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Madrid has been Spain’s capital since 1561.
In 1981, the province of Madrid was removed from Castile-La Mancha, to which it naturally belonged, and constituted as a uniprovincial autonomous community in the nation’s interest as the capital of the nation with the name “Comunidad de Madrid”.
According to the Wikipedia,
“An autonomous community is a first-level political and administrative division of Spain (…), with the aim of guaranteeing the autonomy of the nationalities and regions that integrate the Spanish nation.”
The autonomous communities are led by regional governments who are responsible for education, health, social services, culture, urban and rural development and in some cases, policing.
So what does this mean for you? Spain is, in fact, a very highly decentralized country. This can be confusing and means that you cannot generalize across regions. What might be acceptable in one region might not be in another.
A provincia is a subdivision of a comunidad autónoma.
As the Wikipedia states,
“Historically, the provinces served mainly as transmission belts for policies enacted in Madrid, as Spain was a highly centralized state for most of its history. The importance of the provinces has declined since the adoption of the system of autonomous communities in the period of the Spanish transition to democracy. They nevertheless remain electoral districts for national elections and as geographical references: for instance in postal addresses and telephone codes.”
So Madrid is the capital of Spain, the autonomous community of Madrid and the province of Madrid.
As the home of the national capital, Madrid has always had some special considerations.
Initially, these were because it became the main residence of the Austria’s dynasty (in 1561, Felipe II de Austria was King of Spain) and its court. Today however, because of Spain’s parliamentary monarchy regime, the fact that Madrid is the Royal family’s official residence is a pure anecdote.
Politically, being a parliamentary monarchy implies that the monarch is the head of state and the prime minister (called here presidente del gobierno or president of the government) is the head of government. Therefore, Madrid as capital assumes the role of housing the Executive power in the form of the national government headquarters.
In addition to this, the Legislative power is represented by the Cortes Generales (General Courts), a bicameral parliament constituted by the Congreso de los Diputados (Congress of Deputies) and the Senado (Senate). Both houses are in Madrid.
Finally, the highest jurisdictions in charge of the Judiciary power are the Tribunal Supremo (Supreme Court) and the Tribunal Constitucional (Constitutional Court). The latter regulates the constitutional matters, while the former is the highest court in Spain for all matters not pertaining to the Constitution. And both of them are also located in Madrid.
In economic terms, Madrid is a major center for international business and commerce. It is one of Europe’s largest financial centers and the largest in Spain. Moreover, the Community of Madrid is also one of the richest in Europe as well as the richest in Spain.
The fact of being Spain’s capital has obviously had a strong impact on this fact and it’s one of the reasons of Madrid’s economical success.