Spain Under Franco: Post-Civil War Politics & Economy
Spain’s Economic and Social Development Under Franco: The Situation in Andalusia
A few months after the conclusion of the Spanish Civil War, the world plunged into World War II. The Franco regime was linked to the fascist powers of Germany, Italy, and Japan.
When the World War triggered in September 1939, Spain immediately declared itself neutral. Franco knew that the country was not able to participate in a new war. The Axis powers probed the possibilities of Spain’s integration into the conflict and exerted pressure, but failed.
Franco kept Spain out of the war, separating interviews with two great dictators: Hitler at Hendaye and Mussolini in Bordighera. In these interviews, Franco presented a series of demands for economic, territorial, and armament compensations. These demands made the German dictator think that the price was too high. However, from 1941, Spain sent a division of Falangist volunteers to the Russian front to fight alongside German troops once the Soviet Union was invaded. This military unit was called the Spanish Blue Division.
The vicissitudes of war meant the Falangist regime also had to look after relations with the Allies, from whom Spain received food aid and oil. Propaganda for Germany dropped dramatically in Spain, and relations with the Allies began to cool, ensuring neutrality and withdrawing the Spanish Blue Division from the Russian front.
Once the impossibility of a German victory was clear, the worst of times began for the Falangist regime. The Allies viewed Franco’s support for Germany with disgust, and the heir to the Spanish throne, Don Juan de Borbón, son of Alfonso XII, increased his claim for the restoration of the monarchy and issued a manifesto from Lausanne. But the two major international blows for the Franco regime were:
- Denial of admission to the UN.
- The Allies’ declaration that the Spanish regime was a product of the Axis, proposing its demolition by peaceful means.
The Franco regime was isolated, while the business of the Spanish political opposition abroad grew and guerrilla warfare in the interior of the peninsula worsened. In December 1946, the UN recommended that all countries withdraw their ambassadors from Spain. Only ambassadors from close allies remained, such as Perón’s Argentina and Salazar’s Portugal. Thus, the political and economic boycott against Spain reinforced its isolation in the international context.
Since 1947, the Cold War phase initiated between the Western democratic powers and the Soviet Union. The Soviet Union’s role as champion of anti-Francoism became more interesting to powers like the United States and Britain.
The war had a very negative economic impact. The three years of military clashes broke up the economy: agricultural and industrial production declined, many ways and means of communication were destroyed, and gold reserves and foreign currency were reduced.
One of Franco’s primary objectives was to achieve economic self-sufficiency, i.e., autarky. Thus, Spain’s incorporation into the phase of rapid growth and technological change, which dominated Europe between 1945 and 1973, was considerably delayed and did not become effective until the 1960s.
Franco’s autarky had two major strands:
- The regulation of imports and exports, requiring authorization to perform them. This measure was intended to limit foreign exchange. Consequently, products became more expensive, and there was an acute shortage of essential goods.
- The promotion of industry to secure the military and political independence of the new state. It boosted capital equipment industries. In 1941, the institution that was to be the promoter of industrial policy was founded: the Instituto Nacional de Industria (INI).