By Anna Guryanova

LASTUR_The Basque case is an example of how the new local approach to economic development can be a solution for overcoming economic challenges of a European state. Although the entire territory of Spain was heavily hit by 2008 economic crisis, the Basque country managed to secure its economic strength because of its human development approach. Amid negative economic conditions in Europe, Basque government advanced in foreign trade by increasing exports by 18% in the fourth quarter of 2014. Its industrial activity also rose, changing by 3% in January of 2015. Another determinant of its economic success includes better results in dealing with youth unemployment, which has tripled across Spain in seven years. The overall unemployment rate in Spain keeps its high-sky average, which also shows that economic crisis is not left behind yet. In the meanwhile Basque regional unemployment remains the lowest in Spain. Basque credit rating is also higher than the one of the central government of the country. And while Spain is struggling to maintain stable economic growth and overcome negative effects of the recent financial crisis, many argue that it needs the new model for its development.

Moreover, the Basque economic model can be of use for other EU states as well. In the first two quarters of 2015 EUR has weakened against USD by more than 20% which got it to the 12 year low in the spring of 2015. While investors were more willing to reallocate their portfolios from Europe, and the European shares were dipping below multi-year highs, many analysts argued that European currency has become less attractive because of the controversial monetary policies and currency reserve shifts of the European Central Bank additionally to high European exposure to current political instability. Euro keeps being pushed down and capital flights become the potential challenge for the European market.

Such condition is unusual for once stable European zone and is a characteristic of many developing and developed economies being subjected to volatility and risks such as economic failures of the EU member states and current refugee crisis. The Greek financial crisis and its struggle to cooperate with the EU and ECB are the most recent examples of the challenges Europe is being exposed to. The Greek debt crisis is just one of the examples of the post-2008 crisis, which demonstrates why there should be structural shifts in domestic economic policies of the European governments. These changes should be made according to the strengths and weaknesses of every economy in particular and incorporate sociopolitical distinctive traits of every state separately.

So, what can Spain learn from the Basque experience of alternative way of organization of the social and economic space?

The path of economic development of the Basque country is a unique case of progress based on the model of sustainable human development. The Basque government was able to incorporate economic, social and environmental agendas into the new development plan of 1998-2008. Although the three fields are not traditionally interrelated, their combination has created the platform of development from below, which is opposite to the traditional top-down economic approach. The goal of the economic policies in the Basque country is to incorporate its population into the work of the cooperatives and governance, while also focusing on research and development. One of the crucial differences of the Basque economic approach comparatively to the traditional approaches is that it sets the goal to incorporate social balance into the public- private shared leadership and governance. The Basque government was able to undertake regeneration of the region and rediscover the region as an industrial center within the context of multi-national societies and their ability to self-regulate. Furthermore, political challenges did not stop the regeneration but rather added up the important sociopolitical component, which makes the Basque case even more interesting for the rest of Europe, which countries have been recently going through some sort of ethno-religious struggle.

Another crucial side of the Basque development is its focus on sustainability. The energy strategy of the Basque country includes four critical areas necessary for achieving the transition away from an economic model dependent upon hydrocarbon fuels. It includes improvements in energy efficiency, increasing renewable sources of energy, investing in energy infrastructures and promotion of research and development. Basque technology and innovation centers have been attracting increasing amount of domestic and international attention, which contributes to the creation of competitive intelligent spaces.

It might be hard to imagine Spain completely reversing its economic path and following the Basque example. However, there are lessons European countries can learn from this unique case. The Basque example proposes the new creative approach focused on the increased importance of interdependence, which is certainly a trend in both politics and international markets.