SPAIN: POLITICAL AND ECONOMIC OVERVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000303440001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: January 14, 2011
• Sequence Number: 1
• Publication Date: February 26, 1986
• Content Type: MEMO

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Central Intelligence Agency
26 February 1986
Spain: Political and Economic Overview
Prime Minister Gonzalez's center-left Socialist Party has an
absolute parliamentry majority, and opinion polls indicate that
he is a favorite to win another term in office in the next
parliamentary election which must be held by the end of 1986.
Support from centrist voters is crucial to winning elections in
Spain, and those voters have been as pleased with Gonzalez's
moderation as they have been put off by the pugnacity and Franco
regime connections of his chief opponent, Manuel Fraga, who is
the leader of the conservative Popular Alliance. Former centrist
Prime Minister Adolfo Suarez and regional party leader Miguel
Roca have launched political parties of their own in an attempt
to fill the political middle ground between Gonzalez and Fraga,
but neither has attracted much support from the voters. The
Prime Minister is just as fortunate on his left flank -- the
Communists are badly split and their highly publicized feuding
has virtually destroyed their credibility with the electorate.
Along with constitutional monarchs in other parts of Europe,
King Juan Carlos reigns but does not rule. Franco handpicked
Juan Carlos as his successor, but when the King ascended the
throne following Franco's death in 1975 he chose instead to
foster democracy. His behind-the-scenes interventions helped
keep Spanish democracy on track in its early years. The most
dramatic moment in the King's reign came, in fact, when he was
instrumental in quashing an attempted military coup in February
1981. The King is strongly concerned with institutionalizing the
monarchy in Spain, however, and he knows that the future of the
monarchy will be best assured by winning respect as a non-
partisan and largely ceremonial chief of state.
This memorandum was prepared by Office of
Questions and comments are wel
Chief, West European Division,
EUR M86-20020
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The Key Players
Prime Minister Felipe Gonzalez is a gifted politician who is
enormously ambitious both for himself and for his country. He is
a political moderate who is commited to Spain's long term
modernization. He is less of a political strategist than a
tactician who lives by his instincts. His reliance on
improvisation rather than long range planning, however, led him
to drift into a referendum on NATO and that trait may yet prove
his Achilles heel.
Leader of the Popular Alliance party and conservative
opposition chief Manuel Fraga is probably miscast as a politician
a role that requires a finesse and a feel for the.popular mood
that Fraga has never had. He acquired his current position as
leader of the right-of-center opposition largely by default when
the previous governing party self-destructed and the Socialists
swept into power in 1982. Since then, Fraga has actually lost
support. At least part of that decline stems from his tendency
to speak like he thinks--in terms of black and white, right and
wrong--not in terms of the grey middle range that the Spanish
public, still remembering the extremes of the civil war, values
and rewards electorally.
Adolfo Suarez was the first democratically elected Prime
Minister of the post-Franco era and worked closely with King Juan
Carlos in implementing the transition to representative
government. Although he played a key role in the democratic
.transition, he failed to keep his party, the center-right Center
Democratic Union, united behind him. He resigned from that party
in 1981 and subsequently formed the centrist Social Democratic
Center Party (CDS). Although opinion polls rank Suarez second
only to Gonzalez in popularity among party leaders, the CDS ran
poorly in 1982 and appears unlikely to do much better in the next
national election later this year.
Miguel Roca is the parliamentary spokesman for the Catalan
regional coalition, Convergence and Union. He is trying to
launch a new national center-right party--the Democratic Reform
Party. Although Roca's fellow politicians respect him for his
shrewdness, he stirs little excitement with the voters and the
Reform Democrats have had trouble getting off the ground.
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The NATO Referendum
The national referendum on NATO membership will take place on
12 March. The government is asking voters to endorse membership
in the Alliance. In order to increase support, it has linked
continued participation'to non-integration in NATO's military
command, a reduction in the US military presence, and
continuation of the country's non-nuclear policy. Opinion polls
vary widely, but indicate the government will have a rough
battle.
Gonzalez plans to keep Spain in NATO even in case of a referendum
defeat by calling an early election and running on a pro-NATO
platform. A lopsided defeat, however, would almost certainly
place overwhelming pressure on him to leave the Alliance.
Current Economic Situation
With a per capita income of $4200 in 1984, Spain is one of the.
poorer European countries, richer only than Turkey, Portugal and
Greece. In contrast to the rapid growth experienced during the
"miracle years" of 1960-73, Spain has averaged an annual growth
rate of only 1.7 percent since then. The present Socialist
government has put in place a painful austerity program designed
to modernize the economy and cope with persistent inflation and
current account deficits. It has moderated inflation and turned
around the payments deficits, but has pushed unemployment up to
21.8 percent, the highest rate in Western Europe. The
centerpiece of the government's long-term economic plan is the
industrial restructuring program, which aims to streamline
"sunset" industries such as steel, shipbuilding and textiles and
develop new high-tech industries. Madrid is counting on joint
ventures with foreign multinationals to secure capital and
technology, and also on entry into the European Community. The
latter, however, probably will cause some short-term dislocation
in the economy as Spanish tariffs are dismantled and relatively
inefficient Spanish industries are exposed to European
competition. Exports of Spanish agricultural goods, moreover,
probably will not expand significantly because high EC tariffs
will only gradually diminish over the seven to ten year
transition period.
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SUBJECT: Spain: Political and Economic Overview
Distribution:
Original - Major General John Mitchell
Commander of US Forces, Berlin
1 - DDI
1 - D/EURA
2 - EURA Production Staff
1 - C/PES
4 - IMB/CB
1 - - C/WE
1 - WE/IAB
1 - WE/IAB
EURA/WE/IAB/ I(26 February 1986)
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