Basque Autonomous Community

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The Basque Parlament | Vitoria

Government
The Basque Country has had its own Government and autonomous Parliament since the arrival of democracy in Spain in the late nineteen seventies. So the Basques virtually govern themselves in areas such as education, health, culture and housing.

In other sectors, including research, industrial policy, transport and communications, there is a high degree of autonomy, financed by a "Concierto Económico", or Economic Agreement, struck with the central Spanish government. The Concierto is by no means a recent invention; the original agreement dates back to 1878. Under the terms of the Agreement, reached every five years, each of the three Historic Territories has powers regarding fiscal legislation, and the capacity to handle the taxes collected. The Agreement permits the Basque authorities to collect almost all the taxes levied in the Community and then to administer the revenue collected according to their own budget and that of the Spanish central government.

These circumstances have enabled the Basque Country to broaden and develop the base for self-government. The Community now has its own 7,000-strong police force, the Ertzaintza, and its own public radio and TV organisation, Eusko Irrati Telebista, which has 4 radio broadcasting stations and 2 TV channels..

Politically speaking, the Basque Country is organised on confederate lines; the three Historic Territories, Araba, Bizkaia and Gipuzkoa, return 25 members each to the Basque parliament, which makes the laws, approves the annual General Budget, elects its own Lehendakari, or Chief Minister, and keeps a close watch on everything the Government does.

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Language
There are two official languages in the Basque Autonomous Community: Spanish, the official language of all of Spain, and Euskara or Euskera, the native Basque language, also spoken in Navarra and the French Basque Country in the French region of Aquitaine.

Euskara, an ancient language that reaches back farther than the Indo-European languages, has suffered serious setbacks within the Autonomous Community for a variety of reasons. However, in the past thirty years the language has experimented a great recovery. Today, 50% of pre-university students carry out their studies in Euskara.

People who express themselves effortlessly in Euskara (Euskaldunes) make up 26% of the total population; another 20% speak the language with a certain amount of difficulty. Gipuzkoa is the province with the highest percentage of Basque speaking people.

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Industry
The Basque GDP registered real growth of 1.8% in 2002, one point three percentage points less than 2001 (3.1%), and four point two percentage points less than the annual cycle maximum achieved in 1998 (6%), when the current phase of progressive deceleration in growth began, interrupted just once in 2000. External events have always had a major influence on the region’s economy and the reduction in growth in 2002 with regard to levels in 2001 is clearly an effect of the decline shown by all the world’s major economies, with the exception of the US.

Despite this and the fact that the Basque GDP’s results for the year can only be described as moderate, it still clocked in well above the figures achieved by Germany (0.2%), Japan (0.3%), France (1.2%) and the UK (1.6%), and only slightly below the United States (2.4%). These results provide an international context for 2002 of fairly limited progress although a slight upswing was noted during the year.

Moderate growth in the Basque GDP in comparison with previous years was basically due to the lower pace of internal demand (1.9%) where investment growth levels fell from 4.4% in 2001 to 2.3% in 2002, while consumption decelerated at a lower rate (six tenths of a percentage point). Curiously, investment levels in construction (6.8%) were nearly as high as in 2001, while investments in capital goods imitated the poor performances registered in major economies, with a negative rate of around –2.9%. Finally, the net contribution of the foreign sector was very slightly negative as a result of a minimal increase (0.3%) in foreign sales and greater growth (1.9%) in foreign procurements. Foreign sales performed in accordance with the lack of dynamism affecting demand for imports by the main target economies for Basque products.
The supply side of the regional macro-economic chart clearly shows construction as the most dynamic sector during the year, with growth levels at 4.8%. The sector was particularly active in the last two quarters of the year. The regional industry was noticeably affected by lower levels of industrial activity all over the world and by a substantial general fall in investments in capital goods that brought growth rates down to 1.1%. However, it is true that a still moderate acceleration was noted from the third quarter of 2002 on, in line with developments in industrial performances in the leading countries. The services sector also registered growth of 1.9% during the year, very slightly higher than the GDP, at a time of very moderate job creation levels and a noticeable slowing in the pace of private consumption in the Basque Country. Quarterly results in the region’s services sector showed decreasing growth in the first three quarters of the year, with a 1.8% increase in the fourth (one tenth up on the third quarter). Finally, the primary sector registered a substantial decrease of –6.9%.

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