 jobs), Spain is the leader in the EU. For the first time ever, the annual unemployment rate has dropped below 3 percent. According to all estimates, the growth will continue for the next 4-5 years.

It is not for me to speak about the changes that have occurred in Russia since 1977. I can only note that Russia is currently in an exceptionally powerful and favorable development stage. The last seven years, its annual economic growth has been 6.6 percent with an increase in Russian families incomes of nearly 70 percent. Both the Russian economy and Russian society are transforming, which helps improve the standard of living for a wide strata of the population.

Mr. Ambassador, what, in your opinion, is the state of our bilateral relations?
The political relations between the Kingdom of Spain and the Russian Federation are excellent. Over the last three years, His Majesty the King of Spain has visited Russia three times and had talks with President Vladimir Putin there. In February 2006, President Putin paid Spain an official visit, while our Prime Minister Jose Luis Rodriguez Zapatero came to Moscow in December 2004 and in May 2005. Preparations are being made for his next visit to Moscow which is likely to take place in the fall of 2007.

Ministries and other governmental bodies of both countries are in constant contact with each other. The mentioned visits at all levels make for agreement on many important issues: strong support of a multi-lateral approach rather than unilateralism in world affairs; the supreme significance of the UN; emphasis on conflict prevention; the priority of dialog; support of the Alliance of civilizations, etc.

In the economic sector our ties have not yet reached the desirable level. The Spanish side is making an effort to improve the situation. Over the last three years, the volume of exports has increased by 20-25 percent each year. Spain has already made relatively big investments in the Russian economy (Altadis-Balkan, the companies Roca, Uralita, Maxam, Gallina Blanca, etc. have constructed plants in Russia), major commercial projects are being implemented (Zara, Mango, a variety of viticulture, wine making, and food branch enterprises), and so on.

For the time being, Russian exports are limited to raw materials, oil (along with Saudi Arabia, Russia remains Spains main supplier), ferrous and non-ferrous metal products as well as timber. As for the import of products of Russias light industry, it is practically nonexistent. This situation needs to be changed.

Speaking about the future of our bilateral relations, we should note that the European Union is a key factor in their development. And it should be underscored that Spain is a member of the so-called group of Friends of Russia that always backs any initiative and proposal aimed at boosting and improving our ties. Here we should point out our firm support of the proposal to hold talks with the Russian Federation on expanding the free trade zones to cover goods, services, capital and human resources and also partly on some policies impacting major markets (in the fields of competition, environmental protection, etc.). Spain expects a decision on such talks to be made in the near future.

The European Union and Russia are privileged partners. The EU accounts for more than 50 percent of the total volume of imports into and investments in Russia. So we have to develop all the potential of this partnership and make it into a strategic partnership. That would make it possible not only to raise the level of well-being and economic and social development of both the Russian Federation and the European Union but also decisively promote peace and stability in Europe and worldwide.

Photos courtesy of the Embassy of Spain, ITAR-TASS and the site www.fotoart.org.ua



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