Perspectives on Iberian Economic Integration

María Alejandra Amado Garfias, João Amador (), Sónia Félix, Joana M. Garcia, Vanda Geraldes da Cunha, Corinna Ghirelli, Ángel Luis Gómez Jiménez, Eduardo Gutiérrez Chacón, Cristina Manteu, Luis Molina Sánchez, Enrique Moral-Benito, Sergio Puente Díaz, Javier Quintana González, Martín Saldías, Sharmin Sazedj, Sofia Terlica and Jacopo Timini
Additional contact information
María Alejandra Amado Garfias: Banco de España
Sónia Félix: Banco de Portugal
Joana M. Garcia: Banco de Portugal
Vanda Geraldes da Cunha: Banco de Portugal
Corinna Ghirelli: Banco de España
Ángel Luis Gómez Jiménez: Banco de España
Eduardo Gutiérrez Chacón: Banco de España
Cristina Manteu: Banco de Portugal
Luis Molina Sánchez: Banco de España
Enrique Moral-Benito: Banco de España
Sergio Puente Díaz: Banco de España
Javier Quintana González: Banco de España
Martín Saldías: Banco de Portugal
Sharmin Sazedj: Banco de Portugal
Sofia Terlica: Banco de Portugal
Jacopo Timini: Banco de España

No 2621, Occasional Papers from Banco de España

Abstract: This paper examines the functioning of the European Single Market through the experience of Spain and Portugal, two economies whose geographical proximity, shared border and joint EU membership since 1986 make them a particularly informative case study. Organizing the analysis around the Single Market’s four freedoms, the paper combines descriptive indicators, structural-gravity estimates, a multi-country general-equilibrium trade model, price-convergence and electricity-coupling measures, administrative labour-market data, survival analysis and granular investment and banking data to assess integration in trade, energy, labour mobility and capital markets. The findings show that Iberian integration is substantial but markedly uneven across dimensions. Trade in goods and production network linkages have deepened considerably since accession, and wholesale electricity markets are exceptionally well integrated, reflecting strong complementarities between Spanish solar and Portuguese hydropower generation. By contrast, services trade, labour mobility and non-bank financial investment remain comparatively underdeveloped. These results show that the legal framework of the Single Market has generated deep integration in some markets while leaving others fragmented, and that closing the remaining gaps requires more effective implementation, regulatory cooperation and mutual recognition, supported by infrastructure investment and interoperable administrative systems.

Keywords: Iberian economic integration; international trade; energy; migration; capital markets (search for similar items in EconPapers)
JEL-codes: F14 F15 F22 F36 O52 Q43 (search for similar items in EconPapers)
Pages: 90 pages
Date: 2026-10
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Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:2621e

DOI: 10.53479/44748

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