Franco’s Spain: Foreign Policy, Opposition, and Economy

Posted on Mar 31, 2025 in Geography

Foreign Policy

European Community

Spain applied for admission to the European Community in 1962, but it was rejected due to the antidemocratic nature of the Franco regime. Later, in 1970, Spain reached a commercial agreement that reduced import and export duties for trade with EC countries.

Gibraltar

Spain requested the United Nations for sovereignty over Gibraltar.

  • The UN Assembly’s judgement favored Spain.
  • The United Kingdom refused to relinquish control of Gibraltar.
  • Spain closed the border in 1969.

Decolonization

Equatorial Guinea gained independence in 1968. Regarding the Sahara, Spain agreed to a referendum on self-determination. While Franco was near death, Morocco organized the Green March, a procession of unarmed men into the territory. To avoid war, the territory was divided between Morocco and Mauritania in the Agreements of Madrid.

Opposition to the Regime

The strongest opposition groups were clandestine:

  • Communist Party (PC)
  • Trade Union Comisiones Obreras

The Socialist Party and the Socialist Trade Union UGT reorganized in the 1970s. Catalan and Basque nationalist groups and terrorist groups such as ETA and GRAPO were formed. ETA planted a bomb under the car of the president of the government, Admiral Carrero Blanco, killing him in 1973. Franco died on November 20, 1975, after a long illness. Shortly after, Don Juan Carlos was crowned King of Spain.

Economic Development

The Period of Autarky (1939-1959)

International isolation led Spain to develop a system of autarky, or self-sufficiency. The aim was to provide the population with products that the country could produce on its own. This required state intervention in the economy.

The state:

  • Controlled the prices and production of wheat.
  • Created the National Institute of Industry to promote the industrial production of basic goods.
  • Nationalized some services, such as the railway system (RENFE).
  • Financed public works.
  • Limited imports and exports.

Consequences of this policy:

  • Economic stagnation
  • Decline in agricultural and industrial production
  • Shortage of basic products, leading to hunger
  • Rationing of certain basic products, which increased in price
  • Black market (estraperlo), where rationed products were sold illegally
  • The black market and corrupt civil servants benefited.
  • First popular protests in Catalonia, Asturias, and the Basque Country.

Economic Development After Autarky

In 1959, the autarky system was replaced by the PLAN DE ESTABILIZACIÓN, an economic program that opened the economy to the international market.

  • Prices and commerce were deregulated.
  • The peseta was devalued.
  • Salaries were frozen.

The plan was successful, and the economic situation improved. Other factors that helped the economy:

  • Money sent home to Spain by emigrants abroad
  • The tourist boom
  • The arrival of foreign capital and technology, especially from the USA

The economy was modernized, changing from an agrarian to an industrial economy. All economic sectors improved:

  • Agriculture: The use of new machinery and fertilizers, and the increased use of irrigation.
  • Tertiary sector: The growth of commerce and tourism.

Regional imbalances were accentuated. Industry was concentrated in Madrid and around the coast. Inland Spain remained agrarian, and its population migrated. There was also a greater dependency on foreign capital and technology.