Located in south-western Europe, Spain borders the Mediterranean Sea, North Atlantic Ocean, Bay of Biscay and the Pyrenees Mountains. It covers an area of 498,800 sq km south-west of France. With a population of 46.4 million (2016), Spain’s official languages include Castilian (Spanish), Basque, Catalan and Galician. Ninety-four per cent of the population identifies as Roman Catholic. Spain’s capital is Madrid.
Relations between Australia and Spain continue to expand, boosted in 2017 by the celebration of 50 years of diplomatic relations. Spain offers significant potential as a partner, both in business and in international relations. While Spain's foreign policy traditionally focuses on the European Union (EU), the Mediterranean and Latin America, it is broadening its diplomatic and commercial presence in the Indo-Pacific. The Australian and Spanish Governments augment growing trade and investment links by maintaining policy dialogue on areas of shared interest. We will deepen our engagement on human rights issues following the successful election of both Australia and Spain to the United Nations Human Rights Council for the 2018-2020 term. In addition, Spain is a strong proponent of trade liberalisation and has offered its support for an Australia-European Union Free Trade Agreement. Spanish companies have established a strong and growing presence in Australia, including by basing their Indo-Pacific operations in Australia.
During the period 2004–14, cooperation on large-scale military projects (worth $13 billion) has created a foundation for expanded bilateral engagement between Australia and Spain. A tangible example of this deepening defence relationship is the commissioning of HMAS Canberra (November 2014) and HMAS Adelaide (December 2015) - two Royal Australian Navy (RAN) landing helicopter dock (LHD) ships. The LHDs are Australia's largest-ever warships in RAN service, with impressive helicopter and amphibious capacity and surgical facilities, which can be configured for humanitarian, disaster relief or combat missions. They were designed by Spanish company Navantia, one of the world’s largest shipbuilders. The construction of the hull was undertaken in Spain (Ferrol), and transported to BAE Systems shipyard in Victoria (Williamstown) for final construction and fit-out.
This follows the award of three major Australian naval acquisition contracts — for two amphibious vessels, three air warfare destroyers (AWD) and twelve landing craft vessels — where Navantia is deeply involved as either designer, builder or section supplier. The Spanish-designed AWDs will also be among the most capable ships of their size in the world. The Navantia contracts complement those won in 2004 by EADS-CASA, the Spain-based division of Airbus Military, to provide the Royal Australian Air Force with five (later seven) multi-role tanker transport aircraft.
In March 2016, Navantia was selected as the preferred tenderer for the RAN replenishment vessel replacement project, at a total cost of $640 million, with the first of two vessels expected to be delivered in 2019. In April 2016, Navantia was one of the companies shortlisted for the RAN’s Future Frigates program, valued at more than $35 billion, with construction expected to commence in Adelaide in 2020. As well as strengthening Australia’s naval capability, these projects are also providing significant employment, innovation and commercial flow-on to Australian firms.
Cooperation on defence acquisition projects has led to increasingly close links between the RAN and the Spanish Armada (navy), which have gradually evolved into a strategic partnership. A manifestation of this strengthened relationship was the agreement between the two navies for the deployment of the Spanish logistic supply ship, SNS Cantabria, to Australia in 2013 to exercise and train with Australian naval ships for eight months. The deployment also allowed SNS Cantabria to represent Spain at the Australian International Fleet Review to commemorate the centenary of the arrival into Sydney Harbour of the first ships of the Royal Australian Navy in 1913. The Spanish frigate Cristóbal Colón was deployed to Australia in the first half of 2017 to assist the RAN with the introduction into service of the first Hobart Class AWD. In preparation for the induction into Australian service in coming years of Spanish-designed ships, the Armada has also provided considerable training and operational assistance to the RAN.
In 2017, this close defence relationship was further strengthened by a number of high-level visits. During a visit to Australia in June, Spanish Minister for Defence, María Dolores de Cospedal, met with Australian Defence Minister Marise Payne and Minister for Defence Industry Christopher Pyne, to discuss both countries’ defence industries and future cooperation. The Spanish Armada Chief accompanied Minister de Cospedal on her visit to Australia and conducted a bilateral meeting with the Australian Chief of Navy, Vice Admiral Tim Barrett. In November, the Chief of Navy visited Spain to participate in a ceremonial laying of the keel of the Navantia-made new Australian combat replenishment vessel.
The Spanish and Australian Defence Forces are also conducting similar Building Partner Capacity (BPC) missions in Iraq as part of the multinational coalition against Daesh. This has led to valuable information sharing and exchange of ideas concerning this important mission.
The first recorded Spanish free settler to Australia was J.B.L. De Arrieta, who arrived in 1821. The NSW colonial government granted him 2,000 acres of land at Morton Park. He died in 1838 and is commemorated through the naming of Spaniard's Hill near Camden.
More recently, in the 2016 Census 119,952 Australian residents claimed Spanish descent, while 15,391 indicated they were born in Spain. The Spanish community in Australia comprises principally those who migrated to Australia in the 1960s under a government-to-government assisted migrant passage program, and their children, but also includes the descendants of nineteenth-century, primarily agricultural, immigrants.
Spain is Australia’s 30th largest market by short-term visitor arrivals. In the year ended September 2017, there were 40,400 visitors from Spain, an increase of 7.9 per cent on the previous year. Over the last five years, the average annual growth in arrivals from Spain was 11.4 per cent. Spain is Australia’s 22nd largest short-term destination. In the year ended September 2017, 88,500 Australian residents returned from Spain following a short-term visit overseas, an increase of 20.3 per cent on the previous year, contributing to a five-year average annual growth of 11.9 per cent.
In June 2017, Australia and Spain agreed to increase the numbers of places available under the successful Work and Holiday Maker program (WHM) from 600 to 1500. This offers more opportunities for Spanish and Australian youth to enjoy living and working in each other’s country.
Spain is a significant English Language Courses (ELICOS) market, being one of the countries with strongest growth in terms of student numbers. Spanish nationals travelling on tourist visas may also attend ELICOS, as the courses are often shorter than three months and therefore do not require a student visa. In the 2016 calendar year, there were 6,452 Spanish students enrolled in a range of education sectors (higher education, vocational education and training, schools, ELICOS and non-award training programs). This compares to 5,673 enrolments in 2015 and represents an annual increase of 14 per cent.
Spanish authorities estimate that there are approximately 2,000 Australians (not dual nationals) living and working in Spain. The Australian Embassy estimates there are approximately another 4,000 Australians with Spanish or EU dual nationality living in the country.
Since 2009, when the Spanish government opened a branch in Sydney, the Cervantes Institute has been contributing to the expanding knowledge in Australia of modern Spain, its language and culture.
The Association of Spanish Researchers in Australia-Pacific (SRAP) aims to encourage professional and academic discourse and collaboration, and promotes a culture of scientific knowledge exchange between Spanish and Australian researchers working in the Asia-Pacific region. In 2017, SRAP held its 3rd Australia-Spain Research Forum in Sydney and Canberra.
The Spain-Australia Council Foundation is a private non-profit organisation supported by the Spanish Ministry of Foreign Affairs and Cooperation. Its goal is to strengthen and deepen bilateral relations between Spain and Australia, promoting common interests through investment forums and business meetings, cultural and educational activities and exchange programs in fields like science and technology, energy, art, gastronomy and legal affairs.
The Australian Embassy in Madrid manages a high profile public diplomacy program. Activities in 2016-17 focused on raising awareness about contemporary Australia in Spain. Events highlighted Australian music, film, literature and indigenous cultures and promoted Australia as a successful multicultural nation and an attractive place to study, work, visit, live and invest. In June 2017, the Embassy hosted an event at the Royal Theatre in Madrid to launch celebrations marking 50 years of diplomatic relations between Australia and Spain.
Agreements between Australia and Spain include an Extradition Treaty (1988), Treaty on Mutual Assistance in Criminal Matters (1991), Agreement on Cultural, Educational and Scientific Cooperation (1991), Double Taxation Agreement (1992), Social Security Agreement (2003), Air Services Agreement (2009), Agreement for the Mutual Protection of Classified Information of Defence Interest (2012), Defence Cooperation Memorandum of Understanding (2013), Work and Holiday Visa Memorandum of Understanding (2014) and Sports Cooperation Memorandum of Understanding (2014).
- Defence Minister Maria Dolores de Cospedal, visited Sydney in June 2017.
- Prime Minister Mariano Rajoy, visited Australia for the G20 Summit in November 2014.
- Foreign Minister José García-Margallo, visited Canberra in September 2014 to meet business leaders, sign the bilateral Work and Holiday Visa Agreement and inaugurate the Spanish-built solar energy plant at Royalla (ACT).
- King Juan Carlos and Queen Sofia made an official state visit to Australia in June 2009, which included Canberra and Sydney.
- Trade and Investment Minister Andrew Robb, visited Madrid in July 2014, accompanied by a high-level business delegation from the Europe-Australia Business Council.
- Infrastructure Minister Anthony Albanese, visited in April 2013.
- Defence Materiel Minister Jason Clare, visited in August 2011.
- Governor-General Quentin Bryce, visited in June 2011.
- Foreign Affairs Minister Stephen Smith, visited in February 2010.
Bilateral economic relationship
In 2016-17, Spain was Australia's 26th largest goods and services trading partner, with total trade reaching $3.4 billion. Australian merchandise exports to Spain were valued at $697 million, and included coal, other ores and concentrates, fruit and nuts, and electronic integrated circuits. Australian imports from Spain in 2016-17 stood at $2 billion, with the biggest import items being passenger motor vehicles, medicaments (including veterinary), fixed vegetable oils and fats, and rubber tyres, treads and tubes. Also in 2016-17, Australia’s trade in services with Spain totaled $623 million; $342 million in exports and $281 million in imports.
See also the section on 'Defence Cooperation'.
In 2016, Spain’s investment in Australia was valued at $948 million. Spanish companies are increasingly significant players in the infrastructure, water and energy sectors in Australia. Many of Spain's largest infrastructure companies have a presence in Australia.
Significant contracts awarded to Spanish companies in Australia since 2015 include:
- Transport infrastructure projects:
- CAF — Canberra and Newcastle light rail.
- ACS — Sydney M5 motorway.
- Acciona-Ferrovial — Toowoomba Second Range Crossing.
- OHL — Pacific Highway upgrade.
- Renewable energy generation projects:
- Elecnor — Barcaldine and Moree solar photovoltaic plants in Queensland and NSW, and, first and second phases of the Bungala Solar photovoltaic park project in South Australia - the largest photovoltaic project under construction to date in Australia.
- Gas Natural Fenosa — Crookwell windfarm in NSW.
- Acciona — Mt Gellibrand wind farm in Victoria.
Australian investment in Spain was worth $5.1 billion in 2016. Major Australian investments in Spain are in a diverse range of sectors, including financial services and energy, mining, education, petroleum and gas storage and distribution and car parking infrastructure.
Australian manufacturers have also had success in Spain. In 2017, Western Australian shipbuilding company Austal Ltd won a contract worth $190 million for two high-speed trimaran ferries to operate in Spain’s Canary Islands.
More economic and trade information can be found in the Spain Country Fact Sheet [PDF 171 KB].
The Australian Trade and Investment Commission (Austrade) is the Australian Government’s trade and investment promotion agency. Austrade helps Australian companies succeed in international business, promotes and markets Australian education internationally, develops tourism policy and research to grow Australia’s tourism industry and attracts productive foreign investment into Australia. Austrade has an office in Madrid, responsible for Spain and Portugal.
Austrade’s priorities in Spain form part of its broader strategy for developing Australia’s trade and investment relationship with Western Europe. These include: digital industrialisation (such as autonomous driving, robotics and automation); advanced maritime and defence technology and manufacturing; smart cities infrastructure and technology; work-oriented training and borderless learning; and, renewable energy, power generation and storage technologies. Some of these initiatives are predominantly designed to attract further European investment into Australia, while others are more focused on opportunities for Australian companies to participate in global value chains and/or innovation eco-systems in Europe.
The Australia-Spain Business Association is headquartered in Madrid, with branches in Barcelona and Santiago de Compostela (Galicia). The Spanish Government and Catalan regional Government maintain trade promotion offices in Sydney, where the Spanish-Australian Chamber of Commerce and Industry, La Camara, promotes business relationships within the Spanish-Australian business community. The Spain-Australia Council Foundation board consists of several key Spanish companies with a presence in Australia such as Acciona, Navantia, Ferrovial and Indra.
System of government
Spain is a parliamentary monarchy. The head of state is His Majesty King Felipe VI, who is also commander-in-chief of Spain's armed forces and head of the Supreme Council of Defence. The head of the government is the prime minister (known in Spanish as the president of the government) who is appointed by the king but must win an investiture vote in parliament. Legislative power is vested in the Cortes Generales, comprising two houses, elected by direct universal adult suffrage for four years. The Congress of Deputies (lower house) has 350 members, elected by proportional representation. There is also a less powerful but nevertheless important Senate, with powers of legislative amendment. It comprises 266 members (208 directly elected and 58 appointed as regional representatives).
The Spanish constitution recognises the right of the various regions of Spain to autonomy while emphasising the indissoluble unity of the Spanish state. Spain is divided into 17 autonomous communities, each with its own elected assembly and executive government, together with two North African enclaves, Ceuta and Melilla, called autonomous cities. The powers of the autonomous communities vary considerably, with the Basque Country, Catalonia and Galicia having special status and extensive powers, including over regional policing.
Spain's major political parties include the centre-right People's Party (Partido Popular - PP) and the centre-left Socialist Party (PSOE). In 2015, two newcomers — the radical left anti-austerity Podemos (‘We can’) and the liberal, centrist Ciudadanos (‘Citizens’) parties — entered the mainstream for the first time, ending the domination by the PP and Socialists stretching back to 1978 and the new post-Franco Constitution. Other significant parties include, in Catalonia, mainstream pro-independence parties Esquerra Republicana (the Catalan Republican Left, ERC) and the Catalan Democratic Party (PDeCat), in the Basque country, the Basque Nationalist Party (PNV), which is made up of pro-independence, moderate democratic nationalists, and in Galicia, the Galician Nationalist Block (BNG) and the Galician Socialist Party. All of the main national parties also have regional affiliates in Catalonia, the Basque Country and Galicia.
Prime Minister Mariano Rajoy, leader of the PP, was re-appointed in October 2016 following two inconclusive election results in December 2015 and June 2016. Despite the PP winning the most seats in both elections, it did not win sufficient seats to form a majority government. It took almost one year for the PP to form a minority government with the support of Ciudadanos and the abstention of the Socialist Party.
Mr Rajoy is only the second conservative PM since Spain’s transition to democracy in the 1970s. His government’s overwhelming focus has been on the economy and implementing structural reforms in an effort to continue Spain’s recovery from its 2007-13 financial crisis and to lower Spain’s high unemployment rate.
The 2017 push for independence by Catalonia led to Spain’s worst constitutional crisis in 40 years. Despite rulings by the Spanish Constitutional Court, the Catalan regional government proceeded to hold an ‘independence referendum’ on 1 October and subsequently unilaterally declared independence from Spain. On 27 October, Prime Minister Rajoy suspended Catalonia’s self-rule, dismissed the regional government and called fresh elections in Catalonia on 21 December. The election returned a fragmented regional parliament with no party winning the majority needed to form government (68 seats). Ciudadanos (37 seats), Catalan Democratic Party running as Junts Per Catalunya (Together for Catalonia) (34 seats) and Esquerra Republicana (32 seats) achieved the top three results.
In the modern era, Spain’s role in international affairs grew following its entry into the European Community in 1986. Spaniards are strongly pro-European. Spain is also a member of the OECD and is a permanent invitee to the G20. Spain assumed a non-permanent seat on the UN Security Council for the 2015-16 term.
Spain became a member of the North Atlantic Treaty Organization (NATO) in 1982, with its full integration into the military structure of NATO completed in 1997. Until 2014 when the transition process was completed, around 1,500 Spanish military personnel were involved in the NATO-led International Security Assistance Force (ISAF) operation in Afghanistan. Alongside its Global Coalition Partners, Spain is engaged in international efforts building the capabilities of Iraq’s Security Forces and in the fight against Daesh. Previously, Spain has sent troops on peace-keeping missions in Bosnia, Kosovo, Haiti and Lebanon, and as observers in the former Yugoslavia, Ethiopia, Eritrea, the Congo, Kosovo, Burundi and Sudan.
Spain has maintained its close relationships with Hispanic America and the Philippines, based on history, a common culture, language, religion and strong investment and trade ties. A further priority is the Mediterranean rim, where a number of countries have important political and economic links with Spain. The Union of the Mediterranean has its headquarters in Barcelona. Relations with Morocco have often been dominated by the issues of sovereignty of the two Spanish enclaves of Ceuta and Melilla, illegal immigration, drug-trafficking, fishing rights and countering terrorist activities. Spain continues to dispute British sovereignty over Gibraltar.
Spain became a Forum Dialogue Partner of the Pacific Islands Forum in 2014, and provides a modest aid program to the region. The Pacific is important to Spain’s fishing industry and in recent years it has increased efforts to prosecute Illegal, Unregulated and Unreported (IUU) fishing breaches by Spanish companies and individuals. Spain has strong historical ties in the Pacific, with Guam, the Marshall Islands, Palau and the Federated States of Micronesia, a part of its former empire.
Spain's economy grew rapidly following its accession to the European Community in 1986. It adopted the euro on 1 January 2002. In 2016, Spain’s economy was the 14th largest worldwide, the 5th largest in the European Union (EU) and the Eurozone’s 4th largest. Also in 2016, Spain’s top three principal merchandise export destinations were France (15.1 per cent), Germany (11.3 per cent) and Italy (8.0 per cent). Australia ranked 34th (0.5 per cent). At the same time, Spain’s top three principal merchandise import sources were Germany (13.5 per cent), France (11.1 per cent) and China (8.7 per cent), with Australia ranked 61st (0.2 per cent).
Since the 1990s, Spanish companies have gained multinational status, often expanding their activities in culturally close Latin American markets, where Spain is the second biggest foreign investor after the US. Spanish companies have also expanded into Asia, especially China and India. Typically, Spanish companies have invested in fields like renewable energy commercialisation, technology, train manufacturing, textiles, petroleum and infrastructure, with six of the ten biggest international construction firms specialising in transport infrastructure being Spanish companies.
In the period leading up to the global financial crisis (GFC) in 2008, the Spanish economy boomed and attracted appreciable levels of foreign capital. However, Spain was hit hard by the late 2007 collapse of a speculative housing boom as well as by the GFC. The economy went into recession in 2009.
After two years of austerity measures, Spain came out of recession in late 2013 and in January 2014 formally exited ahead of time, the EU financial assistance package to the Spanish banking sector. Assisted by productivity gains and improved competitiveness, Spain’s exports diversified and rose significantly, and the current account has been in surplus since 2013. In 2014, Spain consolidated the first signs of recovery across a wide range of indicators (consumer confidence, property prices, employment growth, competitiveness, inwards investment, tourism), which has continued since. Spain has been described as one of the brightest spots in the Eurozone. By July 2017, Spain’s economy returned to its pre-crisis size. Unemployment is falling although, at 17 per cent in 2017, it remains high.
Spain's real GDP growth is expected to remain robust in 2018, despite some moderation, according to the European Commission.
Services play an important role in Spain’s economy, making up an estimated 74 per cent of GDP in 2016, followed by industry at 23 per cent and agriculture at almost 3 per cent. Spain relies on tourism for 12 per cent of its GDP, with 82 million tourists in 2017.
Spain’s manufacturing sector is dominated by textiles and apparel (including footwear), food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, clay and refractory products, pharmaceuticals and medical equipment.
Spain’s key agricultural products include grain, vegetables, olives, wine grapes, sugar beets, citrus, beef, pork, poultry, dairy products and fish. With a coastline of almost 8,000 km, Spain’s fishing industry is the biggest in the EU and its fishing fleet is the third largest. Spain is also home to the largest fish processing industry in Europe and one of its largest markets for fish and seafood. Spaniards are the largest consumers of fish and seafood in the world after the Japanese.
Updated 12 February 2018.