France is Spain’s leading economic partner, with trade totalling more than 60 billion euros annually. We are Spain’s second supplier (11% of Spanish imports) and its leading customer (17.6% of Spanish exports). France is also the third-biggest investor in Spain, with nearly 4,000 companies, of which 10% or more of the capital is held by French investors. These companies generate more than 400,000 jobs. Finally, in the financial sector, French banks are the leading holders of Spain’s public debt (5.4% of the total).
France’s positions are trending downward but seem to be starting to recover slightly: while France has had a considerable trade surplus with Spain for a long time, this surplus started to erode in 2007. Accordingly, our trade balance showed a deficit of 923 million euros over the first five months of 2012. Over the period, the share of French products in Spanish imports moved from 18.4% in 1998 to 10.8% in 2011 (a stable level compared with 2010), whereas the market share of German products is remaining stable near 12% and that of Chinese products is 7.1% (against 2.8% in 2000). Nevertheless, since 2003, our country has remained Spain’s second-leading supplier, just behind Germany (11.8%). Spain is France’s third-leading customer (7.3% of French exports), after Germany and Italy. In addition, France is still Spain’s leading customer (17.9% of Spanish exports in 2011), well ahead of Germany (10.2%). In the ranking of the countries supplying France, Spain comes in at number five (6% of French imports), after Germany, China, Belgium and Italy.
The automotive sector, at the heart of bilateral trade, is a growing source of trade deficit for France: this is the leading import and export category between France and Spain. Since 2006, the trade balance in this key sector has shown a deficit for France. At the end of 2011, this deficit reached €3b, and, to a large extent, explains France’s growing trade deficit. However, France is still able to show a trade surplus with Spain in the following sectors: energy products (+€1.3b end of 2011), capital goods (+€1.2b), textile products (+€0.8b) and chemical and pharmaceutical products (+€1.2b).
France is the leading destination for Spanish tourists abroad, and, vice versa, is one of the top markets sending tourists to Spain (ranked third after the United Kingdom and Germany). For 2011, French visitors accounted for 15% of the total foreign tourists in Spain. While the flow of German tourists is increasing hesitantly (+2.5% year-over-year), France is continuing to catch up with its neighbour across the Rhine: in 2011, Spain played host to 8.5 million French tourists, versus 9 million German tourists. The balance of services, in which the tourism sector plays a key role, still shows a deficit for France (-€4.6b in 2010).
A high volume of investment in both directions is observed: France is still the third-biggest investor in Spain (after the United Kingdom and the USA). There are three French companies among the 20 biggest companies in Spain: Carrefour, PSA and Renault. Total foreign direct investment held by France in Spain was estimated to be €32 billion at the end of 2010. Spain was the seventh-biggest investor country in France in 2010: Spanish companies are established in more than 1,600 sites in France, employing about 75,500 people (especially in textiles and clothing, energy and trade and financial activities).
Finally, French banks are very exposed to Spain’s economy: Spain’s second creditor, with exposure totalling €107 billion, just behind German banks (€119 billion), French banks are, on the other hand, the leading foreign banks in terms of holdings of Spain’s public debt, with €20 billion. However, France is clearly not a priority market for Spanish banks, which are established especially in South America and Great Britain, among other places.
Updated on 04.09.12
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