I lived in downtown Madrid for 4 years back in the late 60's--early 70's. I found quite a bit of flamenco guitar being played at the bars around town--by regular patrons who would just bring in their guitars and start playing. It was usually accompanied by rhythmic clapping of the other patrons. It was very entertaining. Also, there were groups of university students who would form "La Tuna" groups--5 or 6 students dressed in traditional costumes, who would roam the streets, stopping below apartment balconies or in front of restaurants and bars, playing guitars and singing for tips. They often stopped in front of my apt. building and the residents would throw money to them from the balconies. I haven't been back since, so I don't know if it all is still taking place.
"For 37 years I've practiced 14 hours a day, and now they call me a genius” -- Pablo de Sarasate