Spain and the United States - Real Instituto Elcano

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SPAIN AND THE UNITED STATES
$279 million in 1994 to $1.7 billion in 2004, while that in depository
institutions increased from $1.7 billion to $2.4 billion. According to Spain’s
Foreign Investments Registry, the stock of direct investment in the United
States, based on the immediate as opposed to the ultimate investing country of
destination, amounted to 6.8 billion at the end of 2003 (latest year available),
5.9% of the total stock of Spain’s investment abroad and the seventh largest
(see Exhibit 3.2).
Exhibit 3.1. Foreign Direct Investment in the United States on a Historical Cost
Basis (US$ millions)*
The United States was the seventh-largest recipient of Spain’s
net investment in 2004 (see Exhibit 3.3). The exceptionally high figure for the
United Kingdom was due to Santander’s purchase of Abbey, the sixth-largest
UK bank, in the largest cross-border acquisition of a retail bank in the
Euro zone.
After Spain joined the European Union in 1986, the strategic focus of large
companies, in particular, gradually changed from one of defending their
relatively mature home market to aggressively expanding abroad. The
liberalization of the domestic market in Spain as European single market
directives began to unfold made big Spanish companies, particularly the staterun
monopolies in telecommunications (Telefónica) and oil and natural gas
(Repsol), more conscious of the need to reposition themselves in the more
competitive environment. Outward direct investment surged from an average
of $2.3 billion in 1985-95 to $18.9 billion in 1998, $42 billion in 1999, a peak
of $54.6 billion in 2000 and $42 billion in 2004, according to the OECD. Little
of it went to the United States.