Glossary -- Spain

Council of Europe: Founded in 1949 to foster parliamentary democracy, social and economic progress, and unity among its member states. Membership is limited to those European countries that respect the rule of law and the fundamental human rights and freedoms of all those living within their boundaries. As of 1988, its membership consisted of twenty-one West European countries.
European Community (EC--also commonly called the Community): The EC comprises three communities: the European Coal and Steel Community (ECSC), the European Economic Community (EEC, also known as the Common Market), and the European Atomic Energy Community (EURATOM). Each community is a legally distinct body, but since 1967 they have shared common governing institutions. The EC forms more than a framework for free trade and economic cooperation: the signatories to the treaties governing the communities have agreed in principle to integrate their economies and ultimately to form a political union. Belgium, France, Italy, Luxembourg, the Netherlands, and the Federal Republic of Germany (West Germany) are charter members of the EC. Britain, Denmark, and Ireland joined on January 1, 1973; Greece became a member on January 1, 1981; and Portugal and Spain entered on January 1, 1986.
European Currency Unit (ECU): Instituted in 1979, the ECU is the unit of account of the EC (q.v.). The value of the ECU is determined by the value of a basket that includes the currencies of all EC member states. In establishing the value of the basket, each member's currency receives a share that reflects the relative strength and importance of the member's economy. In 1988 one ECU was equivalent to about one United States dollar.
European Economic Community (EEC): See EC.
European Free Trade Association (EFTA): Founded in 1961, EFTA aims at supporting free trade among its members and increasing the liberalization of trade on a global basis, but particularly within Western Europe. In 1988 the organization's member states were Austria, Finland, Iceland, Norway, Sweden, and Switzerland.
Gross domestic product (GDP): The total value of goods and services produced by the domestic economy during a given period, usually one year. Obtained by adding the value contributed by each sector of the economy in the form of profits, compensation to employees, and depreciation (consumption of capital). Most GDP usage in this book was based on GDP at factor cost. Real GDP is the value of GDP when inflation has been taken into account.
Gross national product (GDP): Obtained by adding GDP (q.v.) and the income received from abroad by residents less payments remitted abroad to nonresidents. GNP valued at market prices was used in this book. Real GNP is the value of GNP when inflation has been taken into account.
International Monetary Fund (IMF): Established along with the World Bank (q.v.) in 1945, the IMF is a specialized agency affiliated with the United Nations that takes responsibility for stabilizing international exchange rates and payments. The main business of the IMF is the provision of loans to its members when they experience balance-of-payment difficulties. These loans often carry conditions that require substantial internal economic adjustments by the recipients.
Organisation for Economic Co- operation and Development (OECD): Established in 1961 to replace the Organisation for European Economic Co-operation, the OECD is an international organization composed of the industrialized market economy countries (twenty-four full members as of 1988). It seeks to promote economic and social welfare in member countries as well as in developing countries by providing a forum in which to formulate and to coordinate policies.
peseta: Basic Spanish currency unit. Consists of 100 centimos, but these are no longer in legal use. In terms of the United States dollar, the exchange rate averaged 60 pesetas in 1965, 56 pesetas in 1975, 79 pesetas in 1980, 126 pesetas in 1982, 173 pesetas in 1984, 154 pesetas in 1985, 134 pesetas in 1986, 107 pesetas in 1987, and 113 pesetas in 1988.
VAT: Value-added tax. A tax applied to the additional value created at a given stage of production and calculated as a percentage of the difference between the product value at that stage and the cost of all materials and services purchased as inputs. The VAT is the primary form of indirect taxation applied in the EEC (q.v.), and it is the basis of each country's contribution to the community budget.
World Bank: Informal name used to designate a group of three affiliated international institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), and the International Finance Corporation (IFC). The IBRD, established in 1945, has the primary purpose of providing loans to developing countries for productive projects. The IDA, a legally separate loan fund administered by the staff of the IBRD, was set up in 1960 to furnish credits to the poorest developing countries on much easier terms than those of conventional IBRD loans. The IFC, founded in 1956, supplements the activities of the IBRD through loans and assistance designed specifically to encourage the growth of productive private enterprises in less developed countries. The president and certain senior officers of the IBRD hold the same positions in the IFC. The three institutions are owned by the governments of the countries that subscribe their capital. To participate in the World Bank group, member states must first belong to the IMF (q.v.).