National Industrial Institute

   The state holding company Instituto Nacional de Industria, or INI, was finally broken up in 1995 after an existence of over half a century, during which time it played a key role in the state-led industrialization of Spain, though not a wholly successful one, since many of its companies eventually became major loss-makers. Its industrial interests have covered a vast range: iron and steel, aluminium, coal, electricity, shipbuilding, air and sea transport, oil refining, chemicals and fertilizers, vehicle and aircraft manufacture, armaments, wood pulp, and electronics. INI was for many years counted among the top twenty industrial conglomerates in Europe and accounted for 5 percent of Spain's GDP. When the world recession induced by the first oil shock hit Spain somewhat belatedly in 1975, the effect on her industrial base was devastating, and INI's role rapidly became that of throwing a lifeline to insolvent companies by providing massive subsidies from tax revenues. Teneo, set up by the González government in 1992 to look after those INI companies which could survive without subsidies and prepare them for privatization, was to be dissolved by the new administration of José María Aznar, its companies being passed over to the Sociedad Estatal de Participation Industrial (SEPI), which in effect is a new, leaner version of INI run from the Ministry of Industry and incorporating the state's highly profitable shareholdings in Repsol (oil) and Endesa (power), the earnings from which are being made available to subsidize and restructure the loss-makers with a view to privatization. Those INI companies for which there is no hope of profitability (shipbuilding and coal mining) have been re-grouped under the aegis of the Agencia Industrial del Estado and, subject to EC regulations, have a call on the state budget. It is essentially EC rules on state subsidies that have spelt the end for INI, but INI's two biggest lossmakers, the shipbuilder Astilleros Españoles and the coal producer Hunosa, pose a problem of major proportions, outright closure appearing politically and socially unacceptable because of the scale of job losses involved.

   Further reading

   - Salmon, K. (1995) The Modern Spanish Economy, 2nd edn, London: Pinter (a very accessible account of all the main aspects of the Spanish economy).

   C. A. LONGHURST