The Spanish Socialist Party and the modernisation of Spain 9781526102898

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The Spanish Socialist Party and the modernisation of Spain Paul Kennedy

Critical Labour Movement Studies

The Spanish Socialist Party and the modernisation of Spain

Critical Labour Movement Studies Series editors John Callaghan Steven Fielding Steve Ludlam

Already published in the series Jenny Andersson, Between growth and security: Swedish social democracy from a strong society to a third way John Callaghan, Steven Fielding and Steve Ludlam (eds), Interpreting the Labour Party: approaches to Labour politics and history Aaron Edwards, A history of the Northern Ireland Labour Party: democratic socialism and sectarianism Thomas Fetzer, Paradoxes of internationalism: British and German trade unions at Ford and General Motors 1967-2000 Andrew Gamble, Steve Ludlam, Andrew Taylor and Stephen Wood (eds) Labour, the state, social movements and the challenge of neo-liberal globalisation Dianne Hayter, Fightback! Labour’s traditional right in the 1970s and 1980s Jonas Hinnfors, Reinterpreting social democracy: a history of stability in the British Labour Party and Swedish Social Democratic Party Ben Jackson, Equality and the British Left: a study in progressive political thought, 1900–64 Leighton James, The politics of identity and civil society in Britain and Germany: miners in the Ruhr and South Wales 1890–1926 Declan McHugh, Labour in the city: the development of the Labour Party in Manchester, 1918–31 Stephen Meredith, Labour’s old and new? The parliamentary Right of the British Labour Party 1970–79 and the roots of New Labour Jeremy Nuttall, Psychological socialism: the Labour Party and qualities of mind and character, 1931 to the present Lucy Robinson, Gay men and the left in post-war Britain: how the personal got political

The Spanish Socialist Party and the modernisation of Spain Paul Kennedy

Manchester University Press Manchester and New York distributed in the United States exclusively by Palgrave Macmillan

Copyright © Paul Kennedy 2013 The right of Paul Kennedy to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. Published by Manchester University Press Oxford Road, Manchester M13 9NR, UK and Room 400, 175 Fifth Avenue, New York, NY 10010, USA www.manchesteruniversitypress.co.uk Distributed in the United States exclusively by Palgrave Macmillan, 175 Fifth Avenue, New York, NY 10010, USA Distributed in Canada exclusively by UBC Press, University of British Columbia, 2029 West Mall, Vancouver, BC, Canada V6T 1Z2 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data applied for ISBN  978 0 7190 07413 4  hardback First published 2013 The publisher has no responsibility for the persistence or accuracy of URLs for any external or thirdparty internet websites referred to in this book, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

Typeset by Servis Filmsetting Ltd, Stockport, Cheshire

Contents

Series editors foreword vii Acknowledgementsxi Introduction1  1 The PSOE and social democracy 7  2 The character of Spanish Socialism: a historical overview, 1879–1982 15  3 The PSOE and the European Community: from isolation to integration33  4 Economic policy under the PSOE, 1982–96 54  5  Foreign and security policy under the PSOE government (1982–96): the irresistible force of European imperatives? 89  6 The PSOE and the question of regional autonomy 143  7 The PSOE in opposition, 1996–2004 153  8 Zapatismo: progressive ideology in a post-­social democratic world? 166  9 Foreign and security policy under Rodríguez Zapatero 178 10  Nemesis: economic policy under the PSOE and the road to defeat 191 11 Conclusion 204 Appendix: Party organisation, membership and general election results 2000–11 207 Bibliography211 Index224

Series editors’ foreword

The start of the twenty-­first century is superficially an inauspicious time to study labour movements. Political parties once associated with the working class have seemingly embraced capitalism. The trade unions with which these parties were once linked have suffered near-­fatal reverses. The industrial proletariat looks both divided and in rapid decline. The development of multi-­level governance, prompted by ‘globalisation’ has furthermore apparently destroyed the institutional context for advancing the labour ‘interest’. Many consequently now look on terms such as the ‘working class’, ‘socialism’ and ‘the labour movement’ as politically and historically redundant. The purpose of this series is to give a platform to those students of labour movements who challenge, or develop, established ways of thinking and so demonstrate the continued vitality of the subject and the work of those interested in it. For despite appearances, many social democratic parties remain important competitors for national office and proffer distinctive programmes. Unions still impede the free flow of ‘market forces’. If workers are a more diverse body and have exchanged blue collars for white, insecurity remains an everyday problem. The new institutional and global context is moreover as much of an opportunity as a threat. Yet, it cannot be doubted that, compared with the immediate post-­1945 period, at the beginning of the new millennium, what many still refer to as the ‘labour movement’ is much less influential. Whether this should be considered a time of retreat or reconfiguration is unclear – and a question the series aims to clarify The series will not only give a voice to studies of particular national bodies but will also promote comparative works that contrast experiences across time and geography. This entails taking due account of the political, economic and cultural settings in which labour movements have operated. In particular this involves taking the past seriously as a way of understanding the present as well as utilising sympathetic approaches drawn from sociology, economics and elsewhere. John Callaghan Steven Fielding Steve Ludlam

For Santina

Acknowledgements

Many thanks to Anthony Mason and all at Manchester University Press for their patience and professionalism. I am also grateful to the PSOE for providing me with the information on party membership contained in Tables 1–3 and the photos on the cover of the party logo, Pablo Iglesias, Felipe González and José Luis Rodríguez Zapatero.

Introduction

When the Spanish Socialist Workers’ Party (Partido Socialista Obrero ­Español – PSOE) lost office in November 2011, obtaining its lowest number of parliamentary seats since democracy had been re-­established in the period after Franco’s death in 1975, it faced an uncertain future. Spain’s most electorally successful political party, the PSOE had won six of the eleven general elections held since 1977, been runner-­up in the remaining five, and had been in government for two of the three decades since the party first entered office in 1982. Moreover, the PSOE is a party with a long history of which it is intensely proud. Founded in 1879, the PSOE has historically been concerned with ending Spain’s chronic historical backwardness and isolation and securing a place for the country as an equal alongside its European neighbours. From its founding father, Pablo Iglesias, to its current leader, Alfredo Pérez Rubalcaba, the party has been guided by a progressive, modernising project which, during its history, has led to episodes of repression which threatened the party’s very existence. In the period during and after the Civil War, the PSOE paid a high price for its prominence as the largest political party on the left of the political spectrum throughout the Second Republic (1931–36). When Franco died, the PSOE was more a historical memory than a credible party of government. It nevertheless recovered to play a key role in Spain’s transition from dictatorship to democracy, establishing itself as the country’s chief opposition party at general elections in 1977 – the first held in over forty years – and 1979. Throughout its long history, the PSOE had been notable for a pragmatic practice which belied its often radical discourse, and Felipe González was able to reposition the party as a moderate force capable of filling the gap left by the disintegration of the party which had guided Spain through its transition to democracy, the Democratic Centre Union (Unión de Centro Democrático – UCD), and gain the support of an electorate which stretched beyond the party’s working-­class base. Given the UCD’s collapse and the fact that Spain had experienced a failed coup d’état the year before the PSOE’s general election victory, it is no exaggeration to suggest that the survival of democracy depended on the unified, disciplined force which the PSOE had become under the undisputed leadership of González.

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The Spanish Socialist Party

It was modernisation achieved through the instrument of European integration which formed the basis of the party’s programme in government rather than any overt appeal to traditionally Socialist goals. Asked at the beginning of his premiership what his aim was, González replied, ‘que España funcione’ – ‘to make Spain work’. The transformation of the country under the PSOE was swift. Before the end of the party’s first term in office, membership of the European Community had been secured, and a referendum had been held which found in favour of Spain remaining within NATO. During most of the party’s second (1986–89) and third (1989–93) terms in office Spain enjoyed the highest average rate of economic growth in the European Community as the country became a magnet for foreign investment. Growth was used during this period by the Socialist government to transform Spain’s insubstantial welfare state into an institution on a par with that of its neighbours as the country began to enjoy levels of health, education and social services which had long since existed throughout most of the rest of Western Europe. Moreover Spain was able to secure an enhanced profile for itself in the three key areas of Spanish foreign policy concern, the European Union (EU), Latin America and the Mediterranean. Progress was also made on consolidating the so-­called ‘State of the Autonomies’, Spain’s system of ­devolution to its seventeen autonomous regions, By this stage, Spain was able to show the world that it had thrown off the stagnant authoritarianism of the Franco dictatorship. The image presented at the Barcelona Olympics and the Seville Expo in 1992 was that of a vibrant, confident, prosperous country finally at ease with itself. The glamour of Spain’s annus mirabilis nevertheless also marked the start of a brief, but intense, recession which threatened to exclude Spain from the single currency project designed at Maastricht. The economic downturn placed in question the economic credibility of the government, whilst the implication of party figures in corruption ­allegations simultaneously eroded the government’s political credibility. Despite the difficulty of meeting the Maastricht convergence criteria within a context of economic recession, the PSOE government’s support for the European project never wavered, regardless of the related political cost as public spending was slashed. Although the party was able to secure a fourth and final term in office under González (1993–96), albeit for the first time without an overall majority, the PSOE approached the 1996 general election with little hope of victory. Exhausted by having been in office for over thirteen years, unable to meet a single one of the Maastricht convergence criteria, and exposed as having participated in acts of corruption ranging from illegal party finance to the organisation of death squads tasked with kidnapping and killing suspected Basque terrorists, the PSOE was dislodged from office by the narrowest of margins, just over 1 per cent of the vote. For all its failings, the PSOE had retained the support of a surprisingly loyal electorate. With the benefit of hindsight, the narrowness of the PSOE’s defeat lulled the party into a false sense of security about the seriousness of the changes required to enable a return to government. The replacement of Felipe González after his resignation from the leadership in 1997 proved problematic and the party

Introduction

3

obtained its worst result in over two decades in 2000 when it obtained just 125 of the 350 seats in the lower house of parliament, the Congreso de los Diputados (Congress of Deputies). With Spain once again enjoying economic growth well above the EU average and the government of the Popular Party (Partido Popular – PP) under José María Aznar disproving those who had suggested that it would be high-­handed and authoritarian, the electorate had been happy to endorse the government with the overall majority which it had been denied in 1996. Paradoxically, receipt of an overall majority led to the start of a process which would culminate in the party’s defeat in 2004. Imposing unpopular labour market and education reforms, the PP government also gave its backing to the US-­led invasion of Iraq in 2003, despite the opposition of the vast majority of the Spanish population. More than any other issue, Iraq provided the new PSOE leader, José Luis Rodríguez Zapatero, with his opportunity to enhance his own and the PSOE’s profile within the Spanish political arena. Narrowly elected General Secretary at the PSOE’s 35th Congress in July 2000, shortly after the general election, Rodríguez Zapatero had made slow progress as leader of the  main opposition party, but was able to bring about a degree of unity within the party which had been notably absent throughout the previous decade. Moving on from the González era, Rodríguez Zapatero personified a generational and programmatic shift which was ultimately capable of returning the PSOE to office in 2004. Although critics suggested that Rodríguez Zapatero owed his victory to the particular circumstances in which the 2004 general election took place – just three days after Al-­Qaeda terrorist attacks caused the deaths of nearly two hundred people on commuter trains in Madrid, an event which was generally viewed to have been bungled by the PP government with respect to news ­management – Rodríguez Zapatero’s government proved sufficiently popular to obtain ­re-­election in 2008. With the economy still thriving throughout the PSOE’s first term in office – above-­EU-­average growth continued to characterise the Spanish economy throughout this period – Rodríguez Zapatero opted for continuity with regard to economic policy. With the economy geared towards a booming construction sector which provided the government with ample tax revenues, the PSOE government was able to boast a set of economic indicators which were amongst the best in the EU. Public debt fell below 40 per cent, whilst there was a surplus in the public accounts. Spain’s chronic unemployment problem also appeared to have been addressed, with an unemployment rate of 8 per cent ­dropping below the EU average during the course of 2007. Given such apparent success, it is not surprising that Rodríguez Zapatero looked beyond the economic sphere in terms of policy innovation. Civil and gender rights were transformed under his leadership, with legislation on domestic violence, equal rights between men and women, gay marriage and adoption being prominent achievements. Rodríguez Zapatero also boldly put an end to the Pacto de Olvido (Amnesia Accord) which had characterised the post-­Franco period, a tacit agreement not to address the injustices of the dictatorship. State support was given to victims of the dictatorship, including financial assistance to the

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The Spanish Socialist Party

families of those who had suffered at the hands of the regime. This aid included assistance in the search for the remains of those killed by the regime and dumped in unmarked graves. Traditional social democratic concerns such as welfare were also attended to, most prominently in the form of a Dependency Law which ­provided state aid to those dependent on carers. Rodríguez Zapatero’s period in government is nevertheless not likely to be remembered for legislation in the area of civil and gender rights, or even the Dependency Law, but rather for its handling of the crisis suffered by the Spanish economy throughout most of the PSOE’s final term in office (2008–11). Spain’s economic growth model had been overly dependent on construction and the progressive collapse of the sector from late 2007 destabilised the entire economy. The harm done to the PSOE government’s credibility was significant. Initially denying the gravity of the situation – for instance, there was a marked reluctance on the part of the government to use the term ‘crisis’ and pledges were made that Spain would not have to introduce the kind of austerity measures which would make it easier and cheaper to lay employees off – the government belatedly acknowledged that the county was facing its worst economic situation in eighty years. Despite the implementation of one of the largest fiscal stimulus programmes in the world, the economy continued to deteriorate and the government had to go back on many of the pledges it had made in order to address the situation. Fiscal stimulus was replaced by successive austerity packages by the end of 2009 and May 2010 marked a historic turning point as the government was forced by the EU to slash the salaries of civil servants, freeze pensions and impose cuts throughout the public sector in order to reduce a deficit which had spiralled to 11 per cent of GDP by the end of 2009. Meanwhile, unemployment edged inexorably towards five million. The government’s defeat at the general election held in November 2011 was hardly surprising, nor was its scale. In seeking to meet the EU’s targets on deficit reduction the PSOE government under Rodríguez Zapatero effectively became unelectable. Rodríguez Zapatero himself had announced in April 2011 that he would not be standing for a third term as premier. By now viewed as a liability to his party and government, he agreed to remain Prime Minister until the general election, which, in July, he declared would be brought forward three months. The former Interior Minister and First Deputy Prime Minister, Alfredo Pérez Rubalcaba, accepted the poisoned chalice of leading the party into the election, and despite the party’s poor result at the general election, he was endorsed as Rodríguez Zapatero’s successor as PSOE General Secretary at the party’s 38th Congress in February 2012. In his state of the nation address to the Congress of Deputies in July 2010, Rodríguez Zapatero had announced that in order to address the worst economic crisis in decades he would take all necessary measures, however difficult they might be. Moreover, he would do so ‘whatever the personal cost’. The 2011 general election result indicates that he was as good as his word, although blame for the government’s actions went beyond the figure of the Prime Minister to the party itself. Many of those who had previously voted for the PSOE were left

Introduction

5

feeling that they had been abandoned by the government. Rodríguez Zapatero’s personal responsibility for this situation was considerable. He had been able to impose a level of dominance over the party and government which not only discouraged criticism from within his own ranks, but which, during his first term, led him to display a level of self-­confidence which proved fatal once boom turned to bust during his second term. Precious time was lost when, instead of acknowledging the intensification of the crisis, the government sought to deny that any such crisis existed, despite ample evidence to the contrary. When austerity measures were eventually introduced, the government failed to explain clearly why it had acted as it did, why it believed its actions to be in the national interest and what the consequences of its failure to act would have been. There was a sense in which the 2011 general election marked the end of an era. No longer the dominant political force within Spain, the PSOE was forced to adapt to a reduced status in which its very capacity to mount an effective opposition to the incoming PP government was in question. It remains to be seen whether the PSOE is once again capable of the kind of reinvention which has characterised the party throughout its history. The chapters which make up this book consider the above issues in greater detail. Chapter 1 considers the PSOE within the context of social democracy and the dilemmas facing social democratic parties in the contemporary era. Emphasis will be placed on the political environment in which the PSOE operated and the constraints which conditioned its actions. The tension between pragmatism and ideology serves as a backdrop to the chapter. Chapter 2 provides an overview of the PSOE’s history, from the party’s foundation in 1879 to its victory at the 1982 general election. The emphasis is on establishing the ‘character’ of Spanish Socialism so as to place in context its actions in office and opposition. Chapter 3 focuses on Spain’s relations with the European Community up until membership was achieved under the PSOE in 1986. The justification for including this material is that the PSOE – historically considered to be Spain’s most ‘European’ political party – considers the securing of Spain’s membership of the Community to be one of its greatest achievements in office. The imperatives imposed by European integration underpinned the PSOE’s policies throughout its entire period in government. Moreover, given that ‘Europeanisation’ became almost interchangeable with the term ‘modernisation’ in the party’s discourse under González, this level of detail appears apposite. Chapter 4 considers economic policy under the premiership of Felipe González. The PSOE’s claims to have brought about Spain’s modernisation rest upon the economic transformation of the country which took place during this period. Coverage of public spending on the welfare state and infrastructure are also be included in the chapter. Given that the economic credibility of the government was to a degree undermined by the simultaneous loss of political credibility linked to myriad corruption allegations relating to the PSOE, the chapter also contains a section ­considering the phenomenon of corruption and its significance for the party.

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The Spanish Socialist Party

Chapter 5 is an examination of foreign and security policy during the party’s period in office under González. Particular attention is given to the three chief axes of Spanish foreign policy concern – the EU, Latin America and the Mediterranean – together with a consideration of the significance of the issue of Spain’s membership of NATO. Chapter 6 is devoted to one of the key aspects of Spain’s modernisation over recent decades, the issue of devolution of power from central government to Spain’s regions. The chapter provides information on the previous UCD government’s handling of the issue before consideration is given to the PSOE government’s initiates during its period in office under Felipe González. Chapter 7 considers the PSOE’s period in opposition between 1996 and 2004 and links the material covered in the previous chapters to the more recent period during which the PSOE was led by José Luis Rodríguez Zapatero. Chapter 8 analyses the question of whether the PSOE’s period in office under Rodríguez Zapatero can be characterised by a distinctive ideology. Given the constraints on political parties in the contemporary era with respect to economic policy – and most particularly, for our purposes, the constraints on social democratic parties – parties have looked beyond the economic field in order to differentiate themselves from their political opponents. The chapter examines the degree to which ideology was employed to differentiate the PSOE under Rodríguez Zapatero from the party under González. The chapter will consider the theoretical and philosophical influences claimed by Rodríguez Zapatero and includes coverage of policy in the following areas: the protection and extension of civil and gender rights, including the Dependency Law; historical memory; and constitutional affairs, including reform of regional autonomy statutes Chapter 9 is concerned with the issue of foreign and security policy under Rodríguez Zapatero and will consider his decision to withdraw Spanish troops from Iraq immediately after the PSOE’s general election victory in 2004. Chapter 10 examines the question of economic policy under the PSOE between 2004 and 2011 and the degree to which the Rodríguez Zapatero government’s handling of the economic situation contributed towards the party’s general ­election defeat in November 2011. Chapter 11 draws the book to a close with an overall conclusion, and is f­ ollowed by an Appendix, containing information on party organisation, membership and general Election results.

1

The PSOE and social democracy

It is important that this book on the Spanish Socialist Party starts with a theoretical discussion of social democracy since the 1970s, when the PSOE went from being a marginal political force to become a viable party of government. The aim is to establish the PSOE’s position and draw lessons from the experience of one of Europe’s most electorally successful social democratic parties over recent decades. Amongst Europe’s oldest social democratic parties, the PSOE was able to establish itself as the most significant political party during the Second Republic (1931–36), and historical memory played a significant role in the PSOE’s re-­emergence following Franco’s death. Although the party shrank to near-­irrelevance during the dictatorship, its virtual re-­establishment under the leadership of Felipe González enabled it, firstly, to secure and consolidate a dominant position within the Spanish left, secondly, as the country’s chief party of opposition, to establish itself as a credible party of government, and thirdly, to retain office at four successive general elections between 1982 and 1993. Although, within the context of an economy in recession and a seemingly never-­ending stream of party-­related corruption allegations, the PSOE lost office in 1996, finding the transition from office to government challenging, a renewed party leadership under José Luis Rodríguez Zapatero was able to secure consecutive general election victories in 2004 and 2008. Despite faring badly at the 2011 general election, the PSOE was still far and away Spain’s most electorally ­successful political party. It is important to place any study of the PSOE’s experience with respect to social democracy within the broader dilemmas facing social democratic parties in the ‘post-­material’ world (Heywood, 1995a: 229). The literature on the challenges facing social democratic governments with respect to the prosecution of an autonomous national economic policy is considerable (see, inter alia, Gray, 1996, 1998; Giddens, 1998, 2002; Cuperus et al., 2001). Constraints include globalisation (especially of the financial markets); Europeanisation of product markets; the existence of an independent European Central Bank with a monetarist statute; high national indebtedness; demographic shifts; heterogenisation of the social structure; individualisation (values, lifestyle etc.); and increasing voter volatility

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The Spanish Socialist Party

(Merkel, 2001: 36). The end of the post-­war boom, and the fact that lower economic growth rates rendered impossible the pursuit simultaneously of policies that reduced inequality, raised living standards and fitted the needs of capitalist accumulation have also been advanced as an explanation for why social democrats have adopted neoliberal policies since at least the 1980s (Lavelle, 2009: 9). Moreover, although countries throughout the world, reacting to the scale of the international financial and economic crisis of 2008, were quick to apply Keynesian-­style prescriptions, demand management was ultimately put back in the policy locker, supplanted once again by a neoliberal approach which had brought the developed world to the edge of the precipice. As Sevilla (2011: 432–3) has argued, the experience of the crisis has not led to the EU reconsidering its stance with respect to the functioning of the economy in general and that of monetary union in particular. Much less has it persuaded the EU to embrace the concept of a lack of aggregate demand and it has not advocated the implementation of compensatory public policies. If a company cannot sell its products, the problem is always one of lack of competitiveness, rather than lack of demand. Consequently, the way to avoid an increase in unemployment is not by stimulating public demand, but rather by improving levels of competitiveness. Similarly, the foreign deficits of eurozone member countries can only be corrected by improving competitiveness so as to stimulate export growth. Competitiveness can only be improved by cost reductions. Market liberalism, deregulation, the central role played by finance within national economies – all viewed as being key elements in the apparently irresistible phenomenon of globalisation – were likely to have more of a future than the interventionism which had only been temporarily applied in order to prevent the collapse of the international banking system and economic meltdown. When the PSOE entered office in 1982, in common with other social democratic parties throughout Europe it was confronted with the reality that traditional egalitarian tools such as Keynesian-­style demand management, state ownership and mass public provision were all under challenge to a greater or lesser extent. The practical realisation of ‘socialism’ was placed on hold as a utopian goal which could be achieved only through the foundation of economic ‘modernisation’ via European integration. The use of European integration as a strategic option for modernising Spain became the key policy of the PSOE government; ideology was secondary to pragmatic management of the economy (Heywood, 1995a: 198, 225, 229). Others have similarly highlighted the PSOE leadership’s emphasis on pragmatism and realism, rather than ideology, social democratic or otherwise (Gillespie, 1989: 402–3). Felipe González – to the chagrin of some in the party – was happy to adopt Deng Xiaoping’s aphorism, indicating that ‘it doesn’t matter if the cat is black or white, as long as it catches mice’. The ends justified the means, even if those means bore little resemblance to traditional social democratic precepts. Essentially, the party’s aims were viewed in terms of accepting the challenge of consolidating Spanish democracy whilst at the same time bringing Spain up to the level of its European neighbours, socially, economically and politically. European integra-

The PSOE and social democracy

9

tion provided the fundamental framework for this transformation, ranging from the industrial reforms required to allow Spain to be accepted as a member, to the constraints provided by the Maastricht convergence criteria, and, subsequently, the Growth and Stability Pact. Socialist transformation was side-­lined. The party’s frequently expressed aim of bringing about Spain’s ‘modernisation’ captured the essence of its objectives. It has been argued that those writers who labelled the PSOE’s economic policy orientation as neoliberal (Share, 1988; Petras, 1993) ought, rather, to have viewed the party’s stance as a pragmatic response to an international context over which the Socialists had little control (Heywood, 1994a: 1; 1995: 227). The economic foundations of social democracy had effectively been demolished by the global freedom of capital (Gray, 1996: 26). The degree of manoeuvre available to social democratic parties was therefore viewed as being highly circumscribed. With neoliberalism in the ascendency, emphasis was placed on the market as an efficient mechanism for the distribution of resources and the opening of economies to international trade and competition. Priority was awarded to the control of inflation, the deregulation of economic activity and balanced budgets. Such has been the supremacy enjoyed by these precepts that they have become just as much features of social democratic economic policies as they are of conservative policies. It is argued that there is now only one viable economic policy, and that economic management is either effective or ineffective, rather than being left-­wing or right-­wing (Maravall, 2009: 255; Sevilla, 2011: 454). Others have nevertheless contested this view, arguing that constraints did not prevent the González government from implementing a set of economic policies in line with the party’s social democratic ideological preferences. Taxes were increased by a third whilst the public sector was used to develop the most extensive capital formation plans in Europe in the 1980s (Boix, 1996: 24). By the early 1990s, health care provision had been extended to the entire population, with Spain boasting the highest proportion of doctors per head of population of all OECD countries. Pension rights were similarly universalised, spending on education rose five-­fold during the decade 1982–92 and the amount spent by the State on unemployment benefits more than doubled in terms of percentage GDP. Total public sector spending accounted for around 50 per cent of GDP in 1995, around half of which was accounted for by outlays on the welfare state, in line with the EU average (Kennedy, 1997: 98–9). Similarly, during the first decade of the twenty-­first century, the PSOE government under Rodríguez Zapatero was able, prior to the economic downturn, to put in place significant social democratic achievements, including a Dependency Law, passed in November 2006, which guaranteed state assistance to elderly people and those suffering from severe disabilities, including mental illness. Such was the significance of the initiative that the government described it as the ‘fourth pillar’ of the welfare state, joining existing provision in health care, education and pensions. A further indication of the government’s social democratic policy credentials was the fact that those on the lowest incomes enjoyed the largest percentage decrease in their income tax contributions between 2004 and 2008, whilst

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The Spanish Socialist Party

social expenditure accounted for half of the 2008 budget. These achievements are ­considered in greater detail in Chapter 10. The case of Spain under the PSOE thereby appears to bear out the hypothesis that political parties can still exert a major influence on a country’s economic policy. As Pierson argues, ‘there are still choices to be made – even if these have become more expensive or more difficult to mobilize’ (Pierson, 2001: 88). Furthermore, there has been criticism of the view that globalisation ‘imposes’ neoliberal policy agendas on social democratic governments, in that it ignores how the influence of the processes of globalisation is mediated by domestic ­institutions, and the actors working within them (Clift, 2003: 211). A further issue within the debate on social democracy is the need to acknowledge that although social democratic governments are subject to a number of the same significant international constraints, domestic factors play a key role in shaping national social democratic agendas and the way in which they are put forward (Cowell and Larkin, 2001: 108). Furthermore, new political orientations and drastic sociological changes within social democratic parties have generated new patterns which reflect the diversity of socio-­political issues each party faces in its own national context (Marlière, 1999: 14). As Marquand reminds us, ‘social democracy is, by nature, heterogeneous. There has never been a single social ­democratic orthodoxy, and it would be astonishing if one were to develop in this time of bewildering flux. Now, even more than in previous decades, it is wiser to think of social democracies than of social democracy’ (Marquand, 1999: 10). Social democracy can no longer be confined to national economies and national economic management. Some greater degree of diversity is required (Gamble and Wright, 1999: 5). Concerned about electability, social democratic parties have sought a broader base in ‘progressive’ opinion, leading them to adopt a ‘citizenship-­focused’ discourse, indicating the degree to which social liberalism has influenced social democracy (Pierson, 2001: 59). Under González, PSOE governments shared the social democratic concern with equality and non-­discrimination in the exercise of citizenship rights; emphasis was placed on the expansion of social policies, rather than on traditional – and increasingly outdated – social democratic policy preferences such as the extension of public ownership (Maravall, 1992: 25). This approach continued under Rodríguez Zapatero, who commented: My socialism is not of the old ‘tax and spend’ variety, i.e. where there is unlimited public spending paid for by tax increases. Nor is it the socialism of a state with numerous public sector companies in areas where private initiative obtains better results. Nor am I, as regards the day-­to-­day functioning of the economy, a supporter of government meddling in companies’ activities. I think that it is necessary to establish a set of clear and transparent rules for companies, and that public finances should be managed rigorously. (Calamai and Garzia, 2006: 83)

Similarly, in an interview which he gave to the Spanish newspaper, El Mundo in April 2006, Rodríguez Zapatero described his vision of social democracy in the following terms:

The PSOE and social democracy

11

A modern left’s programme is based on a well-­managed economy with a surplus in the public accounts, moderate taxes and a limited public sector. All of this accompanied by the extension of civil and social rights. (Quoted in Maravall, 2009: 254)

The tax burden barely changed under the PSOE’s first term in office. The top rate of tax was reduced by 3 per cent and the threshold of each tax band was raised only slightly (Maravall, 2009: 255). Marquand, writing about the UK, comments that the concept of a new intellectual and political paradigm combining insights from traditional social liberalism and traditional social democracy emerged during the early 1990s based on the work of individual writers such as Will Hutton and Ralf Dahrendorf and organisations such as Charter 88. Although he describes it as being ‘inchoate, and in places distinctly fuzzy’, Marquand (1999: 13–14) identifies five key features:

• It was broadly liberal in politics, but broadly social democratic in economics. • It was for capitalism against socialism, but implied profound changes in the

architecture of British capitalism and a concomitant challenge to powerful corporate interests. • Although drawing on American academic writing, its vision of the political and moral economy was much closer to those of mainland Europe than to the United States. • It was pluralistic, implying a multiplicity of power centres, economic and political. • It rejected the notion of a single modern condition to which there is a single route. Marquand notes that Blair’s New Labour rejected the paradigm, arguing that its own methods constituted ‘the sole path to the future’. The paradigm nevertheless displays broad similarities with the kind of ideological underpinning which the PSOE, under the leadership of Rodríguez Zapatero, sought to provide for the Spanish variant of social democracy. Rodríguez Zapatero and members of his immediate circle have readily acknowledged their debt to US academics such as John Rawls and Benjamin Barber, and the Princeton-­based Irish academic, Philip Pettit. The constraints on economic policy nevertheless remained considerable and the long boom enjoyed by the Spanish economy between the mid-­1990s and 2008 served to dissuade Rodríguez Zapatero’s government from introducing significant changes in the country’s economic growth model. Given the buoyancy of the economic inheritance left by his PP predecessors in government, it is understandable that Rodríguez Zapatero pragmatically opted to implement a policy which broadly remained within the parameters established under José María Aznar between 1996 and 2004. Enjoying a surplus on the public accounts throughout almost his entire first term in office at a time when significant public deficits were the norm throughout the EU, and with public debt being comfortably below the EU Growth and Stability Pact’s 60 per cent of GDP limit, any major shift in policy might even have appeared foolhardy. Moreover, Spain’s chronic unemployment rate was on a downward trend, and Spain accounted for a good proportion of

12

The Spanish Socialist Party

the job creation within the EU. Innovation in the economic policy field therefore appeared to be unnecessary. Although the PSOE’s manifesto at the 2004 general election was critical of the prominent position played by the housing sector, highlighting ‘the current risks concerning the Spanish economy, which is highly indebted and geared towards bricks and mortar’ (PSOE, 2004a: 104), Rodríguez Zapatero did little when in government after 2004 – particularly during his first term, when the economy boomed – to replace Spain’s construction-­based economic model with an alternative approach more geared towards addressing structural weaknesses within the economy and improving economic competitiveness. Such solutions were only proposed after boom turned to bust. Ultimately, the economic downturn, which hit Spain particularly badly, and the government’s response, which was viewed by much of the population as being tardy, inconsistent and devoid of strategic vision, effectively condemned the PSOE to defeat at the 2011 general election. The Calvary of the PSOE’s final term in office under Rodríguez Zapatero between 2008 and 2011, when his government implemented a series of economic austerity measures designed to stave off the kind of bail-­out previously visited upon Greece, Ireland and Portugal, saw the government’s popularity plummet. As we have seen, the party obtained a ­historically poor result at the 2011 general election. The PSOE therefore provides an example of a social democratic party which appeared to have little margin available to respond to the challenges posed by the international economic downturn from 2008 in a recognisably social democratic fashion. Although, in line with the actions adopted by other EU countries, the Rodríguez Zapatero government’s initial response to the crisis was to implement a fiscal stimulus package – in Spain’s case, one of the largest implemented by governments seeking to address the emergency – pressure from the EU and beyond, including intervention by the US President, Barack Obama, meant that fiscal stimulus had largely been replaced by austerity by the autumn of 2009. At a time when the neoliberal economic policy paradigm which had been dominant for the previous three decades appeared to be more the problem than the solution, the PSOE, like social democratic parties more generally, could propose no distinctive policy alternatives, or at least none which were capable of maintaining market confidence in the Spanish economy. Having presided over an increase in unemployment to 22 per cent of the Spanish labour force, and with the country desperate to avoid an EU bail-­out, the PSOE could hardly be surprised by the scale of its defeat at the 2011 general election. The international economic and financial crisis after 2008 paradoxically left social democracy facing ‘both the best of times and the worst of times’ (Paramio, 2009: 83–5). According to this analysis, ‘the best of times’ describes a situation whereby the downturn brought about by the failure of the neoliberal paradigm gave renewed credibility to a growth model which prioritised social cohesion above the rapid and unequal accumulation of wealth, and which recognised the need for public regulation in order to check the dysfunctional operation of the markets, guaranteeing education and health care and investing in the public

The PSOE and social democracy

13

goods necessary for sustainable growth. It was nevertheless simultaneously ‘the worst of times’, given that, during the period of neoliberal ascendancy, individualist values became entrenched as society became individualised, the public sphere and politics became discredited, and progressive party identities became weaker. This process led the leaders of social democratic parties to distance themselves from their traditional base without securing an alternative social base. Three decades of neoliberal hegemony did not just lead to a historic crisis of capitalism, but also provoked a high degree of scepticism from citizens with regard to what they could expect from politics. As Paramio concludes, this loss of confidence in democratic politics is particularly corrosive for social democracy given that ‘conservative parties can always count on the support of big economic interests, but for social democracy, in contrast, there is no other support than that which it receives at each moment from citizens’ (Paramio, 2009: 85). Having embraced neoliberal policies, social democratic parties have had little option other than to look beyond the ambit of economic policy in an effort to differentiate themselves from their conservative counterparts. Reform in the area of social rights has figured prominently in this regard, although care is taken to ensure that any such reform does not clash with the interests of the business world (Sevilla, 2011: 455–6). Accordingly, in Spain, innovation was reserved for areas of government policy beyond the economic sphere, most particularly in the field of civil liberties. Legislation on domestic violence and gay marriage, an equality law, the regularisation of the status of over 700,000 illegal immigrants and a law concerning the recovery of historic memory, which was aimed at honouring the memory of those who had suffered at the hands of the Franco dictatorship both during and after the Civil War, were some of the government’s most notable achievements. Attention is devoted to these issues in Chapter 8. Unfortunately for Rodríguez Zapatero and the PSOE, none of these achievements was capable of neutralising the public rejection of the government as the economy sank deeper into crisis. To conclude, despite the scale of the international economic and financial crisis of 2008, the neoliberal paradigm was sufficiently robust to maintain its ascendency over policies directed towards demand management. If Keynesianism were to be applied, it would be done so in small, limited doses which would be hastily abandoned as soon as the financial markets began to show signs of unease. Whilst the high average level of economic growth during the Rodríguez Zapatero government’s first term in office between 2004 and 2008 enabled it to implement the kind of redistributive policies – most notably the Dependency Law approved in 2006 – which have been viewed as being characteristic of social democratic parties, Rodríguez Zapatero, during his second term, ultimately had little choice other than to do whatever was required to prevent a further deterioration in the country’s financial position. This meant an end to redistribution and the introduction of one of the largest packages of cuts in contemporary Spanish history. The conclusion to be drawn is that the PSOE appeared to be as incapable as other social democratic parties – or, indeed, any political parties capable of winning office – of constructing an alternative narrative on economic recovery

14

The Spanish Socialist Party

which might gain the support of the electorate. When the PSOE handed over power to Mariano Rajoy’s PP in November 2011, it could nevertheless claim that it had at least ensured that Spanish democracy had remained intact, at a time when the governments of both Greece and Italy had been entrusted to non-­elected technocrats. Despite the difficulties experienced by the PSOE under Rodríguez Zapatero, there was no collapse of confidence in the entire political class as became apparent in both Athens and Rome. The State, instead of acting independently as a counterbalance to the business world, has instead been captured by the business world, a development which seriously constrains the State’s agenda (Sevilla, 2011: 455). In the case of Spain, the task of government had been reduced to retaining the confidence of the bond markets. Ideology – social democratic or otherwise – had become a casualty of this imperative.

2

The character of Spanish Socialism: a historical overview, 1879–1982

The PSOE is acutely mindful of its history and traditions and this awareness of the past is a key element in the contemporary party’s self-­affirmation (Gunther, 1986: 10; Tezanos, 1989: 436; Juliá, 1990: 270; Maravall, 1992: 7; Heywood, 1994a: 3). In order to analyse today’s PSOE it is necessary to consider the party’s historical legacy. Indifferent to electoral politics during the first three decades of its existence following its establishment in 1879, the PSOE emerged – electorally – as the most successful political party during the Second Republic (1931–36). Providing the Republic with two prime ministers during the Civil War (1936–39), the party was exposed to savage repression under Franco’s dictatorship, and by the time of the dictator’s death in 1975, the PSOE had only just begun to emerge from the status of political irrelevance. Virtually re-­founded under the leadership of Felipe González in the final years of the dictatorship – ‘a new party for a new Spain’ (Graham, 1991: 1) – the PSOE established itself as Spain’s chief opposition party before entering office in 1982. Since then it has only been out of office during the eight-­year period 1996–2004, and the period following the November 2011 general election. This chapter provides an overview of the PSOE’s history in the 103-­year period between the party’s foundation in 1879 and the party’s general election victory in October 1982, seeking to place the party within the historical context in which it operated. Although it is impossible to do justice within a single chapter to the party’s historical development over such a long period, an attempt has been made to identify the most salient features of the party’s past which ­continue to have relevance to the PSOE of the twenty-­first century. The early PSOE, 1879–1939 The PSOE’s early experience was one of painfully slow development and limited political success (Gillespie, 1989: 1–35; Heywood, 1990: 1–28; Juliá, 1997: 15–85). The party was established in 1879 in Madrid by a group of printers and other workers, the most prominent of whom was Pablo Iglesias. The General Workers’ Union (Unión General de Trabajadores – UGT) was established as a formally autonomous union federation in 1888 – albeit one which shared basically the

16

The Spanish Socialist Party

same leadership as the PSOE (Juliá, 1997: 39) – serving as the PSOE’s ally in the labour movement (Gillespie, 1989: 9). In his analysis of the development of Spanish Socialism before the outbreak of the Civil War in 1936, Heywood emphasises the PSOE’s poor grasp of Marxist theory, the unoriginality of its own theoretical formulations and the failure to apply a theory relevant to Spain’s economic and political situation. Theory and practice often bore little relation to one another as the party’s espousal of Marxist revolution belied a more timid, reformist practice. Three factors are advanced to explain this disjuncture: the nature of the Spanish state; the early PSOE’s dependence on French interpretations of Marxism; and the predominance of organisational concerns over theoretical analysis (Heywood, 1990: 1–3). Political action in the guise of revolutionary activity was postponed indefinitely. Preservation of the party’s organisation had a higher priority than revolution (Juliá, 1997: 38–9). Simplistically identifying Spain’s minuscule middle class as the party’s chief enemy, Iglesias refused to enter into any electoral agreements with middle-­class Republican parties, who were viewed as competing for the votes of the working class. The PSOE thereby effectively prevented itself from gaining parliamentary representation, prolonging its marginal role in Spanish politics. The party only reversed its isolationist stance due to the repression which followed the so-­called ‘Tragic Week’ in Catalonia in July 1909, when protests at the call-­up of reservists for the war in Morocco escalated into a general strike in which the PSOE played a leading role. Within two months, an electoral agreement had been reached with Republican parties representing middle-­class, liberal interests, enabling Iglesias to obtain the PSOE’s first parliamentary seat the following year. Nevertheless, by the outbreak of the First World War, the Socialist movement was barely established at a national level, with party support largely being confined to Madrid, Asturias and the Basque Country (Heywood, 1989: 231). A significant characteristic of the party in its early years, and one which has had an influence in more recent times, was the PSOE’s high moral tone, personified by the ascetic figure of Iglesias. Such was his austere reputation that he was referred to by the Spanish philosopher Ortega y Gasset as a ‘lay saint’. In the words of Gerald Brenan, the early PSOE was a party in which ‘there was something almost Genevan in the standards of self-­respect, personal morality and obedience to conscience that it demanded of its followers’ (Brenan, 1943: 219). Acutely aware of this legacy, the PSOE approached elections a century after the party’s foundation boasting of its ‘one hundred years of honesty’. The allegations of corruption which plagued the party during the early 1990s did untold harm to this reputation. Ortega y Gasset also viewed Iglesias as one of Spain’s ‘greatest Europeans’, and wrote that ‘the Socialist Party must be Spain’s Europeanising party’ (Tezanos, 1993: 91). In the early years of the twentieth century, the modernisation of the country was viewed as being closely linked to ‘Europeanisation’, with emphasis being placed on addressing the social, economic and political gap between Spain and the rest of the continent. At this stage in its development, the Socialist movement was able to attract a number of prominent intellectuals who identified the PSOE as the political vehicle best equipped to bring Spain to the level of

Spanish Socialism: a historical overview

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its European neighbours. It is significant that members of this younger intake of intellectuals, who were to constitute the party’s leadership after the death of the party’s founding father, Iglesias, in 1925, were imbued with a more European outlook: Julián Besteiro had studied at the Sorbonne and at the universities of Munich, Berlin and Leipzig, whilst Fernando de los Ríos, who was to enjoy a reputation as one of the PSOE’s foremost ‘Europeanisers’, had studied in Germany. As ‘a party deeply rooted in the West European social democratic tradition’ (Maravall, 1992: 7), the PSOE remains Spain’s most ‘European’ party. As we will see in Chapter 3, which considers the PSOE’s handling of the negotiations which led to Spain joining the European Community in 1986, the definitive end of Spain’s historical marginalisation from the rest of the continent constitutes one of the PSOE’s proudest achievements. The capture of the party’s first parliamentary seat helped boost the party’s fortunes and party membership grew from 6,000 to 30,000 between 1908 and 1918 (Tezanos, 1989: 438). A number of prominent liberal intellectuals, including such figures as Besteiro and De los Ríos, also joined the party during this period. An indication of the consequent decline in the influence of Iglesias was the leadership’s decision to place the party at the head of a national general strike in August 1917 in protest at falling living standards. The failure of the strike and the subsequent brutal repression visited upon the organisers of the industrial action convinced the party’s leaders of the need to avoid direct confrontation with the State. The moderates around Iglesias and Besteiro became convinced that ‘revolutionary activity was best avoided’ (Heywood, 1990: 53). Events in Russia in October 1917 were virtually ignored: the first positive reference to the Bolsheviks appeared in the party’s newspaper, El Socialista, in March 1918 (Gillespie, 1989: 15). Emphasis was instead placed on the pursuit of a more pragmatic electoral strategy which sought to take full advantage of the Spanish parliamentary system. This strategy bore fruit in 1918 when the party won six parliamentary seats. A faction within the party opposed to this legalist course welcomed the October Revolution and began to adopt more revolutionary positions, leaving to establish the Spanish Communist Party (Partido Comunista de España – PCE) in 1921. The influence of the Communist Party prior to the Civil War proved to be minimal, as it enjoyed little support within the labour movement. An indication of the threat posed to the established order by the new party was the fact that Primo de Rivera, who led a successful coup against the constitutional regime in 1923, establishing himself as dictator until his fall in 1930, did not even trouble to ban the party’s publications. As late as March 1936 the PCE had just 3,000 members (Brenan, 1943: 306). The departure of the party’s pro-­Bolshevik faction confirmed the Socialists’ reformist trend, which was further underlined when Francisco Largo Caballero, one of the most prominent members of the leadership after Iglesias himself, accepted Primo’s offer to collaborate with his regime. The Socialist trade union leader even joined Primo’s Council of State, holding responsibility for labour affairs. Collaboration with the dictatorship, which Heywood has described as ‘perhaps the most undistinguished period in the PSOE’s history’ (Heywood,

18

The Spanish Socialist Party

1994a: 1) nevertheless enabled the Socialists to escape the repression visited upon their anarchist rivals (Preston, 1994: 16). With Iglesias dying in 1925, Largo Caballero was able to replace him as the most influential Socialist leader, and was adept enough to end his collaboration with Primo’s regime before it became discredited and collapsed in 1930. Furthermore, the PSOE maintained links with the republican movement throughout the period up until the king’s departure. When the king fled Spain and the Second Republic was proclaimed in April 1931, both the PSOE and UGT were in a strong position to play a key role in political life. PSOE membership had risen to almost 20,000 (from a low of about 8,000 from 1923 to 1927), whilst membership of the UGT had reached 100,000 (Share, 1989: 18). The PSOE’s significance during the Second Republic may be judged by the fact that it was the largest party of the left, both in terms of its share of the vote and membership. The PSOE was ‘the organisation which embodied the Second Republic’s reforming zeal’ (Graham, 1991: 244). The Socialist movement’s cohesion was nevertheless in question throughout virtually the entire history of the Republic. The essential point of dispute within the PSOE centred on the degree to which the party should co-­operate with middle-­class, liberal, political forces in defence of the Republic, and, in particular, whether it should participate in government. Other prominent Socialist leaders, such as Indalecio Prieto and Fernando de los Ríos, favoured collaboration with republican political forces, and were prepared to accept cabinet posts, Prieto being appointed Finance Minister and De los Ríos, Justice Minister. During the Republic’s first three years, Largo Caballero also backed this strategy, accepting the post of Labour Minister. In so doing, all three leaders felt that they were helping to consolidate what was viewed as the long-­awaited bourgeois revolution, despite the efforts of the land-­based oligarchy to frustrate the Republic’s reforms and preserve its own privileges. Others, such as Julián Besteiro, opposed any participation in government, believing it would undermine any possibility of achieving Socialist goals (Méndez Lago, 2000: 49). The Republic was supported insofar as it was seen as the necessary precursor to Socialist revolution, but, ultimately, it was an obstacle to be overcome (Heywood, 1994a: 4). Despite Besteiro’s reservations, until 1933 the PSOE’s commitment to parliamentary democracy appeared unequivocal. The fact that the party remained split into three factions – with supporters lining up behind Besteiro, Prieto or Largo Caballero – nevertheless contributed towards the PSOE’s weakness over the remaining years of the Republic’s existence. The land-­based reactionary opposition had been able to address the state of disarray with which they had met the proclamation of the Republic and organise sufficiently to win the elections held in November 1933. In contrast, disillusionment with the Republic contributed to a growing belief within the sector of the PSOE led by Largo Caballero that genuine reform within the parameters of the regime was impossible. The alliance between the PSOE and Republican parties which had been a key feature between 1931 and 1933 was abandoned for the 1933 general election, thereby weakening the left’s electoral prospects within a political system which favoured electoral alliances. The worsening international situation

Spanish Socialism: a historical overview

19

further contributed to the radicalisation of sectors within the PSOE – Hitler was appointed German Chancellor in March 1933, whilst Dollfuss crushed Austria’s Socialists in February 1934. The gap between Largo Caballero’s revolutionary rhetoric and reformist practice was highlighted during the ill-­fated revolutionary uprising of October 1934. This key event was provoked by the left’s fears that the appointment to the government of ministers belonging to Gil Robles’ Confederación Española de Derechas Autónomas (Spanish Confederation of Autonomous Right-­Wing Groups – CEDA) presaged a shift towards Fascism. Imprisoned after the events of October, Largo Caballero advocated a ‘Bolshevisation’ of the PSOE – support for the dictatorship of the proletariat, mass mobilisation, and the backing of greater links with the Communists. This shift has been characterised as ‘a drift from reformism to a self-­destructive rhetorical revolutionism . . . Behind the consequent revolutionary posturing stood a long tradition of reformism. There can be little doubt that even the most verbally radical of the Socialist leaders viewed with considerable trepidation the prospect of actually organising a revolution’ (Preston, 1994: 2, 130). For all his radical posturing, Largo Caballero’s actions displayed restraint. Significantly, he and his supporters never sought to channel the massive rural base within the land workers’ section of the UGT, the Federación Nacional de Trabajadores de la Tierra, in a way consistent with their revolutionary rhetoric (Graham, 1991: 48). Caballero’s chief party rival, Indalecio Prieto, drew different conclusions from the events of October 1934. Although viewed as the party’s leading moderate, Prieto committed himself to activities in October 1934 which surpassed those of Largo Caballero in terms of their militancy. He later regretted his decision to provide arms to the uprising in Asturias and acknowledged the PSOE’s incapacity for revolutionary adventurism. The chief conclusion he drew from what has been described as ‘the first battle of the Civil War’ (Brenan, 1943: 284) was that the reconstruction of the 1931–33 coalition with the Republicans was essential. The PSOE had the key role in consolidating the democratic system as a basis for the gradual introduction of significant reforms ranging from labour relations to a system of social security. Despite some resistance from the sector of the party which supported Largo Caballero, Prieto, together with the former Prime Minister, Manuel Azaña, established an electoral coalition consisting of left-­wing and Republican groups (including, at the insistence of Largo Caballero, the PCE), which won the elections held on 16 February 1936. By now clearly dominant within the Socialist movement, Largo Caballero imposed the party line whereby the PSOE would support, but not participate in, government. This decision effectively prevented Prieto from replacing Azaña as premier when the latter was appointed President of the Republic in May 1936. The appointment of the far less capable Republican, Casares Quiroga, exacerbated the government’s weakness. Two months later, the military uprising against the elected government, which had been in gestation from the moment the Popular Front Coalition’s general election victory became known, sparked off the Civil War. Viewed as the only political leader capable of uniting the various forces

20

The Spanish Socialist Party

which had formed the Popular Front Coalition, and bolstering the Republic’s war effort, Largo Caballero was appointed as premier in November 1936. However, with the Communist Party gaining prominence within the Republican camp due to dependence on Soviet military aid (in the context of the policy of ­non-­intervention by France and the United Kingdom which effectively favoured the Francoist forces), Largo Caballero and the Socialist movement more generally, became progressively marginalised (Graham, 1990; 1991). Refusing to support the purge of the anti-­Soviet leftist POUM (Partido Obrero de Unificatión Marxista – worker’s Party of Marxist Unification) and anarchists in May 1937, Largo Caballero resigned as premier and was replaced by his party colleague, Juan Negrín, who pragmatically accepted Communist influence as the price to be paid for continued military aid from Stalin. He was supported by his Socialist colleague, Prieto, who, appointed Defence Minister, was prepared to collaborate with the Communists in order to engineer Largo Caballero’s resignation. Prieto’s tolerance of Communist power nevertheless proved to be temporary. Unable to stomach Communist influence within the Republic’s armed forces, he resigned from the government in April 1938. Vainly awaiting the start of a European conflict which might finally bring the aid from France and the UK which had hitherto been denied, the Republic resisted until Franco declared his victory on 1 April 1939. Just five months later, Europe went to war. Back from the abyss, 1939–75 The Socialist movement was almost destroyed by the experience of Civil War. The repression suffered by the party was severe: four members of the party executive elected in March 1939, former minister, Julián Zugazagoitia, former General Secretary of the FNTT, the UGT land-­workers’ union, Ricardo Zabalza, and thirty-­two Socialist parliamentary members were executed (Mateos, 2004:  94). The 70-­year-­old Julián Besteiro died in a Francoist prison in 1940. Having escaped to France, Francisco Largo Caballero was imprisoned by the Nazis in Oranienburg concentration camp during the Second World War, dying in exile in Paris in 1946. In these conditions it was difficult for the party to regroup. The Francoist authorities arrested six entire PSOE and UGT executive committees between 1945 and 1953 (Mateos, 1993: 4). Over 1,000 party activists were arrested in Spain between 1941 and 1969 and in 1953 the UGT General Secretary, Tomás Centeno, was tortured and killed by the security police in Madrid (Maravall, 1985: 132). Fixated on internal wrangling about responsibilities for the errors of the past, and having to come to terms with the fact that victory in the Second World War would not lead the allies to dislodge Franco from power, the PSOE was almost ‘reduced to a historical memory’ (Juliá, 1997: 394). The exiled leadership, headed by Rodolfo Llopis, based itself in Toulouse from 1944, and increasingly lost touch with the social, economic and political situation in Spain (Mateos, 1993; Vargas, 1999).

Spanish Socialism: a historical overview

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With its political strategy still focused principally on an intense a­nti-­ Communism inherited from the Civil War, the leadership appeared incapable of responding in a coherent fashion to the myriad challenges posed by the profound social and economic transformation of Spain which gathered pace following the implementation of the regime’s Economic Stabilisation Plan in 1959, accepted by Franco as the price for staving off economic collapse. The process of modernisation which was a feature throughout Southern Europe from the 1950s onwards helped gradually undermine the dictatorships of the region, involving profound changes in social structures. A rural exodus, urbanisation, emigration, the influx of tourists, secularisation, greater intellectual debate and the impact of external influences on latent economic, social, cultural and political conflicts were key factors in this process (Heywood, 1993a: 1). Jealously defending its power within the party, the old guard rejected all efforts launched by Socialist activists within Spain to pursue a process of revitalisation within the party. Retaining a suspicion of the Communists which lasted throughout the Francoist dictatorship, there was no question of mounting joint operations with the PCE against the Franco regime, despite the fact that the Communists’ internal structures allowed them to pursue a far more effective clandestine existence than the Socialists. The party’s tenuous presence within Spain exacerbated this failing. Joaquín Arango, who was a Minister under Felipe González between 1982 and 1988, has remarked that he cannot remember having encountered a single Socialist in Madrid in the late 1960s and early 1970s (Burns Marañón, 1996: 94–5). In contrast, the key role played by the Communist movement in the infiltration of the official trade union movement via the Workers’ Commissions (Comisiones Obreras) during Spain’s ‘economic miracle’ in the 1960s enabled it to consolidate its position as the most effective anti-­Francoist force. Although small, the Socialist presence within Spain was of a sufficient scale by the beginning of the 1970s to allow the mounting of a challenge to the exiled leadership. At the party’s 24th Congress (11th Congress-­in-­exile) held in Toulouse in August 1970, the groups based within Spain, which included in their number Felipe González and Alfonso Guerra, succeeded in wresting greater autonomy from the party old guard. Executive Committee members based in Spain were granted autonomous decision-­making powers for matters pertaining to within the country, and an equal share in the international representation of the party (Gillespie, 1989: 269). In addition, the PSOE’s Executive Committee would henceforth contain nine representatives from inside Spain and just seven based in exile (Juliá, 1997: 403). By the time the next Congress was held in Toulouse in August 1972 the split between the interior and the exiled party leadership had developed to such an extent that the latter group attempted a boycott. The division within the party was formalised when the old guard held their own smaller Congress at the end of the year. The victory of the renovadores (modernisers) over the históricos (old guard) was assured when the Socialist International recognised the former in January 1974 (Ortuño Anaya, 2005: 54). This advantage was pressed home during the 26th Congress held at Suresnes, near Paris, in October 1974, which was attended

22

The Spanish Socialist Party

by the Socialist International leader, Bruno Pitterman and the French Socialist leader, François Mitterrand. Congress delegates elected Felipe González as First Secretary, rather than the favourite to fill the post, Nicolás Redondo, who opted to remain UGT Secretary General. The results of the Congress were such that they virtually constituted the re-­foundation of the party: only a handful of those based outside Spain remained on the party’s bodies and there were no longer any remaining personal links with the history of the Republic and Civil War (Juliá, 1997: 423). The election of González to the leadership gave the party a more radical image. The 32-­year-­old lawyer from Seville offered a striking contrast to the septuagenarian Llopis. Share argues that the ‘renovated’ party presented a more radical image as a result of the pressures which the party’s clandestine existence had imposed on the membership in the interior (Share, 1985: 85). This radicalism was reflected at the Suresnes Congress, during which the party called for ‘mass mobilization, pressure and negotiation, with the aim of achieving a ruptura democrática – a break in the nation’s political history that would open the way for democracy’ (Maravall, 1985: 134). Congress resolutions advocated ‘the radical transformation of capitalist society into a Socialist society’, whilst also noting ‘the historic intensification of the contradictions inherent in the capitalist system, which is inevitably condemned to disappear’. Although the party voiced support for the construction of a united Europe, it ruled out the possibility that such a union be based ‘on political and economic institutions at the service of international capitalism’ (PSOE, 1974: 1–3). González’s right-­hand-­man, Alfonso Guerra, has explained the party’s radical self-­image at this point as a function of the party having endured forty years of clandestine existence. Without structure, the party required an increasingly forthright ideological identity in order to secure its own survival (Burns Marañón, 1996: 132). As Heywood argues, there was a sense in which the party was effectively recreated in the early 1970s despite the PSOE’s insistence on its historical continuity (Heywood, 1994a: 3). Seeking to outflank its Communist rival, the PSOE was prepared to wear its Marxist label on its sleeve, Marxism providing the party with a useful tool with which to compete with the Communist Party. Indeed, at this stage, the party appeared to be taking up a position to the left of the PCE, which in July 1974 had set up the Junta Democrática (Democratic Council). The Junta was an attempt to co-­ordinate opposition groups across the political spectrum, from the PCE itself to ultra-­Catholic Carlists and prominent monarchists such as Calvo Serer. The PSOE leadership, although invited, chose not to join in order to avoid any appearance of being in a subordinate position to the Communists. The undoubted influence of the Junta nevertheless encouraged the PSOE to attempt to organise an alternative opposition grouping, the Plataforma de Convergencia Democrática (Democratic Convergence Platform) the following year. Including the leading Christian Democrat, Joaquín Ruiz-­Giménez, the Plataforma was established, not so much to compete with the Junta, but rather to enable the PSOE to negotiate a common opposition front without the terms being set by the Communists (Gillespie, 1989: 306). In the coming years, the PSOE’s collabora-

Spanish Socialism: a historical overview

23

tion with respected figures such as Ruiz-­Giménez was additionally useful in that it proved instrumental in promoting the image of Socialist moderation which was to be so important in the PSOE’s eventual electoral success (Heywood, 1994a: 7). In essence, in the period between 1879 and 1975, the experience of the Second Republic and Civil War confirmed the essentially reformist character of the Socialist movement established by Pablo Iglesias. The PSOE’s rhetorical radicalism belied the party’s patent unsuitability for revolutionary activity. When the party acted in a non-­legalistic manner, it did so more as an act of defence, rather than as a pro-­active act of aggression against the capitalist system. Furthermore it was ineffective in playing this limited, and essentially defensive, role. It was to prove similarly unsuccessful as a clandestine force under Franco’s dictatorship. The confrontation between a confused rhetorical radicalism and a more pragmatic, legalistic reformism which had been a feature of the party’s inheritance from the era of Pablo Iglesias, became particularly acute from 1934 onwards, debilitating both the Socialist movement itself and the Republic as a whole. At the end of the Civil War, the PSOE was broken and divided. Future generations of Socialists were provided with an object lesson in the importance of organisation, discipline and unity of purpose. When democracy returned to Spain following Franco’s death in 1975, the party leadership under Felipe González maintained a keen interest in the party’s history and traditions, and the PSOE’s experience during the 1930s served as a crucial point of reference in the elaboration of party strategy. The PSOE’s new leadership under González saw its task as injecting a degree of flexibility into the party which would enable it to respond in an uncertain political situation, whilst simultaneously gaining hegemony on the left. Whilst the PSOE leadership was keen to avoid the internal conflicts which had marred the party in the past, the next half decade proved, in fact, to be a period of extreme instability. The party which emerged from this volatile period was able to establish itself as the dominant force in the Spanish political arena in the early 1980s. Transformation and the path to power, 1975–82 During the latter half of the 1970s, the PSOE underwent a swift transformation from being a small, radical mass-­mobilisation party into a more moderate, catch-­all party with realistic prospects of power. This section will examine the party’s successful evolution during this period and seek to explain the factors which influenced such far-­reaching changes. The PSOE’s transformation must be viewed in the context of the immediate post-­Franco years, a period of considerable uncertainty. Political parties which had only recently been legalised were forced to reassess past strategies and react in a flexible manner to the challenges presented by a rapidly changing political situation. A measure of the PSOE’s success during the period is the fact that the party was able to emerge as both the hegemonic force on the left and as a credible contender for office. During the early stage of the transition from dictatorship to democracy, before elections were on the political agenda, the PSOE struck an ­unequivocally

24

The Spanish Socialist Party

radical pose, anxious not to be outflanked on the left by the PCE and other Socialist ­groupings such as Enrique Tierno Galván’s Partido Socialista Popular (Popular Socialist Party – PSP). According to Gunther, the PSOE’s emergence as a ‘radical party with mass mobilisation aspirations’ was due to several factors (Gunther, 1986: 12–13). The political environment in the immediate post-­ Franco years, during which the clandestine opposition advocated mass demonstrations, appeared to favour the mass-­mobilisation model. Since the largest and ­best-­established party of opposition, the PCE, favoured this line, it was ­understandable that its rivals on the left responded in a similar fashion. By 1976 the party had to re-­establish its credentials on a secure basis, set out its defining features and make known its stance towards other parties on the left, most notably the PCE (Juliá, 1990: 270). When Felipe González told his Socialist Summer School audience in August 1976 that the PSOE was a party with a history which had serious reasons for saying that it was Marxist, his aim was to occupy the political space of democratic socialism and social democracy and undercut the claims of other competitors on the left to the same territory (García Santesmases, 1993: 36, 39). This view is echoed by Juliá, who views the party’s espousal of Marxism as the key ideological element in the PSOE’s strategy of self-­affirmation and its attempt to establish its dominance over the PCE (Juliá, 1990: 273–4). When the 27th Party Congress took place in December 1976, the first to be held in Spain since the Second Republic, it did so at the end of a year in which the militancy of the working-­class movement had led to the loss of 149 million hours through strikes (Maravall, 1985: 135). Heywood places the PSOE’s embracing of a Marxist label in the political and economic context of the period immediately following the death of Franco, arguing that ‘this was a period in which capitalism was held to be on the verge of collapse . . . the PSOE’s adoption of an explicit Marxist self-­image was thus seen at the time as neither particularly noteworthy nor surprising’ (Heywood, 1994a: 8). The international context must also be borne in mind when seeking to explain the apparent radicalism of the party’s stance, whereby, for the first time in its history, the PSOE declared itself to be ‘a Class Party, and therefore a mass Party, Marxist and democratic’ and rejected ‘any accommodation with capitalism or simple reform of the capitalist system’ (PSOE, 1976: 2). The Portuguese Revolution had taken place just two years before, whilst memories of Pinochet’s bloody coup d’état against Salvador Allende’s democratically elected leftist ­government in Chile were still fresh. Gillespie suggests that González went along with the radical resolutions due to the fact that the Congress was essentially a means of re-­acquainting the Spanish public with the party. The image presented by González was of more significance than Congress resolutions which would receive little attention from the public (Gillespie, 1989, 321, 324–5). In any case, the majority of PSOE voters at the time did not view the PSOE as being a Marxist party (Heywood, 1987: 194; Tezanos, 1989: 492). However radical the party’s rhetoric at the Congress, the consolidation of democracy, parliamentary politics and access to government remained the party’s key concerns (Maravall, 1992: 10).

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The PSOE’s strength was also reinforced by its international links to other European Socialist and social democratic parties, which gave it a definite advantage over its rivals as the party established itself as one of the country’s leading political forces within Spain’s newly established democratic system. Once again, as at Suresnes, the PSOE’s credibility was boosted by the attendance of Socialist figures including Olof Palme, François Mitterrand, Pietro Nenni, Michael Foot, Carlos Altamirano and Willy Brandt at the Congress, which served to reinforce the party’s international standing. In its programme for the 1977 general election, the PSOE viewed itself as being particularly well suited to ‘open up Europe to Spain’ due to the party’s ‘superb relations with the Socialist and Social Democratic Parties of Europe, many of which are in government’ (PSOE, 1977: 25). The attendance of the leader of the German Social Democratic Party (Sozialdemokratische Partei Deutschlands – SPD), Willy Brandt, was particularly significant. Brandt described the relationship between the two parties as being ‘excellent, very close, of great mutual respect and growing co-­operation’ (quoted in Gillespie, 1989: 374). Brandt had even contacted the Spanish authorities to secure a passport for González, so as to enable him to travel abroad (Tusell, 1999: 105). Gillespie argues that it was only with the aid of German money in 1975 that González was able to build up a modest party apparatus, although, as he adds, ‘more important than the money was the way in which Brandt became the PSOE’s “validator” in the Socialist International’ (Gillespie, 1989: 374). The UCD Minister, Rodolfo Martín Villa has supported this assertion, arguing that before gaining office, the PSOE ‘enjoyed a privileged position in the international field by virtue of the support of the Socialist International. Furthermore, its President, Willy Brandt endorsed, promoted and protected them, as did the German Socialist government itself’ (quoted in García i Segura, 1985: 59). Attention has also been drawn to the SPD’s support for the PSOE and the financial aid channelled through the Friedrich Ebert Foundation, which had opened an office in Madrid in early 1976, ostensibly for the PSOE’s research and educational programmes. The Foundation’s Director later revealed it spent more than 27 million marks in Spain between 1976 and 1980 (Juliá, 1997: 471). Within two years of Felipe González becoming party leader, the PSOE, with less than ten thousand members, had sufficient resources to establish party headquarters throughout Spain. The extent of the role played by the Ebert Foundation during the transition was later underlined when King Juan Carlos decorated its Director, Dieter Koniecki, for his contribution to Spanish democracy (Pinto-­Duschinsky, 1991: 55). Gilmour argues that ‘the SPD provided the PSOE with substantial funds and thus had considerable influence on its behaviour’ and adds that in early 1976, ‘the principal means of communication between the Spanish government and the main Spanish socialist party appears to have been through the German embassy’ (Gilmour, 1985: 166–7). In similarly unequivocal terms, Holman also argues that ‘the advice of Willy Brandt (as President of the Socialist International since 1976) was decisive in the de-­radicalisation of the Socialist party’s programme’ (Holman, 1996: 77). Smith also argues that given the SPD’s own moderate ­centrist

26

The Spanish Socialist Party

t­endencies, it is reasonable to assume that the German party encouraged the PSOE’s moderation (Smith, 1998: 58). Whether German aid inevitably bought the SPD influence which was used to direct the PSOE towards a more moderate political stance is debatable and, as has been suggested, overly simplistic (Gillespie, 1989: 375). Felipe González himself has commented that ‘despite what people think, Willy Brandt was a good listener and offered little advice’ (Juliá et al., 1996: 542). It was nevertheless likely that German links stimulated the envy and distrust of the PSOE’s political competitors. Santiago Carrillo, leader of the Spanish Communist Party, complained during the 1979 general election campaign that the PSOE was now the party of Willy Brandt and Helmut Schmidt rather than Pablo Iglesias (Gilmour, 1985: 208). European links were nevertheless undoubtedly of great benefit. As García i Segura confirms, ‘Relations between the party and the Socialist International would prove to be fundamental in the public re-­launching of the PSOE both internationally and domestically’ (García i Segura, 1985: 51). At the time of the Congress, the party still adopted an ambiguous stance with regard to the reform programme set in train by Adolfo Suárez, who had replaced the Franco loyalist, Arias Navarro, as Prime Minister in July 1976. The PSOE was not unique as an opposition force to have little faith that elements from within the former Francoist regime would willingly participate in (let alone direct) a gradual transition to democracy, as indeed proved the case. It was thought that a clean break (ruptura) would be necessary, rather than an evolutionary process of reform (Gunther, 1986: 13). The PSOE’s decision to recommend abstention during the referendum on the Political Reform Law, held the same month as the party’s 27th Congress in December 1976, indicated the PSOE’s wariness of Suárez’s intentions. This stance was rapidly abandoned when it was apparent that the law provided the foundation for the establishment of a democratic system which offered the PSOE the genuine prospect of office. Swift progress was made in the transition from dictatorship to democracy; by April 1977 all major political parties had been legalised, including the PCE, and the Francoist party and unions had been dismantled, thereby going some way towards meeting the demands of the PSOE and other opposition groups. The PSOE’s progressive abandonment of the radicalism which it had displayed since the Suresnes Congress must therefore be viewed as a function of its adjustment to the new democratic framework. Alfonso Guerra has noted the difference between the radical nature of the resolutions passed at the 27th Congress and the moderation of the PSOE’s manifesto for the general election held just four months later (Burns Marañón, 1996: 133). Share argues that as the party was aware that opinion polls indicated that most of the Spanish electorate judged itself to be on the moderate centre left of the political spectrum, ‘the PSOE leadership designed an electoral campaign that downplayed virtually all radical aspects of the 1976 platform . . . Most important, the PSOE campaign centred on the charismatic image of its leader, Felipe González, a tactic that was aimed at personalizing the appeal of the PSOE and downplaying ideological and programmatic issues’ (Share, 1989: 43).

Spanish Socialism: a historical overview

27

This electoral strategy proved successful as the PSOE’s capture of just under 30 per cent of the vote against the UCD’s 34.4 per cent established both the party’s hegemony on the left and its position as the major opposition party. By 1979, party membership had grown to ten times the 1976 figure of 9,141 (Tezanos, 1989: 438–9). With the party’s status as a leading player in the nascent democracy firmly established, the PSOE curtailed all talk of ruptura. The PSOE had been able to outmanoeuvre its rival on the left, the PCE, obtaining a percentage of the vote three times greater. Heywood has examined the process whereby the PSOE gained hegemony over the Spanish Communist Party during the transition to democracy (Heywood, 1987). Heywood argues that, in essence, the PSOE had a better understanding of the political implications of the profound changes which had taken place in the country’s socio-­economic structure over recent decades. Prior to the 1977 elections, when it was by no means clear which of the two parties would gain ascendancy, Marxism was of use in establishing both parties’ left-­wing credentials. With the PSOE’s relative success at the 1977 elections, Felipe González and the PSOE leadership realised that the party’s embracing of a fairly simplistic appreciation of Marxism hindered its further development under a political system which at last offered it a realistic prospect of power. Further factors also favoured the PSOE. As already discussed, during the early 1970s, a new generation of leaders based in Spain centred on Felipe González and the PSOE Deputy Leader, Alfonso Guerra, had been able to capture control of the party from a foreign-­based ageing leadership with little appreciation of the extensive changes in Spanish social structures. In contrast the PCE, under the leadership of Santiago Carrillo, twenty-­seven years older than González, was still redolent of the past, conjuring up uncomfortable memories of the Civil War. Whilst under the harsh conditions of the Franco dictatorship the internal structures of the PCE proved superior to those of the PSOE, the establishment of a democratic regime proved more conducive to the PSOE than to its Communist rival. Indeed, ‘for many in the PCE, their principal aim had been achieved; with Franco gone, membership of the Communist Party would lose its logic’ (Heywood, 1987: 200). Whilst the prospect of imposing discipline within the PCE appeared all the more difficult, the PSOE faced a more appealing future. For the Socialists, ‘the ever-­increasing likelihood of achieving political power, and the possibilities this would allow for rewards and advancement to loyal members, would make discipline easier to impose’ (Heywood, 1987: 200). A high degree of internal discipline was assured following the organisational changes adopted at the party’s 28th Congress in 1979, and the Extraordinary Congress later the same year at which Felipe González’s dominance over the party was overwhelmingly confirmed. Subsequently, iron discipline was to be one of the key characteristics of the party under González’s leadership. Heywood concludes that, in essence, ‘the keynote of the transition became moderation, which was always likely to favour the Socialists rather than the Communists’ (Heywood, 1987: 201). He nevertheless stresses that ‘there was no inevitability about the Socialists’ success’ (Heywood, 1987: 207). Indeed, at

28

The Spanish Socialist Party

the time of Franco’s death, the PCE had become both larger and more institutionalised (Gunther, 1986: 10). A combination of clear leadership, provided by Felipe González, and an iron discipline, engineered by the PSOE’s deputy leader, Alfonso Guerra, combined with a greater grasp of the true political situation in Spain, were all factors which contributed towards the PSOE’s triumph over its Communist rival. As Nash has argued, and as we have already seen, ‘debate on party strategy and ideology, allied to disputes about the kind of party the PSOE should be, have been a feature of the party’s history’ (Nash, 1983: 32). This observation is particularly apt in describing the party in the late 1970s when it discarded its only recently acquired Marxist self-­description. Felipe González was among the first to recognise the electoral implications of the Spanish electorate’s overwhelming preference for moderation. The Spain of 1975 was different to that of 1977. ‘In a very brief period of time, the values of a leftist culture formed in opposition to Francoism gave way to those of a new political system which was the fruit of all-­party consensus’ (Juliá, 1990: 275). As the chief opposition party, the PSOE was now confident of gaining power through the ballot box in the medium term, and in this context the PSOE’s avowal of Marxism, ‘which had allowed the PSOE to go to its inevitable rendezvous with the PCE without an inferiority complex’ (Juliá, 1990: 273) began to look like an electoral liability. As Heywood has argued, ‘Once democracy had been established . . . Marxism ceased to serve a useful political purpose as the PSOE sought to adapt to Spain’s altered social structure by converting itself into a modern, catch-­all party’ (Heywood, 1994a: 3). With the June 1977 elections having established the PSOE’s hegemonic position over other parties of the left, electoral tactics suggested that ‘the only expansion possible had to be on the right’ (Heywood, 1994a: 3), as the party ‘sought to implement a catch-­all electoral strategy and to attract moderate middle-­class voters’ (Gunther, 1986: 17). At a dinner held at Barcelona’s Colón Hotel on 8 May 1978, with many journalists present, Felipe González unexpectedly proposed that the party drop its Marxist self-­definition at its next Congress. However, with a general election being called for March 1979, following the approval by referendum of the Constitution in December 1978, the PSOE entered the election campaign with the issue unresolved. In the election campaign, the PSOE, as it had two years previously, ‘sought to project an image of moderation and responsibility’ (Gunther, 1986: 18). That the party was less successful in carrying this off than in 1977 was to some extent due to Adolfo Suárez’s shrewd exploitation of ‘the contradiction between this moderate image and the PSOE’s radical party platform . . . especially the references to Marxism’ (Share, 1989: 52). The results of the elections were relatively disappointing for the PSOE, with the party only increasing its share of the vote by 1.2 per cent, gaining three additional seats in the Congress of Deputies. Moreover, the PSOE’s incorporation of smaller Socialist groupings prior to the election, most notably Tierno Galván’s PSP, had encouraged hopes that the party would be able to gain a significantly larger proportion of seats. The results were nevertheless good enough to support

Spanish Socialism: a historical overview

29

suggestions that the PSOE’s transformation into a catch-­all party remained on track, with support being received from across the electoral spectrum, with the PSOE winning an important share of the middle-­class, white collar and rural vote (Maravall, 1985: 150). Most importantly, the experience of the 1979 general elections strengthened González’s resolve to tackle head-­on both his party’s self-­definition as Marxist and the questioning of his own personal authority as party leader. The stage was set for clarification of the issue at the party’s 28th Congress held in May 1979. Here the extreme left, or críticos, made known their dissatisfaction at the party’s rightward drift and what they viewed as the high-­handed behaviour of party leaders. There was further resentment at what they saw as the undue influence enjoyed within the party by the former leaders of groups such as the Federación de Partidos Socialistas (Federation of Socialist Parties), which had been absorbed by the PSOE following the 1977 general elections. The críticos ‘regarded the parachute landing of the new technocrats as leading the party in an unacceptably social democratic direction’ (Preston, 1986: 155). This was a charge shared by the left-­wing socialist, Francisco Bustelo, who said: ‘I have a lot of respect for social democracy but it’s not what we want here. We suspect that Felipe González and Guerra want to tilt the party towards social democracy’ (quoted in Nash, 1983: 45). Despite González’s protestations, a majority of delegates voted in favour of the following resolution: ‘The PSOE reaffirms its character as a class, mass party; Marxist, democratic and federal’ (PSOE, 1979b: 4). Speaking about the Congress some time later, Felipe González revealingly described it as an event at which ‘pragmatism collided with the accumulated ideology of the party’ (Share, 1989: 58). Preston suggests that the leadership lost the vote on the party’s self-­definition due to its tenuous control over the delegates, ‘who were predominantly activists elected by local provincial PSOE groups. Only 30 per cent of them were paid party bureaucrats controllable by the apparatus. The remainder felt free to give vent to their dissatisfaction with the rightward electoralist trend of the party’ (Preston, 1986: 155–6). González’s shock resignation as leader took everyone by surprise – ­particularly the críticos. His view was that if the party persisted in retaining a Marxist ­self-­definition, it could no longer retain him as its leader. The preference of the críticos – a Marxist PSOE under Felipe González – was not on offer, and they had no wish to propose an alternative leadership, given their recognition of González’s status as the PSOE’s chief asset: the PSOE without Felipe González was as undesirable to the left of the party as it was to the right. As Gillespie argues: ‘So long as the alternatives were presented as “Marxismo, sí o no”, the left was winning; as soon as the issue became one of leadership, the tables were turned’ (Gillespie, 1989: 348–9). Amidst the sensation of González’s resignation, votes which the leadership did win concerning internal organisation and party statutes went relatively unnoticed, despite the fact that they clearly strengthened the party apparatus under Alfonso Guerra and limited the power of the rank-­and-­file. Guerra’s enhanced control over the apparatus become apparent at the Extraordinary Congress in

30

The Spanish Socialist Party

September, which was convened to rule on the party’s ideological self-­definition and to elect a new executive. As Heywood has commented, ‘the real significance of the 1979 congresses lay not so much in the resolution of the ideological debate as in the organisational changes which ensured that the executive’s control of the party was massively enhanced’ (Heywood, 1994a: 9). Similarly, Gunther has argued that, ‘while González and Guerra failed at [the 28th] Congress in almost every respect, their supporters did succeed in changing the procedures by which delegates would be elected to future congresses’ (Gunther, 1986: 22). Furthermore, it was agreed that those party members found guilty of damaging the party’s image could be expelled, whilst the number of delegations was reduced from 1,000 to a far more manageable 50. By the time of the Extraordinary Congress, the key issues were addressed by an almost totally different set of delegates who were far more open to persuasion. That the leadership was able to tighten its control over the apparatus was also assisted by the party’s small membership. Membership totalled just 3,403 in 1972, and even when the party gained office a decade later it was still relatively small at just 116,514 (Tezanos, 1992: 46; 1993: 234). Toeing the party line would be a prerequisite to obtain political appointments. Heywood has also noted that commentators have in the main failed to appreciate that the Marxist tag had only been introduced into the party’s self-­definition in December 1976 (Heywood, 1994a: 2). Similarly, Gunther notes that the changes proposed by González ‘would not constitute a sharp lurch to the right, but were oriented towards restoring Marxism to the position it had held prior to 1976’ (Gunther, 1986: 17). The party’s adoption and abandonment of its Marxist tag can therefore only be understood ‘within the complex context of the party’s historical legacy, the collapse of the Franco regime and subsequent transition to democracy, and the battle with the PCE to capture the leftist political space’ (Heywood, 1994a: 8). In an interview which he gave between the two Congresses, González made a point of emphasising the party’s need to present itself as a mature alternative government, saying: ‘the country cannot afford to wait ten years for the party to mature’ (quoted in García Santesmases, 1993: 70). This was said as the UCD government was starting to show early signs of the degeneration which would eventually lead to its rout in the 1982 general elections. Felipe González’s view was that his party had to be ready, possibly at short notice, to replace the UCD as Spain’s party of government and safeguard Spain’s democratic future. Thanks to the new system of electing delegates to Congress which had been passed the previous May, González’s victory at the Extraordinary Congress was overwhelming. The party leaders had put in place provisions which only accommodated the views of the majority (Share, 1989: 56). Alfonso Guerra, not only Felipe González’s right-­hand man, but also head of the largest delegation, that of Andalusia, wielded almost 25 per cent of the total number of votes. The críticos gained less than 10 per cent of the Congress’s support despite estimations of their strength in the party being around 40 per cent (Nash, 1983: 46–7).

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31

Not a single crítico was elected onto the party’s ruling Executive Committee, and González was returned as General Secretary with 86 per cent of the vote. Although Marxism was accepted ‘as a critical, theoretical and undogmatic tool for the analysis and transformation of social reality’, the contributions of ­non-­Marxists towards Socialism were acknowledged as being of equal value to those of Marxists (PSOE, 1979c: 2). Such was the scale of Felipe González’s victory at the Extraordinary Congress that ‘he now had virtual carte blanche to complete the party transformation’ (Gillespie, 1989: 356). Between the Extraordinary Congress and victory in the general elections of October 1982, González’s party sought to present an image and a party programme to the Spanish electorate which would ‘give hope to everyone, and antagonise no-­one’ (Nash, 1983: 60). The need for such a strong, united alternative government was underlined when Spaniards were reminded of the fragility of their country’s young democracy during the attempted coup d’état of 23 February 1981. Prior to the failed coup, the PSOE had aggressively attacked the increasingly beleaguered UCD, whose leader, Adolfo Suárez, had emerged with little credit from a PSOE-­tabled censure motion in May 1980. Suárez’s resignation in January 1981 was followed less than a month later by the coup, during which parliamentary deputies were held hostage by a group of paramilitary civil guards under the commend of Lieutenant Colonel Tejero, who had been involved in a previous coup attempt in 1978. The shock caused by the failed coup served to remind Felipe González and the PSOE that their priority task was to defend Spain’s weak democratic institutions. In the immediate aftermath, the PSOE offered to enter into a coalition with the UCD, but the offer was refused by the new Prime Minister, Leopoldo Calvo-­ Sotelo. Willingness to co-­operate with the Calvo-­Sotelo government even led the PSOE to lend its support to the government’s attempt to backtrack on Spain’s autonomy process, the LOAPA (Ley Orgánica de la Armonización del Proceso Autonómico – Organic Law Concerning the Harmonisation of the Autonomy Process), in September 1981. However the PSOE did fiercely oppose Calvo-­Sotelo’s decision to take Spain into NATO, also in September 1981, when, with some justification, the UCD government was accused of acting with undue haste over such an important matter. Indeed, González pledged that a future PSOE government would put the matter before the Spanish people in a referendum. The image presented by the PSOE at its 29th Congress in October 1981 was one of sober responsibility. The Congress aimed to ‘project the PSOE as a party opening wide its doors so that Spanish society as a whole was more fully represented in its ranks’ (Nash, 1983: 56). The unity demonstrated at the Congress was positively embarrassing for a democratic party – the executive report was approved by a vote of 96.6 per cent and Felipe González was re-­elected General Secretary with 100 per cent (Gillespie, 1989: 362). Preston argues that the programme offered by the PSOE to the Spanish electorate in October 1982 ‘could not have been more moderate. Long-­term ambitions

32

The Spanish Socialist Party

for the creation of a just and egalitarian society were subordinated to immediate practical tasks like the restructuring of Spanish industry, the stimulation of employment, the reform of Spain’s cumbersome civil service and the elaboration of a more positive and independent foreign policy’ (Preston, 1986: 23). The scale of the PSOE’s victory at the 1982 election, at which it captured just under half of the vote and 58 per cent of parliamentary seats, enabled it to form a single-­party government for the first time in its history. Furthermore, with its electoral support well distributed around the country, the party attracted voters from across the electoral spectrum, thereby becoming more of a ‘catch-­all’ party: ‘Just 19.1 per cent of its votes in the 1982 election came from the manual working class, while 32.1 per cent of new members in 1983 were professionals, office workers and technicians’ (Heywood, 1987: 207). The new PSOE government was in a strong position to implement the ‘change’ which it had promised the electorate. The PSOE’s transformation ‘from a small, disorganised, radical party of clandestine opposition to the Franquist regime into a large, moderate catch-­all party’ (Gunther, 1986: 10) was now complete as the party stood on the threshold of power. The party had successfully thrown off the radical mantle which it had considered necessary in order to meet the challenge from the PCE, whilst organisational reforms had tightened the leadership’s control over the party, injecting it with a degree of discipline noticeably absent in the country’s other main parties.

3

The PSOE and the European Community: from isolation to integration

Given the salience of European integration for the PSOE, and given that there is little literature available in English on the membership negotiations which were concluded during the party’s first term in office under Felipe González, the present chapter considers Spain’s historic relationship with what is now the EU so as to place in context the party’s attitude towards European integration in the period since Spain became a member in 1986. Spain’s EEC membership was achieved only after one of the most protracted negotiating processes in the history of the Community. Accession lay at the end of a twenty-­four year odyssey following the country’s first application for association in 1962. This chapter examines the historical background to Spain’s membership of the Community, which may be conveniently split into three main phases: (1) the period leading up to the Franco regime’s application for an Association Agreement in 1962 and the 1970 Preferential Trade Agreement with the Community; (2) negotiations carried out during Spain’s transition from dictatorship to democracy; and (3) the development of the PSOE’s own stance on European integration and the Socialists’ successful conclusion of negotiations in 1985. During the first period, we will see that although the Franco regime was quick to appreciate the potential relevance of European integration for Spain’s own economic liberalisation, membership was denied due to the non-­democratic nature of the regime. With Franco dead and democracy re-­established, it was initially hoped that negotiations would be relatively straightforward. In actual fact, negotiations became drawn out more as a result of the EEC’s own internal budgetary difficulties than due to any particular Spanish shortcomings, whether political or economic. Consequently, little progress was made under the UCD government (1977–82) and the PSOE therefore faced a considerable task when it entered office towards the end of 1982. Despite the scale of the challenge posed by the negotiations, the PSOE government was eventually able to conclude negotiations in June 1985, enabling Spain to gain full membership on 1 January 1986. This historical perspective is justified on the grounds that an appreciation of Spain’s problematic relationship with the EC during the twenty-­year period

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The Spanish Socialist Party

which preceded the PSOE’s victory is essential if any full understanding of the PSOE’s own stance on European integration is to be gained. Given the tortuous nature of Spain’s relations with the EC during this period, it is understandable that the Socialist government’s successful conclusion of negotiations during its first term in office was identified by the PSOE, and indeed by the Spanish public as a whole, as being a historic achievement. Furthermore, appreciation of the PSOE’s feat was aided by the fact that Spanish EC membership was supported across the political spectrum, in contrast to the fundamental differences on the question in other Southern European countries such as Greece and Portugal. This divergence has been explained with reference to the impact of integration on each country’s national economy, the limits which integration imposes on the determination of the political and economic system, and the impact of integration on the international standing of each country (Álvarez-­Miranda, 1996). Throughout the period covered in this chapter, the PSOE maintained a keen interest in the European project. From the attendance of the party’s General Secretary, Rodolfo Llopis, at the Congress of the European Movement in Munich in 1962, through the early 1970s when his successor, Felipe González, adopted a more radical position with an emphasis on anti-­capitalism and anti-­Atlanticism, and into the 1980s when this stance gave way to a more pragmatic emphasis on modernisation and competitiveness, the PSOE’s support for European ­integration remained constant. Franco and the European Community At the end of the Second World War the Franco regime’s pariah status within the international community was confirmed by the United Nations Resolution of 12 December 1946 recommending the withdrawal of ambassadors from Madrid and the application of economic sanctions. Two years later Spain’s exclusion from the Marshall Plan threatened to bring about the economic collapse of the country. The gravity of the situation was such that only loans granted to Spain by the Argentine dictator, Perón, between 1946 and 1948 helped stave off famine. By the end of the decade the very survival of the regime was in question. That it did manage to survive was largely due to developments outside Spain. The Berlin blockade of 1948–49 and the start of the Korean War in June 1950 brought about an intensification of the Cold War which led to a change in the attitude of the major Western powers towards Spain. On 27 August 1953 a Concordat was signed with the Vatican and the regime’s isolation was further relaxed when, under US pressure, the UN decided to rescind its 1946 resolution. Shortly afterwards, further evidence of the regime’s growing international recognition was provided by the Pact of Madrid, signed with the US on 26 September 1953. The Pact encompassed three bilateral agreements on mutual defence, military aid and economic aid. By its terms the US was allowed to establish air bases at Torrejón, Zaragoza and Morón, and a naval base at Rota. In return Spain received, between 1951 and 1957, a total of $625 million in aid (Harrison, 1993: 20). As Preston argues, ‘Franco had got what he wanted: the end of international ostracism, a

The PSOE and the European Community

35

massive consolidation of his regime and the right to present himself publicly as the valued ally of the United States’ (Preston, 1993: 624). Thanks to the US Bases Agreement the Franco regime was provided with the means to ride out its most serious period of crisis. If further proof were required to show that the regime’s international isolation was at an end, it was provided by Spain’s admission to the United Nations at the end of 1955. However, US aid could not disguise the fact that by the late 1950s the regime’s autarchic economic policies based on attaining self-­ sufficiency via import substitution had failed disastrously. The creation of the European Economic Community in 1957 underlined Spain’s continuing economic isolation at a time of increasing international economic co-­operation. In February 1957 changes in Franco’s cabinet ushered in a group of ‘technocrats’ whose aim was the creation of a market economy capable of being integrated into the Western economy. For the most part members of the conservative Catholic lay group Opus Dei, ministers such as Alberto Ullastres Calvo at the Trade Ministry, Laureano López Rodó, director of Franco’s Office of Economic Co-­ordination and Planning and Finance Minister Mariano Navarro Rubio, advocated wide-­ranging economic liberalisation. Significantly, the technocrats did not advocate any accompanying political liberalisation. On the contrary, authoritarianism was viewed as being a key factor in the effective implementation of economic reforms. Evidence of the new economic policy of integration came in 1958 when Spain became a member of the World Bank, the International Monetary Fund and the International Bank for Reconstruction and Development. The following year Spain joined the Organisation for European Economic Co-­operation (OEEC). Visits and recommendations from the International Bank for Reconstruction and Development and the OEEC contributed towards the introduction of the 1959 Stabilisation Plan, which was to mark the end of autarchy and the start of a more open era in Spanish economic affairs. The plan combined a package of deflationary and tight monetary measures aimed at opening Spain up to European markets via a modernisation and liberalisation of the Spanish economy. Public sector borrowing was slashed, multiple exchange rates were abolished, the peseta was devalued by 43 per cent against the dollar, direct government controls over economic activities were jettisoned and foreign investors were enticed by guarantees and incentives. One immediate result of the Stabilisation Plan was recession and unemployment, with many Spanish workers leaving to find work abroad. On the positive side, there was a spectacular improvement in the balance of payments, a stabilisation in prices, and, most important of all, the plan brought about the conditions for sustained long-­term growth. Indeed, this growth proved to be spectacular: between 1959 and 1971 Spain’s GDP grew at an average annual rate of 7.3 per cent, compared to France’s 5.8 per cent, Italy’s 5.5 per cent, and West Germany’s 4.9 per cent (Lieberman, 1982: 232). Only Japan boasted faster growth than that of Spain during its ‘economic miracle’. Carr and Fusi remind us that this figure partly reflects the fact that the starting point was so low, and that growth was not evenly distributed throughout the economy, with sectors such as textiles, steel and coal production s­uffering

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The Spanish Socialist Party

throughout the period. Moreover, industrial development was not strong enough to stem the flow of Spaniards forced to seek work abroad (Carr and Fusi, 1979: 75–6). Yet even this latter point can be viewed in a positive light when we consider that remittances from the more than one million Spanish emigrants, together with receipts from foreign tourism and increased foreign investment, helped finance the high levels of imports and deficits on the balance of trade. One of the prime motivations behind the economic liberalisation measures contained in the 1959 Stabilisation Plan had been fear of being left out of the process of European integration initiated by the signing of the Treaty of Rome on 25 March 1957. Within four months of this key event the Spanish government created an ‘Interministerial Commission for the Study of the European Economic Community’ (CICE). This had as its chief aim: ‘the technical study of the possible repercussions in Spain of the functioning of the European Communities created by the Treaties of Rome (EEC and Euratom) and those which may arise from the eventual creation of a free trade area’ (quoted in Tamames, 1986a: 168–9). According to Tamames, the ineffectiveness of this body was partly due to the scepticism displayed towards the European Community in the opening years of its existence by its chairman, Gual Villalbi. His doubts were soon to prove misplaced. The significance of the European Community and its superiority over the European Free Trade Association (EFTA), which had been set up on 4 January 1960, were made clear to Spain when one of its main markets, the UK, announced its decision to become a Community member in July 1961. Furthermore, the Community’s aim of creating a common agricultural policy made it more attractive than the EFTA, whose free trade area did not apply to agricultural products. In 1962 Spain’s deficit with the Community was $200 million. By 1965 this figure had quadrupled (Alonso, 1985: 26). Some sort of agreement with the Community appeared inevitable. Therefore, on 9 February 1962, the Spanish Foreign Minister, Fernando María Castiella, sent a letter to the Chairman of the European Community’s Council of Ministers, Maurice Couve de Murville, requesting that negotiations with the Community be started with the aim of concluding an association agreement which might form the basis for Spain’s full integration at a later date. The Spanish Foreign Minister’s application highlighted ‘Spain’s European vocation, repeatedly confirmed throughout its history’ and argued that ‘the success of the Spanish Stabilisation Plan, achieved in co-­operation with international bodies, is an encouraging sign’ (PSOE, 1985: 50). The timing of Spain’s approach proved unfortunate. Several weeks before, on 15 January 1962, the European Parliament had issued its Birkelbach report, the chief conclusion of which was that: ‘states whose governments do not have democratic legitimisation and whose people do not participate in government decisions, either directly or through fully elected representatives, cannot aspire to be admitted into the circle of peoples which forms the European communities’ (quoted in Pollack and Hunter, 1987: 134). The economic liberalisation signalled by the 1959 Stabilisation Plan had not been matched by any political relaxation of the regime. Spain’s request therefore elicited no more than a cold acknowledgement from Couve de Murville dated 7 March 1962.

The PSOE and the European Community

37

However, a greater response to Spain’s application was forthcoming from within the country’s own political circles. Proof of this was provided by the participation of over one hundred Spanish opposition figures from both inside and outside Spain at the Congress of the European Movement held in Munich on 5 and 6 June 1962. The participants, amongst whom was the PSOE’s leader, Rodolfo Llopis, voted in favour of a resolution recommending that the Community reject Spain’s application as long as basic democratic rights were denied. Franco denigrated those attending the Congress as traitors and several were arrested and sent into exile on their return to Spain. Spain’s chances were also harmed by the Community’s attentions being focused on the UK, De Gaulle vetoing the Macmillan government’s application for UK membership in January 1963. Frustrated by the Community’s failure to answer Castiella’s letter, the Spanish government wrote again on 14 February 1964, i.e. two years after Spain’s first approach. On 2 June 1964 the President of the European Council, Henry Spaak, sent a cautious reply to Spain stating that the Council had authorised the Commission to open negotiations with the Spanish government. The Commission’s aim was to ‘examine the economic problems which the development of the European Community has created for Spain, and to seek appropriate solutions’ (Tamames, 1986a: 171). The chief stumbling block, as has already been indicated, was the Birkelbach report, which ruled out any association with Spain due to the non-­democratic character of its regime. The legal nature of any relationship was therefore a very sensitive issue. The challenge facing Spanish negotiators was to reach an agreement with the Community which met Spain’s economic requirements as regards reducing the country’s deficit, and which also proved politically acceptable to the Community. On 9 December 1964 the first session of exploratory negotiations began. The attention of the Spanish negotiators was soon taken up with a series of questions passed to the Spaniards by the Community delegation requesting that they elaborate on several ambiguities and omissions. However, before much progress could be achieved, the negotiations were suspended in July 1965 when France withdrew all her representatives from Community organisations due to disagreements over the Community’s own budgetary resources. The same month Spain appointed Alberto Ullastres, the technocrat driving force behind the country’s Stabilisation Plan, as Spain’s first ambassador with sole accreditation to the Community. The significance of this appointment is highlighted by Preston, when he argues that, ‘It was a mark of the greater priority given to relations with the EEC that Alberto Ullastres became Spanish Ambassador to the Community’ (Preston, 1993: 722). During the pause in negotiations Ullastres convinced the Spanish Foreign Minister, Castiella, that diplomatic efforts would more fruitfully be directed towards a preferential trade agreement rather than an association, which implied the Community’s political recognition of Franco’s regime. When exploratory negotiations were renewed in January 1966 following the return of France’s Community representatives, Spanish negotiators examined the possibility of concluding a preferential trade agreement. The Spanish impressed

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The Spanish Socialist Party

on their interlocutors that their market could only remain open to Community goods if preferential access to the Community were awarded to Spain, so that the latter’s deficit with the Community could be reduced (Alonso, 1985: 27). The final solution proved to be a preferential trade agreement ‘in stages’, only the first of which would be regulated. Passage to the second stage would only occur with the agreement of both parties after certain, non-­specific, conditions had been met (Arroyo, 1991: 35–6). This satisfied Spain’s economic requirements and soothed the Community’s political fears, given that the latter retained a veto over any future attempt by the Franco regime to transform the preferential trade agreement into a vehicle for full integration (Alonso, 1985: 29). Exploratory negotiations drew to a close on 19 July 1966 and on 25 November 1966 the Commission passed a report on the negotiations to the Council. On 11 July 1967 the Council finally approved the start of negotiations, which, three years later, led to a preferential trade agreement being signed in Luxembourg on 29 June 1970, the first official document regulating Spain’s relations with the Community. In the industrial field the Community offered Spain a tariff reduction ranging between 60 and 70 per cent for the majority of Spanish goods, with the exception of certain products, where the reduction was limited to 40 per cent. For their part, the Spanish granted the Community an average reduction of 27 per cent (Montes, 1993: 56). The picture was less favourable in the agricultural field, but the very fact that Spanish negotiators succeeded in placing agriculture on the agenda was something of a coup. The final agreement covered 63 per cent of Spain’s agricultural sales to the Community (Alonso, 1985: 39). Since Spain carried out more than a third of her foreign trade with the Community, it was vital that her negotiators obtained an advantageous settlement and the figures indicate that they were successful in doing this. The terms of the Preferential Trade Agreement were undoubtedly more favourable to Spain than to the Community and the net effect on the Spanish economy was positive. Spain’s trading figures with the Community more than doubled from 109,347 million pesetas in 1970 to 240,994 million pesetas in 1973, whilst Spain’s exports rose from 60,342 million pesetas to 144,819 million pesetas during the same period (Tamames, 1986b: 250). By 1978 Spain’s deficit with the Community had been transformed into a balance which lasted up until the country’s integration in 1986. The favourable nature of the 1970 Preferential Trade Agreement to Spain later became all the more apparent during the EEC membership negotiations conducted by the PSOE between 1982 and 1985 as EEC negotiators highlighted the imbalance in tariff reductions between the two sides. In short, the Preferential Trade Agreement was too favourable to Spain and too harmful to the EEC’s ­interests to serve as a blueprint for an Accession Treaty (Marks, 1997: 92). The political importance of the landmark Preferential Trade Agreement for Spain was indicated by the country’s Foreign Minister, Gregorio López Bravo, who stated, ‘this is only a first stage, but it entails a practically irreversible process, with a very clear ultimate aim’ (De Blaye, 1976: 272). The enlargement of the Community in 1973, when the original six were

The PSOE and the European Community

39

joined by the UK, Ireland and Denmark, necessitated a renegotiation of the 1970 Agreement, particularly since Spanish agricultural exports to the UK were vital to the Spanish economy. The different structure of these exports, compared to Spanish agricultural exports to the six, ruled out simply extending the 1970 Agreement to the three new members. Alonso states that if this had happened, the percentage of Spanish sales benefiting from Community concessions would have dropped from 62 to 21 per cent (Alonso, 1985: 79). Attempts to renegotiate the terms of the 1970 Agreement took place against the background of the Franco regime’s death throes. ETA’s murder of Carrero Blanco on 20 December 1973, Arias Navarro’s timid apertura or ‘opening up’ of the regime and Franco’s increasing frailty persuaded the Spanish negotiators to refrain from making excessive concessions when the approaching end of the regime promised Spain the prospect of greater opportunities in Europe. Matters were in any case taken out of the hands of the negotiators when the Community suspended negotiations following the Franco regime’s execution of five political prisoners on 27 September 1975. Two months later Franco died. Spain’s approaches to the European Community were inevitably hampered by the non-­democratic nature of Franco’s regime. Nevertheless, the liberalisation of the Spanish economy initiated by the 1959 Stabilisation Plan and consolidated by subsequent Development Plans in 1964, 1968 and 1972, which were similarly concerned with economic liberalisation, at least made European integration a more economically realistic prospect. Therefore the landmark Preferential Trade Agreement can rightly be considered as the prelude to Spain’s entry into the European Community. Franco’s death, and the transition to democracy which removed the chief political obstacles hindering Spain’s progress appeared to usher in a new era in Spain’s relations with the EC. Spanish EC membership, although by no means considered to be a mere formality, at last appeared to be within reach. Spain and the European Community during the transition to democracy Franco’s death on 20 November 1975 and the subsequent transition from dictatorship to democracy transformed Spain’s European aspirations. Now Spaniards would only be satisfied by the achievement of full Community membership and many believed that this would be brought about relatively quickly. Their optimism was misplaced. As Preston and Smyth have argued, ‘The Spaniards, who were required to democratise their political life in order to qualify for admission to the EEC, then found that the Community appeared more intent on assessing their application in terms of economic criteria and categories than on acknowledging Madrid’s impeccable constitutional credentials for adherence to the Common Market’ (Preston and Smyth, 1984: 2). On 20 January 1976 the European Council announced that it was prepared to renew the negotiations which had been suspended since the previous September. However, little progress was made by the government of Arias Navarro, who was replaced in as Prime Minister in July 1976 by Adolfo Suárez. By the end of the

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The Spanish Socialist Party

year Suárez’s democratisation process had received overwhelming support from the Spanish people in the Referendum on Political Reform and general elections were called for 15 June 1977. One of the more notable aspects of the election campaign was the agreement right across the political spectrum on the desirability of Spain’s accession to the Community. All the major national political parties accepted that European integration would bolster the country’s nascent democratic regime. Similarly, parties agreed that there was no viable economic alternative to full integration into Europe and that Spain would rise to the challenge of greater economic integration as it had done following the implementation of the Stabilisation Plan in 1959 and the Preferential Trade Agreement with the Common Market in 1970. Internal political debate on Spain’s admission to the Community was therefore limited. The victory of Adolfo Suárez’s centre-­ right coalition, Unión de Centro Democrático (UCD) in the elections was followed, on 28 July 1977, by Spain’s formal request for full Community membership. This petition was considered by the Council of Ministers on 20–21 September 1977 and the Commission was given the task of drawing up the mandatory avis, or ‘opinion’, on Spain’s application for membership. At the beginning of November 1977, Adolfo Suárez paid an official visit to the Commission, which had begun drawing up a report on the economic and institutional problems posed by the admission of Spain, Portugal and Greece into the Community. The report would serve as a basis for the Community’s individual opinions on Spain and Portugal, negotiations with Greece already having reached an advanced stage. Entitled ‘Joint reflections on the problems of enlargement’ (and subsequently usually referred to as the fresco), the report consisted of three documents: one bearing the above title, together with two complementary documents, ‘The transition period and the institutional consequences of enlargements’ and ‘Economic and sectorial aspects: analyses presented by the Commission to complement the joint reflections on the problems of enlargement’. The main message behind the fresco was that enlargement, coming as it did during a period of economic recession, must not weaken the economies of either the Community or applicant countries and progress towards Economic and Monetary Union (EMU) must not be endangered. Consequently, transition periods would differ between different countries, with different transition periods for different sectors of the economy. Transition periods would range between five and ten years, with those over five years being divided into two stages. On 10 February 1978 the Spanish government set up a Ministry for Relations with the European Communities under Leopoldo Calvo-­Sotelo. This event was followed by the Council’s receipt of the fresco from the Commission on 20 April 1978. Although Calvo-­Sotelo and his team gained a favourable impression of the fresco, their optimism was dealt a blow by the Commission’s avis, which was passed to the Council on 29 November 1978. A far stricter document than the fresco, the avis proposed a membership process which would require Spain to carry out tariff reductions within the shortest possible time limits. Value Added Tax (VAT) would be imposed from the date of Spain’s admission, and the Community’s agricultural market would be protected against Spain’s ‘Mediterranean’ produce.

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The ten-­year transition period favoured by Spain for much of her economy would only apply to the free movement of Spain’s ­agricultural goods and workers, i.e. not to Spanish industry. Such was the consternation caused by the avis within the Spanish business community that the Spanish Employers’ Organisation, the Confederación Española de Organizaciones Empresariales – CEOE – commissioned a ­wide-­ranging survey amongst its member organisations. Its results presented a picture of a critical entrepreneurial sector anxious that both agriculture and industry should benefit from ten-­year transition periods, with VAT being phased in rather than imposed from day one of Spain’s accession. Their attitude to EEC membership was summed up by the phrase: ‘sí a la adhesión, pero no a cualquier precio’ (‘yes to membership, but not at any price’). The referendum on Spain’s new democratic Constitution held on 6 December 1978 was followed by the Commission’s ruling, given at its session of 18–19 December 1978, that negotiations for Spain’s admission to the Community would begin in February 1979. Over eighteen months had passed since Spain’s formal request for membership had been forwarded to the Community and Spanish negotiators hoped they would be able to make up for lost time. Membership negotiations were officially opened on 5 February 1979 and immediately concerned themselves with drawing up a vue d’ensemble, or joint identification and definition of the difficulties posed by Spain’s accession – hardly necessary after fifteen years of talks which had already resulted in a Preferential Trade Agreement. Progress was not helped by the attention of the Community states being largely directed towards the first direct elections to the European Parliament in June 1979. Nevertheless, June 1979 also saw the start of a second negotiating session, this time held at deputy level, which established a procedure for negotiations. Issues to be negotiated were divided into thirteen chapters, each covering a particular topic, whilst a fourteenth chapter was earmarked for ‘other issues’. This latter chapter would eventually include twenty-­one subdivisions (Alonso, 1985: 138). A second ministerial level session began on 18 September 1979. While it was still in progress, Suárez visited the President of the European Commission, Roy Jenkins, and reached an agreement that negotiations proper should begin in the second half of 1980. His aim was to ensure that an accession treaty would be in force no later than 1 January 1983, before the next Spanish general elections. By the end of 1979 there had been five negotiating sessions: two at ministerial level and three at deputy level. Unfortunately for Spain, the year had also witnessed a worsening of the Community’s internal problems. Disputes over the Common Agricultural Policy (CAP), the Community’s own resources and the British budgetary contribution were all creating a cocktail of ill-­feeling which hampered Spain’s European ambitions. Growing calls for agro-­budgetary reform during the first half of 1980 culminated in a speech given by French President Giscard D’Estaing on 5 June 1980 to an audience of French farmers in which he called for a pause in Community negotiations with Spain and demanded a resolution of the Community’s budgetary difficulties and a reform of the CAP. Only a year away from presidential elections, D’Estaing undoubtedly acted, ­according

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The Spanish Socialist Party

to François Mitterrand, with ‘his eyes fixed on the ballot boxes’ (quoted in Macdonald, 1988: 79). Spain’s relations with France, already damaged by French inaction against suspected ETA terrorists in the south of France, reached their nadir. D’Estaing’s speech nevertheless ‘reinforced and consolidated the already existing link between Spain’s integration and the Community’s internal agro-­ budgetary reform. Henceforth, quite clearly, that link between the two issues would prove to be the central element in Spain’s membership negotiations’ (Alonso, 1985: 141). The Spanish government’s immediate, and unexpected, response to D’Estaing’s speech was its announcement, on 15 June 1980, that it would be seeking Spanish membership of NATO in the near future. Convinced that there was a link between NATO and EEC membership, the Spanish government hoped that entry into the Alliance would undermine French opposition to Spain’s incorporation into the Community. Two conditions were attached to Spain’s proposed NATO membership: that progress be achieved, firstly, in the country’s Community membership negotiations, and secondly, in its negotiations with Britain over Gibraltar. Although keen to tackle the most problematic issues of agriculture and fishing, Spain’s negotiators were forced by the French stance to seek progress in less controversial areas when negotiations restarted in the autumn of 1980. The following year was marked by growing disunity within the UCD government. Exhausted by the task of heading the country’s government throughout the transition, and with little stomach for the in-­fighting within the party, Suárez announced his resignation in a television broadcast on 29 January 1981. During the parliamentary investiture vote of his successor, Leopoldo Calvo-­Sotelo, on 23 February 1981, an attempted coup d’état took place. Although defeated within twenty-­four hours, the coup highlighted the vulnerability of Spain’s fledgling democracy. Hopes that the failed coup would provoke a more conciliatory approach from France proved illusory as the French stressed that Spain’s refusal to consider applying VAT from the date of accession was becoming a major stumbling block in Spain’s negotiations. François Mitterrand upheld this position following his victory in the presidential elections of May 1981. The new Spanish Prime Minister, Calvo-­Sotelo, faced by lack of progress in Spain’s Community membership negotiations, and anxious to please the Spanish military following the attempted coup of 23 February, now stepped up the country’s efforts to join NATO. On 10 December 1981 the government signed a NATO protocol inviting Spain into the Alliance, Spain’s formal entry being scheduled for May 1982. By the end of 1981 there had been twenty-­five negotiation sessions – nine at ministerial level and sixteen at deputy level. Not a single chapter had been completed. The Spanish negotiating team nevertheless appeared to have reason to be more optimistic about making progress during 1982. Belgium held the Presidency of the Council of Ministers during the first half of the year and pledged to speed up enlargement negotiations. These received a fillip when, on 26 February 1982, Spanish negotiators finally conceded that VAT would be imposed

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43

from day one of Spain’s integration. This momentum was maintained and during the ministerial level negotiating session on 22 March 1982 six important chapters were completed covering Transport, Capital Movements, Economic and Financial Questions, Harmonisation of Legislation, Regional Policy, and Right to Settlement and Free Provision of Services. This March session marked a partial relaxation in the French stance. In declarations to Le Monde, the French Minister responsible for Community affairs, Chandernagor, stated that he favoured parallel progress between the enlargement process and the resolution of the Community’s internal problems (Morán, 1990: 44). Spain controversially entered NATO in May 1982, against the wishes of the opposition Socialist PSOE, who pledged to hold a referendum on the NATO issue if voted into power. In the view of the PSOE, the government had taken the major step of taking the country into NATO without having achieved any significant progress on either the European Community or Gibraltar, thereby failing to achieve the conditions set out by the government for NATO membership two years before. The following month France checked recent progress when President Mitterrand, at the European Council Meeting in Brussels, proposed that the European Commission draw up an ‘inventory’ of the problems posed by enlargement. Negotiations would be suspended while the Commission examined the Community’s own resources and the financing of the Community budget, Mediterranean agricultural produce, the free movement of workers and fishing (Alonso, 1985: 162). By this stage the UCD government had participated in thirty-­one negotiating sessions, yet was accused by Fernando Morán, Foreign Minister under the PSOE following the October 1982 general election, of having failed to get down to the ‘essence’ of the negotiation. Stung by this accusation, Raimundo Bassols, a key figure in the UCD government’s negotiating team, has argued that since the UCD bequeathed the incoming PSOE negotiating team six completed chapters, in addition to a further seven in an advanced stage of development, Morán’s accusation is poorly grounded (Bassols, 1995: 282). Similarly, the Socialist Secretary of State for Relations with the Community, Manuel Marín, argued in December 1982 that the negotiating team hoped to complete seven chapters within six months. As Bassols argues, ‘The desire expressed to complete seven chapters of the negotiations would not have been at all possible if the seven chapters had not been very well developed and well-­advanced’ (Bassols, 1995: 283). To conclude this section on Spain’s EEC membership negotiations during the transition to democracy, it must be stressed that the failure of the UCD negotiating teams to conclude a deal on Spanish membership was to a large extent due to factors beyond the control of the Spanish government. The oil crises of 1973 and 1979 had dealt a blow to all Western economies and Spain, largely dependent on imported energy supplies, suffered more than most European countries. The resulting period of recession served as the backdrop to Spain’s democratic transition, much as the depression of the 1930s had coincided with the Second Republic of 1931–36.

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The Spanish Socialist Party

Moreover, it was understandable that the priority of UCD governments between 1977 and 1982 was a successful transition from dictatorship to democracy. Such major questions as Spanish EC membership and much-­needed reform aimed at tackling a growing economic crisis therefore failed to gain the attention from government which they deserved. The stance adopted by France towards Spain throughout much of this period, and the internal Community disagreements over finance, brought about a situation whereby the political problems posed by the nature of Franco’s regime were replaced, once democracy was restored, by economic difficulties which proved to be almost insuperable. The projected enlargement of the Community therefore took place in far from propitious circumstances. The overall majority obtained by the PSOE in the general elections held on 28 October 1982 provided it with the opportunity to fulfil its boast that it was the only Spanish political party capable of unlocking the door to European Community membership. The PSOE and the European Community This section will examine the successful conclusion of EEC negotiations by the PSOE. Before considering the Socialists’ role in the negotiating process, it is necessary to preface this section with an examination of the development of the PSOE’s attitude towards European integration from the Francoist period up until the party’s victory at the 1982 general election. Although the PSOE has long had a reputation for being a leading supporter of further European integration, we will examine how, in the context of the Francoist dictatorship, the party felt compelled to oppose greater links between Spain and the European Community for as long as the non-­democratic regime survived. Once the transition to democracy was under way, the party gave its full support to Spanish approaches to the EC, although it was critical of the UCD government’s handling of the negotiation process. By the start of the 1980s, the party was already presenting itself as the sole political party capable of obtaining the country’s accession to the EC. As we have seen, the PSOE had historically looked to Europe in order to jettison Spain’s backwardness and isolation. Referring to the 1930s, Linz described the PSOE as ‘the least typically Spanish and the most European of Spanish parties’ (quoted in Gillespie, 1996: 155). During the Francoist period, the party had shown a keen interest in efforts aimed towards greater European integration and the Socialist leaders Indalecio Prieto and Rodolfo Llopis attended the May 1948 Hague Congress to discuss European union (Featherstone, 1988: 287). The PSOE nevertheless felt compelled to temper its enthusiasm for greater links between Spain and Europe during the Francoist dictatorship. Gillespie provides two reasons for the ambiguity of the PSOE’s position on Europe prior to Franco’s death in 1975 (Gillespie, 1996: 156–7). On a historical level, the party was concerned that the diplomatic isolation which the Franco regime had suffered throughout the 1940s and early 1950s had been replaced by growing international links, culminating in the Preferential EEC Trade Agreement signed in 1970. As the party argued at its Congress in 1974, ‘The PSOE declares its opposition to Spain’s integration in the EEC for as long as the current political regime

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45

remains in place and it reminds European governments that such an integration, instead of compelling the recognition of formal freedoms in our country, would bring about a strengthening of the regime’ (PSOE, 1974: 4). Two years later, at its 27th Congress, the party stated that it would go on ‘urging sister parties and democratic governments to continue to oppose Spain’s entry into European bodies and initiatives as long as its non-­democratic character persists and until the full installation of democracy in our country’ (PSOE, 1976: 14). Ideologically, Spanish membership of the EEC also posed the PSOE problems. As the party old guard, led by Rodolfo Llopis, gave way in the early 1970s to the young radicals, led by Felipe González, the anti-­capitalist rhetoric adopted by the leadership suggested a problematic relationship between the PSOE and the EEC. The fact that the party was emerging from a long period of clandestine operation, in which the advocacy of maximalist positions provided a sense of cohesion in the face of the threat posed by the Francoist dictatorship, also favoured the anti-­capitalist edge to the party’s rhetoric. Whilst at the PSOE’s 26th Congress at Suresnes in 1974, the party confirmed ‘its support for the construction of a united Europe’ it rejected the possibility that ‘this unity be based on political and economic institutions serving international capitalism’ (PSOE, 1974: 4). As we saw in Chapter 2, the party’s radical rhetoric at this time should be seen in the context of the party’s attempt to stake out a position on the left in competition with the rival claims of the larger, and better organised, Spanish Communist Party (PCE). Although the party’s discourse at this time was decidedly anti-­Atlanticist, its support for European integration remained constant, even at the time that the party’s anti-­capitalist rhetoric was at its most radical. In July 1976 the PSOE and the Portuguese Socialist Party (PS) were awarded observer status at the Congress at which EC Socialist parties met to draw up the programme for elections to the European Parliament (Álvarez-­Miranda, 1996: 220). With democracy restored and a new Constitution agreed within three years of Franco’s death, and the establishment of the PSOE as both the main opposition party and party of the left after the 1977 election, the party was able to tone down its historical and ideological objections to the EEC. The manifesto for the 1977 general election stated that: Spain forms part of Europe. For geographical and historical reasons. For political and economic imperatives, a democratic Spain cannot remain outside the construction of a European unity capable of overcoming old-­fashioned nationalisms and providing a framework for the development of socialism, independent of imperialisms and in cooperation with the third world. The aim of this process must be a democratic and Socialist Europe. The PSOE, on account of its superb relations with the Socialist and Social Democratic Parties of Europe, many of which are in government, takes on the responsibility of opening up Europe to Spain. (PSOE, 1977: 25)

For the 1979 elections, the party manifesto stated that, ‘The PSOE in government will negotiate an EEC accession treaty based on appropriate and fair conditions for Spain. We Socialists wish Spain to play a decisive role in the project of European unity’ (PSOE, 1979a: 17). This pro-­European stance was given a further

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The Spanish Socialist Party

boost when the PSOE leadership was able to increase its control over the party following the abandonment of its Marxist self-­definition at the 1979 Extraordinary Congress and the subsequent adoption of more moderate positions. A further justification for supporting the country’s prompt entry into the EEC was provided by the failed coup d’état of February 1981. As Featherstone has argued, ‘Membership of the Community, with its supranational powers, would provide a bulwark against domestic anti-­democratic forces; would lend legitimacy to the democratic system and help to restore civil pride’ (Featherstone, 1989: 250). The PSOE was nevertheless still prepared to criticise the UCD government for its handling of the negotiations, albeit with reference to the particular difficulties faced by the Spanish negotiating team. At the party’s 29th Congress eight months after the failed coup attempt, the PSOE acknowledged that, ‘Spain’s European Communities (EEC) accession process has been hindered by economic difficulties (above all in France) and by the actual internal crisis of the Europe of the 10, which is suffering serious problems caused by the first and second enlargements (from 6 to 10 members)’. Criticism of the UCD government followed: ‘It is also true that the attitude of UCD governments, which have approached membership negotiations with something of an exclusive attitude, has not allowed what has been a constant demand of the Socialists: the joint effort of political, social and economic forces to put constant pressure on our European interlocutors.’ The PSOE’s acknowledgement of the size of the challenge posed by European integration, as well as its desirability for the country’s future, is indicated in the following section: ‘If we fully acknowledge that our integration is positive and irreversible, negotiating efforts must be accompanied by an institutional, financial and economic adaptation which decisively brings us closer to the European model, as a cost which will once and for all benefit Spain, forcing its modernisation’ (PSOE, 1981: 32). The PSOE’s attitude towards European integration before the party gained power in 1982 was therefore consistently favourable. The anti-­capitalist rhetoric of the early 1970s must be viewed in the particular political context of the time as the party emerged from a long period of illegality anxious not to be out-­flanked on the left by its Communist rival. This stance did not place in doubt the party’s generally favourable attitude towards Europe. In his book outlining Spain’s relationship with the EC between 1957 and 1985, Raimundo Bassols, Secretary of State for Relations with the EC under the UCD government, makes clear his own faith in the PSOE’s attitude towards European integration, whilst referring to the poorly founded doubts of others on the PSOE’s European commitment: ‘quite a few prominent pro-­Europeans . . . for reasons unknown to me, from time to time expressed doubts about the Spanish attitude towards Europe if the Socialist Party won. These fears were groundless since both Felipe González and the PSOE had always been favourable to the idea of Europe’ (Bassols, 1995: 280; emphasis added). Bassols’s UCD colleague, Rodolfo Martín Villa, also had confidence in the PSOE, arguing that the Socialists were ‘clearly immersed in the reality of recent years in Spain, and consequently, despite their shortcomings and occasional outbursts, reflected the general spirit of moderation and coexistence which so encouraged the majority of their compatriots’ (García i Segura, 1985: 59).

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47

The October 1982 general elections swept the PSOE into power with an overall majority which helped strengthen Spain’s hand at the Community negotiating table. In his investiture speech the following month the new Prime Minister, Felipe González, stressed that the country’s integration into the Community was a ‘tema de estado’ (matter of state) which was above party politics. He also pledged to seek to finalise negotiations within the lifetime of the newly elected parliament. In doing so he was mindful of the fact that the Community’s internal problems would have to be solved before enlargement could take place and he looked to Bonn and Paris to tackle the difficulties posed, respectively, by finance and agriculture. The question of a linkage between membership of the Community and NATO also played an increasingly important role over the lifetime of the parliament as the Prime Minister realised that ‘the EC-­NATO link worked in both directions: NATO membership was a lever on the EC negotiations, and González plainly hoped that Common Market entry would mute domestic opposition to NATO’ (Treverton, 1988: 125). A position of stalemate imposed by President Mitterrand’s insistence, in June 1982, that the Commission draw up an ‘inventory’ of the problems posed by enlargement, faced Spain’s new negotiating team, led by the Foreign Minister, Fernando Morán, and the Minister for European Community Relations, Manuel Marín. Morán had written an influential book on Spanish foreign policy, Una Política Exterior Para España (A Foreign Policy for Spain) in 1980. The book was notable for the emphasis which it placed on Spain pursuing a more ­‘third-­worldist’ foreign policy outside of NATO. Fourteen years older than Felipe González, Morán was never close to the Prime Minister and relations between the two were strained. It is significant that once Spain’s membership of the Community was assured in June 1985, Morán was replaced by the more ‘­Alliance-­friendly’ Francisco Fernández Ordóñez. For his part, Manuel Marín had formerly lectured at the College of Europe in Bruges and he was to remain in Brussels as a European Commissioner after Spain’s entry into the Community in 1986. The inventory, which linked the Community’s enlargement to the solution of its budgetary problems, was presented by the Commission to the European Council Meeting in Copenhagen on 3–4 December 1982 and was approved. At the first ministerial level negotiating session attended by the new Foreign Minister, Morán stressed that negotiations would particularly deal with those chapters whose content was subject to internal Community reform, so as to address Spanish and Portuguese concerns (Morán, 1990: 47–8). Despite the statement in the Council Meeting’s final communiqué that negotiations with Spain and Portugal should be completed ‘as soon as possible’, President Mitterrand remained implacable. The year drew to a close with a tally of thirty-­six negotiating sessions having been held. Six chapters had been completed and seven others were enjoying varying levels of progress, but the key problems of agriculture, fishing and ­budgetary matters still lay unaddressed. During the first six months of 1983 the Presidency of the Council of Ministers was held by Germany under its new Christian Democrat/Liberal coalition government led by Helmut Kohl. The change of government did not affect the implicit

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The Spanish Socialist Party

support offered to Spain’s Community integration by Germany by the previous SPD administration. Nevertheless, it would be wrong to suggest that any such backing came without conditions. The PSOE government’s ambiguous stance on NATO membership was capable of upsetting Hispano-­German relations. Felipe González’s volte-­face on the Alliance over the coming period was evidence that he was aware of the importance of retaining support for Spain’s European bid. The Spanish parliament’s ratification of the US Bases Agreement on 29 April 1983 was followed by González’s trip to Bonn on 3 May 1983, his first official visit abroad, during which he expressed ‘comprehension of and solidarity with’ NATO’s decision to deploy 572 Cruise and Pershing II missiles in Germany and elsewhere in Europe as from the end of the year, if US-­Soviet arms control negotiations in Geneva proved fruitless (quoted by Treverton, 1988: 125). This statement, as Preston and Smyth remind us, earned González much abuse from within his own party – ‘his first from the Left since 1975’ (Preston and Smyth, 1984: 76–7). Despite this criticism, it is likely that González’s shift contributed towards a certain relaxation in the Community’s stance towards Spain, c­ ulminating in the Stuttgart Community summit in June 1983. A new negotiating session which began on 20 April 1983 led to positive developments in the area of textiles, and although no further chapters were completed, the progress achieved was the first since March 1982. It was not sufficient, however, to prevent Morán from speaking out during the session against the lack of flexibility and understanding displayed by the Community’s negotiating team (Alonso, 1985: 168). Similar charges were made by the Spanish Employers’ Organisation, the CEOE, in June when the Commission forwarded a document to the Council covering the transition period for Spanish agricultural goods. In addition to failing to include such sensitive Spanish goods as wine and olive oil, the document proposed a transition period for fruit and vegetables which would be split into two stages, the first lasting between four and six years, the second between ten and twelve (Morán, 1990: 48). A month after González visited Bonn, he returned to Germany to attend the European Council Meeting in Stuttgart, which at last began tackling the paralysis within the Community caused by the question of finance. Germany proposed that each member state should increase the amount of VAT receipts contributed to the Community from 1 to 1.4 per cent. However, as the largest contributor, Germany made this offer on the condition that efforts be stepped up to enlarge the Community to the south. ‘In a nutshell, Germany agreed to pay the cost of enlargement in exchange for a commitment from France to lift its veto on Spain’s candidacy for EC membership’ (Macdonald, 1988: 82). As Arroyo succinctly explains, ‘if, hitherto, budgetary problems had prevented Spain and Portugal’s entry into the EEC, from that point the solution to those problems could only be provided by enlargement’ (Arroyo, 1991: 47–8). Crucially, French opposition to enlargement became less pronounced after the Stuttgart Council Meeting. Raimundo Bassols, a member of the UCD’s negotiating team has argued that ‘the most important thing to emerge from the Stuttgart summit was a general

The PSOE and the European Community

49

feeling that enlargement was inevitable. It was no longer possible to reform the Community without enlarging it’ (Bassols, 1995: 287). On 21 June 1983 a new ministerial level negotiating session led to the completion of the chapter on Fiscal Matters, Spain formally accepting that it would impose VAT from the date of admission to the Community. This was the first chapter to be completed since March the previous year. Also at this session, the Community presented Spain’s negotiators with a very tough document on fisheries which recommended the continuation of the system of fishing licences and quotas currently in operation. A meeting between Spanish and French ministers took place the same month in La Granja and a system was agreed on whereby each minister would regularly meet his counterpart. This served to build on the partial thaw in bilateral relations between the two countries which dated back to a meeting held between Foreign Ministers Morán and Cheysson at La Celle Saint Cloud on 10–11 January. However, further substantive agreement between the two countries was prevented throughout the remainder of 1983 by France’s unwillingness to co-­ operate with Spain on combating ETA terrorism. Spanish appeals for the extradition of suspected ETA terrorists from French territory had been rejected for some years and this, together with French attacks on Spanish lorries and fishing vessels, prompted Felipe González, during a brief visit to Paris on 20 December 1983, to persuade Mitterrand ‘of the potential costs to Spanish democracy of further delays in finding solutions to both the enlargement and Basque problems’ (quoted in Macdonald, 1988: 84). The French President’s response was to reassure Spain and her European ambitions that ‘Nobody has the right to turn their back on history’ (quoted in Preston and Smyth, 1984: 80). Three more chapters were also completed in 1983. Before the August Community holidays, the chapter on Monopolies was successfully concluded and was well received by Spain’s important oil refining sector. A further chapter was completed on 18 October covering Spain’s North African enclaves, Ceuta and Melilla, and the momentum was maintained when the chapter on Euratom was concluded at the end of the year. This latter achievement was particularly noteworthy in that Spain successfully resisted Community pressures aimed at forcing it to sign the Non-­Proliferation Treaty. The European Council Meeting in Athens on 4–6 December 1983 had no effect on Community enlargement, with the UK’s budgetary demands leading to a unique situation in which no communiqué was issued after the meeting. Bassols has described the summit as a ‘real catastrophe’ (Bassols, 1995: 289). France held the Presidency of the Council of Ministers during the first half of 1984. Spain looked to its neighbour to show flexibility in the areas of agriculture and the treatment of suspected ETA terrorists on French territory. In a speech to the Parliamentary Assembly of the Council of Europe on 31 January 1984, Felipe González acknowledged the crucial nature of the coming year for Spain’s hopes of European integration: ‘I am confident that this year, 1984, will prove decisive in this undertaking, so that membership may be achieved on 1 January 1986’ (quoted in Armero, 1989: 164). González’s confidence was reflected in

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The Spanish Socialist Party

the French statement at the end of the Hispano-­French summit at Rambouillet on 11 and 12 February 1984 that it hoped negotiations would be completed by 30 September 1984, allowing Spain and Portugal to join the Community on 1 January 1986. However this upbeat message was not reflected in any relaxation of the French stance on Spanish tariff reductions and fruit and vegetables. This was emphasised the following week when the Spanish delegation was presented with a Community document on agriculture which followed the inflexible line laid down the previous June. Progress was nevertheless achieved at the ministerial level meeting held on 10 April 1984, when chapters covering Foreign Relations and Patents were successfully completed. The ministerial level meeting held in Luxembourg on 19 June 1984 was to prove decisive as the Community at last sought to tackle the most important areas of tariff reductions and agriculture. Spain was presented with an offer on industrial tariff reduction: a six-­year transition period, without a descreste (prior reduction of customs duties), but with speeded-­up reductions for tariffs over 20  per cent. The Spanish proposed a seven-­year transition period in eight sections with no descreste; the initial period would enjoy a slow introduction so as to cushion the blow to Spanish industry. With regard to agriculture, the Community accepted the usual seven-­year period for non-­sensitive goods (and considered as such by both parties) with the possibility of a further extension of four to six years. These formulae would serve as the basis for the eventual agreement on industrial and agricultural protection reductions and promoted a feeling of optimism in the run-­up to the European Council Meeting at Fontainebleu, marking the end of the French Presidency, on 25–26 June 1984. The Fontainebleu summit proved to be a turning point in that it produced a compromise solution to the Community’s internal problems, most notably UK budgetary concerns and the Community’s own resources, thereby removing a major obstacle to the enlargement process. The final communiqué repeated the Community’s hopes that enlargement negotiations would be completed by the end of September 1984, with Spain and Portugal’s entry into the Community being scheduled for 1 January 1986. At the end of June, President Mitterrand visited Madrid accompanied by his European Community Relations Minister, Roland Dumas, and shortly afterwards both countries’ Interior Ministers signed the Castellana Agreement, which led to improved joint action against ETA terrorism. By the middle of 1984 bilateral relations between the two countries had improved to such an extent that Felipe González was able to issue an official communiqué on 27 June which paid tribute to France’s handling of the Presidency of the Council of Ministers and ‘the determination and dedication shown during her term, which have contributed so much to the achievement of these results’ (quoted in Armero, 1989: 164). These feelings of satisfaction were not to last and negotiations dragged on past the deadline of 30 September proposed by France. Agricultural and Spanish budgetary problems did not lend themselves to a swift solution. In the meantime González was to complete his volte-­face on NATO. In an interview he later gave to the weekly magazine, Cambio 16, in March 1986 he

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51

indicated that before coming to power the PSOE had made honest mistakes due to the party’s lack of access to all the relevant information; now in government, the PSOE was in a better position to appreciate the security and foreign policy repercussions which Spain’s leaving NATO would have (Pollack and Hunter, 1987: 168). NATO membership, like that of the European Community, was viewed as being part and parcel of the ‘modernisation’ of Spanish society. During an interview on French television in May 1984, González was asked about his government’s position on NATO. The Spanish Prime Minister reiterated that ‘Spain could not turn its back on assuming its share of the responsibility for the defence of the West’ (Rodríguez, 1988: 65). On 24 October 1984 during the State of the nation debate in parliament González presented his ‘Decalogue’, or ten-­point programme on foreign and security policy, in which he backed Spain’s membership of the Alliance. The pill would be sugared by González’s insistence that his government would not take the country into the Alliance’s integrated structure, the US military presence in Spain would be reduced and no nuclear weapons would be permitted on Spanish territory. The Prime Minister’s position was reinforced by majority votes in support of his pro-­NATO stance in December 1984 both in parliament and at the 30th Congress of the PSOE. The linkage between the issues of NATO and EC membership is dealt with in more detail in Chapter 5. Suffice it to state here that on 9 November 1985, Felipe González declared that Spain’s Community membership was directly linked to Spain’s staying in the Alliance (Rodríguez, 1988: 66). In his memoirs, Fernando Morán denies that the PSOE’s volte-­face on NATO ‘was the key element in a process aimed at the wholesale shift to the right of the Socialist project . . . I do not believe that there was a cold overall plan to move Spanish society to the right and strip the PSOE of its ideology, although there was an analysis of the need to scale down the ideological load accumulated during the transition’ (Morán, 1990: 349). However, the very fact that Morán was replaced as Foreign Minister immediately after the signing of Spain’s EC Accession Treaty itself indicated the sensitivity of the question. On 23 October 1984 the Community offered the Spanish negotiating team a package which proposed a schedule for industrial tariff reductions and measures ranging from olive oil to Social Affairs. At the fourth interministerial seminar held the same month in Barcelona the Spanish and French addressed the ­remaining differences on the enlargement question, including fisheries. The European Council Meeting in Dublin on 3–4 December 1984 successfully addressed the contentious issue of Community wine. Little progress was made, however, on fisheries. The meeting was most notable for Greece’s demand that the Community’s Integrated Mediterranean Programmes (IMP) be adequately financed in accordance with the undertaking given to Greece prior to the country’s integration in 1981. Until this was done, Greece threatened to veto the Community’s enlargement. The Greek threat remained until the financing of the IMP was eventually agreed, to Greek satisfaction, at the next European Council Meeting in Brussels on 29–30 March 1985. The ministerial level negotiating session held on 17 and 18 December led to

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The Spanish Socialist Party

the completion of chapters on the Customs Union, the European Coal and Steel Community and Institutions. The New Year nevertheless opened with minimal progress having been achieved on Agriculture, Fisheries, Social Affairs, Own Resources, the Canary Islands and Spain’s Relations with Portugal. The European Council expressed its impatience at the pace of the enlargement negotiations at its session on 28–29 January 1985 in an official declaration which stated, ‘the Council has confirmed, above all, the intention and absolute necessity of concluding negotiations in March, before the European Council meeting’ (quoted in Alonso, 1985: 199). During the same two days a ministerial level negotiating session failed to reach any agreement. However, on 8 February 1985 the Commission sent the Council a package which contained proposals for the chapters covering Agriculture, Fisheries and Social Affairs. Although these proposals failed to satisfy the Spanish delegation, they nevertheless served as a basis for final negotiations. The ministerial level negotiating session of 18–19 February 1985 was unsuccessful and Spain’s European Community Relations Minister, Marín, held a meeting in Brussels with the Permanent Representatives Committee and the new President of the Commission, Jacques Delors, in an effort to achieve progress in Agriculture and Fisheries. Between 17 and 21 March 1985 a parallel meeting of the Council and ministerial negotiating sessions took place at which a Community package, based on that of 8 February, was put forward, embracing the chapters on Agriculture, Fisheries, Social Affairs, Own Resources and the Canary Islands. Just as it seemed that agreement between the Community and Spain had been finally reached, France imposed a last-­minute veto over the proposals for Spanish wine and fishing vessels. Such was the delicacy of the situation that a secret meeting was arranged for 26 March between Morán and Roland Dumas, at the latter’s home in Bordeaux, at which remaining differences were ironed out. At the negotiating session which took place on 28 and 29 March immediately prior to the European Council Meeting on 29–30 in Brussels, agreement was at last reached on the package vetoed by France the previous week. Apart from negotiation of the chapter on Spanish/Portuguese Relations, which was eventually completed on 8 May 1985, and several minor points, the negotiations were finally over. Spain and Portugal would join the European Community on 1 January 1986. The Admission Treaty was signed in Lisbon and Madrid on 12 June 1985 and two weeks later, during a vote on the treaty in the Spanish Congress of Deputies, all members voted in favour. This was the first time in European Community history that an Admission Treaty had been ratified without any votes against. Twenty-­three years earlier, Spain had made its first approach to the European Community at the start of the most protracted negotiations process in EC history. Political difficulties were to be replaced by economic obstacles after the installation of democracy, and the negotiations led by the PSOE between 1982 and 1985 were not straightforward, as has been shown. Although the eventual Admission Treaty can be criticised on several counts and from several perspectives, particularly with regard to agriculture, Spain’s Community integration on 1 January

The PSOE and the European Community

53

1986 marked the country’s return to the first rank of world affairs and was of crucial importance in the PSOE’s ideological and political development. Having considered Spain’s relationship with the European Economic Community up to its accession in 1986, we will now turn to the question of the party’s economic policy under the leadership of Felipe González.

4

Economic policy under the PSOE, 1982–96

Entering office in 1982 at a time when social democracy was generally acknowledged to be in retreat before the dominant neoliberal paradigm, the PSOE acknowledged that the pursuit of an interventionist, Keynesian-­style economic policy would be unlikely to secure economic success. The very gravity of the economic situation bequeathed by the Socialists’ UCD predecessors militated against the adoption of any kind of risk likely to provoke an adverse reaction from the financial markets. Indeed, 1982, when the PSOE entered office, has been described as ‘probably the worst year for the [Spanish] economy since the Second World War’ (Linde, 1990: 54). Spanish unemployment stood at over 16 per cent – the highest of any member of the OECD – inflation had reached 14 per cent and GDP had grown by only 1.2 per cent in the previous year, whilst the public deficit had trebled since 1978 to total 5.4 per cent of GDP. Moreover, wages were rising four times as rapidly as productivity (Smith, 1998: 27). The political imperative of the transition to democracy had effectively ruled out the elaboration of a consistent economic strategy on the part of the UCD government. The government essentially made the pragmatic decision that the postponement and partial realisation of much-­needed economic reforms was a price worth paying if social peace were to be maintained. Any alternative policy might ultimately threaten the transition itself. In the long term, however, this strategy was unviable as the gravity of Spain’s economic crisis became a major contributory factor in the atmosphere of political crisis which characterised the UCD’s final term in office (1979–82).1 Furthermore, the UCD government lacked the political mandate which would have allowed it more freedom of manoeuvre with regard to economic policy. Never in possession of an overall parliamentary majority, it often had to secure a degree of consensus amongst the political parties in order to implement its policies. Vital time was therefore lost in addressing the crisis, thereby further exacerbating the situation. The incoming PSOE government in 1982 was thus faced with the unenviable task of mounting the first coherent response to an economic crisis which had begun almost a decade before and the very seriousness of which restricted the government’s economic policy options. Essentially, the very gravity

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55

of the economic situation ensured that the PSOE government enjoyed little margin for manoeuvre in its economic policy (Segura, 1990: 65). To complicate matters further, the Spanish population looked to the incoming PSOE government to satisfy further its pent-­up demands for higher social spending, which had already increased considerably under the UCD, rising from 12.5 per cent of GDP in 1976 to almost 20 per cent in 1981 (Bandrés, 1999: 636). The PSOE nevertheless entered office in possession of several key advantages over its ineffectual UCD predecessors. A united, disciplined party under an undisputed leadership, and in possession of a large parliamentary majority, the PSOE was confident that it had both the strength and the mandate to impose what it viewed as an inevitable and chronically delayed process of economic adjustment. The main constraint on the incoming PSOE government’s economic policy came in the form of the gravity of the economic crisis experienced by Spain when the party gained office. Economic policy and preparation for EC membership, 1982–86 With the arrival of the PSOE in power, economic policy moved towards centre stage as the government sought to keep its election promise to secure the country’s membership of the European Community before the end of its first term. This aim could only be achieved by tackling the Spanish economy’s many structural imbalances so as to bring about economic conditions capable of attracting foreign investment. If Spain were to be in a position to compete, policy-­makers faced having to reform an outmoded small-­scale agricultural sector, an ill-­ adapted financial system hobbled by undercapitalised banks and securities markets, and an inefficient system of state-­run firms. An indication of the PSOE government’s urgency was its decision to devalue the currency on its first day in office (Maravall, 1993: 95). With Spain’s proposed entry into the European Community receiving support from all sectors of society – as well as across the political spectrum – allied to a widespread appreciation that Spain’s economic plight required an urgent and wide-­ranging response, the government’s bid to create the competitive conditions necessary to gain admission met with a favourable public response.2 The attitude of trade unions and employers’ organisations was also sympathetic and government policy was assisted by the conclusion of several agreements with social partners during its first term in office. In February 1983 both the Socialist UGT and the Communist-­dominated Comisiones Obreras (Workers’ Commissions – CC.OO.), along with the main employers’ organisation, the Confederación Española de Organizaciones Empresariales (Spanish Confederation of Employers’ Organisations – CEOE), signed up to the Acuerdo Interconfederal (Interconfederal Agreement – AI), which sought to limit wage rises. The UGT and the CEOE also joined the government in signing the Acuerdo Económico y Social (Economic and Social Agreement – AES) in October 1984 (renewed in 1985 and 1986), which also included provisions aimed at controlling wage rises, although the CC.OO.’s growing uneasiness with the government’s economic policy prevented its participation.

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The Spanish Socialist Party

The government’s ability to retain the support of the trade unions – at least during its first term in office – ensured that it was able to introduce a package of severe economic measures. Whether a right-­wing government would have been able to push through an equally tough economic programme remains a moot point. Social pacts with the trade unions were nevertheless destined to be a feature of just the PSOE’s first term in office, with consensus being replaced by ­confrontation during the remainder of the party’s period in office. The unity and discipline of the PSOE, which were its most distinctive features until the early 1990s, combined with its retention of its overall majority between 1982 and 1993, meant that the party was not dependent on the trade unions’ good will in order to prosecute its economic policy (Heywood, 1999: 109). In short, the Socialist government, recently granted a convincing mandate at the general election, was in the best position of any post-­Franco administration to carry out a major industrial and economic overhaul. European integration provided the perfect justification for this challenge and was widely viewed as being an essential element in the PSOE’s all-­encompassing attempt to bring about the ‘modernisation’ of Spain. As González commented shortly after losing office in 1996, ‘we had to carry out a project of modernisation which wasn’t specifically social democratic’ (Burns Marañón, 1996: 502). Some observers have been more critical with respect to the PSOE’s lack of a guiding ideology. Juan Francisco Martín Seco has argued that ‘from a political point of view, the different PSOE governments have adopted the project of European integration as an essential part of their message. As the ideological content of their political programme has steadily diminished, they have been forced to look for a substitute capable of becoming at least a slogan for the government’s action. The idea of Europe fitted the bill nicely’ (Martín Seco, 1993: 161). In the economic field, therefore, the macroeconomic strategy dictated by the demands of European integration provided more of a guide to policy than any path towards socialist transformation. Seeking to establish a stable macroeconomic framework, the PSOE adopted a set of restrictive economic policies from the start, opting for a wide-­ranging economic liberalisation via the introduction of tight monetary, fiscal and wage policies. The aim was to foster the conditions for the attraction of foreign investment. The PSOE’s caution was also linked to an awareness of the constraints imposed by the international economic environment on the party’s economic strategy. The Mitterrand government’s hapless experience in France since 1981, when it was faced with massive speculation and capital flight, provided the incoming PSOE government with an example of the difficulties involved in prosecuting an expansionist economic policy in a post-­Keynesian world, particularly in the midst of a serious recession.3 In contrast to their French counterparts, the Spanish Socialists gave little prominence to nationalisation and they only earmarked the electric high-­tension network for nationalisation, in line with the previous UCD government’s policy. Indeed, the PSOE equated nationalisation with the bureaucracy and inefficiency of the Francoist past rather than viewing it as an instrument for implementing egalitarian goals (Maravall, 1992: 25). Emphasis was instead placed on the creation of investment incentives for private business and the pursuit of a

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wide-­ranging ‘modernisation’ and liberalisation of archaic economic structures which were in no fit state to confront the challenges which European integration entailed. Increased exposure to foreign markets and the dismantling of barriers which made the Spanish economy one of the most protected in the OECD required painful surgery. The government’s ‘Medium-­ Term Economic Programme, 1983–1986’ ­highlighted the importance of achieving four basic aims:

• the reduction of inflation to EC levels; • the improvement of company profits to boost investment; • the flexibilisation and liberalisation of the economy, favouring the implantation of a genuine market economy;

• and the adaptation of the existing manufacturing structure to confront the economic crisis via reconversion processes. (Fuentes Quintana, 1993: 57)

In order to restructure the economy, tight monetary, fiscal and wage policies were directed towards correcting the so-­called ‘basic imbalances’: inflation, public deficit and foreign deficit (Segura, 1990: 62; Montes, 1993: 71). These measures were complemented by a massive ‘reconversion’, or restructuring, of industry. The government’s restructuring policy had an added urgency in that European Community regulations would prohibit any such wide-­ranging economic overhaul once EEC membership integration had been secured. The bulk of the restructuring policy therefore had to be carried out during the government’s first years in office (Salmon, 1995: 116–18). The policy culminated in the 1984 Law of Reconversion and Reindustrialisation aimed at lowering the rate of deindustrialisation and improving the international competitiveness of Spanish industry. These goals would be achieved, firstly, by increased productivity and improved company profitability (by cutting excess capacity and overstaffing and by restructuring the financial liabilities of excessively indebted companies), and secondly, by the promotion of investment and technological innovation in those activities which showed greatest profit potential. Around 800 firms were involved in the restructuring programmes, employing just over 280,000 workers, of whom 83,000 were scheduled to lose their jobs. Emphasis was placed on modernisation, rationalisation, financial restructuring, and fiscal and labour reforms. It has been estimated that the combined cost of reconversion programmes under both the UCD and PSOE governments was at least 3 billion pesetas (Montes, 1993: 74–5). Under the PSOE, early retirement packages and Employment Promotion Funds (Fondos de Promoción de Empleo – FPE) were established for those laid off as part of the restructuring process. The government’s handling of redundancies has been criticised for being overly generous (Segura, 1990: 73). In addition, the government created so-­called Emergency Reindustrialisation Areas (Zonas de Urgente Reindustrialización – ZUR), regions designated to have been particularly badly hit by industrial restructuring, which qualified for special ­government grants to attract new investment. The fact that the government was prepared to devote such considerable sums

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to mitigate the effects of the reconversion programmes indicates that the trade unions had some success in influencing government policy. Indeed, Smith contrasts the strength of Spanish organised labour’s organisational links and mobilisational capacity with the relative weakness of its French counterparts. Spanish labour was sufficiently strong to force policy-­makers to depart from orthodox adjustment measures and was able to ‘combine insider influence (through the UGT) and street pressure (mainly from the CC.OO.) to delay the adjustment process and to extract generous income-­support programmes for laid-­off workers’ (Smith, 1998: 20). It might be concluded that although the trade unions were incapable of preventing the large-­scale job losses caused by the government’s policies, they were still capable of exerting significant influence on policy-­ makers. The effect was to force the government to relax its attempts to limit the budget deficit and permit a relatively high level of social spending, albeit linked to job losses resulting from the reconversion programmes. Bearing in mind that the chief aim of the programme was to lower the rate of de-­industrialisation and improve the international competitiveness of Spanish industry, the policy must, strictly speaking, be judged a failure. Political considerations forced the government to spend significant sums of money on those whose jobs were lost as a result of the policy, whilst an opportunity was wasted to direct new investment towards the improvement of the operational and financial structure of public enterprises and the promotion of new industries. In an effort to fund its restructuring policies, the government raised taxes appreciably, with householders faring considerably worse than businesses. Between 1982 and 1984, taxes increased from 30.8 to 34.3 per cent of Spain’s GDP (Share, 1989: 76), whilst Salmon adds that the tax burden in Spain increased more than in any other OECD country between 1980 and 1992 (Salmon, 1995: 44).4 This tax increase would appear to suggest that despite the PSOE leadership’s preference for moderate policy positions, it was still prepared to endorse the higher rates of taxation traditionally favoured by Socialist and social democratic parties. However, despite the steady increase in fiscal pressure throughout the PSOE’s period in office, it should be noted that even by 1995, the party’s final full year in office, the overall tax burden in Spain was 34 per cent of GDP, below that of all other EU countries, with the exception of Ireland and Portugal (El País, 1998: 362). In addition to industrial restructuring, the Socialists viewed the injection of a greater degree of flexibility into the labour market as a priority task in a bid to boost investment and productivity. One of the legacies of the Franco regime was the widespread existence of rigid, legally protected work contracts throughout the labour market which made any adjustments extremely difficult and costly. In 1984 the government carried out a reform of the Workers’ Statute (Estatuto de los Trabajadores), which made it easier to lay workers off and led to an increase in the number of fixed-­term contracts. Within a decade of the Workers’ Statute, temporary job contracts constituted 35 per cent of all salaried employment in Spain (against an EU average of 9 per cent), whilst just 2 per cent of all new job contracts in 1994 were permanent (Economist Intelligence Unit, 1995a: 20). By 1985 the support of the trade unions for the government’s economic poli-

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cies began to wane as understanding turned to anger. Nicolás Redondo, the president of the Socialist trade union, the Unión General de Trabajadores (UGT), and himself a PSOE parliamentary representative, or diputado, stated in the spring of 1985: ‘What is certain is that this version of market economy, which is presented to us as the only one possible and the universal panacea, is bringing to our country nothing other than greater unemployment, greater inequality and greater poverty’ (quoted in Camiller, 1994: 251). The government responded by arguing that any attempt to correct the country’s antiquated, protected and uncompetitive industrial sector in an effort to prepare it for the more competitive environment within the EC was bound to be painful. In the Epilogue to the 1991 Programa 2000 manifesto, Felipe González explained the government’s stance: ‘Our position is clear: yes to social dialogue and social agreement, and yes to political dialogue and political agreement too. But no to any attempt to constrain the design and development of our project. This Party is a sovereign body’ (González, 1991: 126–7). The subsequent period was therefore notable for a distancing between the government and the trade unions, including the UGT. Indeed, the UGT, concerned that its closeness to the government might lead to a haemorrhaging of support to its chief rival, the Communist-­dominated Comisiones Obreras (Workers’ Commissions), began to adopt a more confrontational stance with respect to the government.5 Moreover, the government’s belief that it did not require external support to implement its economic policy was further reinforced by the retention of its overall majority at the general election held in June 1986. By 1985 the PSOE’s stewardship of the economy had been favourable in several areas. Inflation was showing a downward momentum and GDP was growing at around the EC average for this period, whilst the balance of payments had been returned to surplus. Indeed, the International Monetary Fund was sufficiently impressed at the PSOE’s streamlining of the economy to argue that ‘As Spain entered the EC, the fundamental macroeconomic imbalances that had plagued the economy during the previous fifteen years had been eliminated and market mechanisms had largely replaced previously pervasive government interventions’ (Galy, 1993: 7). The climate for domestic and foreign investment had markedly improved since 1982 and the economy was set to enter a period of growth which outstripped that of the European Community. The prospect of EC membership had been instrumental in stimulating economic liberalisation measures and entry into the EC in 1986 ensured an extension of such measures over subsequent years. Looking back on his government’s first term in office, Felipe González recalled in 1996: We had to carry out industrial reconversion processes which were extremely painful for us; we were growing very slowly, and had to make agreements with the trade unions and workers did make certain sacrifices, from the point of view of salaries, so as to enable an improvement in company profits. (González, 1996: 9)

Enrique Fuentes Quintana, the architect of the Moncloa Pacts, a major package of reforms aimed at addressing the economic crisis, agreed between the UCD

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government, the main political parties, employers’ organisations and elements of the trade union movement, gave a favourable appraisal of the PSOE government’s economic policy during its first term. Explaining that it was feared that the PSOE would restrict business freedom, intervene in the markets and marginalise the need for businesses to make a profit as a necessary condition of economic development, he argues that, on the contrary, the government’s strategy, ‘emphasised the importance of extending liberalisation, flexibility and the competitiveness of markets, services and capital, and accentuated the need to ensure the recovery of business profits as the motor for the growth and dynamism of companies’ (Fuentes Quintana, 1993: 60). Nevertheless, Nicolás Redondo’s concerns about the government’s economic policies were not without substance. Job creation and income distribution had hardly been viewed as a priority by the government. Unemployment, which had risen by 6 per cent to around 22 per cent, was by far the highest in the European Community when Spain was admitted in 1986. Just over a fifth of the jobs in industry had been lost between 1978 and 1984 (Segura, 1990: 67). The government quietly dropped its 1982 pledge to create 800,000 new jobs. Indeed, around 690,000 jobs had been lost during the PSOE’s first term. Moreover, Share informs us that by October 1987 only 27.01 per cent of the unemployed were covered by unemployment insurance (Share, 1989: 76). Spain’s per capita GDP was little over half that of the EC average, superior only to that of Portugal and Greece, whilst Spanish productivity was only 78 per cent of the EC average (Montes, 1993: 77). The Spanish economy therefore retained several major weaknesses on the eve of the country’s membership of the EC. Whilst the economy had emerged from the crisis of the early 1980s and overall performance had undoubtedly improved, there were still several causes of concern, including:

• a propensity towards higher than average inflation; • a labour market which still displayed many rigidities dating back to the Franco • • • • •

era; an inability to export more than the country imported; the low technological base of much of Spanish industry; meagre levels of saving; inadequate investment in industry and research and development; a level of unemployment which remained the highest in Western Europe.

It was likely that many of these frailties would be exposed by the relatively stiff terms under which Spain was admitted to the European Community, particularly those pertaining to the lifting of protection. The Accession Treaty required an immediate and significant reduction in Spanish tariffs on industrial goods while phasing in equal treatment for Spanish agriculture only over ten years. All these anxieties were particularly well-­founded in that Spain’s entry into the European Community in 1986 coincided with the creation, by means of the Single European Act, of a highly competitive trading environment. Indeed, it has been noted that in the late 1980s the EC experienced its most important period of

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trade liberalisation since completion of the Common Market in 1968 (Moravcsik, 1999: 314). It was Spain’s good fortune that 1986 also witnessed the consolidation of the international economic upturn, which, in the medium term, did much to disguise the country’s many economic weaknesses. One of the most pernicious aspects of the late 1980s boom was the complacency it engendered as to the scale of the ­challenge posed by these problems. With respect to the key influences on economic policy-­making during the PSOE’s first term in office, the dominance of the Ministry of Finance is particularly notable. It is significant that Felipe González ensured that economic policy throughout the PSOE’s period in office was entrusted to ministers on the economically liberal wing of the party. The stability of economic management under the PSOE was underpinned by the fact that during the party’s entire thirteen-­and-­a-­half-­year period in office, only three Ministers held the Finance portfolio: Miguel Boyer (1982–85), Carlos Solchaga (1985–93) and Pedro Solbes (1993–96).6 During this entire period, all three ministers enjoyed the full confidence of Felipe González. Indeed, incumbents of the Finance Ministry appeared to enjoy a greater degree of confidence with González than the holders of any other portfolio. As Heywood has noted, the Ministry of the Economy and Finance (Ministerio de Economía y Hacienda – MEH) was able to utilise its dominance over budgetary policy to establish itself as the key government department (Heywood, 1999: 111–15). Responsible for all aspects of the economy, the MEH was –­and ­remains – the largest of all government departments and in contrast to other government departments, operates as an autonomous actor with a highly developed capacity for intervention. In contrast, Alfonso Guerra, Deputy Prime Minister between 1982 and 1991, who viewed himself as the party’s listener (oyente) within the government7, was unable to exert an influence on economic policy. Certainly, at no stage did he, or indeed the party as a whole, possess a veto over the government’s economic policy.8 Whilst the trade unions, particularly the Socialist UGT, had played a prominent role in social pacts during the PSOE’s first term, and they had had considerable success in persuading the government to offer relatively generous redundancy terms to those laid off in connection with the industrial reconversion programmes, they had no institutionally defined access to the policy process. Indeed, the trade unions’ frustration at the government’s failure to consult them over policy had become palpable by the end of the PSOE’s first term in office. Speaking in July 1985, Nicolás Redondo reacted to the government’s plans to reform pensions by stating, ‘to our great surprise and dismay we have encountered a series of decisions made and policies implemented without being previously consulted’ (quoted in Juliá, 2000: 338). Furthermore, there would be no more social pacts after the end of the PSOE’s first term in office – although such agreements were welcome, the government did not consider them necessary. The retention of the government’s overall majority9 for over a decade provided a sound mandate

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which, combined with the buoyant economic growth which lasted throughout the PSOE’s second term in office and into the 1990s, further reinforced the government’s autonomy over policy. The following section will now consider this period of economic recovery. The PSOE and economic policy, 1986–90: European integration and the Single European Act Although there was an economic upturn at the end of this period, Spain’s entry into the European Community in 1986 and the signing of the Single European Act the same year ensured that, if anything, the margin for manoeuvre remaining to the government in the field of economic policy became even more circumscribed. The push towards Economic and Monetary Union following the Maastricht Treaty, signed in March 1992, constituted a further intensification of this process. European integration therefore constituted a major constraint on economic policy throughout the PSOE’s entire period in office. Nevertheless, in spite of the major economic disequilibria and social costs which European integration entailed, the Socialist government continued to give its full support to the process. Concerns about the possible negative impact of several aspects of Spain’s entry into the EC were in any case muted by the quite exceptional period of growth enjoyed by the Spanish economy in the late 1980s. From 1986 to 1990 Spain’s GDP grew at an average rate of nearly 5 per cent per year – easily the highest increase in the European Community, whilst Spain only fell behind the EC average in 1992 (Chislett, 1994: 12). The stimulus provided by Spain’s membership of the EC was largely responsible for the recovery in the country’s economic fortunes, although several other factors had a significant bearing. The restructuring policies carried out in the early 1980s had laid the foundations for the upturn, whilst Spain’s new-­found political stability had also served to impress the international business community, which was encouraged to invest in the Spanish market. The lack of investment opportunities elsewhere throughout the world in the mid-­to late 1980s also attracted foreign investors towards Spain. As Jorge Hay of the Banco Central Hispano Americano has argued, ‘There was nowhere else to invest. Latin America was reeling from the debt crisis. Africa was a poor prospect, China was closed and so was Eastern Europe’ (Guardian, 15 April 1995: 35). The international upturn and the abrupt fall in the price of oil during 1986 also favoured Spanish recovery. Spain was particularly dependent on energy imports and therefore benefited considerably from the 60 per cent fall in the cost of obtaining crude between 1985 and 1986 (Salmon, 1995: 52). It has also been calculated that the drop in world oil prices cut manufacturing costs by the equivalent of 3.5 per cent of Spanish GDP (Camiller, 1994: 255). Spain’s entry into the EC sparked off an immediate rise in domestic demand, which the country’s uncompetitive industries were in no position to satisfy. Competitiveness was not aided by the small size of Spanish industrial firms: in

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1985, 80 per cent of Spanish manufacturing workers were employed in firms with less than ten workers, whilst the average number of workers per manufacturing plant was only thirteen (OECD, 1991: 15). Overall Spanish spending on research and development was also among the lowest in the EC. Faced by a domestic market incapable of satisfying their requirements, Spanish entrepreneurs were forced to look abroad. The removal of Spain’s tariff barriers and the strength of the peseta therefore opened the floodgates to a torrent of imports. The divergence in the performance of imports and exports since 1986 was marked, the former expanding by 40 per cent in real peseta terms between 1986 and 1990, compared to a rise in the latter of only 20 per cent during the same period (Heywood, 1993b: 4). The exposure of Spanish industry to intense competition following the swift removal of protective measures had a profound effect on the current account deficit. The scale of this development may be judged by the fact that Spain’s trade deficit was second only in absolute size to that of the USA by 1992, equivalent to 6.1 per cent of GDP, linked to the rise in imports. The volume of imported consumer goods quadrupled between 1986 and 1992 (Economist Intelligence Unit, 1995b: 31) The government’s decision to maintain a strong peseta was one of the chief reasons for the sluggish growth in exports and therefore contributed towards the deterioration of the trade deficit. The combination of a strong peseta and high interest rates well above those of other EC member countries in conditions of high international liquidity and total freedom of capital movement sucked massive amounts of foreign investment into Spain (Montes, 1993: 103). Aware of the importance of maintaining the flow of foreign investment, the government lifted controls on inward investment two years ahead of the schedule agreed in Spain’s EC Accession Treaty (Youngs, 1999: 49). This investment was particularly important as a means of financing a current account deficit which showed signs of spinning out of control. In 1986 alone the amount of foreign direct investment was greater than that for the whole period 1970 to 1979 and was 50 per cent greater than for the period 1980 to 1985 (Heywood, 1993b: 2). By 1989, Spain attracted the fourth highest volume of foreign investment in the world, behind the US, the UK and France (García Álvarez, 1992: 25). In addition to Spain’s membership of the EC, the country’s attraction as a destination for long-­term capital was based on expectations about the strength of the domestic economy and Spain’s relatively low labour costs, whilst short-­term flows of a more speculative nature were attracted more by high interest rate differentials and expectations over exchange rate variations (Salmon, 1995: 17; Ayuso and Escrivá, 1998: 137). By 1990, nearly a third of firms were owned by foreigners, ‘one of the highest levels of overseas penetration of any developed country’ (Heywood, 1993b: 14). By the time that the PSOE left office in 1996, the key sectors of the economy were dominated by foreign capital. Consumer electronics, electronic equipment, pharmaceuticals, information technology, electric materials and car manufacturing were all dominated by multinational ­corporations (McVeigh, 1999: 87).

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The downside of Spain’s dependence on foreign investment became apparent during the economic recession of the early 1990s when there were several significant and highly publicised examples of disinvestment. These included the withdrawal of support by the Kuwaiti Investment Office from its Spanish holdings, the decision by Volkswagen to bring car assembly at its Zona Franca site in Barcelona to a close, the threatened closures of the Suzuki motor-­vehicle plant at Linares and of the Gillette factory in Seville and the closure of the Ebro-­Kubota plant in Madrid (Salmon, 1995: 34).10 Further examples included Sanyo’s transfer of part of its activity to Eastern Europe and BASF’s decision to transfer the construction of an acrylics plant to Belgium (Chislett, 1996: 57). Commenting on the fact that in 1993 there was an actual net outflow of capital from Spain, the Economist Intelligence Unit warned that this development ‘exposed the Spanish economy’s excessive dependence on foreign capital’ (Economist Intelligence Unit, 1995b: 34). Asked what he identified as being the most serious problem facing the Spanish economy, Luis Ángel Rojo, Governor of the Spanish Central Bank, informed the Spanish parliament in October 1993 that, while unemployment remained a serious issue, there were others, such as the ‘relocation’ of industry, which, although not sufficiently discussed, ‘raised truly tremendous problems’ (quoted in Chislett, 1994: 18). As significant numbers of Spanish businesses fell into foreign hands, decision-­making headquarters were increasingly located outside Spain. Spain’s foreign reserves, swollen by inward investment, became the fourth highest in the world behind those of the US, Japan and Germany in the early 1990s. In June 1992 they reached a peak of 72.1 billion dollars before falling back during the foreign exchange crises in the autumn (Economist Intelligence Unit, 1994: 40). With respect to employment, the investment-­led boom of the late 1980s led to the creation of around 1.5 million jobs, 85 per cent of which were temporary. Between 1987 and 1990, 87 per cent of total new employment was located in the service sector (European Commission, 1992: 5). Whilst there was growth in construction employment and a stabilisation in industrial employment, agricultural employment continued to decline. Despite these gains, Spanish unemployment still remained around twice the EC average and never fell below 16 per cent during the PSOE’s entire period in office. Several factors have been advanced to explain Spain’s above-­average rate of unemployment (Salmon, 1995: 32). These include the expansion of the population of working age, the end of large-­scale emigration, higher female economic activity rates, the existence of widespread multiple employment (pluriempleo) and overtime working, and factors related to structural change in the economy, notably the continued decline of employment in agriculture and in traditional manufacturing. The rigidity of the labour market has also been emphasised. Martín (1997: 76–8) identified the two most important rigidities in the Spanish labour market in the mid-­1990s: the high cost of cancelling open-­ended contracts, and the enormous disparity between open-­ended and short-­term contracts. She concluded that segmentation of the labour market between the majority on

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open-­ended contracts and the third of wage earners on short-­term contracts had hindered job creation and exacerbated Spain’s chronic unemployment problem. The relatively low numbers of people working part-­time and inadequate levels of education and vocational training were further contributory factors. A full fifteen years later, the reform of the labour market, which still displayed these weaknesses, was the first major policy initiative undertaken by Mariano Rajoy’s PP government after its election victory in November 2011. In order to balance these charges of inflexibility, however, it is worth noting that, with one third of the wage earners in Spain on short-­term contracts, large numbers of workers could be dismissed with virtually no dismissal costs.11 Indeed, insufficient emphasis has been placed on those aspects of the Spanish labour market which indicate a high degree of flexibility:

• Labour costs in manufacturing were the third lowest in the OECD in 1994 (Chislett, 1996: 23);

• Real remuneration per employee in Spain grew at an accumulated rate of

• •

• •

6.5 per cent between 1985 and 1991, against an EC average of 13.6 per cent; real unitary labour costs in Spain fell by 10.2 per cent, against an average EC decrease of 3.4 per cent (Martín Seco, 1994: 156); At an average annual rate of 0.25 per cent between 1982 and 1989, real labour costs were growing well below productivity (Royo, 2000: 218); Even between 1989 and 1991, when wage growth accelerated after the breakdown of social ‘concertation’ between the government and the trade unions, the real wage per person in Spain still grew well below the EC average (1.8 per cent as opposed to 5.2 per cent) (Pérez, 1997: 175); As late as 1991, the OECD was highlighting Spain’s record of wage moderation as being one of the country’s main points of attraction for foreign investors (Pérez, 1997: 175); Collective pay agreements were again running below the inflation rate by 1994 (Economist Intelligence Unit, 1995b: 16).

Labour market flexibility was certainly necessary by 1989, when the economy showed signs of overheating. Between 1988 and 1989 inflation rose by 2 per cent to 6.8 per cent, provoked by still-­buoyant domestic demand. The swift transformation of one of Europe’s most protected economies into one of the most open, allied to the government’s pursuit of monetary policies which had pushed interest rates and the peseta to vertiginous heights, had condemned indigenous industry to chronic uncompetitiveness and industrial production declined precipitately after 1989. Industry Minister Aranzadi’s belief that ‘the best industrial policy is the one that doesn’t exist’ highlighted the government’s ‘hands off’ attitude towards industry (quoted in El País, 1995: 162). Seeking to illustrate the government’s failure to support domestic manufacturing, one commentator likened the government’s approach to the sector as throwing somebody in at the deep end of a swimming pool and expecting him to figure a way out (Martín Seco, 1994: 160). As Montes concludes, ‘irrespective of the political significance and the social repercussions, the Spanish economy’s evolution since integration allows one to

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draw the conclusion that it was in no fit state to withstand such a rapid ­‘opening-­up’ as that imposed by the Treaty of Accession to the EC’ (Montes, 1993: 114). The growth rates enjoyed by the Spanish economy in the late 1980s were unsustainable and the government’s priority was now to pilot a soft landing by dampening demand and injecting a greater degree of discipline into the economy. The administration’s response was, firstly, to adopt a more restrictive monetary stance from late 1988 onwards (interest rates rose from 10.5 per cent in September 1988 to 14.5 per cent in July 1989) and secondly and more unexpectedly, to place the peseta within the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS). The decision to enter the ERM in June 1989 was an indication of the government’s determination to bring the rate of inflation down to the average of ERM members and to tackle the current account deficit (OECD, 1991: 26). An exchange rate of 65 pesetas/1 DM was fixed, with a fluctuation rate of 6 per cent. Expert opinion considered the parity to be excessively high, given that, at the time of joining, it was estimated that Spain’s current account deficit would exceed $11 billion, around 3 per cent of GDP (González Fernández, 1993: 82). To quote one team of commentators, the decision to join the EMS at that point in time and at that rate constituted ‘a risky choice’ (García Crespo, Mendizábal and Marisol, 1991: 87). The degree of risk is indicated by the fact that the team was writing the year before the ERM crisis of September 1992. Despite the worrying disequilibria within the Spanish economy, the peseta promptly became established as the strongest currency within the ERM, remaining, for most of the next three years, in the upper range of its band against the other ERM currencies. Luis de Velasco, junior trade minister under González during the PSOE’s first term in office (1982–86) has argued that the peseta had been overvalued by around 20 per cent, arguing that the parity was ‘one of the most mistaken economic policy decisions of those years. Setting an overvalued exchange rate with the simultaneous removal of tariff and trade restrictions on account of our entry into the EC is economic suicide’ (De Velasco, 1996: 22). In the midst of the economic boom, domestic demand increased at an annual rate of around 7 per cent in the five years to 1990. However, Spanish industry had been in no position to satisfy such a rate of growth and foreign investments and imports had flooded the country, attracted by the government’s pursuit of an economic policy centred on a strong peseta and high interest rates. Salmon observes that the strong peseta ‘placed severe pressure on domestic economic activity, contributing to de-­industrialisation, the decline in tourism at the turn of the decade and rising unemployment from mid-­1992’ (Salmon, 1995: 14).12 Domestic industry’s requirements had been sacrificed in the quest for foreign capital, which became increasingly important as a means of servicing a spiralling trade deficit, whilst foreign penetration of the Spanish economy as a whole rose throughout the period. The decision to join the ERM signalled a further stage in the limitation of the government’s margin for manoeuvre in macroeconomic policy. In addition, it provided justification for the adoption of a more restrictive stance, which was

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necessary in order to reinforce anti-­inflationary policy. There was therefore less opportunity for growth within the Spanish economy. As Montes argues, ‘Subjected to the discipline of the EMS, the exchange rate went from being an instrument of economic policy to become a totem before which the real problems confronting the majority of the population – unemployment, job security, income redistribution, spending on infrastructure, sufficient social provision, and a fairer fiscal system – were sacrificed’ (Montes, 1993: 106). Public demand for higher levels of social spending provided the background to the deteriorating relationship between the government and trade unions, which reached its nadir in the massively supported one-­day general strike in December 1988. The chief concern of the trade unions, endorsed by the 80 per cent of the workforce who supported the action, was that the economic upturn had not led the government to award greater prominence to redistribution in the form of increased social spending. As we will see in the section on welfare below, the strike had a significant impact on the government’s record on social spending as fiscal policy was eased considerably. The government’s response to the strike led to its implementation of contradictory policies (Smith, 1998: 98). Whilst seeking to placate the unions with promises of increased social spending, it also tried to dampen down an overheated economy by raising interest rates and cutting spending. Shortly after the strike, nevertheless, confrontations between elements within the party apparatus, led by Alfonso Guerra, and the advocates of a liberal economic policy more in line with the demands of European integration, associated with the Finance Minister, Carlos Solchaga, further confirmed the lack of influence of the party on economic policy, as was discussed in the previous section. Felipe González unequivocally offered his support to Solchaga and his team, reminding Guerra that ‘Spain is governed from the Moncloa [the Prime Minister’s residence] and not Ferraz [site of the PSOE headquarters]’ (quoted in Heywood, 1994a: 17).13 Interestingly, González made the above claim at the party’s 32nd Congress, held in November 1990. The Congress was generally considered to be a success for supporters of Alfonso Guerra, who had clashed with both Boyer and Solchaga, and consequently a victory for the Guerra-­dominated party apparatus. Solchaga acknowledged as much at the time. Yet, even though supporters of Guerra, the so-­called guerristas, were able to establish control of the party apparatus, and were in the majority in parliament, they – crucially – had no presence in government, which was left most definitely in the hands of the renovadores (modernisers), most prominently Solchaga himself, who obtained the full support of the Prime Minister. In fact, as Juliá has noted, there were in any case few differences of substance between the two groups (Juliá, 2000: 341). Indeed, it has been suggested that Guerra was motivated more by the need to defend his personalised, clientelistic power base from the encroachments of liberal technocrats, such as Solchaga, than he was by matters of strict ideology (Youngs, 1999: 56). The Congress also gave considerable attention to Programa 2000, the initiative inspired by Alfonso Guerra, aimed at the programmatic renewal of the PSOE in

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the late 1980s and early 1990s.14 Indeed, the Congress Resolution on Programa 2000 accounted for 58 pages of the 177-­page Congress Resolutions (PSOE, 1990). Yet the impact of the initiative on the government’s economic policy, or indeed, on any aspect of policy, was negligible. Besides, within two months of the Congress, Guerra was forced to resign from the government in connection with a financial scandal concerning his brother. Guerra’s departure from the government appeared to further weaken the party’s position with respect to policy-­making. Internal debate on economic policy was in any case discouraged. As one of the PSOE’s key economic advisers, Manuel Escudero, told me immediately after the party’s general election defeat in 1996: There has existed, to an extent, the view within the PSOE that there is only one possible economic policy, the one dictated by the government. Debates which should have taken place did not take place. Why not? Because the PSOE is not prepared to permit internal party debate on economic policy.15

Having recently bolstered its European credentials via Spain’s entry into the Exchange Rate Mechanism, the PSOE government confronted the new decade, the 1990s, with confidence. Economic policy, with Felipe González’s blessing, remained firmly under the control of economic liberals, and was primarily justified in terms of the imperatives of European integration. This strategy found favour with the majority of the Spanish population, which appreciated the influence of Spain’s EC membership on the country’s buoyant economic growth. We will now move on to consider the final years of the PSOE’s stewardship of the economy under the González premiership. The PSOE, economic policy and the economic downturn from 1992: Maastricht and the quest for convergence As long as the boom continued, the PSOE government’s policy of attuning economic strategy to the imperatives of the financial markets in an effort to converge with the economies of the leading EC member states appeared to make sense, at least in purely financial terms. However, the end of the boom in 1991 brought to the surface the Spanish economy’s macroeconomic and structural disequilibria, which were of sufficient gravity to exacerbate the economic downturn (OECD, 1993: 81). When international economic conditions took a sharp turn for the worse in the 1990s and the full implications of the single market and the Maastricht Treaty began to sink in, concerns grew about the magnitude of the economic challenges posed by the European ‘project’. Furthermore, at the very time that boom was turning to bust within the Spanish economy, the EU was making its heaviest demands upon the Spanish government in the form of convergence criteria which required a drastic reduction of the spiralling public deficit. As we have seen, the government’s efforts to respond to the general strike of December 1988, which crystallised public support for increased social spending,

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further complicated policy choices. When Franco died in 1975, the percentage of Spain’s GDP devoted to social spending was half that of the EEC average. The subsequent transition to democracy witnessed an explosion of social demands as social spending rose from 12.5 per cent of GDP in 1976 to almost 20 per cent in 1981 (Bandrés, 1999: 636). Given that the PSOE’s first term in office between 1982 and 1986 had essentially been an exercise in economic crisis management, its agenda had been more concerned with restraining public spending on welfare rather than extending provision. This stance was maintained during the PSOE’s second term in office and the percentage of GDP devoted to social spending rose by just 1.2 per cent between 1982 and 1989 (Bandrés, 1999: 637). Significantly, the PSOE’s main achievements in welfare spending were put in place in the period following the general strike. In 1989 alone the government spent over 2 billion pesetas to improve social services (Royo, 2000: 207). The rate of growth of public spending rose from 11 per cent in 1988 to 16.2 per cent in 1989 (Gámir, 2000: 52). Over the period 1989 to 1993, social spending increased from 20.8 per cent of GDP to 26 per cent (Bandrés, 1999: 638–9). Linked to the increase in public spending was the particularly strong employment growth within the public sector. It has been estimated that public sector employment grew by 25 per cent between 1988 and 1993, embracing public administration, education and health, representing half of all employment growth in services over the period (Salmon, 1995: 209). By the early 1990s, the entire population had access to free health care, whilst Spain boasted the highest ratio of doctors per head of population in the OECD (Economist Intelligence Unit, 1994: 11). When the PSOE had entered office in 1982, six million Spaniards had no access to public health care. Public health care expenditure more than tripled to 5.6 per cent of GDP between 1982 and 1992 (Economist Intelligence Unit, 1995b: 19). A measure of the success of the government’s health policy was the Economist Intelligence Unit’s claim that the private health care sector began to suffer a serious loss of clients to the public sector during the 1980s and 1990s, due to the vast improvements in quality of the latter (Economist Intelligence Unit, 1995b: 20). Minimum pension rights were similarly extended, by December 1990, to the entire population and indexed to inflation, regardless of whether social security contributions had been paid. By 1991 there were two million more pensioners than when the PSOE entered office and spending on pensions had increased three-­fold (Tezanos, 1992: 39). Pension payments amounted to a fraction under 10 per cent of GDP by 1993 (Bandrés, 1999: 639). The amount spent on unemployment benefits more than doubled in terms of percentage GDP to 4.8 per cent of GDP between 1983 and 1994 (Chislett, 1996: 28). Spending on education also increased five-­fold during the decade 1982–92. The school leaving age was also raised to 16 and 1.4 million new school places were created (Tezanos, 1992: 40). University student numbers also nearly doubled from 744,000 in 1983/84 to 1,376,805 in 1993/94 (Economist Intelligence Unit, 1994: 12). Total public sector spending by 1995, the PSOE’s last full year in office, was almost 50 per cent of GDP, of which outlays on the welfare state (pensions,

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unemployment benefits, health, education, housing and other social services) accounted for around half, in line with the EU average (Chislett, 1996: 27). Yet despite the PSOE’s undoubted achievements in welfare, Spain still had the third lowest per capita welfare spending in the EU after Greece and Portugal when the PSOE left office in 1996 (Chislett, 1996: 27). Notwithstanding increased public expenditure on unemployment benefits, only half of Spain’s jobless qualified for benefit in 1994 (Heywood, 1994a: 20). Given the disproportionate impact of unemployment on the young, the role played by the extended family as a support for the inadequate system of social protection remained significant. Capital spending also rose significantly during this period.16 The Economist Intelligence Unit noted that ‘Spain in the mid-­1980s still had an infrastructure more appropriate to a developing country than to Europe’s fastest-­growing economy’ (Economist Intelligence Unit, 1995b: 21). The PSOE’s record in investment in infrastructure thereafter was impressive and has been described as ‘one of the most ambitious social capital investment programmes in Spain’s modern economic history’ (Bandrés, 1993: 1051). Public spending on roads17, railways, ports and airports, oil and gas pipelines, communications and hydraulic projects almost tripled between 1986 and 1991. Investment was particularly marked in the period leading up to Spain’s annus mirabilis of 1992, when the country played lavish host to the Olympic Games in Barcelona and the World Expo in Seville. Indeed, Catalonia and Andalusia obtained the lion’s share of investment in infrastructure during the four-­year period 1988–91. The government’s decision to link Madrid with Seville via the high-­speed AVE train on the occasion of the Expo was particularly controversial. Many viewed the government’s approval of the scheme as being a political rather than an economic decision due to Andalusia being a PSOE stronghold. The project swallowed over half of total rail investment during its construction. For the Olympic Games in Barcelona, the State bankrolled 70 per cent of the $6 billion investment in urban development, sports installations and infrastructure considered an integral part of the Olympic project. The public investment ploughed into the city by the government contributed towards the PSOE seeing its vote in Barcelona increase at the 1996 general election despite it being heavily defeated in all the other big Spanish cities (Robinson, 1996: 15). Speaking at the PSOE’s 33rd Congress in March 1994, Felipe González reminded party members that Spain was ‘the country with the highest public investment in Europe, investment largely directed towards public works’ (PSOE, 1994: 232). By 1991/92, the government had committed just below 5 per cent of GDP to public investment and in its Convergence Plan, agreed the same year, pledged to maintain investment at 5 per cent of GDP over the next five years. By 1992, the deteriorating economic situation led to the first year-­on-­year decrease in the amount spent on public works programmes since 1984 and in 1995 the government formally dropped the spending commitment which it had made just three years before. With gaps opening up in the public finances, the government chose to cut back on public works programmes rather than cut deeper into the even more politically sensitive social security budget. For all its achievements in social and infrastructure spending, the policy mix

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of a tight monetary policy and relatively lax fiscal policy – particularly necessary after the peseta’s entry into the ERM in 1989 – was contradictory and unsustainable (Smith, 1998: 99–100). On the one hand, high interest rates replaced the earlier social pacts as a means of enforcing wage moderation, whilst also serving to maintain the flow of direct foreign investment. The tight monetary stance also offered the means of financing the budgetary deficit in a non-­inflationary manner. On the other hand, increased public spending provided the means of addressing the demands of those supporting the general strike in an effort to purchase public support. This unlikely policy combination was only sustainable if Spain could maintain the flow of foreign investment. Carlos Solchaga, Finance Minister between 1985 and 1993, has claimed that his immediate reaction to the general strike in December 1988 was to raise in the Council of Ministers, or cabinet, the holding of an immediate general election, ‘because people needed to know who was in charge: a government constrained by the trade unions or a government which had endured a general strike but which had the support of the population’. Interestingly, Solchaga adds that González’s main reason for not calling a general election was that Spain was holding its first EC Presidency during the first half of 1989 (Burns Marañón, 1996: 160).18 Only when the Spanish Presidency of the EC was completed, the peseta was placed in the ERM (in June 1989) and the country had quietened down somewhat, did González call a general election for October 1989, a full ten months after the general strike (Burns Marañón, 1996: 160).19 The government therefore appeared to subordinate domestic political considerations to the constraints imposed by Spain’s EC membership. The result was that the government committed itself to levels of spending on welfare and infrastructure which were of such magnitude that they ultimately placed its EC-­imposed financial commitments in doubt, most particularly the need to meet the Maastricht convergence criteria. Felipe González’s successor as PSOE General Secretary, Joaquín Almunia, has indicated that the government’s decision to respond to the general strike by increasing its commitment to social spending was its ‘greatest mistake in economic policy’ because it was not supported by an ‘orthodox economic policy’ (Almunia, 1998: 26). In an interview which I held with him in May 1995, Almunia was equally candid, suggesting that the PSOE government’s economic policy had been flawed throughout the period 1989–93 due to its reliance on the maintenance of a strong peseta. He argued that there should have been greater flexibility with regard to the exchange rate, accompanied by a lowering of interest rates which – crucially – would have required greater control over public spending.20 We can conclude that the general strike had a decisive influence on the government’s economic strategy. Shaken by the strike, the government immediately opted for a more expansionary policy, thereby effectively impeding a good part of its liberalisation and economic reform policies (Bandrés, 1999: 638). The chances of Spain being able to meet its EC-­imposed financial commitments therefore became all the more difficult. We must argue, therefore, that the government, concerned about the public support given to the general strike of December 1988, and the loss of support at the October 1989 general election, opted to pursue its

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strategy of a tight monetary policy combined with a lax fiscal policy21 in the hope that the economic boom would continue unabated. When the economic downturn became apparent in 1992, efforts were at last made to rein in public spending. It can also be argued that the government’s decision to relax fiscal policy between 1989 and 1993 was a response to the party’s declining electoral fortunes, with a view to retaining the support of the party’s electoral base. Worryingly for the PSOE, it lost 3 percentage points of the total electorate at the 1989 election, mostly to the Communist-­dominated Izquierda Unida (Boix, 1998: 208). We must also note that 1989 marked the start of an upturn in the fortunes of the PSOE’s main right-­wing rival, the PP, which gained a new leader in José María Aznar, who would eventually lead his party into office in 1996. The party system therefore took on a far more competitive complexion at the dawn of the new decade. The electoral dilemmas suffered by the PSOE and its policy responses contributed to the reshaping of its supporting electoral coalition away from the quasi-­catch-­all character it had when it entered office (Boix, 1998: 209). The combination of high marginal tax rates22, an overvalued peseta, and the seemingly never-­ending series of PSOE-­related corruption cases eroded the PSOE vote in urban areas and halved the party’s support among white-­collar employees and highly qualified blue-­collar workers. Nevertheless, the public expenditure directed at Spain’s least developed regions and the expansion of the welfare state added, to a still solid working-­class base, the vote of urban areas and the endorsement of welfare benefit recipients. Around 40 per cent of the industrial working class and the agricultural ‘proletariat’ (or close to 60 per cent as a proportion of those who voted) supported the PSOE throughout the decade (against 12 per cent for the PP). Over 30 per cent of the unemployed (who had lost a job) and the pensioners (40 per cent as a proportion of actual voters) voted PSOE in 1993, twice the rate of the PP (Boix, 1998: 209). As Ross has noted, the PSOE went from being the party of modernisation and progress in the 1980s to becoming a party which, in the 1990s, was dependent on Spain’s least dynamic regions and social groups (Ross, 1997: 63). Also at the start of the 1990s, the Spanish people, for the first time, began to express doubts as to whether the costs of increased European integration were worth paying. Eurobarometer polls indicated that the proportion of Spaniards convinced that the full implementation of the Single Market was for them a ‘good thing’ was, between 1985 and mid-­1989, higher than that of any other nationality, steadily increasing up to a figure of 70 per cent by the end of the decade (Youngs, 1999: 58). There was a 40 per cent difference between those who expected the effects of the EU on the Spanish economy to be good and those who considered them to be bad in 1991. This difference had declined to just 5 points by 1995. The difference between those who considered the effects of the EU on the Spanish job situation to be good and those who thought them to be bad, which was negligible in 1991, went down to minus 25 points in 1995 (Pérez-­Díaz, 1999: 127–8). A Eurobarometer poll in May 1995 indicated that only 20 per cent of Spaniards believed that Spain had benefited from membership of the EU. The percentage

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of those who believed that membership had not been beneficial – 60 per cent – was the highest in the EU (European Commission, 1995: 5). The decline in the popularity of the EU between 1992 and 1995 was caused by the internal political ­situation – the PSOE government was reeling throughout this period at the seemingly never-­ending series of corruption cases linked to the party – and the economic crisis (Alaminos, 2001: 98). Given the significance of the effect of the PSOE’s involvement in numerous corruption cases on the government’s political credibility23, and the extent to which corruption dominated the PSOE’s final term in office under Felipe González (1993–96), it will be helpful at this point to consider the phenomenon of corruption before returning to the question of economic policy. The PSOE’s Achilles heel? Corruption and its significance for the Socialist government under González Interviewed shortly after the PSOE left office in 1996, Felipe González claimed ‘we wouldn’t have lost an election in twenty-­five years if it hadn’t been for the corruption cases’ (ABC, 28 June 1996: 32). This section will consider the issue of corruption and the degree to which it contributed towards the PSOE’s decline during the latter part of the party’s period in office under Felipe González. Whereas corruption is by no means the single explanatory factor for the PSOE’s decline – the economic recession of the early 1990s, and the natural fall in support of a government which had been in office for so long are further causes – the phenomenon played a sufficiently important role to merit inclusion in this study of the PSOE. Such was the dominance of the PSOE under González within the political arena – the party won four consecutive general election victories and was also well-­placed at both the local and regional levels of government throughout much of the party’s period in office – that the party effectively ‘became’ the State as the demarcation between state and government became blurred over time (Heywood, 1994b). Heywood defines political corruption in liberal democracies as being characterised by two fundamental aspects: an abuse of trust and an attempt to control the political arena through an undemocratic use of power and influence. One of the legacies of the Franco regime had been that there existed neither the tradition nor the experience of associative mechanisms which are central to the functioning of a democratic party system. The civic culture required to sustain democracy still had to be nurtured. Spanish political parties became characterised by low levels of party membership, restricting the degree to which membership dues could finance party activities. The immediate priority for parties in a media age was the search for votes rather than the drive for membership. With elections constantly taking place in Spain at the various levels of government – local, regional, national and European – the financial demands of electoral competition created a new stimulus to engage in corrupt practices. Moreover, the lack of ­effective checks on executive power further encouraged corruption to develop. One of the earliest corruption cases which damaged the PSOE’s political credibility emerged in the early 1990s concerning the brother of the Deputy Prime

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Minister, Alfonso Guerra. Employed at a government office in Seville, Juan Guerra was accused of influence peddling which enabled him to amass a significant personal fortune. Charged in 1995 with tax fraud, perversion of the course of justice and embezzlement of public funds, he was found guilty of the count of tax evasion and was sentenced to one year in prison. The media frenzy surrounding the case was notable and led to Alfonso Guerra’s resignation from the ­government in 1991. Further scandals included illegal party financing via front companies (Filesa, Malesa and Time Export), which led to the conviction of two PSOE parliamentary deputies, Guillermo Galeote and Carlos Navarro and a PSOE member of the Senate, José María Sala. The PSOE was by means the only political party to engage in parallel financing. Prominent figures within the PP in Valencia resigned from the party when they were implicated in the so-­called Naseiro case in 1990, which involved property speculation. The Health Minister, Julián García Valverde, also had to resign from the government in January 1992, when it was alleged that he had benefited from land speculation during his former employment as the Chairman of the Spanish Rail network, RENFE. It emerged later that year that the Governor of the Spanish Central Bank since 1984, Mariano Rubio, had engaged in insider trading linked to the holding company Ibercorp, forcing his resignation in 1992 and, subsequently, his imprisonment in 1996. Just as corrosive for the PSOE government’s credibility was the revelation in late 1993 that the Director General of the paramilitary Civil Guard since 1987, Luis Roldán, had been able to make use of his position to amass a fortune via his access to public funds. The fallout for the government increased when it emerged that Roldán had lied about his qualifications before being appointed to the post. Escaping detention in April 1994, Roldán disappeared before being tracked down to Laos in February 1995, where he was re-­arrested. He was subsequently sentenced to twenty-­eight years in prison for embezzlement and tax fraud. Although all the above cases were significant, it was the revelation that the government had been engaged in a ‘dirty war’ involving the kidnapping and killing of suspected ETA terrorists and sympathisers which constituted the most damning indictment of its political credibility.24 Funded covertly by the Spanish Interior Ministry, death squads were responsible for the deaths of twenty-­three people between 1983 and 1987. The killings were largely carried out in the French Basque Country by hired hitmen. The ex-­Director General of State Security, Julián Sancristóbal was imprisoned in November 1994 for his involvement with the case, followed, three months later by Rafael Vera, who had been immediately responsible to the then Interior Minister, José Barrionuevo, who was himself imprisoned in 1998. Although not charged as part of the investigation, Felipe González, as Prime Minister throughout the relevant period, was suspected by many to have been ultimately responsible for the initiative, despite his continued denials. The media’s role in the exposure of these and many other corruption cases was significant and conservative newspapers El Mundo and ABC were particularly

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prominent in uncovering several infamous cases. The then Director of ABC, Luis María Ansón, acknowledged several years after the PSOE left office that there had been a ‘search and destroy operation’ mounted by prominent journalists, together with leading figures within the PP, against Felipe González, ‘whom it had proved impossible to defeat at the ballot box’. The aim had been to dislodge Felipe González from office by whatever means necessary and facilitate José María Aznar’s victory (quoted in Marín, Molinero and Ysás, 2001: 448). Beyond the newspaper media, a number of books were published on the phenomenon of corruption, an evocative example being the ‘Guide to Corruption’ (Guía de la Corrupción), by Eduardo Marín de Pozuelo, Jordi Bordas and Santiago Tarín (Plaza y Janés, Barcelona, 1994). Whatever the motivation behind the emergence of corruption allegations in the media, it nevertheless remained the case that a democratically elected government had – to take just a single, albeit the most serious, case – been engaged in the kidnapping and liquidation of suspected terrorists. The credibility of the PSOE, the government and González himself suffered to such an extent that the party, as we will see in Chapter 8, made a conscious effort to distance itself from the more unsavoury aspects of the PSOE’s period in government, and present an alternative image. The PSOE’s slogan at the 2004 general election was ‘Socialists Now’ (Socialistas Ahora), it being implicit that Rodríguez Zapatero’s brand of Socialism had moved on from that of Felipe González. Recession and defeat: economic policy, 1992–96 The slump in the popularity of the EU amongst the Spanish population engendered by the intensification of the economic downturn proved to be ephemeral. Economic recovery, the tardiness of which had contributed to the PSOE’s defeat at the March 1996 general election, became increasingly apparent as 1996 progressed, and, once it was clear that Spain would qualify for Stage Three of EMU, there was a return to Spain’s traditional optimism with respect to its relationship with Europe (Gillespie, 2000: 153). The key element in the economic boom experienced by Spain in the five-­year period after the country entered the EC in 1986 had been the country’s capacity to attract large sums of foreign investment. From 1990, however, investment began to decelerate, and contracted in 1992 and 1993 (Economist Intelligence Unit, 1994: 15). With monetary policy severely curtailed by the peseta’s entry into the ERM, tight fiscal measures became the chief tool of government economic management and in the summer of 1992 a series of major fiscal revisions was introduced in an effort to tackle the public sector deficit. VAT was increased from 13 to 15 per cent (in line with the EC standard rate), income tax was increased except for those on very low incomes, and cuts in government spending were announced (Salmon, 1995: 15). Shortly afterwards the crisis within the Exchange Rate Mechanism25 forced the government into a major reappraisal of monetary policy, including a ­devaluation

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of the peseta by 5 per cent on 16 September 1992. Of course, Spain had not been the only country obliged by its membership of the ERM to maintain interest rates at a level inconsistent with the requirements of the domestic economy. The PSOE government nevertheless refused to follow the example of the UK and Italy by withdrawing the peseta from the discredited system, despite successive devaluations over the following months. On the contrary, the Socialists viewed withdrawal as a betrayal of their commitment to European integration. They had identified so greatly with the European ‘project’ that, in effect, political c­ onsiderations – the PSOE’s identification with the project of European ­integration – outweighed economic concerns.26 There were two further devaluations of 6 per cent on 22 November 1992 and 8 per cent on 13 May 1993 (during which $20 billion of Spanish reserves were spent in a vain attempt to defend the peseta), only weeks before the general election. Commenting on the devaluations, Salmon argues that ‘External factors were thus dictating economic policy (especially German economic policy of maintaining high interest rates to contain inflation sparked by German reunification). High interest rates and clear indications of a tight budget in 1994 were required by the capital markets as the price of maintaining the exchange rate in the ERM’ (Salmon, 1995: 15). The EU constraints imposed on economic policy-­making were therefore becoming all the more apparent, underlining the exiguous nature of the margin of manoeuvre available to Spanish policy-­makers. According to the Economist Intelligence Unit, the abandonment of a restrictive monetary policy, ‘which had converted a strong currency into an article of faith’, and the narrowing of interest rate differentials with other European economies, marked the return of a more realistic economic policy. The Economist Intelligence Unit also cautioned that the narrowing of the interest rate differential would bring new difficulties in its wake, as the government could no longer count on massive flows of foreign capital to cover the current account deficit (Economist Intelligence Unit, 1994: 13). The government’s immediate reaction to the devaluations was one of dismay. As Torrero has noted, ‘the best proof of the lack of realism of economic policy is that the authorities responded to the devaluations with a feeling of resentment, if not anger’ (Torrero, 1993: 470). Spain was forced to pay a high price for its misguided policy on the peseta. The euphoria promoted by Spain’s economic boom had served to conceal the fact that the peseta’s ephemeral strength had been based on the weak foundations of an economy which continued to be uncompetitive. Having caused a loss of competitiveness and the destruction of those sectors of the economy exposed to international competition, particularly manufacturing, the policy was finally punished by the markets as the underlying weaknesses of the economy became apparent. Spain’s excessive dependence on foreign capital had always been unsustainable and successive devaluations of the peseta after September 1992 led to a sharp fall in the balance of the capital account thereafter. The devaluations had a positive effect on Spanish exports, however, which at last became more competitive. Goods exports, spurred by the gain in competitiveness from the peseta’s devalu-

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ations, grew 11 per cent in real terms in 1993, 20.7 per cent in 1994 and around 13 per cent in 1995 (Chislett, 1996: 61). The impact of the devaluations, allied to a sharp drop in domestic demand, helped cut the deficit on the current account to just 1 per cent of GDP in 1993, a vast improvement on the unsustainable levels of previous years. A welcome result of the ERM crisis was that it led to a reappraisal of underlying economic realities throughout the EC. Certainly, the shortcomings of the Spanish economy were laid bare. The meeting of the convergence criteria for EMU nevertheless remained the chief focus of economic policy. Five months before the ERM crisis, the government had drawn up a Convergence Plan, which outlined how the government planned to fulfil the conditions necessary for participation in EMU. The government’s optimism was such that it not only expected the economy to fulfil the convergence criteria adopted at Maastricht, but to actually exceed them. This goal would be achieved by carrying out structural reforms aimed at promoting greater flexibility and deregulation within the economy, particularly throughout the public sector. In this way one million jobs would be created between 1992 and 1996. As Fuentes Quintana observed, ‘it would be difficult to find a Spanish economic policy document displaying such a degree of optimistic triumphalism as the Convergence Plan’ (Fuentes Quintana, 1993: 98). The plan was, in any case, made obsolete by the deterioration in the economic situation, culminating in the three devaluations in nine months following the ERM crisis of September 1992. For example, the plan’s macroeconomic projections predicted that GDP would grow by 3 per cent in 1992 and 3.3 per cent in 1993, when it fact growth in 1992 moderated to a mere 0.8 per cent, before contracting by 1.2 per cent in 1993. Similarly, the plan’s prediction for total public debt as a percentage of GDP in 1994 (45.3 per cent) was well below the actual figure of 62.7 per cent, in excess of the 60 per cent convergence criterion established at Maastricht. Such was his lack of confidence in the Convergence Plan that Manuel Marín, the Spanish Socialist vice-­president of the European Commission, declined to defend it before his colleagues in Brussels. The President of the European Commission, Jacques Delors, also expressed doubts on its viability (El País (International Edition), 11 June 1995: 12). In short, the Convergence Plan as drawn up in 1992 was excessively optimistic and became even more so in the context of recession. The government had no option other than to acknowledge this fact and the projections were revised in July 1994. The political credibility of the government had already taken a battering due to the seemingly never-­ending series of corruption allegations linked to the PSOE. This development was now accompanied by a fall in the PSOE ­government’s economic credibility as indicators continued to deteriorate. By 1993, Spain was experiencing its deepest economic recession in over thirty years (Economist Intelligence Unit, 1994: 14). The following year, the government responded by drawing up a three-­year deficit reduction plan aimed at reducing the deficit to 4 per cent of GDP by the end of 1997, the first official acknowledgement that it no longer believed it could fulfil the Maastricht criteria

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by 1997 (Economist Intelligence Unit, 1994: 24). In June 1994, the government awarded the Central Bank, the Banco de España, autonomy in the elaboration and execution of Spanish monetary policy in accordance with the requirements of the Maastricht Treaty. From this point, the Spanish Central Bank’s priority was price stability and it promptly tightened monetary policy in the form of higher ­short-­term interest rates, provoking some criticism from within government circles (Economist Intelligence Unit, 1995b: 15). The unease expressed by opponents of the move illustrated the dilemma in which the government found itself. A keen advocate of further European integration, it was uneasy about the practical results of surrendering such a vital economic policy lever, particularly fearing the possible detrimental effects on growth and employment. The Spanish Central Bank therefore became an even more influential actor as it took control of one of the key economic policy instruments unencumbered by formal political influences. The government nevertheless accepted the development in the belief that the primacy of European imperatives would be in the country’s long-­term interest. In an effort to inject further flexibility into the labour market, the government introduced a major package of reforms in June 1994. Dismissal procedures were eased and a number of more flexible job contracts was established. A general strike in January 1994, organised by the trade unions to protest against the introduction of these measures, was only partially successful and failed to influence the government’s legislation. In retrospect, the general strike of December 1988 had proved to be the high point of the trade unions’ influence over the government agenda and the economic downturn of the early 1990s did little to change this situation. In order to meet the Maastricht convergence criteria, the government turned to privatisation to improve the public finances. Although the PSOE government had never had an official privatisation programme, it had been quite active in totally or partially selling off state-­owned companies since 1985 (Economist Intelligence Unit, 1995b: 28). The policy of industrial disinvestment by the PSOE was nevertheless attributed more to considerations of industrial rationale or pragmatism rather than to any political belief in privatisation (Salmon, 1995: 54). The urgency imposed by the government’s attempt to meet the Maastricht convergence criteria witnessed a particular intensification of stock market flotations of public companies during the PSOE’s final years in office. Just under 1.7 billion pesetas was raised by the PSOE via public share offerings between 1986 and 1996, although it has been claimed that privatisation barely addressed the problem of the public deficit and had little impact on Spain’s chances of meeting the Maastricht convergence criteria (Gámir, 1999: 105, 172–8). The role of the Ministry of the Economy during the privatisation process was crucial. Furthermore, it appears that the Spanish cabinet, the Council of Ministers, was not kept fully informed of the privatisation processes. Nor was there any discussion of the process in the Congress of Deputies or the Senate.27 As Heywood concludes, ‘the constitutional powers vested in the Spanish core executive allowed it to carry out the privatisation . . . as it saw fit’ (Heywood, 1999: 111).

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A further 7 per cent devaluation of the peseta in March 1995 after heavy intervention by the Spanish Central Bank in the financial markets (reserves fell by $2.8 billion in February 1995) heralded the PSOE’s final full year in office. The Spanish government had initially requested an 11–­12 per cent devaluation (Economist Intelligence Unit, 1995a: 14–15). Juan Francisco Jimeno of the Fedea Research Institute summed up the views of many economists on continued Spanish participation in the EMS in a statement to the Spanish press: ‘I am aware that there are political reasons for remaining in the system, but there aren’t any economic reasons’ (El País (International Edition), 13 March 1995: 23). The Economist Intelligence Unit echoed this opinion, arguing that ‘this realignment was forced upon the government for political and not economic reasons’ (Economist Intelligence Unit, 1995b: 34). Between September 1992 and November 1995 the peseta declined 35 per cent against the German mark (Chislett, 1996: 49). The weak foundations upon which the economic boom of the late 1980s was founded became clear the following decade;

• • • • •

Spain’s weak manufacturing base; high levels of foreign penetration of industry; dependence on foreign investment; a poor level of competitiveness exacerbated by an unreal exchange rate; the dominance of the needs of the financial markets over the requirements of the real economy, leading to relative de-­industrialisation.

Despite the boom conditions experienced by the Spanish economy after EC entry, insufficient headway had been made in correcting the economy’s basic imbalances, thereby complicating convergence with the more stable countries in the Community (Ayuso and Escrivá, 1998: 139). Moreover, the economic problems arising from the government’s commitment to converge with the EU contributed towards the fall in support for the PSOE, which was already reeling from myriad corruption allegations. During the PSOE’s final years in office, therefore, the economy remained replete with serious weaknesses. Moreover, as we have seen above, the economic downturn of the early 1990s adversely affected the popularity of European integration amongst the Spanish population. The Economist Intelligence Unit noted in 1995: ‘in recent years . . . a certain disillusionment with EU membership has become evident due to Spain’s loss of favour as an investment destination and a sense of marginalisation from the decision-­making process. Popular sentiment has also been affected by a sense of EU betrayal of Spanish interests’ (Economist Intelligence Unit, 1995b: 9). Single issues, such as the Spanish fishing fleet ­stand-­off with Canada in 1995, during which Spain obtained only lukewarm support from fellow EU member states such as the UK, and the question of EU milk quotas, which placed Spain’s traditional milk-­producing area, Asturias, in a difficult situation, contributed to a more general malaise. The intrusion of the EU into Spanish domestic affairs was becoming increasingly apparent. The difficulties experienced by the agricultural sector during this period

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­ itnessed the emergence of certain tentative policy network developments w regarding the issue of agriculture in reaction to agreements reached within the framework of the EU. The Spanish Ministry of Agriculture, Fisheries and Food (Ministerio de Agricultura, Pesca y Alimentación – MAPA) lobbied the EU in 1995 in favour of those Spanish trawler men whose livelihoods were threatened by the EU’s attempt to allow much-­depleted fisheries stocks to recover by reducing the number of EU fishing vessels (Atienza Serna, 1996: 380). The same Ministry was nevertheless the butt of criticism from farming interests such as COAG (La Co-­ordinadora de Organizaciones de Agricultores y Ganaderos del Estado Español – The Co-­ordinating Body for Spanish Agricultural and Livestock Producers), which accused it of being only interested in the macro-­level of policy, and of promoting the interests of the food industry rather than family farmers (Gibbons, 1999: 93). Other business associations in the export-­oriented sectors also denounced the government’s weakness in defending what they considered not only their particular interests but also the national interests. Some went as far as to thank other European governments publicly for having defended their interests better than did the Spanish government in the contest that pitted them against the Moroccan state in late 1995 (Pérez-­Díaz, 1999: 127). Despite these difficulties, co-­operation between policy actors became an increasing reality in Spain’s agricultural food sector in the 1990s and was likely to continue as state and sectoral organisations continued to fight parallel battles for Spanish agriculture in EU and international policy arenas (Gibbons, 1999: 129).28 It is nevertheless worth noting that Spain’s membership of the EU to a great extent constrained the PSOE government’s available range of options with regard to agriculture (Heywood, 1995a: 259). Signs of an improvement in the Spanish economy began to appear in 1994, although they only really began to feed through to the general population after the PSOE’s defeat at the general election of March 1996. The Spanish population’s apparent disillusionment with Spain’s membership of the EU was shown to be short-­lived. From the mid-­1990s, in the context of an improving economy, and the likelihood that Spain would indeed qualify for Stage Three of EMU, the popularity of European integration among the Spanish population recovered. Data drawn from Eurobarometer has indicated that, by mid-­1996, the percentage of Spaniards viewing EU membership as a ‘good thing’ (51 per cent) was above the EU average (48 per cent) for the first time since 1991 (European Commission, 1999: 26). This finding would appear to bear out the link, as far as Spain is concerned, between the popularity of EU membership and the overall health of the economy. As will be seen below, the traditional enthusiasm for European integration within Spain was again called into question when, in response to deepening crisis from 2008, Rodríguez Zapatero’s Socialist government made deep spending cuts to address the growing public deficit. The improvement in the economy, or at least, public perception of any improvement, came too late to prevent the PSOE’s defeat – albeit by the narrow margin of 1.4 per cent of the vote – at the general election of March 1996. When the election took place, Spain did not meet any of the convergence criteria. Yet

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even this apparent failure was mitigated when the combination of Spain’s emergence from the recession29 and Brussels’ flexible interpretation of EU member countries’ convergence performance enabled Spain to enter Stage Three of EMU in January 1999. Conclusion More than any other factor, European integration provided the PSOE with a framework for economic policy. During the party’s first term in office (1982–86), the prospect of entry into the EC served as the chief justification for the PSOE’s application of a tough adjustment policy aimed at addressing the economic crisis bequeathed by the previous UCD government and preparing the economy for the competitive rigours of EC membership. It is within the context of this crisis that economic policy during PSOE government’s first term in office must primarily be viewed. It can be concluded that the PSOE government achieved considerable success in meeting this challenge. EC membership was secured in 1986, by which time the Spanish economy had started to recover in the context of the international economic upturn. The government’s failure to reduce unemployment nevertheless tarnished this achievement. Spain’s entry into the EC in 1986, coinciding with the signing of the Single European Act, witnessed the start of a five-­year period of foreign investment-­ driven growth which outstripped that of all other EC countries. Macroeconomic policy was designed to maintain the flow of investment, which was required to cover Spain’s escalating trade deficit. This policy centred on the maintenance of high interest rate differentials with regard to the EC average during the late 1980s and early 1990s, which in turn led to an over-­valuation of the peseta. Amidst the euphoria of Spain’s economic boom, the government expressed little concern for the fate of domestic manufacturers and those sectors of the Spanish economy exposed to international competition. Faced with a torrent of cheap imports, much of domestic industry was rendered uncompetitive. Consequently many Spanish businesses either failed or fell into foreign hands over the subsequent period. Adopting a non-­interventionist stance with regard to Spanish industry, the government chose to award priority to the financial markets. As long as the inflow of foreign capital could be maintained, this strategy retained its validity. However, the underlying weaknesses of the Spanish economy made it particularly vulnerable during the economic downturn of the early 1990s, which coincided with the PSOE government’s efforts to secure a place in Stage Three of the EMU project. The costs of the government’s convergence policies were high, particularly in terms of growth and unemployment, and both the ERM crisis and the convergence process served to highlight the major disparities throughout the EU. Despite all the economic, and, indeed, political, difficulties resulting from the PSOE’s efforts to secure Spain’s convergence with the EU’s leading countries, the party’s commitment to European integration remained constant. How do we explain the PSOE’s commitment to European integration as the framework for

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its economic policy throughout its entire period in office and, indeed, was there any alternative? When the PSOE entered office, the very severity of the economic situation left the party little margin for economic manoeuvre. Furthermore, the need to convince the EC that the Spanish economy was in a sufficiently fit state for Spain to be admitted favoured a cautious approach. The recent failure of the French Socialist government’s Keynesian experiment between 1981 and 1983 further reinforced this stance. Viewing European integration as the ultimate imprimatur of Spain’s new democracy, the PSOE was prepared to embrace the economic strategy inherent in that project. With social democracy generally acknowledged to be in retreat before the dynamism of the New Right by the mid-­1980s, when Spain became a member, the EC was itself experiencing a shift away from Keynesianism, with its emphasis on demand management and state interventionism, towards neoliberal economic policies. Increasing emphasis was placed on reducing the role of the State in the economy and awarding markets greater freedom, whilst low inflation became the chief focus of policy. Price stability and freedom of capital movements lay at the heart of the Single European Act, signed the same year as Spain’s entry into the EC, 1986, as well as forming the basis of the Maastricht Treaty, signed in 1992. The PSOE’s application of liberal economic policies was therefore legitimised and reinforced by the very fact that those policies had been incorporated into the European ‘project’. A further factor favouring the PSOE’s rejection of an interventionist30, protectionist approach to economic policy was the Socialists’ recognition that, in the Spanish context, state-­centred economic strategy had been associated with the Franco regime (Maravall, 1992: 25). The PSOE was not unique when it recognised its limited capacity to develop an autonomous macroeconomic policy in the context of seemingly irresistible international economic forces. It was not just the failure of Mitterrand’s Keynesian demand management experiment in France in the early 1980s that had convinced the PSOE of the necessity of attracting foreign capital by providing an environment attractive to investors. Membership of the EC had been a key element in the PSOE’s attempt to convince foreign capital of Spain’s suitability as a destination for investment. The increasingly liberal economic nature of the European ‘project’ also militated against the adoption of a more autonomous policy. Indeed, the phenomenon of globalisation increasingly suggested that governmental autonomy over economic policy would be restricted. Freedom of capital movement and the relaxation of financial market regulation, reinforced by the terms of Spain’s EC Accession Treaty and the liberal economic Single European Act and Maastricht Treaty, provided investors with the confidence to invest. The PSOE’s acceptance of the liberal economic framework provided by the European ‘project’ was therefore viewed by the party as being the ultimate proof of its economic pragmatism. The party was able to make skilful use of European integration as a catalyst for an intense process aimed at consolidating democracy and ‘catching up’ with Europe – politically, economically and socially. The PSOE therefore made much political capital throughout the 1980s from its identification with ever-­closer

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European integration. Spain’s membership of the EC was popular across the Spanish political spectrum and throughout Spanish society, although the high levels of support for European integration contributed to the relative lack of debate within Spain over the question of the effect of EC membership on the economy (Álvarez-­Miranda, 1996: 224).31 Nor was debate stimulated by the above-­average GDP growth between 1986 and 1991. The PSOE’s identification with European integration retained its validity as long as Spanish economic growth remained healthy. This scenario was dramatically altered after Maastricht when, in the context of recession, the Spanish population realised that European integration, after years of being associated with economic success, now became identified with recession and attendant cutbacks in public spending. Just as fiscal austerity and social spending cuts had been a feature of the PSOE’s first term in office, they were also one of the most prominent features of the party’s final term between 1993 and 1996. Despite the enormous strains placed on the Spanish economy by efforts to meet the convergence criteria, the Socialist government’s commitment to its restrictive policies remained unequivocal. Rejecting the possibility of Spain being relegated to any ‘second division’ of EU member states by failing to qualify for Stage Three of EMU, the PSOE virtually courted unpopularity by remaining resolute in the face of daunting economic challenges. The PSOE leadership no doubt calculated that any wavering on the government’s part with regard to Spain’s capacity to meet the criteria would be just as harmful to the PSOE’s prospects as any fall in popularity resulting from the economic difficulties stemming from the ­government’s convergence efforts. After nearly a decade and a half of determining policy within the framework of European imperatives, the PSOE had little appetite for any opposition to the European ‘project’. Quite simply, the PSOE saw no alternative strategy capable of placing Spain once and for all within the EU vanguard. Failure to meet the Maastricht challenge would risk much of what the party had achieved in ­government. As Felipe González observed in 1992: If EMU were to get underway without us, we’d risk a certain crisis of national confidence which would weaken the drive and consensus which we’ve had over the years. We would lose international standing, allowing what has already been achieved to slip away, and Spain would start to run the risk of ‘peripherisation’. Part of the road which we have already put behind us over the last decade would be lost. (Quoted in Barbé, 1999: 167)

The commitment of public resources to improve Spain’s welfare and infrastructure was presented by the PSOE as a further aspect of Spain’s ‘modernisation’, in the sense of Spain seeking to catch up with its fellow European member states. To this extent, the PSOE chose to portray Spain’s compliance with the economic demands of the European ‘project’ and public spending on welfare and infrastructure as two sides of the same ‘modernisation’ coin. Remaining at the heart of the European project and providing levels of social protection and

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infrastructure similar to those in Europe’s leading countries were both key aspects of ‘Europeanisation’. In this sense, the European ‘project’ both served the PSOE as a point of reference as well as providing it with impeccable political justification for both potentially unpopular policy decisions, such as the PSOE government’s efforts to meet the Maastricht convergence criteria, as well as for policies likely to find more favour with the public, such as increased spending on welfare and infrastructure. As the Spanish economy deteriorated, however, these aims became clearly incompatible, as the government sought to cut spending in order to meet the Maastricht convergence criteria. European integration therefore served a dual purpose as offering a ‘route map’ for policy as well as being a major – if not the major – constraint on the government’s autonomy with respect to economic policy. As Salmon has argued, ‘the boundaries of the Spanish economy were dissolving, merging foreign policy with domestic economic management’ (Salmon, 2001: 17). The powers of transnational capital and the broader phenomenon of globalisation served as key constraints on the power of central government in the economic policy-­making arena. Membership of supranational organisations – in particular, the EU – was ­re-­defining the way in which central government managed the economy. No longer was the State in an autonomous position over a wide range of decisions (Salmon, 2001: 35). In charge of policy was the Prime Minister, vested with considerable institutionally endowed powers, and the powerful Ministry of the Economy and Finance, both of which were able to operate without interference from a party apparatus denied access to the policy-­making arena (Heywood, 1999: 112). Peak associations such as the trade unions, devoid of institutional access to policy-­ making, had little success in constraining the government’s freedom to  dictate policy.32 Only the combination of the massive public support shown to the general strike of December 1988 and the PSOE leadership’s fears about the erosion of its electoral support thereafter enabled the trade unions to ‘punch above their weight’ and secure from the government increased levels of social spending. The effect was to make the task of meeting Spain’s EU-­related financial imperatives all the more difficult. These imperatives constituted the most obvious transnational constraint on economic policy, limiting the freedom of manoeuvre available to the government. A further constraint on the government’s freedom to act was its seeming inability to put an end to the corruption allegations which plagued the PSOE from the start of the 1990s up until the party’s loss of office in 1996. Such was the damage caused by the issue of corruption that the party struggled to re-­establish itself as a party of government capable of obtaining the support of the electorate. The dire results obtained by the party in 2000, when the PSOE obtained its worst result in two decades, provided the impetus required to finally move on from the González era. Notes  1 For the disintegration of the UCD as a party of government, see Hopkin, 1999.  2 Smith argues that widespread left support for the González government’s moderate

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economic policy was ‘apparent from the start, even during the 1982–1985 period of austerity that saw the ranks of the unemployed swell by one-­third’. He nevertheless notes that trade union opposition to the government’s policy grew over time (Smith, 1998: 66–7).  3 Miguel Boyer, Finance Minister between 1982 and 1985, and his successor, Carlos Solchaga, have argued that the French experience was keenly followed by the Spanish Socialists, who sought to retain at all costs the confidence of international markets. The essence of the PSOE’s economic realism is captured in Solchaga’s judgement that a small, peripheral country cannot promote expansion on its own (Burns Marañón, 1996: 150; 303).  4 The tax burden increased between 1980 and 1992 by 5 per cent in France, 2 per cent in Germany, and 48 per cent in Spain (Pérez-­Díaz, 1999: 43).  5 Carlos Solchaga, Miguel Boyer’s successor as Finance Minister between 1985 and 1993, has commented that the UGT had been on the point of renewing the AES agreement in August 1986, but had been dissuaded from doing so by the start of the trade union elections campaign the following month and the loss of support to the CC.OO. in large firms (Juliá, Pradera and Prieto, 1996: 567). Despite the fact that the UGT won the elections overall, it was only able to elect 28 per cent of representatives to the CC.OO.’s 37 per cent in firms with more than 1,000 workers (Royo, 2000: 89). According to a leading member of the CC.OO. executive committee, Julián Ariza, these losses convinced UGT leaders that support for the government’s austerity policies had become a handicap; thereafter they looked to a rapprochement with the CC.OO. (Smith, 1998: 97).  6 Both Boyer and Solchaga had worked in the Spanish Central Bank’s Research Department (el Servicio de Estudios del Banco de España) following graduation.  7 It has been argued that González’s decision to decide his government’s composition independently of the influence of the party apparatus explained Guerra’s initial reticence about accepting the post of Deputy Prime Minister (Pastor, 1996: 538).  8 Although Alfonso Guerra, Deputy Prime Minister between 1982 and 1991 and PSOE Deputy General Secretary between 1982 and 1997, successfully resisted Boyer’s bid to be named Deputy Prime Minister in 1985, it is significant that Boyer’s successor as Finance Minister, Carlos Solchaga, implemented a policy fully in line with that of his predecessor. Speaking about the influence of Alfonso Guerra on government policy, Miguel Boyer has commented, ‘Guerra was generally defeated within the government. He would have his say in order to show that he was to the left of everyone else, but in the end what had to be done was done and not just in my case, but also in everybody else’s’ (Burns Marañón, 1996: 308). Carlos Solchaga has also quoted Alfonso Guerra as stating, ‘This isn’t a PSOE Government, it’s a Coalition Government between the PSOE and the Finance Ministry’ (Burns Marañón, 1996: 168). Solchaga notes elsewhere that ‘as soon as Alfonso realised that Felipe González wished to put his trust in his Finance Minister, and in his economic team, he decided that there was no point in constantly kicking up a fuss’ (quoted in Juliá, Pradera and Prieto, 1996: 566).  9 Although the PSOE technically lost its overall majority at the 1989 election, when it won precisely half of the seats in Spain’s Congress of Deputies, the boycott of parliament by four deputies from the Basque separatist party, Herri Batasuna, allowed the PSOE to function as though it still had an absolute majority until the next general ­election in 1993. 10 Salmon also notes that that the largest tranche of government funding to the ­motor-­vehicle industry was agreed with Seat’s Barcelona plant in July 1994, ostensibly

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to support technological development. He stresses the fact that the PSOE government was then dependent on the support of Convergència i Unió to remain in office, and that the decision was greeted with protests from other vehicle manufacturers in Spain who were also claiming more assistance for investment and to cushion the costs of redundancies (Salmon, 1995: 197). This episode illustrates the degree to which the PSOE’s dependence on the support of the Catalan nationalists influenced central government decision-­making. 11 There was a further intensification of this development throughout the 1990s. If those employed in the black economy were added, around half those in employment were working under very flexible arrangements at the beginning of the twenty-­first century (Salmon, 2001: 26). 12 Employment contracted by one million net jobs during the 1992–93 recession and the rate of unemployed reached just under 25 per cent in 1994 (Salmon, 2001: 19–20). 13 Pérez-­Díaz has similarly noted, ‘in the case of the PSOE, the party apparatus of Ferraz had to compete with, and usually played second fiddle to, the advisers to the President in the Moncloa’ (Pérez-­Díaz, 1999: 27). 14 For contrasting views on the significance of Programa 2000, see Heywood, 1993b and Gillespie, 1993. 15 Interview with the author, 6 March 1996. 16 Boix has noted, ‘Public investment only began to grow in a sustained manner after the 1988 budget at a rate of half of one per cent of GDP, before reaching 5 per cent in 1991’ (Boix, 1996: 187). 17 A total of 3,500km of highway was built between 1984 and 1993 (Economist Intelligence Unit, 1995b: 21). The government invested over 4 billion pesetas in the road-­building programme between 1982 and 1992. Almost half of this figure was invested in the three-­year period 1990 to 1992 (García Abadillo, 1997: 230). 18 It might also be noted that the main reason why Felipe González refused to bow to pressure to call early elections during Spain’s second EU Presidency during the latter half of 1995 was precisely because he did not wish to lose this prestigious opportunity to wield power at the European level (Newton with Donaghy, 1997: 316). 19 Solchaga adds that the Minister for Labour and Social Security, Luis Martínez, had assured him that meeting the trade unions’ social demands would cost 90 billion pesetas. The total actually reached 250 billion pesetas. To this total had to be added the substantial increase in the budget of the National Employment Institute (INEM) between 1991 and 1992 as a result of the increase in unemployment, the spending on infrastructure linked to Spain’s hosting in 1992 of the Olympic Games in Barcelona and the World Expo in Seville, and the financing of the deficit run up by the Autonomous Communities and local authorities on public investment. Solchaga makes clear that spending and the accumulation of debt by both levels of government – Autonomous Communities and local authorities – were sanctioned institutionally: ‘According to the Constitution, the Autonomous Communities and local corporations have full sovereignty over indebtedness’ (Burns Marañón, 1996: 162). 20 ‘It’s easy to criticise a policy but it’s far more rigorous to place all the elements of that policy on the table. Would it have been easy to have pursued a more relaxed exchange rate policy with lower interest rates? Yes, but that would have required, at the same time, a less committed policy from the point of view of public spending. We ought to have had a policy based on less public spending and a lower public deficit, and together with that less expansionary budgetary policy, we would have had a less restrictive monetary policy.’ Interview with the author, 25 May 1995.

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21 Heywood has described the PSOE government’s budgetary discipline prior to 1993 as having been ‘amongst the most lax in Europe’ (Heywood, 1999: 123). 22 Carlos Solchaga has identified the increase in the tax burden as being the chief factor in the loss of the electoral support of the middle classes: ‘With regard to the loss of votes in the middle classes . . . I believe the most important factor has been the increase in the tax burden. Social policy has consolidated our vote amongst certain sectors, in the working-­class areas, amongst pensioners, etc. However, regarding the loss of support amongst the middle classes, it is notable that when I became Minister [in 1985], just over six million people filed tax returns. When I left [in 1993] there were just over twelve million. And then people start to take on a cost-­benefit mentality, i.e. ‘I do all the shelling out, and what do I get back in return?’ (Burns Marañón, 1996: 165–6). 23 For details of the various corruption allegations involving the PSOE during the first half of the 1990s, see Heywood, 1994b, 1995b; Tusell, 1999: 331–47; Martín de Pozuelo, Bordas and Tarín, 1994. 24 Paddy Woodworth’s Dirty War. Clean Hands: ETA, the GAL and Spanish Democracy, Yale University Press (2002) deals with the issue of the dirty war in some detail. 25 The most basic contributory factor in the unfolding of the crisis was the German Bundesbank’s decision to raise interest rates in an effort to dampen down the inflationary effects of reunification, thereby forcing ERM members to do likewise at a time when most European EC economies were deep in recession. The Danish people’s rejection of EMU in a referendum in June 1992 and uncertainty over the result of a similar referendum in France were more immediate causes of instability. 26 Shortly before the third successive devaluation of the peseta in May 1993, a Financial Times article on the Spanish response to the currency crisis accused the Spanish government of having dogmatically adopted an approach which had rendered it oblivious to the disbelief expressed by those outside government. European convergence would be achieved regardless of the cost to the country (Pérez, 1997: 183). 27 Writing in 1993, Ruiz de Azúa Antón makes several recommendations with respect to improving parliamentary control in EU matters in Spain: firstly, there should be a complementarity between national parliamentary control and that generated by the relationship between the national parliaments of the member states amongst themselves and with the European Parliament; secondly, greater consultative parliamentary intervention should be fostered prior to decision-­making; thirdly, the institutionalisation of general debates in the lower house should be promoted, thereby enabling important general policy agreements – taken at the highest EU level – to reach the maximum possible public audience; and finally, the construction of a new representative body for territorial interests, with consultative power, should be undertaken (Ruiz de Azúa Antón, 1993: 228). 28 Gibbons nevertheless adds that conflict between the policy actors involved in these networks on national policy issues such as taxation was also likely to continue. Central government control over policy resources emanating from the EU remains firm in Spain. Moreover, he argues that the fragmented pattern of policy networks in Spain indicates that MAPA encourages, as it deems necessary, the development of appropriate policy networks to meet its own and EU needs for decision-­making and policy implementation. 29 The Spanish economy grew at an average annual rate of above 3 per cent from 1994 to the end of 1999, above the EU average (Salmon, 2001: 19). 30 It is nevertheless important not to overstate the PSOE government’s non-­ interventionist proclivities. Heywood notes that in two areas of critical importance to

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Spain’s economic structure – the banking sector and the energy utilities – the PSOE government was consistently interventionist, exerting considerable pressures in both sectors so as to bolster their international competitiveness (Heywood, 1995a: 227). As we will see in Chapter 5, this strategy contributed towards both sectors establishing a leading investment presence in Latin America during the late 1990s. 31 A failing criticised by Víctor Pérez Díaz, who has argued, ‘Even Spain’s entry into the European Community in 1986 was not the object of much public debate, despite its extraordinary consequences. Discussions of economic and welfare policies are usually limited and sprinkled with stereotypes and subterfuges. It seems as though the political class has hardly any interest in stimulating debate on addressing the country’s major problems’ (Pérez Díaz, 1993: 45). 32 Although agreement was reached in 1992 to set up the Consejo Económico y Social (Social and Economic Council – CES), a body suggested by the Constitution and intended as a consultative body representing the trade unions, employers’ groups and consumer groups (including a number of government-­proposed economic experts), the body has been variously described as ‘lacking real influence’ (Heywood, 1995a: 246), being ‘generally regarded as a mere talking shop’ (Ross, 1997: 123) and having ‘little more than symbolic significance’ (Gibbons, 1999: 113).

5

Foreign and security policy under the PSOE government (1982–96): the irresistible force of European imperatives?

Introduction As Vilanova has noted, foreign policy analysis must go beyond the mere recounting of events in the foreign policy field, since this approach tells us little about the nature of the political system. Rather, description must be combined with an attempt to analyse the mechanisms available to the political system for the elaboration and implementation of foreign policy, a distinctive area of public policy replete with its own special features (Vilanova, 1997: 444). One of the chief peculiarities of policy-­making in the field of foreign policy, contributing to its complexity, is that it is subject to constraints and variables outside the control of the domestic political system. This chapter will therefore seek to identify the mechanisms available to the government in the fields of foreign and security policy during the PSOE’s period in office and consider the various constraints and variables – both within and outside the control of the Spanish political system – which impinge on decision-­making. Critical use will be made of the analytical framework developed by Gillespie and Youngs whereby the production of policy is viewed as being derived from the interaction of the specific characteristics of the historical trajectory of Spain’s external relations with more recent developments at the global, European and domestic levels (Gillespie and Youngs, 2001: 6–12). It will be argued that although the PSOE government enjoyed an institutionally enshrined monopoly over the elaboration and implementation of policy in the form of the provisions on foreign policy contained in Article 149 of the 1978 Spanish Constitution, the PSOE’s period in office witnessed the emergence of challenges to the central government’s prerogatives by other actors eager to pursue their own foreign policy initiatives. Of particular significance in this respect are the structural constraints on the power of the central government posed by the Autonomous Communities from the point of view of both levels of government having divergent interests. Whereas central government claimed that it was the sole legitimate authority equipped to defend the interests of the Autonomous Communities in EU forums, certain of the Autonomous Communities challenged this stance, demanding a direct presence within the EU, effectively bypassing central government.

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It is nevertheless necessary to exercise caution when seeking to evaluate the implications of these trends and developments. As Gillespie and Youngs have noted, it is only from the vantage point of the future that it will be able to assess their significance with any degree of certainty (Gillespie and Youngs, 2001: 11). It is nevertheless possible to draw several tentative conclusions about the profile established by certain of the Autonomous Communities during the latter years of the PSOE government’s period in office. The extent to which there developed a certain disjuncture between the formal process of policy-­making and the actual practice of decision-­making and policy implementation will therefore be considered (Vilanova, 1997: 443). It is possible to be far more categorical about the significance of external influences and constraints on policy-­making in the fields of foreign and security policy, both at the EU and broader international level. As we have already seen, European integration served a dual purpose as being a template for policy as well as being one of the most fundamental constraints on the government’s policy autonomy with respect to economic policy during the PSOE’s period in office. Transnational trends largely, but not exclusively, associated with European integration similarly served as a key influence and constraint on foreign and security policy. For example, we will consider in more detail below the degree to which pressures exerted both from within the European Community and from the US contributed towards the PSOE leadership’s U-­turn on Spanish membership of NATO during the party’s first term in office (1982–86). No coherent Spanish foreign and security policy was in place when the PSOE took office in 1982. Although the PSOE’s UCD predecessor had put a definitive end to the pariah status bequeathed by the Franco regime within a large part of the international community, foreign affairs always remained subordinate to the priority of steering the country through its transition to democracy. Security concerns were also relegated to a secondary plane before they were given an unexpected prominence by Calvo-­Sotelo, who hastily secured Spain’s membership of NATO just months before losing power. In its manifesto for the 1982 general election, the PSOE decried the UCD government’s failure to establish and implement a comprehensive and rigorous foreign policy and pledged to restore Spain to the mainstream of foreign and security developments (PSOE, 1982: 45). Armed with a convincing electoral mandate, the PSOE had a historic opportunity to fulfil this pledge. The PSOE’s own foreign and security policy orientations had evolved considerably during the transition. Although the neutralist, anti-­imperialist tone which had characterised the PSOE’s pronouncements during the early years of González’s leadership had been moderated by the time the party gained office, certain vestiges of radicalism remained. Without doubt the most significant of these elements was the party’s continued opposition to NATO membership. The defining moment in this process of de-­radicalisation was reached when the party leadership controversially reversed this stance. Significantly, European integration was a key factor in the PSOE’s volte-­face and henceforth the imperatives of European integration established the basic parameters of the PSOE’s stance

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on foreign and security policy. By the end of its first term in office in 1986, the PSOE had successfully elaborated, in comparison with its predecessors in government, a more coherent foreign and security policy that responded better to Spanish national interests. The European ‘project’ facilitated this achievement and continued to prove of use to the PSOE during the remainder of its period in office. This chapter is concerned with the evolution of foreign and security policy under the PSOE between 1982 and 1996 and will consider three areas viewed by the PSOE leadership as being key elements in Spain’s return to the international mainstream:

• European integration; • defence and security; • the upgrading of Spain’s traditional links with the Mediterranean and Latin America.

It will be argued that European integration was of considerable significance, firstly, in the defence and security policy fields, where there was a progressive ‘Europeanisation’ of Spain’s strategic arrangements, and secondly, as regards policy towards the Mediterranean and Latin America. Most importantly, European integration offered the chief means of putting a decisive end to Spain’s traditional isolationism whilst simultaneously enhancing the country’s international profile. The strategy in this chapter is to outline the key actors in the fields of foreign and security policy before examining in turn the actions of the PSOE government with regard to each of the three areas outlined above: European integration; defence and security; and the upgrading of links with what have been viewed as the ‘traditional’ areas of Spanish foreign policy concern, the Mediterranean and Latin America. In order to establish the background to the government’s actions, each section will be preceded with a relatively brief analysis of the consideration of the PSOE’s policy positions prior to the party’s 1982 election victory. The justification for this approach is that the PSOE’s policies in these areas evolved considerably as the party sought to establish itself within the rapidly changing context of the transition from dictatorship to democracy between 1975 and 1982. An understanding of this evolution towards generally more moderate positions will inform and make possible a fuller appreciation of the development of the PSOE’s policies during its period in government. The rationale for concentrating on these areas is that European integration has been the key element in Spain’s political and economic development, as well as facilitating the advancement of Spain’s international role. Furthermore, Europe had a symbolic significance for the majority of the Spanish people after decades of dictatorship, representing wealth, welfare, democracy, modernisation and international projection (Barbé, 1999: 156). Whether European integration should be included in this chapter on external relations is itself a pertinent question. As has been noted, by the 1990s, ‘Spain’s domestic politics were increasingly inseparable from developments at the European level’ (Youngs, 2001b: 211). Indeed, one of

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the chief threads running through this study of the Socialist government under Felipe González is the increasing influence of European integration on Spanish domestic affairs throughout the PSOE’s period in office. Moreover, the PSOE’s support for European integration altered in accordance with Spain’s continuing political and economic development. Tovias has argued, for example, that when the PSOE came to power in 1982, it supported EC entry primarily for political reasons, i.e. in order to consolidate democracy. Yet by 1986, when Spain actually entered the EC, the political goal had been replaced by the economic one of using integration to modernise the economy, indicating the multi-­faceted nature of the PSOE’s support for European integration (Tovias, 1995: 102). Having examined the question of European integration, which will conclude with an analysis of the evolution of the role of Spain’s Autonomous Communities with respect to the EU, consideration will then be given to the PSOE’s changing perceptions of Spain’s relationship to European defence and security in the light of EU membership and the pressures bearing on the PSOE government as it sought to re-­design the country’s defence and security arrangements. Attention will be given to the way in which the PSOE’s European integration aims conditioned the party’s attitude towards Spanish membership of NATO. The section will consider how Spain’s entry into the EC in January 1986, and the Spanish public’s endorsement of the government’s decision to remain within NATO in the referendum held two months later, prepared the ground for Spanish involvement in further institutional developments in the European security field, most notably the Western European Union (WEU) and the EU’s Common Foreign and Security Policy (CFSP). As Barbé has concluded, ‘the common foreign policy (as well as European security/defence) was an important tool in the process of Europeanisation initiated by the Socialist government with all that it entailed’ (Barbé, 1995: 119). The final section of the chapter will examine the effect of Spain’s entry into the EU on the country’s so-­called ‘special’ relationships with the Mediterranean region and Latin America. Felipe González has identified the ending of Spain’s international isolation as being one of the key tasks facing his governments (González, 1997: 25). He has also taken care to award both regions a priority status in that undertaking, which he has described as ‘eradicating once and for all the barrier of isolation from international politics and Europe as well as opening­up towards Latin America and the Mediterranean’ (Prego, 2000: 184). Heywood has also highlighted the importance of both regions within the PSOE’s foreign policy, arguing that, under the PSOE, Spain was able, for the first time in its modern history, to ‘exert an influence on European foreign policy orientations, particularly with respect to the Mediterranean and Latin America’ (Heywood, 1995a: 272). Barbé, too, has also confirmed that, within Spain’s foreign and security policy agenda, the country ‘gives priority to two regions: the Mediterranean and Latin America’ (Barbé, 1998: 148).1 Indeed, Spain has been described as being ‘a major architect’ of the EU’s policy in the Mediterranean (Gillespie, 2000: 134). With respect to Latin America, Spain

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has played the role of advocate for greater EU interest in the region, whilst at the same time preserving a degree of national autonomy in its dealings with the region, thereby establishing itself as the largest investor in the region by 1996, when the PSOE left office. This section will therefore consider the degree to which the PSOE government was able to use EU membership as a tool for pursuing Spain’s interest in the two regions and how interest groups outside the government, such as Spanish private banks and the partly privatised Telefónica telecommunications company, which sought investment opportunities in Latin America, were able to establish a significant role with respect to policy-­making towards these regions. The key actors in the fields of foreign and security policy will now be introduced, before the chapter proceeds to analyse the development of the PSOE’s positions with regard to the three areas which are its main focus. Key actors and resources in the fields of foreign and security policy The figure of the Prime Minister has had a particularly prominent role in the evolution of foreign, and defence and security, policy since the death of General Franco. Heywood argues that, as Prime Minister, Adolfo Suárez, rather than his foreign affairs minister, Marcelino Oreja, tended to take the initiative on international matters (Heywood, 1995a: 262). Suárez’s UCD successor as Prime Minister, Calvo-­Sotelo, was able to rush through NATO membership during 1981, despite major crises within the ruling party and opposition misgivings, whilst Felipe González further illustrated the political dominance of the Prime Minister when he reversed his own position on the Alliance (Heywood, 1991: 12). González’s particular interest in foreign policy, and especially European affairs, further reinforced the importance of the Prime Minister in the foreign policy-­ making process. The dominance of the Prime Minister was also underpinned by the fact that the PSOE maintained an absolute majority in parliament until 1993. Little criticism of policy was levelled by the PSOE itself, whose role in parliament with respect to the fields of foreign and security policy was more that of a cipher rather than an effective vehicle for critical debate. Parliamentary opposition to the PSOE was relatively ineffective and in any case muted by the fact that the major political parties were pro-­European. The boom experienced by the Spanish economy between 1986 and 1992 also served to invalidate criticism of further Spanish European integration. Although the deflationary effects of the EMU project were criticised by the leadership of the Communist-­dominated Izquierda Unida (IU), even that party tempered its disapproval by stressing its overall support for Spanish membership of the EU. Overall, parliamentary scrutiny of policy-­making in these policy areas was negligible. José María Aznar’s role during the diplomatic imbroglio with Cuba within months of the PP’s general election victory in 1996, which will be considered below, suggests that the power of the Prime Minister in the reassessment of foreign policy positions remained considerable.

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The specialised agency of the State for foreign policy is the Ministry of Foreign Affairs, under mandate from the Prime Minister, whose control over external affairs is facilitated by his specialised policy staff (Gillespie, Rodrigo and Story, 1995: 204). Vilanova highlights the role of the administrative apparatus directly linked to the Prime Minister’s Office. Under the PSOE, a body known as the Prime Minister’s Research Office (Gabinete de Estudios de la Presidencia) was set up in the Prime Minister’s official residence under the prominent diplomat Carlos Alonso Zaldívar, to co-­ordinate the work of foreign policy experts. Certain individual advisers, such as Juan Antonio Yáñez, are also said to have had a strong influence on Felipe González (Vilanova, 1997: 443). A small group of advisers therefore appears to have had a significant role in decision-­making. Although nearly all the ministries have units dealing with European affairs,2 the greatest number is located within the Ministry of Foreign Affairs, which formulates Spain’s negotiating position with respect to the EU and, by holding meetings with other ministries, seeks to ensure that no single ministry defends its own interests rather than the interests of the country as a whole. Under the PSOE government, the department within this ministry dealing exclusively with European Affairs was the Secretariat of State for the European Union (SSEU).3 Co-­ordination of policy between the central government ministries is organised by the SSEU. Every fortnight there is a session of the Interministerial Conference for Community affairs (Conferencia Interministerial para Asuntos Comunitarios  – CIAC), which includes representatives of every ministry. The CIAC is used to resolve disagreement between ministries; in the event of disagreement, the matter is submitted to the Committee for Economic Affairs (Comisión de Asuntos Económicos). With respect to co-­ordination of policy between Madrid and Brussels, this is achieved via regular contact between the Ministry of Foreign Affairs and the Spanish Permanent Representation to the EU (Newton with Donaghy, 1997: 329–30, 335). As Heywood has noted, EU policy co-­ordination has been one area in which it is possible to identify the existence of a policy network, with a powerful ethos of defending Spanish interests channelled through strong personal contacts between the Permanent Representative (REPER), the SSEU and the Ministry of Foreign Affairs (Heywood, 1999: 116–17). The Defence Ministry executes defence and security policy. The military underwent extensive and far-­reaching reforms under the PSOE during the party’s first decade in office. Civilian supremacy was consolidated and modernisation measures were systematically implemented. Military budgets were increased in 1982 and 1984 and far-­reaching changes were made to the command structure and deployment of the armed forces. The position of the Prime Minister and Defence Minister in relation to defence policy was formalised, placing them in control of the decision-­making process and clarifying the ambiguous relationship inherited from previous reforms carried out by the UCD government in 1977. Moreover, the position of Chief of Defence Staff was created to facilitate collaboration between the armed forces and the Defence Minister. The overall result of the PSOE’s reforms was the normalisation of relations between the civil and military

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estates, with the latter fully accepting the former’s political authority (Heywood, 1995a: 62–5). To sum up, it is important to stress the continued centralisation of the policy process around the Prime Minister, who remains the key figure in the field of foreign affairs. Arguably, during the PSOE’s final years in office, Felipe González became more interested in international affairs than in domestic political matters, ‘apparently seeking to assume a role similar to that of the French President’ (Heywood, 1995a: 195).4 The most important institution with respect to policy was the Ministry of Foreign Affairs, and within that ministry, the SSEU. The Spanish Permanent Representative in Brussels was also a bureaucratic actor of significance. The Prime Minister’s Research Office (Gabinete de Estudios de la Presidencia) also appeared to have been influential, although it is difficult to gauge the extent of its influence on the policy process. These actors and institutions collectively comprised the ‘core executive’ with respect to the policy process in the field of foreign affairs under the PSOE. The importance of the SSEU, particularly during the PSOE’s final years in office as ‘Europeanisation’ of foreign policy became more marked, may be gauged by the fact that Carlos Westendorp, Foreign Minister in Felipe González’s last cabinet, had previously been Secretary of State for European Affairs. Similarly, a previous incumbent, Pedro Solbes, European Commissioner for Economic and Monetary Affairs from September 1999, was Finance Minister during the PSOE’s final term in office (1993–96). The close institutional linkage between the Ministry of Foreign Affairs and the Ministry of Finance and the Economy is therefore apparent. Even before Spanish EC accession was secured, Leopoldo Calvo-­Sotelo, UCD Prime Minister between 1981 and 1982, had previously served as Minister for EC relations under Adolfo Suárez. The PSOE and European integration after Accession, 1986–96 As we saw in Chapter 3, membership negotiations were extremely protracted, only being brought to a conclusion in May 1985. The following month the Spanish Congress of Deputies gave its unanimous approval to the Accession – the first time in European Community history that an Accession Treaty had received unanimous ratification. The political support given to EEC membership was particularly important given that the final conditions of entry were in some respects harmful to Spanish national interests (Gillespie, 1996: 160). Spain’s EEC competitors were given access to Spanish markets and her external tariff on industrial goods from third countries was to be reduced to the Community average within a seven-­year period. The most competitive sectors of Spanish farming would not be phased into the Common Agricultural Policy (CAP) for ten years.5 Furthermore, Spanish citizens had to wait seven years before enjoying EEC rights on free movement of labour between member states (Harrison, 1993: 28). The near absence of national debate on the economic consequences of Spanish EEC membership has been viewed as being a factor in the Spanish negotiating

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team’s acceptance of such a relatively harsh deal (Harrison, 1992: 205). It has also been suggested that the Socialist government’s desperation to secure EEC membership in order to strengthen its hand at the forthcoming NATO referendum forced the Spanish negotiating team to act with undue haste during the final stage of negotiations (Montes, 1993: 84–5). Moreover, it has been argued that the formation of an agricultural commercial policy was also adversely affected by the negotiating team’s eagerness to conclude a deal. Opposition to the deal from Spanish farmers focused on the charge that it ‘seriously undermined Spain’s ability to expand her exports of her most competitive agricultural products’ (Lieberman, 1995: 272–3). It has even been suggested that Spanish negotiators were prepared to make temporary concessions on agriculture so as to obtain a better deal for their fisheries sector (Harrison, 1992: 207). This is not to say that the deal actually reached on fisheries has not come in for stringent criticism (García Alonso, 1993: 263). Well-­founded criticism of particular details of the Accession Treaty was of little interest to the overwhelmingly pro-­European Spanish population. After an extremely problematic series of negotiations, Spain had finally been admitted into the European club. Any qualms about the exact terms of membership were swept away in the euphoria of accession. The economic recovery which coincided with Spanish EEC accession also served to mute criticism until economic recession arrived in 1992. Rather than being a side issue subordinate to the main task of the transition to democracy, as it had been under the UCD, European integration became the key to the consolidation of that democracy under the PSOE. As Maravall has argued, ‘Membership of the European Community was the last aspect of democratic consolidation: it was also a central one as it anchored democracy in a favourable political and economic context’ (Maravall, 1992: 23). Moreover, Europe offered the PSOE the means to secure its own political fortunes for the next decade. Economic growth, political liberalisation and diplomatic influence were all closely connected to Spain’s entry into Europe. Following its desencanto, or disillusionment with political affairs under the UCD’s latter period in office, the Spanish population was receptive to the cambio or ‘change’ offered by the PSOE, particularly if the character of that change was to be determined by the demands of Europe, which had long since been viewed by Spaniards as being virtually synonymous with concepts such as progress, tolerance, democracy and ‘modernisation’. The extent to which Europe could retain its capacity to deliver the means for Spain’s ‘modernisation’ was therefore a major factor in the PSOE’s avoidance of the electoral defeats suffered by the majority of the PSOE’s European sister parties during its period in power. As we saw in Chapter 3, the exceptional period of economic growth enjoyed by Spain in the five-­year period following the country’s entry into the EC established a link in the Spanish psyche between economic success and the process of ‘modernisation’ facilitated by Spanish EC membership. Barbé’s description of the period 1986–91 as ‘Spain’s Golden Age in Europe’ is therefore apt (Barbé, 1999: 156).

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With the economy booming during the late 1980s and early 1990s, the PSOE was able to establish Spain as one of the most enthusiastic adherents of initiatives aimed at further deepening the process of European integration. The Single European Act (SEA), signed in 1986, the same year that Spain joined the EC, received the full backing of the PSOE government and was also approved unanimously by the Spanish Congress of Deputies. The PSOE was also pleased to note the SEA’s formalisation of European Political Cooperation (EPC), an attempt to promote greater co-­ordination of foreign affairs between EC member states. The PSOE’s endorsement of a European security policy was also signalled by the Spanish government’s signing of the Protocol of Accession to the WEU in November 1988. It was during Spain’s first EC Presidency, specifically at the Madrid European Council Meeting in June 1989, that approval was given to the EC’s report on EMU; also during the Council Meeting, the Spanish government announced its decision to place the peseta in the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS). Spain was also a signatory to the Schengen Agreement on border controls, which came into force in 1995. The Maastricht Treaty, signed in 1992, also received the full support of the PSOE government and was almost unanimously endorsed by the Congress of Deputies – only three deputies belonging to Herri Batasuna, the political wing of the Basque Terrorist group, ETA, voted against the treaty, whilst a handful of Izquierda Unida deputies abstained. Felipe González justified his support for the Maastricht Treaty in the following terms: In signing the Maastricht Treaty, Spain has committed itself to work for the implementation of the programme established in the Treaty for Europe and it has set itself the aim of being ready to form part of the first group of countries carrying out full monetary union [. . .] This goal is not due to any naive or unrealistic pro-­European fervour, but rather the reasoned conviction, already partly confirmed in recent years, that it is possible and that it is the best thing for the Spanish people. (Quoted in Barbé, 1999: 156)

Leaving to one side the harmful effects on domestic manufacturers and exporters of the macroeconomic policy mix employed by the PSOE government to maintain the inflow of foreign investment, an issue which we have already considered in greater detail in Chapter 3, Spain’s membership of the EC up until this point must be judged to be a success. Having won three successive overall majorities between 1982 and 1989, the PSOE entered the 1990s with a vaunted strength and unity which served as the basis of Spain’s political stability. This stability was crucial as Spain sought to re-­establish itself within the international community under a Prime Minister, Felipe González, who was establishing a reputation as a shrewd international statesman. Calculating that a country of intermediate size and status, such as Spain, was unlikely to benefit from a mere increase in intergovernmental co-­operation, the PSOE government established Spain as an active adherent of further deepening the European integration process (Gillespie, 1996: 160). This support meant acceptance of the toughest challenges, including participation in the EMU project. The apparent strength of the Spanish economy

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during the five-­year period following the country’s entry into the EC meant that any such challenge appeared realistic, and indeed, in Spain’s best interests. As long as the economy boomed, support for the European ‘project’ appeared to be assured, both within the Spanish party system and within Spanish society as a whole. As we will see in the final section of this chapter, Spain under the PSOE had also begun to establish a reputation within the EU as an innovative actor with regard to facilitating the EU’s relations with the two traditional regions of Spanish foreign policy interest, the Mediterranean and Latin America. Realistically assessing Spain’s limited capacity to enforce its policy goals in the two regions, the PSOE sought to ‘co-­opt’ the EU as a considerably more effective surrogate for policy implementation, whilst at the same time enhancing Spain’s prestige within the EU as a facilitator for enhanced EU international engagement. Maastricht witnessed a more marked emphasis on the part of the Spanish government on economic and social cohesion. The downturn in the international economic situation in the early 1990s made this demand all the more pressing as increasing pressures were placed on the Spanish economy in the form of the stringent convergence criteria agreed at Maastricht. As the chief advocate for the establishment of the new Cohesion Fund at the December 1992 Edinburgh Council Meeting, Felipe González successfully obtained for Spain over half of the 15 billion ecus (at 1992 prices) made available to the Fund, the balance going to Portugal (18 per cent), Greece (18 per cent) and Ireland (9 per cent). The Fund was intended for use in environmental and transport projects.6 It was also agreed at Edinburgh to double the financial resources available to the Structural Funds, of which Spain also obtained the lion’s share: 34,443 million ecus between 1994 and 1999, over half as much again as the second largest recipient, Germany, which received 21,724 million ecus (European Commission, 1996: 4). This sum was equivalent to 1.4 per cent of Spain’s GDP during the period (Barbé, 1999: 165). In 1996, the year the PSOE left office, Spain was the largest net recipient of EU transfers, obtaining 33.2 per cent of resources (El País, 1998: 69). In all, Spain obtained 27 per cent of the EU’s total structural resources (Structural Fund and Cohesion Fund combined) between 1994 and 1999 (Barbé, 1999: 193). The importance of fiscal transfers from Brussels to Spain was as much political as economic. The amount obtained was relatively small compared with Spain’s national and regional budgets. Spanish public opinion nevertheless considered them to be crucial to compensate for the opening of Spain’s markets to the exports of more advanced EU member states. Given that Spain had both a growing trade deficit with the rest of the EU and lower levels of income, Spanish policy-­makers were influenced by the judgement that Spanish public opinion would not accept being a net contributor to the Community budget even after enlargement to the East (Granell, 2001: 70). Public opinion was therefore a major constraint on policy-­making under the PSOE and continued to be so under the PP government between 1996 and 2004 with respect to the very same issue of maintaining the flow of EU transfers.7 Salmon indicated that the high levels of the EU’s financial

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transfers to Spain would not survive further EU enlargement (Salmon, 2001: 29). The effect on public opinion of any changes to these arrangements is therefore likely to be significant – hence the PP government’s equally tenacious defence of continued financial transfers after its general election victory in 1996. Indeed, the issue dominated the 1996 Intergovernmental Conference (IGC). In defending the Spanish stance, Aznar adopted Felipe González’s strategy of presenting Spanish demands within the context of overall EU interest. For instance, he defended the deal reached on EU finance at the Berlin summit in March 1999 as being ‘positive for the European Union and positive for Spain’ (El País (International Edition), 30 March 1999: 23). The EU Commission encourages direct contact with the regions, especially in regard to its Structural Funds. Indeed, the administration of the Structural Funds has created a new role for regional government, especially at the application and implementation stage (Heywood, 1995a: 164). The profile of Spain’s Autonomous Communities with respect to the EU was therefore enhanced, a question we will consider in more detail at the end of this section. The results obtained by Felipe González at Edinburgh indicate his success at forging alliances with other EU member states in order to pursue his government’s policy aims. González was the first leader of a Western European country to give his unequivocal support to Chancellor Helmut Kohl over German re-­ unification (Viñas, 1999: 263). As we have seen, this support proved useful at both Maastricht and the 1992 Edinburgh Council Meeting where Kohl’s backing was crucial. As we will also see below, González was even prepared to establish an unlikely alliance with the UK in support of Spanish demands. The maintenance of Spain’s status as a net beneficiary from the EU budget in the decade between Spain’s entry into the EC and the PSOE’s departure from office (1986–96) was one of the most important items on the PSOE’s European agenda. This feat was achieved, with the exception of 1986, whilst annual transfers to Spain from the EU budget averaged just over 0.7 per cent of Spain’s GDP (Newton with Donaghy, 1997: 341). Following the onset of recession in the early 1990s, during the PSOE’s final years in office, the PSOE’s discourse became more firmly focused on the defence of national interests (Gillespie, 1996: 160–3; Barbé, 1999: 167). The prospect of EU  enlargement to Eastern Europe, shifting the EU’s attention away from Southern Europe, contributed towards this shift. The PSOE nevertheless remained both politically and economically committed to European integration and did not countenance any relaxation of the convergence criteria in order to qualify for EMU. Spain would make every effort to satisfy the requirements – ­provided that the country continued to obtain support in the form of financial transfers from the EU. Indeed, the combination of the PSOE’s unwavering efforts to qualify for EMU – seemingly against the odds in the light of the economic downturn of the early 1990s – and its attempts to maintain the flow of financial assistance from Brussels, constituted the key feature of European policy during the PSOE’s remaining period in office. The EU’s enlargement plans contributed further to this emphasis.

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With EU accession negotiations taking place with the four European Free Trade Association (EFTA) countries during the early 1990s (Sweden, Finland and Austria joining in 1995, with Norway’s voters eventually opting to remain outside) and the prospect of enlargement to Eastern and Central Europe becoming an increasingly important item on the EU’s agenda, the PSOE’s task of maintaining the level of EU financial support for Southern Europe became all the more challenging. The obstructive stance adopted by Felipe González at the 1992 Edinburgh Council Meeting in order to secure the maintenance of financial transfers from the EU and his readiness to form an unlikely alliance with the UK over qualified majority voting in March 1994, threatening to block enlargement unless adequate safeguards were implemented, were both examples of the primacy of national interest over the PSOE’s more accustomed commitment to a further deepening of the European integration process. The Autonomous Communities and the European Union A key aspect of this study has been the increasing complexity of policy-­making in relation to the EU. The higher profile adopted by the Autonomous Communities with respect to the EU – particularly during the PSOE’s final years in office under Felipe González – was a further element of this complexity. The question of the degree to which Spain’s Autonomous Communities should participate in the elaboration of the Spanish government’s policy towards the EU has been fiercely debated since Spain’s membership was secured in 1986 and several Autonomous Communities have seized the opportunity to establish a profile within the EU arena in recent years. The evolution of relations has been characterised by two elements: a shift on the part of the relevant actors towards more flexible positions as a result of exogenous factors8 and, above all, central government’s reliance on the parliamentary support of nationalist parties to remain in power. The Conference for European Community-­related Affairs (Conferencia para Asuntos Relacionados con la Comunidad Europeas – CARCE) was established informally in December 1988. Participants included the Minister for Public Administration, the Secretary of State for the European Community, the Secretary of State for Territorial Administrations, and a minister from each Autonomous Community (Morata, 1997: 145–6). The CARCE was provided with greater clout following the signing of the autonomous pact between the government and the PP in 1992.9 The agreement provided for the need to extend the participation of the Autonomous Communities in decision-­making related to the EU. In addition, the CARCE was institutionalised and its organisation was enhanced. All the Autonomous Communities agreed to this development, with the exception of the Basque Country and Catalonia, who were dissatisfied with the terms of the autonomous pact and who preferred to deal with the government on a bilateral basis, particularly via the Secretariat of State for the European Communities.10 The final declaration highlighted the CARCE’s three main functions:

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1 information and discussion about the development of the process of European integration; 2 the institutionalisation of the regions’ participation in EU affairs; 3 support and deepening of regional participation in the various EU policies via the sectoral conferences. Both the central government and the Autonomous Communities committed themselves to facilitate the exchange between ­themselves and via the sectoral conferences of all relevant information. In accordance with the agreement, the degree of intensity and the specific content of the Autonomous Communities’ participation is dependent on the level of competences undertaken by the latter on each issue. In the event that an EU issue affects the exclusive competences of the State, central government is only obliged to keep the Autonomous Communities informed of the stance which it opts to adopt; if competences are shared and an agreement has been reached on the stance put forward at the Council, this agreement will be determinant with respect to establishing the Spanish negotiating position; finally, if the competences are legislative and exclusive to the Autonomous Communities and the Autonomous Communities have agreed a common position, the government will be bound to consider it with respect to establishing the negotiating position of the State (Morata, 1997: 146–7). There is also further evidence to suggest that the Autonomous Communities were able to strengthen their position in the EU from the early 1990s:

• In 1994, the Constitutional Court ruled (during the run-­up to the European

elections) that the ‘historic nationalities’ could operate their own ‘consulates’ in Brussels and elsewhere. The ‘consulates’ would have the right of direct negotiation with EU officials on policy issues of specific concern to their regions. • Regional organisations such as the Patronat Català Pro-­Europa, Interbask, and Fundación Galicia also successfully filtered information to and from the EU, Catalonia, the Basque County and Galicia for many years. • Many regional development programmes such as those for the trans-­frontier zones between Galicia and Portugal generated some verifiable economic spin-­offs. • In the EU Committee of the Regions, Spanish regions were represented by a strong team. Of its twenty-­one initial Spanish members, seventeen were regional presidents who offered some possibility of influence at the higher levels of EU decision-­making for the regions (Gibbons, 1999: 33–4). The effects of these developments on the autonomy of the government with respect to the policy process were significant. Policy-­makers in future are likely to be faced with the challenge of forging sub-­state compromises so that the Spanish capacity to interact with Brussels is not impaired (Viñas, 2001: 89). The PSOE and security policy The PSOE’s defence and security policy before the party gained office in 1982 was dominated by the questions of Spain’s bilateral relationship with the US and the

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question of NATO membership. The PSOE’s pronouncements on the US and NATO were notable for a marked anti-­Americanism which had been a feature of party rhetoric since the 1953 Madrid Pacts cast the US in the role of saviour of the Franco regime. Speaking in 1981 the PSOE leader, Felipe González, illustrated this sentiment when he argued that, ‘America helped Europe to free itself from Fascism, and it not only did not help Spain but condemned it to dictatorship for many years’ (quoted in Treverton, 1988: 126). At its Congress in 1976, the PSOE criticised the Spanish–US military bases agreements as having ‘jeopardised national territory as well as the foreign and domestic policy of the Spanish state’ (PSOE, 1976: 15). The PSOE had no monopoly in anti-­Americanism which spread ‘right across the political spectrum short only of the unreconstructed right’ (Treverton, 1988: 126). The PSOE’s uncompromising stance on the US must therefore be viewed as being in line with national sentiment.11 The majority feeling in Spain, which had been conditioned by resentment at the Franco-­sanctioned presence of US military bases on Spanish soil, was that the threat of a Soviet military strike on Spain was non-­existent and that membership of the Alliance would actually make the country more, rather than less, vulnerable to attack. Put bluntly, anti-­Americanism was a more significant factor in Spanish public opinion than anxiety about Soviet military intentions. It affected Spanish attitudes towards international affairs and shaped the public’s stance on the question of Spain’s membership of NATO. Therefore, whilst all major political forces in Spain had backed European integration, the question of the country’s membership of the Alliance proved to be deeply divisive. Before the PSOE obtained office, its opposition to NATO was unambiguous. At its Congress in 1974, the party voiced its opposition to ‘the existence of military blocs, given that these favour the maintenance of the status quo to the detriment of the oppressed peoples of the world’ (PSOE, 1974: 4). Opposition to military blocs was repeated at the PSOE’s 1976 Congress (PSOE, 1976: 14), whilst in its programme for the 1977 general election the party stressed its opposition to ‘the signing of any treaty or alliance, bases or military relations, as well as to the renewal of those already in existence, which does not meet with the approval, in Parliament or by referendum, of the Spanish people’ (PSOE, 1977: 26). Similarly, in its programme for the general election held two years later, the party voiced its opposition ‘to the linking of Spain to any of the military blocs, due to the limitation this implies as regards our independence and national sovereignty’ (PSOE, 1979a: 17). Interviewed in July 1980, Felipe González commented, ‘I can confirm that the PSOE’s foreign policy has a clear active neutralist inspiration’ (quoted in Gutiérrez and de Miguel, 1989: 317). The establishment and consolidation of the PSOE as the main opposition party at the 1977 and 1979 general elections nevertheless encouraged the party leadership to adopt less confrontational positions. With a realistic prospect of reaching office, the leadership found it advisable to tone down the party’s rhetoric so as to broaden its electoral appeal. In 1978, the party’s secretary of foreign relations, Luis Yáñez, commented, ‘we have moved on from exclusively pursuing a foreign policy of the party towards developing a foreign policy of the State’ (quoted in

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García i Segura, 1986: 51). González’s victory over the issue of dropping Marxism from the party’s self-­description the following year furthered this process. The PSOE’s readiness to adopt a radical stance in the foreign and security field during the early years of the transition to democracy had nevertheless not prevented the development of a general consensus on foreign and security policy amongst the main political forces during these years. Agreement was based around consolidating democracy, avoiding divisive positions which might threaten the democratic process, reinforcing Spain’s role within the international community and obtaining general political advantages for Spain by maximising its strategic situation (Aldecoa Luzarraga, 1994: 163). The specific elements of the consensus were based on gaining admission to the EC, not placing the bilateral agreements with the US in question and not proposing the country’s entry into NATO (Alonso Zaldívar and Castells, 1992: 206–7). This consensus came to an abrupt end when, in June 1980, the UCD government’s foreign minister, Marcelino Oreja, informed parliament that Spain would be seeking admission to NATO. For the first time since the restoration of democracy, foreign affairs became a highly politicised issue (Heywood, 1995a: 263). The PSOE’s concentration on the NATO issue following the attempted coup d’état in February 1981, was particularly important to the party given that foreign policy matters offered the sole means of confronting the government without destabilising the democratic system (Rodrigo, 1995: 60). Domestic political factors rather than strict defence considerations had been the chief factor behind the UCD government’s decision. As Preston and Smyth note, ‘it is interesting that even proponents of Spain’s entry into NATO accepted that the decision was primarily political and could not be calculated in exclusively military or monetary terms’ (Preston and Smyth, 1984: 22). The failed coup d’état of 23 February 1981 had provided a graphic reminder of the readiness of the Spanish armed forces to intervene in domestic politics and the UCD government’s hope that NATO membership would help wean the military off this tendency lay behind the haste with which membership was secured in May 1982. In addition, the question of NATO membership became linked to wider foreign policy objectives, particularly Spain’s application to join the EC (Pollack and Hunter, 1987: 156). It was widely felt in Spain that Germany’s role in supporting Spanish EC membership would prove decisive in neutralising the obstructive stance adopted on the question by the French, who were particularly concerned about the effects which Spanish EC membership would have on French agriculture. In short, it was hoped that entry into NATO would help secure German sponsorship of Spanish EC integration. In essence, NATO membership now constituted a central element in a process of ‘modernisation’ which was already becoming almost synonymous with ‘Europeanisation’. As Heywood argues, ‘in practice, it became impossible to separate the issues of EC entry and NATO membership . . . Once the dual consensus had been shattered by the precipitate moves to join NATO in 1981–2, negotiations over EC entry could not be fully disentangled from the NATO issue’ (Heywood, 1995a: 264).

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The UCD government’s likely defeat at the hands of the PSOE at the next general elections, which had to be held no later than 1983, also persuaded ­Calvo-­Sotelo to secure NATO membership quickly so as to bequeath its likely PSOE successor a fait accompli on NATO. Speaking in 1984, the former Spanish Prime Minister commented, ‘I suspected that the Atlantic decision would be particularly difficult for a government in which sectors of the left which might gain office would surely participate . . . The decision to place Spain within the Alliance would not be easy for a left-­wing government (or for a left-­wing coalition), although such a government might accept the legacy of the past’ (quoted in Viñas, 1986: 77). The party’s rejection of the UCD government’s efforts to link entry into the NATO Alliance with the country’s EC membership was re-­affirmed in a party document published twelve months before the party’s 1982 election victory, entitled 50 Preguntas Sobre la OTAN (50 Questions on NATO), in which the party argued that it was disingenuous of the UCD government to link Spain’s entry into NATO with the EC (Arenal and Aldecoa, 1986: 315–16). At its 29th Congress in October 1981, a resolution was passed which unequivocally set out the PSOE’s opposition to Spain’s integration into NATO and cited four arguments for remaining outside the Alliance:

• NATO’s failure to guarantee Spain’s territorial integrity; • NATO’s unsuitability with respect to Spanish security requirements; • NATO participation increased the risk of the nuclear destruction of the Spanish people;

• NATO expansion to include Spain would provoke a reaction from the Warsaw Pact and increase tension and the risk of war in Europe. (PSOE, 1981: 34)

The party nevertheless pledged to hold a referendum on the issue when in government and took pains to stress that its stance did not signify a rejection of a Spanish role in the defence of the West. The PSOE aimed to implement an appropriate defence system more responsive to national interests, whilst the party voiced its aspiration to bring about the total disappearance of foreign bases on Spanish territory (PSOE, 1981: 34). Despite the PSOE’s opposition to NATO, it is significant that the party made no attempt to persuade other European Socialist and social democratic parties to vote against Spain’s incorporation into the Alliance in May 1982 when, in accordance with NATO procedure, Alliance members were called on to give parliamentary ratification of the enlargement (García Santesmases, 1993: 104). The PSOE’s dispute with the UCD government over NATO membership never led it to export the issue outside of the domestic political arena, indicating that the party was aware that its stance on the Alliance was unlikely to gain support in other European countries, even from the PSOE’s Socialist and social democratic counterparts. In its programme for the October 1982 general election, the party reaffirmed its opposition to ‘the politics of military blocs’, stated that a PSOE government would freeze Spain’s integration into the Alliance’s military structure and repeated its

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1981 commitment to hold a referendum on the question of NATO membership, although without specifying a date (PSOE, 1982: 46–7).12 The pledge of a referendum on NATO appeared to be politically astute in the run-­up to the polls, bearing in mind that it is reckoned to have helped earn the PSOE over a million votes in the election (Gillespie, 1989: 417–18). Having considered the development of the PSOE’s policy positions in the field of defence policy, we will now move on to analyse the evolution of the PSOE government’s handling of policy in government. As we will see, European imperatives made a significant contribution towards the PSOE leadership’s volte-­ face on Spanish membership of NATO once the party reached office. Described as ‘one of the most important issues in the definition of the Socialists’ identity’ (García Santesmases, 1993: 95), the PSOE’s re-­definition of policy on NATO will be viewed as part of the Socialists’ general adaptation of policy to European norms when in government. This will be followed by an examination of how, once Spanish membership of NATO was placed beyond question, the Socialists’ identification with European integration led to their involvement in subsequent institutional developments in the European security field. We will consider the changing perception of the Socialist government’s relationship to European security and how this has conditioned institutional choices and strategies. Throughout the PSOE’s period in office there was a clear institutional progression in the Spanish security relationship. The debate on Spain remaining within NATO which dominated the party’s first term in office was followed by the Socialists’ interest in the revival of the WEU, and latterly, their participation in the Common Foreign and Security Policy (CFSP) during the PSOE’s last years in office in the 1990s. In all these developments, the PSOE’s identification with European integration played a key role. We will firstly examine the relevance of European integration on the government’s volte-­face on NATO. We will then analyse the evolution of the PSOE government’s defence relationship with the US before moving on to consider the Spanish government’s interest in initiatives aimed at promoting a more pronounced European identity in the security field. A key focus will therefore be an assessment of the international pressures and constraints bearing on the PSOE government with respect to the elaboration of a national security policy. Realpolitik par excellence: the PSOE government’s U-­turn on NATO The PSOE swept into power in the October 1982 general election armed with several slogans. The party’s electoral programme had been entitled Por el cambio – ‘(Vote) for Change’ – echoing the party catchword successfully employed by their French and Greek counterparts the previous year (changer la vie and allaghi respectively). Although one of its slogans on the NATO issue had been the ambiguous ‘¡OTAN, de entrada, no!’ (‘NATO, straightaway, no!’), another, ‘Nosotros saldremos por mayoría simple’ (‘We’ll leave by a simple majority’) alluding to the PSOE’s promise of a referendum on the issue of NATO membership, appeared to be unequivocal.

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Felipe González himself added to public confusion on the issue. In an interview during the general election campaign, González had argued, ‘I am not anti-­NATO and I want this to be made clear. The thing is that I’m against Spain not gaining anything positive from its integration’ (quoted in Gutiérrez and de Miguel, 1989: 323). Once office was attained, the party’s record on the Alliance proved problematic as the new government found itself exposed to various pressures, not least of which were those connected with the satisfactory completion of EC negotiations, which favoured Spain remaining within the Alliance. The PSOE Foreign Minister, Fernando Morán, has nevertheless stated: Throughout the whole process of negotiations between 1982 and 1985 not a single pressure was exerted by the Western powers. No conditions were imposed. When our entry into the Community was being ratified by the other member states, the decision to hold the NATO referendum had already been announced. I said that the referendum should be consultative, but the Prime Minister insisted that it should be binding. And despite the fact that there was a possibility that we might not remain in the alliance, no government sought to withdraw or condition Spain’s EC Accession Treaty. (Burns Marañón, 1996: 351–352)13

The PSOE leadership came to appreciate that ‘it was one thing to oppose Spain’s joining NATO, quite another to withdraw from the organisation’ ­(Mujal-­León, 1986: 226). Fernando Morán, who was himself ideologically opposed to NATO, nevertheless sought to sooth the anxieties of Spain’s Alliance allies when he gave the assurance in December 1982 that although the new government had frozen Spanish integration into the military structure, it would nevertheless act like ‘a loyal, cooperative and solid member’ (quoted in Yáñez-­Barnuevo and Viñas, 1992: 97). The unpopularity of continued Spanish membership of the Alliance amongst the Spanish population was evident from the government’s own opinion polls. Fifty-seven per cent of those polled in March 1983 opposed membership, against just 13 per cent in favour (Mujal-­León, 1986: 224). Ironically, the strength of feeling against NATO within the country owed a good deal to the PSOE’s own efforts as it seized on the issue as a major force for electoral mobilisation. As Tulchin argues, ‘once in power, the PSOE was hoist on its own petard as it found itself hard pressed to alter the negative attitudes it had done so much to foster’ (Tulchin, 1988: 161). Although, during its early period in office, the government forced the NATO issue away from the centre-­stage position which it had occupied during the general election campaign, there were nevertheless indications that Felipe González’s stance on European security matters was changing within months of his becoming Prime Minister. During an official trip to Bonn in May 1983 González expressed his understanding of NATO’s deployment of Cruise and Pershing II missiles in West Germany and elsewhere in Europe, even though the German Social Democratic Party opposed the policy; later that month Spain also purchased 72 F-­18A fighter bomber aircraft from the US. However, an unequivocal end was only placed to what became characterised

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as a policy of ‘calculated ambiguity’ when González gave his state of the nation address to the Congress of Deputies in October 1984, in which he set out his government’s security strategy. The most important points of what became known as the Decalogue14 were:

• Spain

would maintain its existing position within NATO, albeit outside the Alliance’s military structure; • the bilateral defence relationship with the US would be maintained, although the US military presence in Spain would be reduced; • Spanish territory would remain denuclearised. (Arenal and Aldecoa, 1986: 246–50)

These three provisos featured in the eventual referendum put before the Spanish electorate in March 1986. González’s change of opinion on NATO was by no means shared by the bulk of the party membership, or even by all the other members of the leadership, but such was González’s authority that the party’s 30th Congress endorsed his stance two months after the Decalogue. As Cotarelo argues, ‘if it had been left up to the party members, Spain would have left NATO’ (Cotarelo, 1992: 231). By this stage PSOE Congresses were already in the process of becoming a cipher for the government, offering it total freedom to act on membership of NATO. According to Marquina, the 30th Congress was ‘completely controlled by the government’ (Marquina, 1991: 41). The party leadership’s strategy over the next two years – of using European integration as a prime justification for remaining within the Alliance was nevertheless particularly effective in winning over a party membership, which, although largely sceptical on NATO, was particularly receptive to appeals to its pro-­European sympathies. Featherstone also stresses the elitist influence on the PSOE’s European policy, whereby the party rank-­and-­file obeyed directions from above. The leadership was therefore able to enjoy considerable domestic freedom, in political terms, in its relations with Europe (Featherstone, 1989: 268). The PSOE leadership’s volte-­face on the issue can be explained by several factors. Firstly, the leadership argued that prior to winning power, the party had not had access to all the relevant information necessary to reach a balanced and definitive position on the question. Having taken on the burden of governmental responsibilities, the PSOE leadership claimed that it was only now capable of understanding the implications of withdrawal on foreign and defence policy (Pollack and Hunter, 1987: 168). However, the PSOE leadership’s U-­turn went beyond foreign and security concerns. Writing about the run-­up to the referendum, Heywood argues that ‘at no point in the campaign did the government defend its pro-­NATO position in terms of defence and security policy; instead, emphasis was placed on the potential political and economic costs if Spain were to say no to NATO . . . the military implications of NATO membership were subordinated to domestic political considerations’ (Heywood, 1995a: 267–8). Marquina similarly argues that ‘the strategic debate was scarcely touched upon’ during the referendum campaign (Marquina, 1991: 43). Essentially the PSOE leadership believed that the country’s goal of ‘modernisation’

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would be put at risk by withdrawal from the Alliance. As Felipe González warned before the referendum, ‘To break our relations with the Atlantic Alliance would create a trauma, with consequences I cannot foresee’ (quoted by Share, 1989: 79). ‘Modernisation’ went hand-­in-­hand with European integration. In 1984 Felipe González argued that ‘if one shares the political, economic and institutional destiny of a group of peoples, logic suggests that one also has to share the destiny of its collective security’ (quoted in Yáñez-­ Barnuevo and Viñas, 1992: 98). González therefore viewed security issues as being an essential component in his government’s policy of ‘Europeanisation’ and in the Europe of the mid-­1980s that component was based on NATO. Days before the referendum was held in March 1986, González argued that ‘we decided to share the destiny of the European countries and we decided, I hope, to do so totally and unreservedly, believing that it is the best thing for us, that it is much better than what we have lived through: isolation, economic backwardness and lack of freedom . . . Spain will participate in the European process with all its consequences, with full rights and with full obligations’ (quoted in García Santesmases, 1993: 147). The evolution of the PSOE’s security policy was explained in a party document commissioned by the Party’s Federal Executive Committee. Entitled Propuesta de una Política de Paz y Seguridad (Proposal for a Policy of Peace and Security) and issued in December 1985, just three months before the NATO referendum, the document makes interesting reading. The section dealing with Spain’s incorporation into the Alliance under the UCD government suggests that even before reaching government, the PSOE had been little inclined to take Spain out of the Alliance. It is striking how much emphasis is given to Spain’s identification with Europe in reaching its decision to remain within NATO: The party leadership gave careful consideration to the new situation and the consequences which a possible departure of our country from the Atlantic Alliance would have on Spain, on the basis of the points: Our overall project of European construction in all its dimensions – political, economic and as regards security matters – would be compromised or, in other words, of being in Europe with all that that entails. European countries would view our departure from the Alliance as an unfriendly gesture showing a lack of solidarity. Despite our unequivocal Europeanist and Western vocation, the apprehension of neighbouring countries would be aroused with inevitable consequences for our credibility abroad and the close collaboration which has been established with them. (Arenal and Aldecoa, 1986: 360)

After emphasising that the party’s 1982 election programme did not comment in favour of Spain abandoning the Alliance, the country’s continued membership of the Alliance under the PSOE is again justified in European terms: Contributing to the peace and security of Europe is contributing to our own security since Spain is part of Europe and nothing which happens in Europe is a matter of indifference to us. In consequence, we must provide our supportive contribution to the Western system of collective security . . . The contribution to the peace and security of Europe is integral to our overall project of collaborating in the process of the construction of European unity in all its three aspects, political, economic and security (Arenal and Aldecoa, 1986: 365–6).

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In a parliamentary debate on the government’s security policy in February 1986 during the run-­up to the referendum, González again emphasised the European link with Spain’s continued membership of NATO: although there is no legal connection between the two, there is a real link in that the European Community with which we wish to share a part of our historic destiny, our political, economic and social project, bases its . . . foreign and security policy on its belonging to the Atlantic Alliance . . . I have changed since 1982 until today, and I have changed because I believe that there have been important reasons which have brought about this change. (Quoted in Yáñez-­Barnuevo and Viñas, 1992: 100)

González confirmed this socialisation process in response to a series of written questions which I forwarded to him in May 1999: There has never existed any formal link between the two [i.e. NATO and EC membership], but it was clear even before we entered the Community that if we wished to be members of the European family in the creation of an economic space it was very difficult not to be similarly engaged in the defence of Europe, which at that time basically centred around NATO; our problem was not one of imposition, but rather one of conviction, of coherence, which became clearer the more we advanced in the integration process and the more the scope of integration grew.

Ángel Viñas, the Foreign Minister’s executive adviser, gave his evaluation of the evolution of the government’s thinking on the Alliance at a conference held shortly before the referendum (Viñas, 1986: 82, 90). According to Viñas, the relationship with the Alliance had ‘never been just a foreign or security policy problem, but primarily and above all, a domestic policy problem’. Responding to a conference participant who argued that since the general election the referendum had gone from being a device to take Spain out of the Alliance to become a means of ensuring that Spain stayed put, Viñas replied that the PSOE’s change of position on the Alliance took place before the party was in government when Spain’s entry into the Alliance changed the international situation and Spanish policy. Felipe González has confirmed this claim: ‘When did I realise that withdrawing from NATO would be too traumatic for Spain’s historical process? When [the then UCD Prime Minister] Calvo-­Sotelo signed [the NATO Accession Treaty]’ (Prego, 2000: 242). The Atlantic Alliance had gone from being a creature of the US to being an integral aspect of participation in the European integration project. The PSOE’s previous concerns about NATO membership compromising Spain’s autonomy in the field of security were now dismissed as being pretentious, illusory and irresponsible. To the dismay of those opposed to Spain remaining in the Alliance, the government made full use of its control over the State media in the run-­up to the referendum, whilst the Prime Minister also placed his personal prestige on the line over the issue. The government’s position was also reinforced by the main opposition party’s recommendation that voters should abstain as a mark of protest that Spain’s NATO membership was even being placed in question. When the referendum was eventually held on 12 March 1986, voters were asked whether they supported Spain’s continued membership subject to three provisos

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first outlined in the Decalogue, namely, Spain would remain in NATO’s military structure; the US military presence in Spain would be reduced; and Spanish territory would remain denuclearised. The PSOE leadership’s margin of victory in the referendum was surprisingly clear-­cut. Of those who voted, 52.5 per cent were in favour and 39.8 per cent against, the remaining votes being either blank or void. The abstention rate was 40.26 per cent (Alonso Zaldívar and Castells, 1992: 208). Spain’s NATO membership was assured, marking a watershed in modern Spanish history. Two months after their referendum victory, the PSOE government informed the Atlantic Council and the Defence Planning Committee of the formula governing Spanish participation in the Alliance (Alonso Zaldívar and Castells, 1992: 208–9; Marquina, 1994: 375–8; Heywood, 1995a: 269–70):

• Spain would fully participate in all Alliance bodies save the integrated military structure;

• Spain would adopt a defence planning procedure similar to that of allied countries;

• Spanish forces would take part in military exercises, preferably in areas of strategic interest to Spain;

• Spanish forces would not be posted to missions under integrated NATO commands;

• Spanish military authorities would reach agreements with integrated NATO

commands for the participation of Spanish forces (under Spanish command) in joint missions with allied forces.

Negotiations continued following the PSOE’s general election victory in June 1986 and agreement was finally reached with NATO in December 1988 over six missions:

• • • • • •

to prevent the occupation of Spanish territory; naval and air operations in the Eastern Atlantic; control of the Strait of Gibraltar and its approaches; naval and air operations in the Western Atlantic; control of Spanish air space; use of Spanish territory for transit, support and rearguard logistics.

Specific aspects of this model of participation in NATO, particularly ­ on-­participation in the integrated military structure, led many observers to n consider the degree to which Spain would follow the French model (Barbé, 1998: 149–50). Spain’s presence in the Military Committee (MC), the Defence Planning Committee (DPC) and the Nuclear Planning Group (NPG) nevertheless served to illustrate the significant differences between the Spanish and French models. Furthermore, co-­ordination agreements were negotiated and signed between the Spanish military authorities and the NATO integrated commands between 1986 and 1992. It must be concluded that, over time, the PSOE leadership had come to appreciate that Spanish membership of the Alliance was part and parcel of the country’s

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integration into the Western community as a whole. Remaining in the Alliance was the sine qua non for both the technological ‘modernisation’ of the country and its entry into the EC (Mesa, 1988: 157–8). The adoption of such an ideological stance was viewed by the leadership as having been misguided, in much the same way as the party’s Marxist self-­description had been. Just as the two 1979 Congresses had marked the defining moment in the party’s abandonment of ideological positions in the domestic policy field, the party’s change of position on NATO may be seen as the key event in its adoption of policies in the foreign and security sphere more in line with Western European norms. Indeed, the NATO issue proved to be the last occasion on which a tension existed between the party and the government with regard to foreign and security policy. Henceforth, the party’s support for government policy was virtually automatic. Writing in 1991, Antonio Marquina noted that ‘The role of the parties is not very relevant; the principal opposition party still has not consolidated structural unity, and the PSOE is completely controlled by the government’ (Marquina, 1991: 62). This situation was also facilitated by the national consensus which existed with regard to the three main areas of Spanish foreign policy: Europe, the Mediterranean and Latin America. Even in the security sphere, most notably when Spain became involved in the Gulf War between 1990 and 1991, there was no significant opposition within the party to ­government policy. The redefinition of the US relationship and the PSOE’s attitude towards a European security identity The terms of the NATO referendum obliged the PSOE government to reassess relations between Spain and the US and joint negotiations began three months after the referendum (Marquina, 1991: 51). After a protracted set of negotiations, an agreement was signed in December 1988. Its most important features were:

• It would be of a purely defensive nature; • The relationship would be based on US agreements with other European countries and would therefore be more balanced than hitherto;

• The USAF 401 Wing’s 72 F-­16 aircraft would be removed from Torrejón within three years;

• A new legal framework would be established to promote Spain’s role in the management and control of the bases;

• The agreement would be for eight years. (Arenal, 1991: 59) The overall result, according to the PSOE, was a more balanced relationship after thirty-­five years of Spanish subordination. Having formalised Spain’s relations with NATO and the US, the PSOE government sought to counterbalance these ‘Atlanticist’ elements by increasingly formulating security policy in European terms. In its programme for the June 1986 general election, the PSOE’s Europeanism was particularly apparent in security matters. The party would:

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• reinforce the European pillar of security, contributing towards providing Europe with appropriate and agreed mechanisms for the best defence of its interests and specific needs; • pursue Spain’s integration into the Western European Union; • seek to ‘provide the European Community with a common foreign and security policy within the framework of political cooperation’; • establish a network of bilateral defence agreements with the countries of Western Europe which would contribute towards providing a greater degree of European autonomy in the defence field. (PSOE, 1986: 113)

The PSOE’s efforts to ‘Europeanise’ its security policy coincided with moves within the EC to develop a more coherent European foreign and security policy identity. The 1986 Single European Act, which came into force in July 1987, had added defence to foreign policy as a legitimate concern for Community ­co-­operation. The Spanish government welcomed this development together with the revival of the WEU after a protracted period of inertia. Speaking in 1987, Felipe González remarked, ‘Spain’s entry into the European Community will, sooner or later, have consequences in the area of security . . . Spain is embarking on a new process within Europe, and in it we wish to do everything possible in order to reinforce Europe’s identity in the field of security’ (González, 1987: 187). The same year, he stated that ‘the moment has come to make a reality of the idea of reinforcing the European pillar of the Atlantic Alliance’ (quoted by George and Stenhouse, 1991: 94). The government’s interest in the development of a more pronounced European defence identity can partly be explained as a response to the resilient ­anti-­Americanism in Spain, which, as has already been noted, was apparent across the political spectrum. Amongst the general population, this sentiment was reinforced by appreciation of the fact that the US had virtually guaranteed the survival of Franco’s regime with the 1953 Madrid Pacts. Suspicion of the US found reflection in PSOE party documents. One such document issued in 1985 argued that rather than leave the Alliance, ‘it was necessary to work from within NATO in order to ensure that the European nations are masters of their own destiny without submitting themselves to Washington’ (quoted in Pollack and Hunter, 1987: 168). Relations between Spain and the US were also strained during the difficult negotiations with the US between 1986 and 1988 over the US military presence in Spain. Maxwell describes the PSOE’s interest in a European defence and foreign policy forum, such as the WEU, as being an aspect of ­anti-­Americanism, ‘a continuous temptation to stick it to the Yankees’ (Maxwell, 1991: 12). This charge fails to take into account the genuine pro-­European sentiment within the PSOE which viewed WEU membership as a positive move in favour of Europeanisation, rather than a negative move against the US. Spain’s entry into the WEU was a fundamental part of the Spanish model of European security. Indeed, owing to its European character, membership of the WEU was a clear priority of the PSOE government (Barbé, 1998: 150). The PSOE therefore sought to present its interest in the development of a

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European security policy as a logical consequence of the country’s full integration into the EC and the European security system. The Spanish premier had first given official notice of his intention to take Spain into the WEU in his 1984 Decalogue and Spain became an ‘active observer’ when the Accession Protocol was signed in November 1988. The fact that the protocol was signed just a month before agreement was reached on the question of US bases in Spain served notice that the PSOE government was prepared to balance the US aspect of European defence by participation in a European security organisation. The Spanish parliament nevertheless only ratified the country’s membership in March 1990 following criticism by the WEU Assembly of the ‘ambiguity’ of Spain’s commitment to the defence of the continent (Marquina, 1994: 379–80). Due to Spain’s particular model of participation within NATO, the terms of the country’s membership of the WEU were novel in two respects: Spain would not join the integrated military command and, despite the WEU’s reliance on nuclear weapons, Spain would not station nuclear weapons on its territory in peacetime (although US vessels would not be challenged on entering Spanish ports) (Clarke, 1991: 173). The non-­nuclear conditions must be seen in the context of Spain having signed the Non-­Proliferation Treaty (NPT) in 1987. It was ironic that no sooner had Spain formalised its security relations with its entry into the WEU, than the end of the Cold War forced a reappraisal of global security matters. This development nevertheless facilitated Spain’s participation in European security and foreign policy matters. The centrality which ‘soft’ security concerns [i.e. concerns of a non-­military nature] attained on the international agenda and the relaxation of the European-­Atlanticist tension which had previously hindered common positions within the EU eased Spain’s entry into the mainstream of EU foreign and security interests (Barbé, 2001: 57). Although Heywood has argued that after the collapse of communism, the PSOE government identified the Conference on Security and Cooperation in Europe (CSCE), rather than NATO, as the best forum for the negotiation of defence issues in Europe and the Mediterranean (Heywood, 1995a: 279), he understates the PSOE’s identification of the EC as the fundamental element in European security. The Spanish Foreign Minister, Fernández Ordóñez, commented in May 1990, ‘I think it is quite clear, at least from the Spanish point of view, that we should not look towards a CSCE which absorbs, eats up, or constricts EC integration’ (quoted in Rodrigo, 1992: 111). In any case, Spain’s support for the CSCE waned after the Conference failed to maintain its impetus following the 1992 Helsinki summit (Marquina, 1994: 386). It was in this context that Spanish membership of the WEU acquired particular significance as moves to bolster European security co-­operation and decrease Europe’s military dependence on the US took on added momentum. Felipe González placed a particular emphasis on the European dimension in security at NATO’s special summit in London in July 1990: ‘The reduction of US and Canadian troops in Europe and our own European vocation make it imperative that the Europeans fortify the pillar of a renovated Alliance on this side of the Atlantic. In this scenario, the EC has a decisive role to play in building up a

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common foreign and security policy and becoming a privileged interlocutor of its North American allies’ (quoted in Rodrigo, 1992: 105–6). The Spanish Prime Minister was speaking just weeks before Iraq’s invasion of Kuwait. The war provoked by Saddam Hussein’s action provided the PSOE government with its first real test of fire since it had formalised its security relations. From the start of the conflict, the Spanish government fully supported UN Security Council resolutions and sought to co-­ordinate its response to the crisis with that of its fellow EC members, who endeavoured to base the Community’s contribution within the framework of the WEU (Alonso Zaldívar and Castells, 1992: 214). The conflict marked the first occasion on which Spain had broken its historical isolationism and the government reasoned that a sceptical Spanish public, traditionally opposed to military involvement abroad, would be more understanding if it were executed within a European body. Over two-­thirds of Spaniards, according to polls, were opposed to the war (Hooper, 1995: 105). At a WEU ministerial meeting held on 21 August 1990, Spain agreed to send a frigate and two corvettes to the Gulf as the country’s contribution to the blockade of Iraq, although the Spanish government made it clear that these forces would not take part in direct combat. The Spanish Prime Minister emphasised the significance of the decision: ‘we are not going to follow the traditional policy of not participating in the destiny of Europe or not sharing the international unanimity about the conflict. I am not for an isolated Spain. We are going to remain firm in our new role’ (quoted in Rodrigo, 1992: 102). The following month he informed the Congress of Deputies that Spain’s limited military response had been taken ‘in defence of our interests in accord with our European vocation, and in defence of our interests as members of the international community’ (quoted in Marks with Verney, 1995: 13). Although Spain’s own military involvement was modest, the support given to US forces by Spain was considerable. Thirty-five per cent of US aircraft sent to the Gulf flew via Spanish bases, making Spain the single most important European platform for the launch of US bombing raids on Iraq, whilst 237 US sea vessels moored in Spanish ports. Spanish logistical support was also given to other members of the WEU, such as France and the UK (Marquina, 1994: 381). One positive aspect of Spain’s contribution to the Gulf War was a soothing of relations between Spain and the US following the tense bases negotiations in 1988. President Bush later described Spanish support during the conflict as ­‘rock-­solid’ (quoted in Alonso Zaldívar and Castells, 1992: 214). The contrast with the US’s view of Spain five years earlier, when the Spanish government had denied the US the use of joint-­use military bases in Spain for its attacks on Libya, was particularly marked. Ángel Viñas has also noted that ‘although it may seem peculiar . . . the clear-­headed Europeanisation of Spanish strategic options [after the 1988 Base Agreement with the US] led to a drastic improvement in the US-­Spanish relationship’.15 Indeed ‘deep integration into the European mainstream’ proved to be, along with democratisation, the chief prerequisite for such an improvement (Viñas, 1999: 263). European integration had effectively proven to be the key to the PSOE’s embrace of existing security arrangements in Western Europe. The generally inadequate response of European countries to the Gulf

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War further reinforced the PSOE’s support for increased European security ­co-­operation. Felipe González concluded in March 1991 that ‘the Gulf crisis showed above all the need for a joint security policy as an indispensable part of a common defence policy’ (quoted by Maxwell and Spiegel, 1994: 56). During negotiations for the Treaty on European Union signed at Maastricht in February 1992, the PSOE government established Spain as one of the promoters of the European defence identity. Together with France and Germany, Spain defended the inclusion of the terms ‘common defence’ and ‘common defence policy’ in the text of the treaty as well as the extension of the WEU’s remit (Barbé, 1998: 151). In its ‘Provisions on a Common Foreign and Defence Policy’ (Title V, Articles J to J.11) the treaty stated that the operational role of the WEU, described as ‘an integral part of the Union’s development’, would be strengthened with a planning cell, closer military co-­operation, regular meetings of Chiefs of Defence Staff and more co-­operation in the armaments field with the aim of creating a European armaments agency. The ‘Declaration on Western European Union’ attached to the treaty stated that the objective was to ‘build up the WEU in stages as the defence component of the European Union . . . and develop WEU as a means to strengthen the European pillar of the Atlantic Alliance’. The PSOE government actively promoted these developments. The treaty nevertheless made it quite clear that the new foreign and security policy procedures would not prejudice the specific defence and security policies of individual member states. EU security policy would also have to take account of policy established by NATO and in 1992, the WEU confirmed NATO’s responsibility for collective self-­defence and formally decided to confine its operations to peacemaking and peacekeeping, crisis management and protection for humanitarian operations (Petersberg tasks) (European Commission, 1996: 6). The PSOE’s hopes for the WEU had been more ambitious, as the party viewed it as being a body capable of co-­ordinating the EU’s security policy in a more effective manner. In its electoral programme for the 1993 general election, the party supported moves to ‘progressively endow the European Union with its own identity in the field of security and defence’ (PSOE, 1993: 93). The PSOE’s 33rd Congress in March 1994 expressed the party’s stance on European security issues as follows: The link between the USA and European security problems constitutes an element of stability which must be maintained . . . The Atlantic Alliance is an instrument of that transatlantic relationship but it is not an end in itself . . . It would be desirable one day to transform that link into a new contractual relationship between the European Union and the USA on a more solid and equal basis. The WEU after Maastricht is no longer just a European political forum on security matters, but rather is charged by the Treaty on European Union with the elaboration and execution of those decisions of the European Union which have military implications. This will require the strengthening of those structures which will allow the WEU’s operational dimension to develop. (PSOE, 1994: 120–1)

That same year, Spain joined the Franco-­ German ‘Eurocorps’ initiative, together with Belgium. The 50,000-­strong force, answerable to the WEU, officially

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became operational in October 1995. Spain also participated in an Italian plan to create an air and naval force within the WEU deployed in the Mediterranean (Marquina, 1994: 384–5). This development led to the Lisbon Declaration of the WEU on 15 May 1995, which ratified the decision by Spain, France and Italy to establish the land and sea forces EUROFOR (European [Rapid Deployment] Force) and EUROMARFOR (European Maritime force). Both were intended to form part of the forces answerable to the WEU, reinforcing Europe’s own capacity for operations under the Petersberg Declaration. The initiative nevertheless created suspicion in North Africa as to the aim of these Southern European forces assigned to NATO and whether that aim might include intervention on the southern shore of the Mediterranean (Barbé, 1998: 159). A subsequent information campaign was launched to reassure North African countries that the nascent emerging European Security and Defence Identity (ESDI) was not directed against them (Echeverria, 1999: 17) During Spain’s Presidency of the EU during the second half of 1995, the PSOE government supported the development of the ESDI, although without fixing specific dates for the incorporation of the WEU. Whilst itself favourable to advancing the process of converting the WEU into the operative defence instrument of the EU, it made a realistic appraisal of the difficulties involved in such a development, given the lack of consensus among EU member states (Barbé, 2001: 50). The policy favoured by the Spanish government was therefore constrained by disagreements within the EU on the issue. Despite its promotion of European security initiatives, the PSOE government nevertheless ensured that it balanced its support for the strengthening of the WEU with a pragmatic acceptance of Spain’s duties within NATO. When NATO bombing operations were launched against the Bosnian Serbs in 1995, eight Spanish F-­18 fighters participated in the action. Spain’s non-­participation in NATO’s military command structure therefore did not prevent the country from fully participating in NATO’s collective security operations in Bosnia (Barbé, 1998: 152–5). The PSOE’s ‘Europeanist’ strategy in the security field therefore entailed the party’s embrace of the NATO Alliance, and the integration of Spain into the other chief instruments of European defence, the WEU and EPC/CFSP. Having formalised the country’s security situation, the PSOE government then chose to present Spain’s controversial involvement in the Gulf War in terms of its European security obligations, a strategy viewed as being the best means of retaining the support of a sceptical public. The remainder of the PSOE’s period in office was notable for unflinching support for further EU security initiatives, together with an acceptance of Spain’s responsibilities in accordance with its model of participation in NATO. The PSOE and policy towards the Mediterranean and Latin America Although Spain has long viewed the Mediterranean and Latin America as priority areas of foreign policy concern, the relationship has been more rhetorical than

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real until recent times. Indeed, it can be argued that even under the PSOE, despite the country being well placed, by virtue of historical, linguistic and cultural affinities, to influence EU policy in these extra-­European zones, the government’s concentration on European affairs served to marginalise both regions as a Spanish foreign policy concern. Felipe González nevertheless brought attention to his efforts to place both regions more firmly on the EU agenda: The relationship between Europe and America cannot go on being a North Atlantic relationship; it must be complemented with a relationship with the South Atlantic, linking Europe with the part of the continent called Latin America or Ibero-­America. And that isn’t just a Spanish priority in which we have an essential interest; we must convince Europe as a whole that its construction cannot be closed off inside its own borders, or in the relationship with the countries of Central and Eastern Europe, but that it must be capable of addressing the North-­South dimension, which links us with the Mediterranean and Latin America. (González, 1991: 121)

It would, therefore, be a mistake to underestimate the sensitivity of both these regions for Spain. Carlos Alonso Zaldívar has singled out ‘the preservation of its autonomy of action in areas like Latin America and the Mediterranean’ as being, together with the promotion of economic ‘modernisation’ and the control of external threats, one of the three main components which shape Spanish foreign and security policy (Alonso Zaldívar, 1991: 188). Whether the PSOE government was indeed able to preserve its ‘autonomy of action’ in these regions is a key focus of this section of the chapter. In opposition, the PSOE awarded priority status to both of the traditional areas of Spanish foreign policy concern, Latin America and the Mediterranean. In its manifesto for the 1977 general election, the party declared its interest in promoting relations in the following terms: ‘on account of our historic and neighbourly relations with the Arab World and due to our cultural, linguistic and varied links with the Latin American countries, democratic Spain will be in an unsurpassable position to channel and promote economic and political relations between these worlds and Spain’ (PSOE, 1977: 26). In Latin America, the PSOE had been able to utilise its membership of the Socialist International to foster links with many parties and movements opposed to the region’s dictatorial regimes (Smith, 1995: 136). As a result of the Sandinista revolution in Nicaragua in 1979, Central America evoked considerable international attention due to tensions between the Sandinista government and the US, a situation exacerbated by the continuing guerrilla war in El Salvador. On account of his prominent role within the Socialist International, Felipe González played a key role in shaping European Socialist and social democratic perspectives as well as indirectly influencing West European policy formation and formulations with respect to the region (Mujal-­León, 1986: 205; Smith, 1995: 136). The situation in Central America provided a further outlet for the PSOE’s anti-­American sentiment, which was simultaneously being stimulated by the UCD government’s decision to pursue membership of NATO. At the party’s 29th Congress in 1981, the party stated that ‘Spain’s Latin American policy cannot stand aside from or repudiate the troubled region of Central America, where the Reagan

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Administration’s ill-­fated Latin American policy is being directed with the greatest intensity’ (PSOE, 1981: 31). Despite his party’s criticism of US policy, Felipe González nevertheless remained in regular contact with the Reagan administration after 1980 on related issues (Mujal-­León, 1986: 205). Whilst Felipe González expressed his ‘unconditional solidarity’ with the Sandinista revolution in Nicaragua, which he described, in 1980, as ‘an exemplary process’ (quoted in Gutiérrez and de Miguel, 1989: 318), he and his party became increasingly concerned about the anti-­democratic tendencies displayed thereafter by the Sandinistas. By October 1983, the PSOE was unequivocal in its condemnation of the extreme positions being increasingly adopted by the regime and the deterioration of the human rights situation in Nicaragua (Roitman, 1985: 70). As we will see below, the PSOE therefore channelled its interest in the region into support for the Contadora Peace Process (Spain was the first European country to sign a declaration of support for the Contadora peace initiatives in the region in April 1983) and subsequent ­multilateral peace initiatives. In comparison with the PSOE’s activism in the Central American crisis, the Mediterranean received relatively less attention from the party when in opposition. The main feature of the party’s pronouncements on the region during the mid-­1970s was a balanced support for both the Palestinian and Israeli peoples and the promotion of the Western Saharan people’s self-­determination (PSOE, 1974: 4; PSOE, 1976: 15). In its programme for the 1979 general election, the party stated that ‘in the Mediterranean, we will pursue a fair and balanced relationship between the coastal countries which advances peace in the region and an effective defence of our interests and rights’ (PSOE, 1979a: 17). At its 29th Congress in 1981, the party set out its Mediterranean policy in some detail. Having identified the Mediterranean as one of the chief areas of confrontation between the great powers, the party argued that, in the Mediterranean, ‘Spain, a regional power of the first rank, can develop its margin of autonomy (if it does not join NATO), contributing towards the avoidance of an increase in tension’. The response of ‘any democratic government in Spain, of whatever colour, should be to contribute towards a fair and long-­lasting peaceful solution’ (PSOE, 1981: 33). Although the PSOE’s offer of its services as an actor in Middle East peace initiatives appeared somewhat ambitious at this stage, it is significant that a decade later, Madrid was chosen to host the Middle East Peace Conference in 1991. Once in office, the PSOE leadership made a realistic appraisal of Spain’s limited capacity to influence foreign policy in isolation, and sought to make use of the foreign and security components of European integration: EPC, the procedures used from 1970 to allow EC member states to discuss and co-­ordinate their positions on foreign affairs, and its replacement, the Common Foreign and Security Policy (CFSP). It was believed that this strategy provided the framework for the evolution of a more effective policy better equipped to support Spanish policy aims. However, as we will see, the PSOE government met with mixed success in placing the traditional spheres of Spanish policy interest on the EU agenda.

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Whilst other Southern European member states shared Spain’s concerns about the importance of the Mediterranean for the EU as a whole, enabling the region to emerge as a major focus of EU security concern after the end of the Cold War, the PSOE government had far less success in promoting and shaping a more pronounced EU interest in Latin America. Spain nevertheless played a significant role in establishing institutional links between the EU and its counterparts in the subcontinent such as the South American Regional Trade Organisation, Mercosur, whose members include Brazil, Argentina, Paraguay and Uruguay. This comparative failure nevertheless allowed the PSOE government considerable margin in which to promote a more autonomous policy in the region, enabling Spain to establish itself as the largest investor in Latin America by the time that the PSOE left office in 1996 (Chislett, 1997: 62). We will also consider the role of actors outside the government in establishing Spain’s investment presence in Latin America, particularly the large Spanish private banks and the partly ­privatised Telefónica telecommunications company. The Mediterranean Spain has historically been sensitive to tensions in the Mediterranean region and from the time it entered office in 1982, the PSOE government viewed relations with the region as being a key component of its foreign policy. Geographical proximity, the existence of the Spanish enclaves of Ceuta and Melilla in North Africa, Spain’s ex-­colonial status in the Western Sahara and the difficult position in which Spain found itself during the Gulf War – anxious to maintain good relations with both the US and the Arab world – ensured that the government was particularly sensitive to security issues in the region. Geo-­strategic interests were therefore considerable. Spain’s economic interests in the region are also significant. Spain has traditionally been dependent on energy imports and the country obtained 72 per cent of its gas and 17 per cent of its oil from the Mediterranean in 2000. Spain also obtained 80 per cent of its phosphates from Morocco, whilst key sectors of the Spanish fishing industry are dependent on Moroccan, Saharan and Mauritanian fish stocks (Núñez Villaverde, 2001: 131). The PSOE government also trusted that European integration would enable it to elaborate and implement a more effective European strategy towards the region, building on the efforts of their French, Greek and Italian partners to reinforce the Mediterranean dimension in the EU’s policy interests. Political instability, Islamic fundamentalism, widespread poverty, demographic pressures and increased levels of immigration from the region are all significant factors which constitute a threat not just to Spain, but to the EU as a whole, particularly its Southern European members. Francisco Fernández Ordóñez described the North African Maghreb region as ‘a time bomb which only the EC can diffuse’ (quoted in Gillespie and Pollack, 1993: 25), whilst his successor as Foreign Minister, Javier Solana, when referring to North Africa, argued that ‘the well-­being of its peoples is a necessary condition for our own well-­being’ (Solana, 1995: 104). The PSOE

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government therefore sought to establish a linkage between European security and Mediterranean stability. There were also sound commercial reasons for the EU’s active interest. For example, the EU accounted for 60 per cent of the foreign trade of the Maghreb countries of North Africa in 1994 (Sahagún, 1994: 254), whilst the countries of the Mediterranean constituted the EU’s third largest trading partner (Westendorp, 1995: 314). When Spain joined the EC in 1986, the Maghreb was not an area of special attention within the Community’s EPC. However, Spanish efforts to convince its EC partners of the strategic risks posed by the Mediterranean region over the coming years were complicated by the end of the Cold War as the EC’s attention became increasingly focused on Eastern and Central Europe following the collapse of Communism. Spanish diplomacy’s role in lobbying for a more pro-­active EC role in the Mediterranean was therefore viewed as being a priority task. As Gillespie has noted, ‘Spanish responses to Mediterranean problems have become substantially “Europeanised”’ (Gillespie, 2000: 134). As part of its strategy to place Spain’s traditional areas of foreign policy concern more firmly on the EC agenda, the PSOE government successfully lobbied for the appointment of the opposition PP politician, Abel Matutes, as EC Commissioner with responsibility for the Mediterranean, Latin America and North–South Relations in 1989. The following year, Matutes proposed a Renewed Mediterranean Policy (RMP) whereby the EC agreed to treble its aid to the Southern Mediterranean countries over the period 1992–96 to 2,375 million ecus. Some appreciation of the imbalance in EC aid provision is gained when it is considered that 29,700 million ecus were given to Central and Eastern European countries during the same period (Marquina, 1993: 64). In addition to the modesty of its financial provisions, the viability of the RMP was also damaged by its ineffective political dimension, in particular the failure to address security and defence concerns. Conscious that the proposals were quite inadequate to address the challenges posed by the region, Spain, together with Italy, played a major role in another initiative which emerged at the Conference on Security and Co-­operation in Europe (CSCE) held in Palma de Mallorca in September 1990. A Conference on Security and Co-­operation in the Mediterranean (CSCM) was proposed on the lines of the CSCE, the chief purpose of which was to create a stable system of regional co-­operation based on three ‘baskets’ dealing with security, economic co-­operation and human rights (Joffé, 1994: 29). The proposal nevertheless failed due to a difficult international climate (the outbreak of the Gulf War and its Mediterranean repercussions and the uncertainties of the Arab–Israeli Peace Process), the opposition of the US, the UK and the Netherlands, and the reticence of Germany and even France (Gillespie, 1997: 35). Marquina notes that ‘France was not very enthusiastic about an initiative that was not its own’ (Marquina, 1993: 68). Indeed, its attitude was conditioned by its simultaneous efforts to promote the so-­called 4+5 group, which proposed a dialogue on economic, cultural and security questions between the four

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European Mediterranean countries most directly concerned about Mediterranean issues – France, Spain, Italy and Portugal (joined in 1991 by Malta) – and the five Arab Maghreb Union (UMA) states – Algeria, Libya, Morocco, Mauritania and Tunisia. The initiative, which benefited from extensive discussions between all four EC states during the Spanish and French EC Presidencies in 1989, enjoyed greater success than the more ambitious CSCM proposal as it was limited to the Maghreb rather than the entire Mediterranean area and also benefited from existing bilateral relations. The initiative’s remit was also limited to co-­operation rather than security issues. However, as proved the case with the CSCM, momentum was again checked due to international developments, in this case, the Bosnian conflict. The evolution of dialogue with the Maghreb states was ­nevertheless viewed as being a useful asset in future developments. The establishment of diplomatic relations with Israel in 1986 was also a key component of the ‘Europeanisation’ of Spanish policy in the region. Spanish entry into the EC necessitated an abandonment of the anti-­Israeli stance established in foreign policy under Franco as Spanish policy was brought in line with that of the Community. Indeed, the Netherlands had set the establishment of diplomatic relations between Spain and Israel as a condition of Spanish EC integration. European integration therefore enabled the PSOE government to redefine foreign policy positions inherited from Spain’s non-­democratic past, thereby allowing the government to occupy a more balanced diplomatic profile in the region. Spain identified the conflict in the Middle East as one of the priority areas for European attention during the country’s Presidency of the EU during the first half of 1989. The effectiveness of Spanish initiatives during the Presidency was aided by the Community’s own extensive efforts to engage the region in dialogue over the previous decade. Indeed, the EC’s discussions with the Arab states of the Middle East represented the first real group-­to-­group dialogue undertaken under EPC (Grugel, 1991: 42). The Madrid Declaration, which was approved in June 1989, formed the basis of the EC’s stance on the Middle East. Hailed as one of the Spanish Presidency’s most successful initiatives, it owed much to the Community’s own diplomatic efforts. The PSOE government was therefore able to contribute towards the achievement of significant results in the international arena thanks to the support provided by the Community as a whole. Evidence of the extent of Spain’s credibility with both Arabs and Israelis was provided in 1991 when Madrid was selected as the host city for the Middle East Peace Conference of October 1991, which marked the start of the peace process. The Spanish capital was chosen as the venue owing to the country’s ‘credibility, neutrality and balance’ (Núñez Villaverde, 2001: 139). Spain’s successful staging of the conference bolstered the country’s diplomatic prestige both within the EU and beyond and has been described as being ‘Spanish diplomacy’s best result in recent years’ (Abu-­Warda, 1994: 312). The momentum of Spanish involvement in EC Mediterranean initiatives was maintained in February 1992 when, in the context of EPC, Community Foreign Ministers commissioned two reports, one directly from Spain on the political situation in the Maghreb, the other a response to the economic problems of the

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region to be written by European Commissioner Abel Matutes (Gillespie, 1997: 36). These reports constituted the basis for the EC Lisbon Council’s acceptance in June 1992 of the Spanish proposal to convert the Maghreb into a joint action area within the CFSP framework (Barbé, 1995: 121). Reporting to the Congress of Deputies, following the Council Meeting, Felipe González underlined the difficulties involved in persuading EU partners of the importance of the Mediterranean: ‘it has been difficult for some Community delegations to accept that the Community’s problems do not just have a priority and urgent dimension when they concern Central and Eastern Europe, but also and for reasons which are perfectly clear to all, when they concern Southern Europe’ (González, 1992: 33). The Lisbon Council Meeting marked a watershed in the elaboration of an EC policy in that it marked a change of emphasis away from financial aid towards free trade with the region (Gillespie, 1997: 36–7). Spain had played a key role in this development and it was another Spaniard, the PSOE’s Manuel Marín, who was to take over the Mediterranean portfolio within the European Commission from Abel Matutes towards the end of 1992. Marín was charged with building on the progress made at Lisbon and at the meeting of the European Council in June 1994 the decision was taken to draw up a proposal for the development of a comprehensive policy covering the entire Mediterranean area. The resulting Euro-­ Mediterranean Partnership (EMP) announced by the Commission in October 1994 proposed the establishment of a Euro-­Mediterranean political stability and security zone, a Euro-­ Mediterranean Economic Space with the creation of an industrial free trade area by the year 2010, substantially improved access to the EU market of the region’s agricultural goods, a process of convergence between the region’s relevant legislation and EU laws (in material pertaining to such things as customs, competitiveness and intellectual property) and an increase in proposed transfers of public and private capital towards the region. The Commission proposed increasing the EU’s budgetary resources for co-­ operation with the Mediterranean region substantially for the period 1995–99. The European Council Meeting in Essen in December 1994 took note of the recommendations, but for the time being went no further than speaking about an ‘appropriate equilibrium’ in the EU’s commitments between Eastern Europe and the Mediterranean (Westendorp, 1995: 315). Most significantly, however, the German Chancellor, Helmut Kohl, was finally persuaded of the necessity of the initiative. According to Gillespie, Felipe González’s role was decisive; the Spanish Prime Minister even threatened in September 1994 to block the Eastern enlargement of the EU unless more aid was directed south (Gillespie, 1997: 39). An indication of the importance of the Essen Council Meeting was that it marked the first occasion on which the EU made explicit its interest in the Mediterranean (Barbé, 2001: 52). Whereas Germany had placed its weight behind the establishment of the European Bank for Reconstruction and Development to aid Central and Eastern Europe, no such institution had been set up to help the Mediterranean. Spanish diplomacy was therefore able to congratulate itself for its successful advocacy of increased EU aid for the Mediterranean at the Cannes summit in June 1995 – support to the region was increased by 115 per cent for the period 1995–99

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compared to 1991–94. Aid to ACP countries (Africa, the Caribbean and the Pacific) and Eastern Europe increased by 18 per cent and 30 per cent respectively. Following the conclusion of the deal, Helmut Kohl praised the Spanish premier’s negotiating skills, commenting, ‘When it comes to finance the genius is always González’ (quoted in El País (International Edition), 3 July 1995: 3). Barbé has argued that the leadership exercised by Felipe González in the area of EU policy towards the Mediterranean during the European Councils at Cannes and Essen gave Spain ‘the profile of a major player in the Union’ (Barbé, 2001: 47). It was nevertheless still the case that the countries of Eastern Europe obtained 6,692 million ecus in aid compared to the Mediterranean’s 4,685 million ecus. Spain was able to maintain the momentum achieved at Cannes during its Presidency of the EU during the second half of 1995. The undoubted high point of Spain’s term was the Euro Mediterranean Conference, which took place in Barcelona in November.16 The Spanish government awarded the Conference maximum priority and, in its capacity as a member of the ‘Troika’ (i.e. the three-­ member group composed of the current EU President together with its immediate predecessor and successor) during the previous French Presidency, had enjoyed a considerable input into the focus, agenda and list of participants for the Conference. Commenting on the Conference’s aims, the Spanish V ­ ice-­President of the European Commission responsible for Mediterranean affairs, Manuel Marín, stressed the Conference’s security dimension when he argued, ‘the only way to quell extremism is by offering people real hope of prosperity. That is what the new Mediterranean policy is trying to do’ (quoted in the Guardian, 25 November 1995: 17). The two-­day conference bore out Spanish pledges to place the region at the heart of EU foreign and security concerns. The Spanish Foreign Minister, Carlos Westendorp, observed that the conference marked Spain’s rise into a diplomatic first division (Gillespie, 2000: 156). The fifteen Foreign Ministers of the EU, together with their counterparts from eleven Mediterranean countries and the Palestinian Authority, and a delegation from the European Parliament and the Commission, attended the Conference. The so-­called Barcelona Declaration, adopted unanimously (after much heated negotiation) by the participants consisted of three main areas: political and security matters; an economic and financial partnership; and a social and cultural aspect. Amongst the most important initiatives in the political field was an institutionalisation of dialogue in the form of conferences of foreign ministers. In the area of economic and social affairs, there was agreement on the gradual introduction of a free-­trade area for industrial goods by the year 2010, to be known as the Euro-­Mediterranean Economic Area (EMEA), on the lines of the North American Free Trade Agreement (NAFTA). In the social, human and cultural sphere, the declaration envisaged a greater dialogue in the cultural, scientific and technological fields, together with closer co-­operation on immigration, demographic problems, the fight against terrorism, drug trafficking and organised crime. The initiative was institutionalised and further conferences of EU and Mediterranean foreign ministers were held in April 1997 and April 1999.

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The potential historical significance of the Barcelona Conference, which heralded a new era of dialogue between the EU and its twelve Mediterranean partners, was undeniable. It enabled the Foreign Ministers of the EU to meet their opposite numbers for the first time and also allowed Israeli and Syrian representatives to sit around the same table for the first time since the Madrid Conference of October 1991. Most importantly, the Conference had partly been prompted by the fears of Spain and other Southern European countries that the EU’s centre of gravity was shifting too far to the north and the east with enlargement and the opening up of Central and Eastern Europe. The Barcelona Conference went some way towards correcting this imbalance and built on the European Commission’s efforts to conclude association agreements with countries in the region. Association agreements with Tunisia, Morocco and Israel were completed in 1995, whilst negotiations were placed in train with Egypt, Jordan and the Lebanon. Exploratory talks also began with Algeria and the European Council of Ministers indicated its willingness to consider an approach from Syria and the autonomous Palestinian territories. Ironically, the success of these developments posed problems for the Spanish government back home with regard to the electoral sensitivity of closer ­EU–Mediterranean links. The opening of the EU’s markets to the countries of the southern rim of the Mediterranean was likely to have an adverse effect on employment in the south of Spain, where agricultural workers were particularly concerned about competition from the Maghreb. Indeed, some 20,000 Spanish farmers held a demonstration in Barcelona timed to coincide with the conference in protest against any trade concessions being granted to non-­EU countries. Furthermore, immediately before the Barcelona Conference and in the context of a six-­month fisheries dispute, the Spanish Congress of Deputies unanimously approved a motion which rejected the association agreement which the Commission was negotiating with Morocco (Gillespie, 1997: 41). This development ought to be seen within the context of the government’s readiness during the PSOE’s final years in office to place greater emphasis on the defence of national interests, as opposed to its hitherto relatively uncritical support for EU legislation. The PSOE government also used the Barcelona Conference, and Spain’s EU Presidency more generally, to increase its prestige with respect to the Spanish population, thereby bolstering its domestic position. Indeed, the Presidency was used as ‘a primary instrument to attain its domestic political salvation. González’s official visits abroad and those he received in Madrid were aimed at transmitting the image of a successful country engaged in world affairs, while Spain was passing through a moment of internal crisis [the poor economic situation and corruption allegations]’ (Barbé, 2001: 47). Any prestige gained in the eyes of the Spanish population was however, insufficient to stave off the PSOE’s defeat at the general election held in March 1996. Spain’s highly regarded handling of the Conference was nevertheless a fitting end to the PSOE’s attempts to influence the EU’s Mediterranean policy. The PSOE

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had undoubtedly established Spain as a highly influential player in the region, and the PSOE’s use of Spain’s membership of the EU had played no small part in this achievement. The PSOE’s successors in government, the PP, were left to meet the challenge of satisfying Mediterranean demands whilst retaining the support of anxious domestic interests. It was a tension which possibly contributed towards the Aznar government’s preference for a less prominent Spanish diplomatic profile in the region following the PP’s general election victory in March 1996. The growing importance of the immigration issue since the PSOE’s loss of power was illustrated particularly violently by the racist incidents involving immigrants from North Africa which began at El Ejido in Almería at the end of the 1990s, illustrating the Mediterranean’s growing sensitivity as a political issue in Spain and justifying the prominence awarded to the region by the PSOE when it was in office. Latin America Latin America is the other main region of the world, after the Mediterranean, with which Spain has close historical and cultural ties. When the PSOE entered office in 1982, it inherited a foreign policy for the area long on rhetoric and short on effective means for the improvement of relations (Cotarelo, 1992: 232). In its programme for the 1982 general election, the PSOE proposed ‘a policy on Latin America which will place our relationship within a framework which goes beyond the current merely rhetorical stage and which will bring up to date and bolster political, economic and cultural co-­operation with the countries of that continent’ (PSOE, 1982: 46). The PSOE government also underlined its interest in Latin America when it created a Secretariat of State for International Cooperation and Latin America in 1985. Spain’s future EEC partners were also made aware of the importance Spain attached to its relations with Latin America during the course of the country’s membership negotiations. Indeed, during this period, European Commission reports highlighted the Latin American ties of Spain and Portugal as being one of the most valuable aspects of the 1986 enlargement (De Laiglesia, 1988: 139). The eventual Accession Treaty signed in Madrid in June 1985 contained a protocol recognising Spain’s particular interest in Latin America as well as a clear declaration on the need to intensify the relationship between the Community and Latin America. Speaking in 1989, Felipe González stressed Spain’s contribution towards the promotion of greater EC understanding of Latin American affairs: ‘unilateral action . . . cannot, even marginally, address the enormous problems which the Latin American continent faces today . . . the only role . . . which we can and must assume is that of insisting at the EC negotiating table that the Latin American continent’s political and economic development is of enormous importance to the Community’ (quoted by Grugel and Alegre, 1991: 70). The PSOE therefore saw its role as being that of defender of Latin American interests within the EC; it also hoped that Spain’s own political importance within the EC would increase accordingly. The success achieved in this venture

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was limited, however. As Hazel Smith has argued, ‘the impact of Spain on the Community’s Central (and Latin) America policy is often exaggerated’ (Smith, 1995: 110). Youngs similarly finds it debatable whether Latin America has obtained significant advantage from Spain’s sponsorship within the EU (Youngs, 2001a: 123). This section will therefore illustrate how the possibility of the PSOE government employing a similar policy in Latin America as it had in the Mediterranean, i.e. utilising the EU as a vehicle for Spanish policy aims, was less tenable given that the EU did not consider the region to be a core foreign and security concern, a stance which the end of the Cold War did little to change. Indeed, it will be argued that the PSOE’s own interest in the region always remained subordinate to the European priority in its foreign policy formulations. The modesty of multilateral links between Latin America and the EU nevertheless did not preclude the PSOE government’s encouragement of bilateral Spanish relations with individual Latin American states. Indeed, the increase in Spain’s investment presence in the region was so vertiginous during the 1990s that in its 1999 report, entitled, Foreign Investment in Latin America and the Caribbean, the United Nations Economic Commission for Latin America and the Caribbean (CEPAL) spoke in terms of ‘a “Spanish Reconquest” of her old colonies’ (CEPAL, 2000: 1).17 During its first years in office, Central America was the focus of the party’s attention, due to the region’s emergence as an international issue. As the PSOE government developed a more sceptical view of the progressive nature of the Sandinista regime in Nicaragua, which reflected that of the Socialist International, they increasingly adopted a less strident stance on the region than they had in opposition, and gave their support to multilateral initiatives aimed at bringing about a negotiated settlement. The PSOE government was therefore the first Western government to back the Contadora regional peace initiative engineered by Mexico, Panama, Colombia and Venezuela in 1983 (Arenal, 1994b: 143–4). The aim was to co-­ordinate and reach agreement on policy in the region with Central American countries so as to promote an atmosphere of confidence and co-­operation, thereby minimising the risks of direct engagement by placing the emphasis on a negotiated settlement. The PSOE’s support for the Arias Plan of 1987 and the Esquipulas process (see below) was a continuation of this strategy. The EC had also sought to play a more active role in the region and the West German Foreign Ministry played a key role in creating a forum for regular dialogue with the countries of the region. Despite the fact that Spain was still not an EC member, Spain participated in the organisation of the resulting body, the San José Conference, which first met in September 1984, and gave its support to a higher EC profile in the region. As Hazel Smith has argued, ‘the EC’s efforts were supported, not just because of their intrinsic merit, but because Spain saw these initiatives as providing the foundation for a more substantial relationship with Latin America. The EC’s activity was also welcomed because it provided the economic means to support foreign policy objectives that Spain shared but could not, because of its relatively economically underdeveloped status, effectively

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implement on its own’ (Smith, 1995: 142). The PSOE therefore valued the possibilities offered by the EC as a vehicle for its own policy aims and trusted that the Community’s interest in Central America would lead to a strengthening of its relations with Latin America as a whole. Ultimately, however, the PSOE government was disappointed by the level of the EC’s engagement in the region and Spain proved to be the most enthusiastic European supporter of subsequent regional peace initiatives such as the Arias Plan in February 1987 and Esquipulas II six months later. In the meantime, the replacement of Ronald Reagan by George Bush as US President and the PSOE government’s tacit acknowledgement of the predominant role of the US in the region contributed towards the PSOE government’s adoption of a less critical stance on US policy towards the region. Indeed, George Bush publicly recognised Felipe González’s leadership of the West on Central American policy at a meeting of the Atlantic Council in May 1989 (Story, 1995: 48). Although the government’s foreign policy generally received the automatic support of the party, government–party tensions became apparent on policy towards Central America (Grugel, 1995: 151), although these decreased as conflict in the region tapered off at the end of the decade. Both the US and Spain took an active part in the negotiation of peace settlements in Nicaragua, Honduras and El Salvador as regional tension markedly diminished, with Spain participating in UN peacekeeping missions after 1989 (Arenal, 1994a: 288–91; Maxwell and Spiegel, 1994: 54). After 1989, with its involvement in the independence of Namibia and in Angola, Spain under the PSOE government contributed forces to keep the peace in Central America (El Salvador and Guatemala) and other parts of the world. It also carried out various military and police training missions in Central America, Angola and Mozambique. In addition to the naval forces sent to the Gulf during the Gulf War (see above) naval forces in non-­combat roles were sent to the Adriatic during the Bosnian war to guarantee the arms embargo. In the Balkan wars of the 1990s, the Spanish armed forces played a more active role, with a presence from November 1992 in Croatia and Bosnia as part of the UN protection force (UNPROPOR). The effect was to contribute to the legitimisation of the role and image of Spain’s armed forces, as well as securing for Spain a greater presence in international forums (Aguirre and Rey, 2001: 190–204). With respect to Latin America, the PSOE government’s hopes that Spain’s entry into the EC would contribute towards the Community adopting a higher profile in the region were encouraged by the European Council Meeting at The Hague in June 1986. The Community pledged to intensify relations with Latin America and the Council of EC Foreign Ministers and the Commission were asked to draw up reports concerning ways in which political, economic and technical relations between the EU and Latin America could be improved. The resulting document, entitled, ‘New EEC Guidelines for Relations with Latin America’ was adopted by the Council of Foreign Ministers held in June 1987, but was notable for the imbalance between the generous attention awarded to political questions and the scant treatment of Latin America’s economic problems (De Laiglesia, 1988: 143). The final policy guidelines nevertheless constituted the first

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strategy paper committing the European Community to action in Latin America (Schumacher, 1995: 121). In an interview the same year, the Spanish Foreign Minister, Fernández Ordóñez, indicated the importance awarded to the EC by the PSOE government when he discussed Spain’s Latin American policy solely in the context of regional initiatives through the EC (Grugel, 1995: 153). Under Abel Matutes, whose responsibilities as EC Commissioner included Latin America, the Community established a closer institutional relationship with the region. The number of EC diplomatic delegations was expanded from four to ten, whilst the European Commission acquired observer status at the Organisation of American States and set up co-­operation mechanisms with organisations such as the Latin American Economic System, the Latin American Economic Integration Association, and the Inter-­American Development Bank (Schumacher, 1995: 121). The Spanish government’s promotion of EC contacts with Latin America had results in several other areas (Arenal, 1994b: 210–11). Largely due to Spanish initiatives, there was renewal of meetings between the Committee of Permanent Representatives (COREPER), the Commission and the Latin American Group Heads of Mission (GRULA), which had been suspended since the Falklands War in 1982. The EC also established co-­operation agreements with all countries in the region with the exception of Cuba. The question of European Investment Bank (EIB) involvement in the region was also raised at meetings between the EU and the Río Group (which initially consisted of Argentina, Brazil, Colombia, Mexico, Panama, Peru, Uruguay and Venezuela). An initiative backed by Portugal and Italy, as well as Spain, it led to the completion, in May 1991, of an agreement granting access to EIB funds. The EU financial body, European Community International Investment Partners (ECIIP), also become involved in industrial and scientific aid to the region. However, Spanish efforts to lobby for a greater financial commitment towards Latin America by the EC were complicated by the uneasiness of those countries, be they Community members or recipients, which were satisfied with existing arrangements (De Laiglesia, 1988: 144). African, Caribbean and Pacific (ACP) countries, largely in the former French and British colonial sphere, continued to dominate EC development policy due to their association with the EC under the Lomé Convention. Without association agreements or inclusion in the Lomé Convention, Latin America only benefited from the EU’s Generalised System of Preferences (GSP), which covered just 30 per cent of Latin America’s exports to the Community (Sahagún, 1994: 266). Spain did, however, sponsor the Dominican Republic’s entry into the Lomé Convention, together with that of Haiti, during its Presidency of the EU in 1989, although the terms of entry have been criticised as offering only ‘a kind of second-­class membership’ (Grugel, 1995: 155). The end of the Cold War and the increased demands of Eastern and Central Europe on the EU have further complicated the question of EC aid to Latin America. In the second half of 1989, Poland and Hungary received more EC aid in just the second half of 1989 than the whole of Latin America obtained during

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the entire year (Sahagún, 1994: 268). It is nevertheless the case that, taking into account individual EC member countries’ bilateral aid and overall EC aid, Europe gave more financial help to Latin America than any other part of the world – 46 per cent compared to the USA’s 25 per cent in 1988–89 (Arenal, 1994b: 210). European aid to South America almost doubled during the period 1991–95 via the European Development Fund (EDF) and through bilateral co-­operation agreements with Argentina, Brazil and the Andean Pact countries (Bolivia, Colombia, Ecuador, Peru and Venezuela) (Heywood, 1995a: 274). Aid awarded to Latin America by the European Community rose from 37 million dollars in 1985 (prior to Spain’s entry into the EC) to 500 million dollars in 1995 (March, 1995: 171). Spain also managed to obtain an increase in EC funding to Latin America during its EC Presidency in 1989 when the Community agreed to a separation of funds intended for Latin America and Asia. This money had previously been grouped together in one budget, with Asia receiving 75 per cent and Latin America 25 per cent. Following the separation, the proportions were altered to 65 per cent for Asian countries and 35 per cent for Latin America (Arenal, 1994b: 209). The Spanish Presidency nevertheless failed to persuade the EC to be more receptive to the idea of a European initiative on the debt question in the region (Grugel, 1991: 44). Moreover the EC aid policies which did exist were criticised for failing to address the issues on which long-­term development depend: development of strategic human resources, the transfer of key technologies and ­sustainable development strategies (Grugel, 1995: 154). In terms of Spain’s own development aid to Latin America, its adoption of the EC’s official development aid (ODA) guidelines following its entry into the European Development Fund in 1989 meant an acceptance of the EC’s existing (i.e. non-­Latin American) regional priorities. Latin America therefore went from being the recipient of 53 per cent of Spanish bilateral ODA in 1989 to just 27 per cent the following year – and this despite the fact that Spain’s contribution more than doubled during the period (Schumacher, 1995: 123). Conscious of the unfairness of aid distribution, the government sought partially to rectify the situation when it channelled $500 million to Latin America via the Fondo de Cooperación Quinto Centenario (Fifth Century Cooperation Fund) set up to commemorate the 500th anniversary of the voyage of Columbus to America (Alonso Zaldívar and Castells, 1992: 236). Prominent in the organisation of the anniversary celebrations was the Instituto de Cooperación Iberoamericana (Institute for Latin American Cooperation – ICI), part of the Spanish Foreign Ministry. Between 1994 and 1995 ICI aid to the region more than trebled from four billion pesetas to thirteen billion pesetas (March, 1996: 165). Spain was the second largest EU donor to the region during the 1990s, behind Germany, although the overall amount of Spain’s development aid declined from 0.28 per cent of GDP in 1993 to 0.23 per cent in 1997 (Youngs, 2001a: 121). By the start of the 1990s, it had become apparent to the PSOE government that its efforts aimed at increasing the EC’s commitment to Latin America had achieved only mixed results as Spanish attempts to persuade the EC to increase its

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financial presence in the region only met with modest success. Spain had ‘overestimated Western Europe’s commitment to the region. EC interest in Latin America remained limited’ (Youngs, 2001a: 155). The PSOE government’s reaction was to complement its EC-­focused strategy with a policy aimed at developing bilateral relations, aided by the boom conditions enjoyed by the Spanish economy between 1986–92. The absence of strong economic and commercial ties between Spain itself and the region nevertheless compromised this goal although this situation changed considerably from the mid-­1990s onwards as Spain established itself as one of the leading investors in the region. Until the mid-­1990s, commercial links between Spain and the Mediterranean region were of far greater significance than those with Latin America. Spain’s exports to Morocco represented just over 4 per cent of Spanish total exports in 1994 – about the same as Spain’s total exports to the whole of Latin America (Sahagún, 1994: 249). Indeed trade flows remained relatively modest between Spain and Latin America. Only 6.4 per cent of Spain’s exports went to Latin America in 1997, with 4.3 per cent of its imports coming from the region, proportions which had not grown since the late 1980s. Another indication of the modest nature of trade between Spain and Latin America is that in 1997 Spain was conducting almost twice as much trade with Portugal as with the whole of Latin America and was importing more from Switzerland than from Argentina, Brazil or Mexico (Youngs, 2001a: 109). It was in the field of investment where Spain really established itself as a leading player. Viewing Latin America as a natural focus for investments abroad, the PSOE government played a proactive role in encouraging Spanish state-­owned companies to increase Spain’s investment presence in the region. The telecommunications concern, Teléfonica, the national airline, Iberia,18 the energy company, Endesa, and the oil conglomerate, Repsol, accounted for the majority of Spanish investment (Grugel, 1995: 156). Here, the PSOE government played a significant role by promoting the merger of Spanish companies so as to form large Spanish-­ controlled enterprises capable of remaining independent and competing in international markets. The PP government continued this strategy after 1996. It is significant that the PSOE government encouraged state-­owned industries in this direction, identifying a trading region which offered a less forbidding competitive environment than within the EU itself. Increasingly privatised from the mid-­ 1990s, these companies became leading players in Latin America, alongside large Spanish private banks. Youngs claims that the private sector was worried that the Spanish government’s efforts to promote greater European interest in Latin America might work to Spain’s disadvantage, given the extent to which the latter’s success was due to the lack of effort from other European investors (Youngs, 2001a: 110).19 The large Spanish private banks invested more than 226 billion pesetas in Latin America between 1994 and 1996 (Chislett, 1997: 101). Examples included the three leading financial groups, the Banco Bilbao Vizcaya Argentaria (BBVA), the Banco Santander Central Hispano (BSCH)20 and La Caixa (Salmon, 2001: 23). As Salmon comments, ‘Although Spain was enveloped in the process of globalisation, the geography of this process was asymmetric. Globalisation was Euro-­

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centric and skewed towards a growing business involvement in Latin America. An Iberian-­South Atlantic axis in the global economy was formed’ (Salmon, 2001: 28). By 1996, when the PSOE left office, Latin America accounted for 34 per cent of Spanish total investment abroad, a figure which rose to 61 per cent in 1997 (Chislett, 1998: 59).21 In absolute terms, Spanish Foreign Direct Investment increased five-­fold between 1995 and 1997 (Youngs, 2001a: 108). By the late 1990s, Latin America far exceeded the EU as the dominant destination of Spanish outward foreign direct investment (Salmon, 2001: 33). Barbé argues that ‘by the end of the 1990s Latin America had become a vital interest for Spain, above even the Mediterranean’ (Barbé, 2001: 54–5). Despite its growing realisation of its limited capacity to influence EU policy towards the region, the PSOE government nevertheless did play a role in the institutionalisation of contacts between the EU and Latin American regional trade blocs. Meetings between EU and Río Group Foreign Ministers were held on a regular basis following the Rome European Council Meeting in December 1990 (Arenal, 1994b: 217), whilst an Interregional Framework Agreement on Trade and Economic Cooperation was signed between the EU and Mercosur (comprising Argentina, Brazil, Paraguay and Uruguay) during the Spanish EU Presidency in December 1995. Fearing that the EU might expand its NAFTA agreement to the entire American continent, Brussels had been planning to reach an agreement with Mercosur since 1994. The agreement established political dialogue between the two regional blocs and envisaged the establishment of progressive trade liberalisation resulting in a free trade area by 2005. Thanks to the agreement, the EU became established as Mercosur’s first trading partner and was left in a better position to lend Mercosur its experience in the construction of an open regional bloc. The agreement paved the way for a future association between the EU and Mercosur and was viewed as being one of the biggest successes of the Spanish Presidency. Spain under the PSOE had possessed sufficient diplomatic capacity within the Mediterranean region to actively shape EU policy. Writing in El País, the Argentinian President Menem was fulsome in his praise for Spain’s role in the conclusion of the agreement: ‘the fact that the excellent EU-­Mercosur agreement has been signed during the Spanish Presidency of the EU is particularly significant. The efforts of the government, the political class and Spanish businessmen to achieve a deepening in relations between Europe and Mercosur are fully recognised and valued by our countries’ (El País (International Edition), 18 December 1995: 9). Outside the framework provided by the EU, the PSOE government also played a key role in the Ibero-­American Community of Nations (Comunidad Iberoamericana de Naciones), which groups together the twenty-­one ­Spanish-­ and Portuguese-­speaking countries of the American continent, in addition to Spain and Portugal. Annual Community summits attended by heads of state and government began in 1991. Although the results of the summits were relatively modest,22 they contributed towards reinforcing Spain’s international profile. Spain’s membership of the United Nations Security Council between 1993 and

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1994 also served a similar purpose, whilst also helping to neutralise the threat of ‘peripherisation’ as the EU increasingly turned its attention towards Eastern and Central Europe (Barbé, 1999: 161). The summits also provided a forum for the exchange of views between member states on difficult issues. For example, the 1994 summit held in Cartagena de Índias in Colombia focused primarily on Cuba’s future (Heywood, 1995a: 295) Heywood has highlighted Cuba as being the most obvious example of how the Spanish international policy concerns have been reoriented towards a more explicitly European focus (Heywood, 1995a: 276–7). The PSOE government’s traditionally good relationship with the Castro regime, clearly differentiated from the US stance, deteriorated during the 1990s as more emphasis was placed on the absence of democracy in Cuba. Despite efforts to maintain relations, the Spanish government refused to provide Castro with financial support to contribute towards compensating for the withdrawal of Soviet aid following the collapse of the USSR. Felipe González commented in 1993 that he attributed Cuba’s economic crisis to the intrinsic errors of Cuban political economy rather than the US boycott and he sent a Spanish economic team to the island led by former Finance Minister Carlos Solchaga, to promote economic liberalisation (Grugel, 1995: 150). The PSOE government nevertheless resisted US pressure to join the economic blockade. Indeed, Spain established itself as the largest foreign investor in Cuba during the early 1990s, with particular interests in the hotel industry. It was therefore understandable that Spain joined with EU colleagues to condemn the US attempt to tighten the economic blockade of Cuba via the Helms-­Burton legislation, which sought to further isolate the Castro regime by strengthening the trade embargo against Cuba and extending US legislation to foreign companies investing in both the US and Cuba. The change of government in Spain following the March 1996 general election nevertheless had a considerable impact on relations with Cuba. In November 1996 relations reached crisis point as Cuba reacted to the new Spanish Prime Minister’s efforts to persuade the EU to adopt a tougher stance on the Castro regime by withdrawing the Spanish ambassador’s credentials. The suspension of normal diplomatic relations between 1996 and 1998 prompted the PSOE opposition to accuse Aznar of providing other EU countries with an opportunity to displace Spain’s investment interests on the island. Spanish commercial interests on the island (in particular, tourist investments) had a key influence with regard to persuading the PP government to reverse its stance in 1998 (Barbé, 2001: 55). Following the PP government’s retreat from its hard-­line stance, its policy on Cuba became virtually indistinguishable from that of the PSOE government, based on the promotion of investment and commercial links, with such economic engagement being justified as the best means of promoting political change (Youngs, 2001a: 114). Domestic actors in the form of Spanish commercial interests therefore had sufficient clout to challenge – and contribute towards reversing – a policy identified with the figure of the Prime Minister himself. Overall, it must be concluded, whilst ‘Spain’s Europeanism has been well

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served politically by her simultaneous interest in, and ties with, Latin America and the Mediterranean’ (Gillespie, 2000: 177), the latter region produced far more tangible results as far as Spanish diplomacy under the PSOE was concerned. Considering Latin America to be firmly within the US sphere of influence, the EU never considered the region to be a priority area, thereby hampering the PSOE’s efforts to amend this situation. The PSOE government must therefore be judged to have enjoyed greater economic success than political success in its dealings with the region as it successfully encouraged Spanish firms to establish themselves as key investors in the area.23 Conclusion It will be recalled that, at the start of this chapter, it was noted that a defining characteristic of the policy process with respect to foreign policy, contributing to its complexity, is that it is subject to constraints and variables outside the control of the domestic political system. Whilst agreeing that the key constraints and variables impinging on the decision-­making autonomy of the government were indeed external, and therefore largely outside its control, we must nevertheless highlight the growing importance of domestic actors serving as a structural constraint in the form of the Autonomous Communities. Constraints on the government’s autonomy with respect to the policy were therefore being exerted both from above in the form of transnational factors, as well as below in the form of the Autonomous Communities. Spain’s membership of the EU acted as the key constraint on the government’s autonomy with respect to policy autonomy due to the manner in which the European integration process contributed towards a growing trans-­ nationalisation of economic activity. The launch of EMU implied a greater role for markets and further loss of autonomy for national states, in favour of both politically independent EU institutions and, increasingly, regionally based authorities (Heywood, 1999: 117). With respect to budgetary discipline, fiscal harmonisation, or macroeconomic convergence plans, central government accepted that the EU ‘rules of the game’ were better than the alternative. Seeking no opt-­outs, the government ensured that Spain secured a place in the first wave of key EU developments and initiatives (Granell, 2001: 67). Globalisation further reinforced the government’s stance with respect to appreciating the constraints imposed on its policy-­making autonomy. Moving from global and European constraints to domestic constraints, the growing profile of the Autonomous Communities was a major development with respect to the Spanish policy-­making arena. The relationship between the various levels of government in Spain underwent significant changes under the PSOE government as a result of both external and internal developments. Broader forces of globalisation, increasing recognition within the EU itself of the importance of sub-­national actors, and the open-­ended nature of Spain’s autonomous process all served to increase the salience of the autonomy-­related issues within the Spanish policy process. The electoral decline suffered by the PSOE

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during the 1990s and, in particular, the loss of the party’s absolute majority at the 1993 general election, transformed the capacity of certain of the Autonomous Communities to secure greater financial resources and develop direct contacts with EU institutions independently from central government. A fundamental characteristic of these processes was their incompleteness, thereby injecting a further element of complexity into the Spanish policy process. These developments took place despite the constraints imposed by the institutional framework in the form of Article 149.1, which, as we have already noted, grants the State exclusive power in matters of international relations. The EU therefore provided an opportunity for regional parties to develop their own international presence and policies, but also represented a means for the pursuit of their conflictive relations with the Spanish state (Alaminos, 2001: 103). Although the PSOE government sometimes reacted with chagrin at several of these developments,24 it had little choice other than to bargain if it wished to remain in office. This situation was prolonged when the minority PP government required the support of nationalist parties to remain in office between 1996 and 2000. We can therefore conclude that the Autonomous Communities provided one of the main constraints on the PSOE government throughout most of the 1990s. Sub-­national constraints combined with transnational constraints in the form of globalisation and the decrease in central government’s economic policy autonomy linked to Spain’s membership of international organisations, most particularly the EU, to further reduce the core executive’s control over the Spanish policy process. Sub-­national elites were now joining, and to some extent, threatening to bypass, national elites with respect to relations with the EU. The ‘core executive’ with respect to foreign policy appeared to be based around the figure of the Prime Minister himself, and the Ministry of Foreign Affairs, with the Secretariat of State for the EU having an especial prominence. The Spanish Permanent Representative in Brussels also appears to have formed an axis with the former institutions to establish a policy network directed towards defending Spain’s interests at the EU level. Institutional links between the Secretariat of State for the EU and the most dominant ministry within the Spanish policy process, the Ministry of the Economy and Finance, also appear to be significant. It is nevertheless difficult to establish the degree of influence exerted on the Prime Minister and the policy process as a whole by the team of policy advisers located within the Research Department of the Office of the Presidency (Gabinete de Estudios de la Presidencia). During the early years of Felipe González’s leadership, the PSOE’s promotion of a radical line in the domestic sphere was matched by the pursuit of a similarly ideological line in foreign and security policy. Policy positions were nevertheless gradually toned down as the party neared governmental responsibilities. When the party reached office in 1982 this process continued as the need to conclude EC membership negotiations established itself as the PSOE government’s chief foreign policy goal. The chief exception to this process of moderation in its foreign and security position was the party’s stance on NATO. Given the strength of anti-­Americanism in Spain and the political unpopularity of Spain’s

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proposed NATO membership, the PSOE was able not only to sustain its opposition to NATO membership, but also to use its apparently unequivocal stance to advance a security policy clearly distinct from that of the government as a vehicle for mobilising its electorate at the 1982 general election. The maintenance of this stance nevertheless became untenable as the party leadership came to appreciate the de facto link between the issues of European integration and the NATO Alliance. In essence, if the PSOE government’s key foreign policy aim of obtaining Spanish membership of the EC required Spain to remain within the Alliance, the leadership considered the U-­turn to be a price worth paying. Once in office, the PSOE leadership learned that security was as necessary a component of the European project as the political and economic aspects. The PSOE’s priority foreign policy task of ensuring Spain’s successful integration into the EC as the key element in its bid to modernise Spain played the key role in conditioning attitudes in the party towards NATO. Once assured of the advisability of remaining within the Alliance, the government was prepared to accept the political risks involved in the holding of a referendum which it was not confident of winning. Not surprisingly, Felipe González later described the holding of the referendum as one of his greatest mistakes. As he commented in 1996, ‘the truth is that, although it worked out alright, it was the sort of mistake which shouldn’t be committed in politics, because I believe that nobody is entitled to subject the people to the pressure of taking a decision on whether or not a country belongs to a military alliance’ (González, 1996: 10). Significantly, the PSOE government chose to play down security issues as it appealed to the Spanish population to support Spain’s continued membership of NATO. On the contrary, the government claimed that the country’s economic well-­being would be jeopardised by Spain leaving NATO. Perhaps most importantly, the government was convinced that any question of Spain seeking to leave NATO would adversely affect Spain’s bid to join the EC. The government was also aware that existing EC members were unlikely to look favourably on any attempt to withdraw Spain from NATO. The need to improve relations with the US was a further constraint impinging on the government. Having formalised the country’s security situation following the NATO referendum in 1986 and reached a new bilateral agreement with the US in 1988, the PSOE had repositioned Spain as a full participant in European security. Thereafter, the PSOE government placed itself quite definitely amongst those EC member states in favour of constructing a European Security and Defence Identity (ESDI), favouring a federalist rather than an intergovernmentalist approach to European integration, and a ‘Europeanist’, rather than an Atlanticist defence model for Europe (Barbé, 1998: 147–8). As Felipe González’s foreign policy adviser, Carlos Alonso Zaldívar, argued in 1991, ‘Spain is at this time one of the countries most clearly in favour of “Europeanising” European security, including its military aspects. Whenever anything significant happened in this direction, the Spanish government has not failed to take an interest and express its opinion about it’ (Alonso Zaldívar, 1991: 211). The PSOE presented its negotiations with the US as fulfilling the referendum conditions for continued Spanish membership of the

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Alliance, which had been justified in ‘Europeanist’ terms. The negotiations, which have been described as having ‘brought US-­Spanish relations to an historical low point’ (Rodrigo, 1992: 107) engendered an ill-­feeling in bilateral relations which only dissipated when Spain proved itself to be a reliable ally during the Gulf War. The PSOE government’s view on European security was that an active EU international role was based on credible economic and political foundations, the latter element being incomplete without a security dimension. Furthermore, the PSOE believed that attempts to forge a closer and more effective foreign and security policy on the basis of the WEU could be made without damaging links with NATO and the US. The validity of the PSOE government’s approach to security matters obtained international endorsement when the Spanish Foreign Minister, Javier Solana, was appointed as NATO secretary-­general in 1995. The appointment was much welcomed in Spain and was viewed as providing the international community’s imprimatur in respect of the country’s normalisation in the security field. If NATO were to adequately reflect the emerging European security and defence identity, it could hardly have had a more ideal man in charge than Solana, whose party had long since advocated such a development. Indeed, Solana’s appointment as the High Representative of the EU for the Common Foreign and Security Policy (CFSP) in October 1999, and Secretary General of the WEU from November 1999, indicated the EU’s recognition of Solana’s particular suitability for both posts. Although the end of the Cold War appeared to improve the prospects of developing a new European security framework, Europe’s response to the Gulf War and the war in the former Yugoslavia was widely viewed as being inadequate. The PSOE therefore agreed with the EU’s line at Maastricht that failures in the European security sphere justified its promotion of a Common Foreign and Security Policy, although they were disappointed by the lack of momentum towards more extensive majority voting within the EU on foreign and security policy and the integration of defence and the WEU into the EU itself. Given that Spanish public opinion was broadly opposed to direct Spanish involvement in the Gulf War, the PSOE government chose to present its participation in the conflict as an aspect of Spain’s European obligations, much as the PSOE had defended Spain’s continued membership of NATO during the referendum campaign in 1986. The strategy appeared to work: at the end of the Gulf War, an opinion poll indicated that 62 per cent of the public supported the government’s role during the conflict (Alonso Zaldívar and Castells, 1992: 215). European integration provided the PSOE with the ideal means with which to present controversial policy options to a public with a distinctively isolationist viewpoint which nevertheless identified with the PSOE’s key policy of using the European integration project to modernise the country. As Marks and Verney argue, ‘Felipe González defended his decision to assist in the preparations for war by arguing that it served Spanish interests by connecting the country’s contribution to his vision of Spain’s place in Europe . . . his analysis of the Gulf War situation was framed by the wider process of European integration in its many aspects’ (Marks with Verney, 1995: 14).

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European integration therefore provided the PSOE with the ideal framework on which to elaborate a national security policy more in line with Spain’s allies. In this connection, European integration provided an opportunity rather than a constraint. As the PSOE government’s perception of Spain’s relationship to European security developed, it advocated Spain’s remaining in NATO, and involved itself in those institutional developments which favoured a European security policy identity, the WEU and the CFSP. This institutional progression brought about a policy more in line with West European security norms which was capable both of satisfying Spain’s international obligations and obtaining public support. The end of the Cold War served to further defuse public opposition to Spanish membership of NATO, so that when the PSOE’s PP successors in government negotiated Spain’s full integration into NATO’s military command in November 1997, it did so without provoking significant public opposition. The development also met with the parliamentary support of the PSOE. With regard to the Mediterranean, the PSOE government was able, in the context of the end of the Cold War, to secure an influential role within the EU’s pro-­Mediterranean lobby and to promote a more effective EU strategy towards the region which would address the concerns of Spanish foreign and security policy. This strategy had two components: firstly, to convince its EU colleagues that the socio-­economic security of the EU’s southern flank depends on the fostering of economic prosperity in the region, and secondly, to encourage the EU to acknowledge that the problems posed by the region have broader implications for the EU as a whole. The PSOE government was therefore able to make use of the EU as a more effective ‘vehicle’ for its policy than any unilateral Spanish initiative could realistically hope to be. The EU provided the means to support Spanish regional foreign policy aims which Spain could not effectively implement on its own. This strategy enabled Spain to ‘punch above its economic weight’ in the region (Gillespie, 1997: 46). ‘Europeanisation’ of Spanish policy in the region nevertheless did not preclude the cultivation of existing bilateral relations with countries of the region. Most notably, throughout the Gulf War, Spanish diplomacy maintained a close dialogue with the countries of the Maghreb in an effort to explain Spanish policy and avoid deterioration in bilateral relations. EU membership also enabled the PSOE government to bring Spanish policy in line with European norms, the most obvious example being the establishment of diplomatic relations with Israel shortly after Spain joined the EC. This development, the intensification of existing relations with the Arab nations of the region, and Spain’s increasing awareness of its key geo-­strategic position in the Western Mediterranean all contributed towards Spain’s emergence as an influential player in the region capable of shaping EU policy during the 1990s. In its programme for the 1982 general election, the PSOE had ambitiously proposed ‘a Mediterranean policy which will enable Spain, as a top-­ranking power in the region, to play an active role in harmonising the interests of countries on both shores of the Mediterranean’ (PSOE, 1982: 46). Nearly fourteen years later, when the PSOE left office, it could justifiably claim to have achieved considerable success in realising this aim, having given Spain a more assertive profile within

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the EU as one of the most innovative countries on Mediterranean foreign policy and security issues. The PSOE’s record on Latin America was more mixed. In Central America, despite the PSOE government’s undoubted interest in the region, it must nevertheless be noted that its policy towards the region always remained subordinate to what it viewed as being the more important foreign and security policy goals defined by the Euro-­Atlantic system. This stance required the PSOE government to make a realistic appraisal of US hegemony in the region, whilst accepting the limitations of the EU as an independent international actor. Strident PSOE criticism of US policy in the region therefore gave way to a more muted attitude, a process which was facilitated by the lessening of tension in the region towards the end of the 1980s, as peace and stability were re-­established through regional co-­operation. Overly ambitious hopes of employing the EU as a more effective surrogate for Spanish policy aims were scaled down as the PSOE government recognised that whilst the Community had an interest in institutionalising relations with the countries of the region, its financial commitment was more equivocal. It was a pattern which would be repeated with regard to EU policy to Latin America as a whole. The PSOE government left office in 1996 having gained a far more realistic appreciation of its capacity to shape EU policy towards a region of the world which the Union steadfastly refused to recognise as being a core concern. Although the PSOE government lobbied for increased political and economic dialogue between the EU and Latin America, with Spain contributing towards the achievement of a number of measures advantageous to Latin America, the EU’s commitment to the region remained limited. Whilst the PSOE enjoyed a significant input into the elaboration of EU policy towards the Mediterranean, a region considered as a key area of economic and strategic concern to the EU, its efforts to do the same in Latin America were frustrated by the EU’s marginal interest in the region. In this context, European policy alone was an inadequate instrument for the implementation of Spanish foreign policy aims in the region. This situation nevertheless did not preclude significant bilateral action outside the framework provided by the EU. Indeed, it can be argued that having accepted the limitations of the EU as an actor in the region, the PSOE government had some success in pursuing a more autonomous policy in the region which more adequately served Spanish policy aims. Conscious that Spain’s own interests in Latin America could only be met by significantly increasing its economic presence in the region, the PSOE government raised Spain’s international profile by encouraging Spanish investment, to the extent that Spain was able – albeit briefly  – to establish itself as the largest investor in Latin America in the mid-­ 1990s. The PSOE government’s role in encouraging the involvement of publicly owned enterprises in Latin America left them well placed, following substantial merger activities and privatisation from the mid-­1990s, to establish a leading investment role in the region Spanish commercial interests thereafter established themselves as significant actors with respect to Spanish foreign policy towards the region. The relative

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lack of interest expressed in the region by the EU has, therefore, to some extent had positive consequences for Spain, in that it provides a wider margin for Spanish political manoeuvring to further Spain’s own Latin American interests. Latin America is thus a good example of where increased Common Foreign and Security Policy harmonisation may in fact constrain Spanish foreign policy (Barbé, 2001: 56). Moreover, the PSOE government was able to seek to enhance Spain’s prestige in the region via initiatives outside the framework of the EU, such as the Latin American Community of Nations. Nevertheless, it is important not to over-­ emphasise the importance of the Spanish–Latin American relationship for the PSOE. Just as the PSOE government did not view Latin America as being the main focus of foreign policy, neither did Latin America view the EU as being a priority concern, and even less so Spain itself. The PSOE government’s foreign policy imperatives remained within the framework set by Spain’s European orientation, just as Latin American countries concentrated on regional integration initiatives such as Mercosur and the retention of strong links with the region’s key trading partner, the US. The prospective Free Trade Area of the Americas was a further key focus of Latin American interest (Youngs, 2001a: 119). The PSOE government’s development of links with Latin America – whether within the framework of the EU or on a more autonomous basis – did not alter the basic fact that Spain’s future lay within the parameters set by the EU, most notably the Common Foreign and Security Policy, thereby effectively relegating the Latin American element within Spanish foreign policy to a secondary plane. We can therefore conclude that there was a ‘Europeanisation’ of the foreign and security policy process which entailed both constraints and opportunities. Constraints centred on the degree of erosion of the PSOE government’s policy-­ making autonomy. With respect to the opportunities offered by ‘Europeanisation’, the government was provided with the ideal means to provide Spain with a coherent national foreign and security policy more in line with that of the EU as a whole. ‘Europeanisation’ effectively put the final nail in the coffin of the concept of Spain being ‘different’, a notion which had not been completely dispelled when the PSOE entered office in 1982. European integration therefore enabled the foreign and security component of Spain’s transition to democracy to be completed. This approach gained the support of the vast majority of the Spanish people, who identified with the PSOE’s utilisation of European integration as being the key element in its all-­embracing policy/leitmotif of ‘modernisation’. Notes  1 Barbé notes elsewhere that the four consecutive PSOE governments (1982–96) defined Europe, Latin America and the Mediterranean as the three priority areas for Spanish foreign policy and that the first PP government (1996–2000) maintained these three priority areas, defining them as permanent interests. She envisages Spain’s permanent interests as a triangle, with Europe occupying the top of the triangle, dominating and determining the relationship with the other two geographical spheres (Barbé, 2001: 51).

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We might conclude, therefore, that the historical nature of Spain’s ties with both regions – despite the fact that the ‘special’ nature of these relationships was more rhetorical than real under Franco – reinforced their status as priority areas of Spanish foreign policy under both the PSOE and PP governments.  2 The most active ministries with respect to being players in the EU arena include, in addition to the Ministry of Foreign Affairs, Economy and Financial Affairs, Industry and Energy, Public Works, Transport and Environment, Agriculture, and Health and Consumer Affairs (Morata, 1996: 145).  3 The Secretariat of State for the EU was renamed as the Secretariat of State for Foreign Policy and the EU (SSEU) by the incoming PP government in May 1996. The effect was to widen its remit to include foreign policy as well as the co-­ordination of EU affairs. The shift was a clear indication of the Secretariat’s growing importance within the policy process with respect to foreign affairs.  4 Heywood adds that González showed a readiness to adopt a ‘hands-­off’ approach with regard to his cabinet, preferring to leave day-­to-­day domestic political matters to his ministers and to his deputy (Heywood, 1995a: 101).  5 The Economist considered that the PSOE had accepted a punishing treaty for both domestic industry and agriculture (Pérez, 1997: 158).  6 The European Commission’s Annual Report of the Cohesion Fund 1997 outlined projects completed with the fund’s assistance by the end of 1997. Environmental projects ranged from those aimed at the preparation of areas for public use in national parks, to sewerage and waste management projects. Transport projects included the M40 Madrid ring road, the conversion of several roads into motorways, and the construction of bypasses in Lérida and Gijón (European Commission, 1999: 85–8).  7 Commenting on José María Aznar’s PP government, Alaminos argued that ‘the PP government, like its Socialist predecessor, faces no significant public opinion constraints on the principle of committing Spain to deeper integration’ (Alaminos, 2001: 96). It would take the international economic crisis, which intensified after 2008, for the Spanish public to reconsider its hitherto relatively uncritical stance on European integration.  8 The Single Market and Maastricht, and, more generally, the phenomenon of globalisation, have favoured the increased profile of regional and local actors on the European scene. Recent years have witnessed a growth in initiatives serving to reinforce the role of sub-­national actors at the European level and develop new formulas of interregional and inter-­municipal co-­operation (an example of this phenomenon would be the International Union of Local Authorities – IULA), making use of the incentives stemming from the EU programmes and policies (Morata, 1997: 148–9). Gibbons nevertheless notes that tensions have been apparent in the distribution of regional funds which Spain has received since 1988 through the Community Support Frameworks. Spain–EU Commission tensions were evident from the outset in the preparation of the plans for these funds, as Spain originally rejected the idea of its regions participating in the process, although it eventually backed down. The allocation of funds received through the Community Support Frameworks also provoked tensions between the Spanish government and the regions, as central government retained control of a considerable tranche of the funds and denied the regions a role in allocating these funds (Gibbons, 1999: 35).  9 For further details of the autonomous pact, see Chapter 6. 10 Co-­ordination between the major EU institutions and the regional departments dealing with Community affairs is also arranged by the Secretariat of State (Newton with Donaghy, 1997: 335).

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11 Sahagún (2001: 156) suggests that the following factors have most shaped the negative attitudes of both Spain and the US: overall ignorance of more than 300 years of shared history; mutual isolation during the larger part of the nineteenth century; the Spanish-­American War of 1898; Spanish neutrality during both world wars; Franco’s ties to Nazi Germany and Fascist Italy; US ideological, economic and military support for the Franco dictatorship; profoundly divergent strategies to meet the major challenges posed by Latin America, at one time based simply on differing political views, but now based on trade and economics as well; different perceptions of regional and global threats, and divergent opinions on the use of force to carry out foreign policy; the fact that European integration has become Spain’s number one strategic priority, which could somehow clash with US interests; the images of Spain and the US depicted in each other’s media, especially film and television. 12 Commenting on the PSOE’s programme for the October 1982 general election, Heywood has noted that ‘as if to compensate for the mildness of its economic proposals, the PSOE appeared to emphasise its more leftist credentials in the area of policy’ (Heywood, 1994a: 15). 13 Morán is nevertheless contradicted by the then Defence Minister, Narcís Serra, who has argued that the question of NATO ‘was linked to the question of the military and entry into Europe, because keeping Spain in NATO was a condition’ (Burns Marañon, 1996: 189). 14 Morán commissioned a paper on the range of options available, written by diplomats from the Ministry of Foreign Affairs and the Spanish delegation to NATO. Supporting membership of the Alliance, it was sent to González in June 1984. The paper, together with analyses prepared by the Defence Minister, Narcís Serra, and González’s special foreign policy adviser, Juan Antonio Yáñez, was used to prepare the Decalogue (Rodrigo, 1995: 62). 15 Sahagún nevertheless claims that ‘the Pentagon always considered Spain to be a second-­class ally’ (Sahagún, 2001: 163). 16 The choice of Barcelona as the venue for the conference was a further indication of the influence exerted by the PSOE’s parliamentary ally, Convergència i Unió, on the government. Felipe González’s successor as PSOE General Secretary, Joaquín Almunia, nevertheless assured me in an interview held in May 1995 that Convergència i Unió was unlikely to condition the PSOE government’s freedom to act during the EU Presidency held in the second half of 1995. 17 Indeed, the Latin American reaction to Spanish investment was mixed, and increasingly strained as the 1990s progressed. Talk of a backlash against the Spanish presence became increasingly common (Youngs, 2001a: 111). 18 Iberia took over Aerolíneas Argentinas, the Argentinian national carrier, in 1990, only to scale back its investment during the mid-­1990s. Iberia’s Latin American adventure (it also invested in Chilean and Venezuelan airlines) cost it about $900 million (Chislett, 1997: 62). The manner of Iberia’s takeover of Aerolíneas Argentinas is of interest with respect to the policy process under the PSOE in that a reputedly reluctant Iberia took over the Argentinian carrier after a deal had been struck between Felipe González and the Argentinian President, Carlos Menem. Certain large scale investments therefore appeared to be arranged at the political level under the PSOE (Youngs, 2001a: 112). 19 Youngs similarly argues that Spanish companies were obliged to begin looking for new markets in Latin America due to their failure to compete within the EU itself (Youngs, 2001a: 109–10).

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20 In less than a decade the Banco Santander Central Hispano and the Banco Bilbao Vizcaya Argentaria had established themselves as Latin America’s leading financial franchises. They employed more people in Latin America than in Spain (Chislett, 2001: 171). 21 An indication of the rapid nature of the growth in Spanish foreign direct investment in Latin America during the mid-­to late 1990s is that the region accounted for just 12 per cent of Spanish foreign direct investment between 1991 and 1993 (Youngs, 2001a: 108). 22 For a critical study of the summits, see Youngs, 2001a: 117–20. 23 Felipe González has claimed that when the PSOE left office in 1996, Spanish firms owned 11 per cent of Argentina’s GDP (Prego, 2000: 319). 24 The Catalan regional government, the Generalitat, established a Commissioner for the Foreign Activities of the Generalitat (Comisionado para Actuaciones Exteriores de la Generalitat) in 1992 (Morata, 1997: 148). The response of the PSOE Foreign Minister was to rule the initiative ‘unconstitutional’ (Vilanova, 1997: 442).

6

The PSOE and the question of regional autonomy The

One of the key elements of the 1978 Constitution had been its consideration of the question of devolution of power to Spain’s regions. Whilst significant progress was made under the UCD government between 1977 and 1982, it was under the PSOE that the process reached maturity, with Spain having become of the most decentralised countries in Europe by the time that the party left office under Felipe González. Such was the influence of autonomous regions such as Catalonia that it was the withdrawal of the parliamentary support of the Catalan regionalist part, Convergència i Unió, which forced González to call early general elections for March 1996. During its first term in office (1996–2000), Jose María Aznar’s PP government was similarly dependent on the parliamentary support of regional parties. With the PSOE being short of an overall majority after winning both the 2004 and 2008 general elections, regional parties retained their prominent ­position on the national political stage. This chapter will sketch out the historical background of the devolution process in Spain, including consideration of the consolidation of Spain’s regional ­autonomy process during the PSOE’s period in office under Felipe González, 1982–96. The UCD government and regional devolution, 1977–82 The question of relations between the centre and the periphery in Spain has a long history. Although autonomy statutes for Catalonia, the Basque Country and Galicia were either approved or in the process of approval during the Second Republic when the Civil War began in July 1936, Franco’s victory enabled him to impose a rigid centralisation. Although the repression visited on any manifestation of regionalism under Franco served to keep regional feeling in check, it did not neutralise the issue. Rather, it placed regional sentiments in deep freeze. The thaw began as a result of the profound socio-­economic changes experienced by Spain during its economic ‘miracle’ in the 1960s; by the time of Franco’s death in November 1975, the regional issue had forced itself towards the top of the political agenda. Governments during the subsequent transition to democracy

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acknowledged that the settlement of the regional question was a key component in securing the necessary social support for the democratisation process. Translating this aim into practice was therefore one of the most challenging tasks facing governments when democracy was re-­established after the dictator’s death. Agreements were reached with Catalonia, the Basque Country and Galicia on the provisional establishment of their regional governments, the Generalitat, the Consejo General Vasco and the Xunta, respectively, between September 1977 and April 1978. The exceptional nature of these ‘historic nationalities’ was further acknowledged in the Constitution drawn up by representatives from the main political parties and approved by the Spanish people in a referendum held in December 1978. According to its terms, Spain was described as being neither federalist nor unitary, but rather, a state made up of Autonomous Communities. Under transitional provision 2 of the Constitution, those regions which had previously voted in favour of autonomy, i.e. Catalonia, the Basque Country and Galicia, and which already had provisional autonomy arrangements in place, would qualify for the ‘fast route’ towards full autonomy. This meant that these three regions were authorised to assume immediately any powers other than those reserved to the central government and set out under Article 149 (see below), without having to meet the demanding conditions laid down for other regions which wished to do so (Ross, 1997: 75). Autonomy Statutes were approved in Catalonia and the Basque Country in 1979 and in Galicia in 1980. It was anticipated that any of Spain’s remaining fourteen regions seeking to proceed towards autonomy would do so in accordance with Article 143 of the Constitution, which offered a ‘slow route’ towards autonomy. These regions would be granted a lower level of autonomy than the ‘historic nationalities’ and have to wait a period of five years after approval of their statutes before they could proceed towards the level of autonomy enjoyed from the outset by Catalonia, the Basque Country and Galicia. In addition, any region seeking to obtain the same level of autonomy enjoyed by the ‘historic nationalities’ was allowed to apply via an ‘exceptional route’ contained in Article 151 of the Constitution, although it would have to satisfy far more complex conditions, including the holding of a referendum in which the proposed statute had to be approved in each of the region’s provinces. To the surprise of the UCD government, Andalusia applied under Article 151, and although the strict conditions were not met in full (less than 50 per cent of the electorate in the Andalusian province of Almeria voted in favour), the government reluctantly granted the speedier, higher level of autonomy and Andalusia’s Autonomy Statute was approved in December 1981. Valencia, the Canary Islands and Navarre also gained a higher level of autonomy than that provided for in Article 143 when parliament granted them extra powers, whilst Navarre was awarded its own special route towards autonomy on account of its fueros (historic rights), which even Franco had respected in recognition of the region’s support throughout the Civil War. Consequently, only ten of Spain’s seventeen regions applied for autonomy via the ‘normal’ route provided for in Article 143, a development which those

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drawing up the Constitution had not envisioned. With regard to the distribution of power between the central state and the Autonomous Communities, the Constitution reserves to the central state responsibility for competencies including international relations, defence and general economic policy (Article 149.1). Morata notes that ‘the real key to the distribution of political power between the central state and the Autonomous Communities lies in the list of competences reserved to the central state (Article 149.1 of the Constitution), whose imprecision and ambiguities have been a constant source of dispute between both levels of government . . . in reality, what we have is a system of shared competences’ (Morata, 1997: 125). As we will see below, the PSOE government’s declining electoral fortunes after 1989 enabled the governments of Spain’s autonomous regions to mount increasingly successful challenges with respect to central government in Madrid. Article 148 sets out those competencies which the Autonomous Communities may assume, including public works in the interests of the Autonomous Community, environmental protection and support for the economic development of the Autonomous Community within the framework of national economic policy. The Autonomous Communities could also assume those competencies not included in Article 149.1 in accordance with the provisions of their respective Statutes of Autonomy (Article 149.3). The UCD government gave the impression of having lost the initiative with respect to the autonomy question by early 1981. The air of crisis surrounding the UCD following Adolfo Suárez’s resignation as Prime Minister in January 1981 was further deepened by the coup d’état the following month. One of the chief complaints levelled by those participating in the coup was that the autonomy process had gone too far. The subsequent period was therefore notable for a certain backtracking with regard to autonomy and the emergence of a bipartisan approach between the UCD and the PSOE aimed at defusing the tensions which had found expression in the coup. Together with the PSOE, the UCD government, now under Leopoldo Calvo-­Sotelo, agreed that no other region would be allowed to repeat Andalusia’s success in gaining ‘fast route’ autonomy. Moreover, both parties agreed to the drawing up of a new law, the Ley Orgánica de Armonización del Proceso Autonómico (Organic Law on the Harmonisation of the Autonomy Process – LOAPA). The LOAPA established that the power of the Autonomous Communities to legislate in certain areas would be subject to the approval of central government. With the joint support of the government and the PSOE, the LOAPA was approved by parliament in June 1982. Viewing the measure as an affront to their regional aspirations, the Basques and Catalans referred the draft law to the Constitutional Court (Tribunal Constitucional), the body provided for in the Constitution to rule on such matters. Before the Constitutional Court was able to reach a decision, the general election of October 1982 was held and the PSOE replaced the UCD in government. By this stage, thirteen of the seventeen Autonomy Statutes had been approved, and the remaining Statutes (those of Extremadura, the Balearic Islands, Madrid and Castile-­Leon) gained approval in February 1983.

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The section of the Constitution concerned with the territorial organisation of the State had therefore permitted the relatively rapid construction of the foundations of Spain’s autonomous process. The very sensitivity of the question and the differing political views of the architects of the Constitution had led to compromises which translated into a certain imprecision in the definition of several of the Constitution’s key concepts. These ambiguities required permanent bargaining between the political parties, the central state and regional governments over several crucial issues (Núñez Seixas, 2000: 323). These questions included the definition of the jurisdictions of the levels of government, the resolution of details regarding the financing of the system and the absence of a mechanism for transferring resources from richer to poorer regions. The PSOE’s task as it entered office in 1982 was therefore no less than the rationalisation and consolidation of an increasingly dynamic process of decentralisation. Effectively, the PSOE had to square the circle of minimising the flexibility of the devolution process, whilst simultaneously reinforcing the dominant role of the central state and responding to the demands of the Autonomous Communities (Hollyman, 1995: 18). Consolidation of the regional autonomy process during the PSOE’s period in office, 1982–96 Rather than seeking to establish a set of institutional relations with the Autonomous Communities, the PSOE government opted in favour of dealing with each individual Autonomous Community over specific issues (Aja, 1992: 53). This approach increased the importance of the Constitutional Court, which had jurisdiction over disputes between central government and the Autonomous Communities over which competences were ‘exclusive’ or ‘shared’. The Constitutional Court ruled on 847 cases between 1981 and 1993, the vast majority emanating from Catalonia and the Basque Country (Gibbons, 1999: 21). The number of cases brought before the Constitutional Court fell sharply after 1989, suggesting the establishment of improved levels of communication between central government and the Autonomous Communities (Heywood, 1995a: 147–9). Indeed, only eight cases were brought before the Constitutional Court in 1995, the PSOE’s last full year in office under González (Aizpeolea, 1996: 122). The Constitutional Court had nevertheless over time established itself as a significant political actor to the extent that it was charged with deciding between the conflicting claims of different levels of government with respect to competence over particular issues. The successive overall majorities enjoyed by the PSOE nevertheless enabled the government to more often than not impose its will during the drawing up of legislation, thereby constraining the development of Autonomous Communities’ competences (Morata, 1997: 127). One of the chief sources of dispute was the question of the financing of the Autonomous Communities. Although Article 156 of the Constitution states that Autonomous Communities should enjoy financial autonomy, regions were awarded more freedom in the spending of revenue and in the drawing up of their

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own budgets than in levying their own taxes or sharing in taxes levied by the State (Newton with Donaghy, 1997: 124). The State nevertheless retained overall responsibility for taxation. With the exception of Navarre and the Basque Country,1 the Autonomous Communities were subject to the Ley Orgánica de Financiación de las Comunidades Autónomas (Organic Law on the Funding of the Autonomous Communities – LOFCA) approved by parliament in 1980. Under the terms of the LOFCA, regions received a block grant, dependent on the cost of carrying out the responsibilities transferred to them. They were also allowed to retain the revenues from certain specified taxes and other sources, such as fines, once authorised to do so by the central government (Ross, 1997: 80). Due to the protracted nature of the devolution of powers to the regions, transitional arrangements were put in place between 1980 and 1986 (Newton with Donaghy, 1997: 125). Autonomous Communities took on increasing powers and responsibilities thereafter. A third of the national fiscal deficit was accounted for by regional government deficits by 1990 (Youngs, 1999: 63). Regional and local governments’ debt grew ten-­fold, from 649 billion pesetas in 1982 to 6,960 billion in 1995 (Pérez-­Díaz, 1999: 111). The percentage of total public spending accounted for by central government fell sharply, from a fraction under 90 per cent in 1980 to just below 66 per cent in 1994. Article 16 of the LOFCA had also provided for the establishment of the Fondo de Compensación Interterritorial (Inter-­regional Compensation Fund – FCI), and further legislation was introduced in 1984 to reactivate the body (Eguiagaray Ucelay, 1992: 334–5). Given the task of correcting imbalances between the regions by means of positive discrimination in favour of the less developed areas, the FCI thereafter channelled a minimum of 30 per cent of the amount designated by the State for new public investment to the regions in accordance with a needs formula based on population density and other social and economic criteria (Newton with Donaghy, 1997: 127–8). The annual provision for the FCI had grown by 1994 to some 128,845 million pesetas ($1.3 billion or £645 million) (Hooper, 1995: 430). During the 1990s, the fund was more closely co-­ordinated with the EU’s Regional Development Funds (Hollyman, 1995: 19). Regional disparities nevertheless remained considerable. For example, per capita disposable income in Extremadura was only two-­thirds that of the Balearic Islands in 1993; Extremadura’s per capita GDP was less than half that of the Balearic Islands (Chislett, 1994: 137). The five-­year period stipulated for the ten Autonomous Communities proceeding towards autonomy via the ‘slow route’ provided for in Article 143 of the Constitution came to an end in 1987. Their claims for a similar level of autonomy to that enjoyed by the remaining Autonomous Communities were voiced with increasing vehemence thereafter. Despite some procrastination, the government finally reached a pacto autonómico (autonomous pact) with the PP in February 1992 aimed at rationalising the autonomy process. In exchange for agreeing an overall maximum level of responsibility, or techo autonómico, the ten ‘slow route’ Autonomous Communities assumed 32 new areas of responsibility, including

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responsibility for education and certain social services. A system of conferencias sectoriales (sectoral conferences) was also established aimed at improving communication between the central state and Autonomous Communities, and between the individual Autonomous Communities. The sectoral conferences brought together political leaders from both levels of government, expert committees and work groups made up of officials charged with administration and implementation. Amongst the most important sectoral conferences are the Financial and Fiscal Policy Council (Consejo de Política Fiscal y Financiera), the Conference for European Union Affairs (Conferencia para Asuntos de La Unión Europea), the Higher Council of Public Service (Consejo Superior de la Función Pública), the Interterritorial Council of the National Health System (Consejo Interterritorial del Sistema Nacional de Salud) and the sectoral conferences on Education, Agriculture, Industry and Energy, and the Environment. Most central and Autonomous Community ministries are therefore linked via institutionalised or informal channels (Morata, 1997: 128). During the PSOE’s first decade in office the autonomy process had therefore made significant – if costly – progress. The debt incurred by the regional and local levels of government rose seven-­fold between 1983 and 1993, from 952,900 million pesetas (of which the Autonomous Communities accounted for 163,700 million pesetas) to 6,602,100 million pesetas (the Autonomous Communities accounting for 3,782,400 million pesetas) (Barea Tejeiro, 1995: 262–3). Debt-­ servicing by the Autonomous Communities accounted for 5.2 per cent of nominal GDP at the end of 1994, up from 1 per cent of GDP in 1987. Including the local tier of government, total debt was 9.4 per cent of GDP. The number of people on the payroll of the seventeen Autonomous Communities rose fourteen-­ fold between 1982 and October 1995 to 621,616, as powers were transferred, and those employed by local government more than doubled to 425,881. The number working for the central government, however, fell by only a quarter to 905,810 (Chislett, 1996: 130). It should be noted that in contrast to the transfer of responsibilities for expenditure, income remained largely tied to transfers from the State to meet the cost of providing the services that were transferred (Salmon, 2001: 35–6). According to one study, in 1994, only 14 per cent of the revenue of Spain’s regional governments came from taxes and 86 per cent from central government transfers and debt instruments, compared with 28 per cent and 72 per cent, respectively, in Germany and 46 per cent and 54 per cent in the US (Chislett, 1994: 136). Indeed, Chislett described the lack of fiscal co-­responsibility as ‘a regional politician’s dream’, whilst noting central government’s reluctance to cede real power over spending (Chislett, 1996: 130). Steps made towards devolving government authority from the centre to the regions constrained the state’s management of the economy, requiring it to engage in a more consultative process in developing economic policy. Moreover it added an extra dimension to control over public expenditure (Salmon, 2001: 35). Without doubt, the amount of financial resources available to the Autonomous Communities and the degree of budgetary autonomy enjoyed by them constituted two significant indicators of their degree of political autonomy (Morata, 1997: 129).

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This expense was particularly problematic given the PSOE government’s efforts to meet the Maastricht convergence criteria. The level of debt incurred by regional and local government therefore added to the difficulties brought about by the downturn in the economy during the early 1990s. In this context, the government stalled over the introduction of so-­called corresponsabilidad fiscal (fiscal co-­ responsibility) – the transfer to the Autonomous Communities of a percentage of income tax receipts. Although the initiative had the advantage of establishing at least a partial link between the raising of revenue and the spending of that revenue by the Autonomous Communities, the government was still concerned about the effect of the measure on the central state’s budget deficit. After the 1993 general election, the PSOE government agreed to introduce fiscal co-­responsibility within three months of the election. According to the terms of the two-­year agreement, the Autonomous Communities would retain and dispose of 15 per cent of their own income tax revenues.2 As Morata has noted, this development meant that the Autonomous Communities took on the mantle of tax-­raising administrations for the first time (Morata, 1997: 136). The measure had a relatively modest effect on the central state’s finances, representing an additional cost of 9,757 million pesetas in 1995, of which Catalonia accounted for 2,615 million pesetas (García Abadillo, 1997: 72). Poorer Autonomous Communities feared that this development would ultimately be of more benefit to wealthier regions, on account of their greater tax-­generating capacity. The Autonomous Community of Galicia even lodged an appeal as to whether the move was constitutional. The initiative nevertheless represented progress as regards making the Autonomous Communities assume responsibilities for both spending and collecting taxes, thereby ­promoting greater budgetary discipline. During its final term in office (1993–96), the PSOE also claimed that it would seek to transform the upper house of the Spanish parliament, the Senado (Senate), into a more genuine Cámara de representación territorial (House of Territorial Representation), in accordance with Article 69 of the Constitution, although little progress was made, due to the fact that almost the entire term was notable more for a seemingly never-­ending series of corruption allegations rather than institutional change. The proposal was that senators would be elected directly by the regional assemblies and the Senate would be charged with initiating legislation relating to the Autonomous Communities (Newton with Donaghy, 1997: 143). Although the issue of transforming the Senate into a genuine parliamentary chamber of regional representation has been advocated by both PSOE and PP governments3 since the 1990s, neither party has made the effort to translate words into action and the Senate was no closer to becoming a federal-­style chamber of regional representation when the PSOE left office under Rodriguez Zapatero in 2011. The Senate unanimously approved a motion in November 1994 whereby the Autonomous Communities would be allowed to form part of Spain’s representation in EU institutions during the second half of 1995 when Spain held the EU Presidency (Brassloff, 1996: 7). Such policy developments were controversial given that, as we have seen above, Article 149.1 of the Constitution awards the

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central state exclusive competence over several areas, including foreign and security policy. The Autonomous Communities nevertheless sought to influence EU decisions both at the domestic and EU level using formal as well as informal channels. The Autonomous Communities have a key role in the allocation and distribution of the EU’s Structural Funds and the sectoral conferences provide the Autonomous Communities with some say with regard to Spain’s EU policy. Indeed, the plenary meeting of the Senate which met in September 1994, gathering together for the first time all the presidents of the Autonomous Communities, with the exception of the Basque President, voted unanimously in favour of considering the sectoral conferences to be the most appropriate mechanism for the participation of the Autonomous Communities in the EU. Furthermore, the motion accepted the possibility of there being direct representation in the institutions and bodies of the EU ‘when it is considered to be proper or because there are Autonomous Community experts who may enrich the position of the Spanish delegation’ (Morata, 1997: 147). The ten Autonomous Communities proceeding towards autonomy via the ‘slow route’ provided for in Article 143 of the Constitution gained extensive powers during the PSOE’s final year in office, 1995. The majority of them were given responsibility for universities and the National Institute of Social Services (Instituto Nacional de Servicios Sociales – INSERSO), as well as significant competences in labour matters, in accordance with the calendar agreed in the autonomous pact between the government and the PP in February 1992. Over the following two years, the competences awarded to the ‘slow route’ Autonomous Communities were set to be as extensive as those awarded to the ‘fast route’ regions (the main divergence being the responsibility for the National Health Institute (Instituto Nacional de la Salud – Insalud), which was not included in the 1992 pacts), with the transfer of responsibility for secondary school education. Indeed, throughout the course of 1995, the State approved 119 transfers of competence to the ‘slow route’ Autonomous Communities, and a further 39 to the ‘fast route’ Autonomous Communities – the largest annual total since the start of the process in the early 1980s (Aizpeolea, 1996: 123). Conclusion We can conclude this section on the consolidation of the regional autonomy process under the PSOE by stating that a process of socialisation and, particularly after the party lost its overall majority at the 1993 general election, realpolitik informed the PSOE government’s attitude towards the decentralisation of power. Even before the party entered office in 1982, it had played a key role in the elaboration of legislation, the LOAPA, which would have effectively curtailed the autonomy process, and possibly de-­stabilised the relationship between the central state and the regions. The PSOE’s support for the LOAPA must be viewed in the context of the sensitivity of the regional question following the coup d’état of February 1981. When the LOAPA was ruled to be unconstitutional, the PSOE rejected the adoption of a ‘broad brush’ approach to decentralisation in favour of

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negotiation with each individual Autonomous Community. Whilst this approach had the disadvantage of many disputes between the central state and the regions having to be settled by the Constitutional Court, the system had become sufficiently consolidated by the end of the 1980s for the government to consider a further expansion of the process. Just as the PSOE had been able to reach agreement with the UCD government on the autonomy question before reaching office, it again showed its preference for a bipartisan approach on this sensitive question by reaching a deal with the main opposition party, the PP, on further extending the autonomy process in 1992. The party’s remaining period in office was notable for the increase in the bargaining power of the regions – particularly Catalonia – with respect to the central government. This period therefore paradoxically witnessed the transfer of further financial powers to the regions at the very time when the chief concern of the central state was to rein in public spending in order for Spain to qualify for Economic and Monetary Union. The Autonomous Communities also forged a key role in the allocation and distribution of the EU’s Structural Funds and the sectoral conferences provided the Autonomous Communities with some say with regard to Spain’s EU policy. According to one commentator, however, the participation of the Autonomous Communities in the decision-­making process was not institutionalised under the PSOE and instruments of collaboration between the State and the Autonomous Communities were created more as a response to the external activity of the Autonomous Communities than as a result of the state’s readiness to allow them to participate in the development of foreign policy – foreign policy being understood as encompassing EU regional policy (García, 1995: 128). Nevertheless, by the end of the PSOE’s period in office, there were indications that it was precisely in the area of regional policy that the nation state was being by-­passed as direct links became established between the EU and the regions (Heywood, 1999: 117). Sub-­national constraints on the government’s autonomy over policy-­making became all the more prominent as the PSOE’s dominance over parliament decreased after the 1989, and particularly, the 1993, general elections, in the form of more confident and empowered Autonomous Communities who sought to establish a role as, to some degree, autonomous actors within the Spanish policy process. The PSOE government’s dependence on the support of the Catalan nationalist Convergència i Unió after the 1993 general election strengthened the hand of the Autonomous Communities in extracting policy concessions from the central government in Madrid, most notably fiscal co-­responsibility, which enabled the Autonomous Communities to spend income tax receipts which had hitherto gone directly to Madrid. This development was further extended under the minority PP government between 1996 and 2000. One of the main criticisms levelled at the process was its cost to the central state, as control over public spending was transferred to the regions. This question grew in prominence during the early 1990s as the PSOE sought to meet the EMU convergence criteria established at Maastricht. EU-­linked factors also had an influence on the PSOE government’s choice of electoral ally after the 1993 general election, when the PSOE became a minority

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government, with Felipe González preferring to establish an understanding with the unambiguously pro-­EMU Convergència i Unió rather than Izquierda Unida, which pursued a more ambiguous line with respect to the single currency project. Jordi Pujol, the President of the Catalan regional government, the Generalitat, similarly presented his decision to provide parliamentary support for the PSOE government in terms of helping Spain to meet its EU-­linked economic imperatives, particularly the Maastricht convergence criteria. Indeed, Pujol was involved in direct negotiations on the budget during the PSOE’s final term in office, 1993–96 (Heywood, 1999: 120). It would nevertheless be unfair to judge the success of the autonomy process in purely financial terms. The decentralisation of power under the PSOE made a major contribution towards the consolidation of the transition from dictatorship to democracy and was a key element in the political stability which characterised the greater part of the PSOE’s period in office. Notes 1 Navarre and the Basque Country, on account of their fueros and conciertos económicos, respectively, are able to levy and collect all taxes, except customs duties and the taxes on petroleum products and tobacco. The regional authorities then deduct an annual quota (cupo) to be paid to the State in respect of those services and powers which the latter retains (Newton with Donaghy, 1997: 130). 2 This figure was doubled to 30 per cent following the PP’s general election victory in March 1996. The narrowness of the victory meant that the PP government, just like its PSOE predecessor, was dependent on the support of the nationalists and regionalists to remain in power. 3 In its programme for the 1996 general election, the PP made the following pledge: ‘The Popular Party, based on loyalty to the Constitution itself and with the aim of making the Senate a genuine Chamber of territorial representation which will strengthen our State of the Autonomies, will promote the necessary agreement between political groups so as to move towards reforming Title III of the Constitution’ (emphasis in original) (PP, Con la Nueva Mayoría, Programa Electoral 1996, 1996: 153). No progress was made in meeting this promise during the PP’s eight-­year period in office between 1996 and 2004.

7

The PSOE in opposition, 1996–2004

Sweet defeat turns bitter: the PSOE 1996–2000 The refusal of the Catalan nationalist Convergència i Unió to support the government’s budget for 1996 left González with no option other than to bring forward the date of the general election to March 1996. The PSOE entered the general election campaign in poor shape. The second half of 1995 had been dominated by the revelation that the Security Service, CESID, had spent the last decade listening into and recording the telephone conversations of prominent politicians, business people and journalists. King Juan Carlos was amongst the lengthy list of those whose privacy had been invaded, and the scandal led to the resignation of the Deputy Prime Minister, Narcís Serra, the Defence Minister, Julián García Vargas and the Director General of the CESID, Emilio Alonso Manglano. In the event, the PSOE was only narrowly defeated by the PP: just 1.4 per cent of the vote divided the two parties. It was the PSOE’s first defeat in a general election in seventeen years. Despite the previous half decade having been dominated by corruption allegations against the PSOE and a deep economic recession which still appeared to place in doubt Spain’s inclusion in the single currency project, the PSOE, and the figure of González himself, still commanded a high degree of loyalty from the electorate. The public spending which had placed in doubt Spain’s capacity to meet the Maastricht convergence criteria had also established a substantial welfare state for the first time in the country’s history. Health care, education and social provision, including the extension of pensions to the entire population, were established, extended and improved by the PSOE under González. Although these progressive achievements had already been in place throughout most of Western Europe for many years, they nevertheless constitute a feat whose difficulty should not be under-­estimated. Similarly, infrastructure was transformed under the PSOE, ranging from airport modernisation to the launch of what would become the most extensive high-­speed rail network in the continent. Moreover, Spain had established itself as a country capable of attracting significant amounts of inward investment and was well placed to consolidate an investment profile abroad – particularly in Latin America – in the years immediately

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after the PSOE’s defeat. With respect to Spain’s prestige abroad, the country’s profile within the three axes of Spanish foreign policy – the EU, Latin America and the Mediterranean – had become transformed during the PSOE’s period in office. The politically loaded term ‘modernisation’ is notoriously difficult to define, but for the purposes of this book, it should be understood to mean that process which served to distance Spain from its historical backwardness – socially, politically and economically – whilst adapting the country to secure and maintain a place amongst the EU’s leading group of countries. Not even the PSOE’s fiercest critics could deny that Spain had made significant progress in this process of modernisation during its period in office. The PSOE could therefore feel that its contribution to the country’s progress had been considerable and that a return to office in the near future was by no means unrealistic, given how narrowly it had been beaten. In retrospect, it is perhaps not surprising that, in actual fact, the PSOE had difficulty coming to terms with its diminished status as Spain’s chief opposition party after having been in office for almost fourteen years. The Socialist leadership’s need to carry out a frank analysis of the party’s failings in the light of its loss of power was hardly facilitated by the complacency engendered by the narrowness of the PP’s victory. The PSOE Deputy General Secretary famously described the PSOE’s result in the election as being a ‘sweet defeat’ and the fact that opinion polls indicated that the PSOE and the PP were virtually level-­pegging in the twelve-­month period after the election further contributed to the PSOE’s failure to appreciate the scale of the task of opposition (Marín, Molinero and Ysás, 2001: 470). To some extent, the difficulties faced by the party following its loss of office are related to its success in government. In carrying out its programme of reforms aimed at the country’s definitive modernisation, the government had little difficulty in gaining the support of a population sympathetic to its bid to transform Spain into a significant actor within the EU. Essentially, the party had been able to capture the imagination of the Spanish people – as well as a sufficient number of their votes – in its efforts to attain a number of clear, popular goals. The task of articulating a new set of aims and gaining the support of the public once these first objectives had been met proved to be far more problematic. Moreover, the genuine lack of debate within the party on policy – which, to a significant extent, was a function of the PSOE’s longevity in office – encumbered the establishment of a political programme capable of gaining the support of the electorate. The PSOE’s dependence on the quite exceptional figure of Felipe González was also problematic, as González himself acknowledged when he stated, before the 1996 election, that he was unsure whether he was more of a problem for the party than a solution. Although he had more than once expressed a wish to step down as leader from the late 1980s onwards, he was fully aware that his leadership of the party remained unrivalled. In the summer of 1995 agreement was reached within the leadership that González’s Foreign Minister, Javier Solana, one of the few individuals capable of attracting cross-­party support, would lead the party at the following year’s general election (Iglesias, 2003: 356–7). However, Solana’s appointment as NATO Secretary General in December 1995 left the party with

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little choice other than to call on González once more with the country just three months away from a general election. Yet as long as González – and those of his generation – remained in control of an exhausted party, there existed an unfavourable contrast with the relatively youthful, dynamic PP leadership. Continued infighting between the guerrista and renovador factions made a further unfavourable contrast with the unity displayed by the PP. A final purge of Guerra and his followers from the party’s Executive Committee was therefore high on the agenda at the PSOE’s 34th Congress in June 1997 (López Alba, 2002: 54). Indeed, rather than focusing on how to improve the party’s effectiveness in opposition to the PP government, debate within the PSOE in the run-­up to the Congress was more concerned about whether Guerra should be re-­elected as Deputy General Secretary (Méndez Lago, 2005: 186). In the event, González’s surprise decision to resign as General Secretary forced the resignation of the remaining members of the Executive Committee, including Guerra and his lieutenant, Txiqui Benegas, who were never to return to the party’s key executive body. Having lost the figure who had led the party for twenty-­three years, the PSOE chose a successor within hours (Powell, 2001: 613). González was instrumental in choosing the new leader, Joaquín Almunia, a loyal ally and prominent renovador. His credibility as leader was adversely affected by the charge that he had obtained the post simply on account of having been González’s choice. The new General Secretary later admitted that his appointment was a result of ‘improvisation’ in the context of an emergency situation. Moreover, Almunia’s position was further undermined by the fact that even after González’s resignation, rumours abounded that, whilst he would not return as party leader, González might again stand as the PSOE’s candidate for Prime Minister at the next general election (Almunia, 2002: 447, 470). Given the momentous events at the Congress, it is hardly surprising that the appointment of the little-­known 36-­year-­old José Luis Rodríguez Zapatero to the new Executive Committee received little comment at the time. His appointment was nevertheless significant in that it contrasted with the fact that González-­era figures continued to occupy leading posts within the party. Although he had been a parliamentary deputy for León since 1986, Rodríguez Zapatero had not held even the most minor government post during the party’s period in office. The appointment nevertheless proved to be crucial to his eventual election as party leader at the PSOE’s next Congress in July 2000. Almunia appeared to have more admirers within the party organisation than among the membership as a whole. The new leader’s efforts to quash the accusation that he was the party apparatus’s man and consolidate his position within the party led him to introduce a primary election system for the PSOE’s candidate to face José María Aznar at the general election due in 2000. That Almunia had overestimated his support became clear when Josep Borrell, the former Public Works Minister and darling of the party membership, declared his candidacy. When the primary was held in April 1998, Borrell was the clear winner. Despite having been a minister, Borrell appeared to be a new figure, from outside the party apparatus,

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and therefore better suited to bring about the renewal of the PSOE (Paramio, 2004: 161). The population could only look on in confusion as the two entered into a frantic series of negotiations over the demarcation of responsibilities. Less than a year after replacing Felipe González, Almunia therefore found himself in an unenviable, if not untenable, position. Borrell’s own credibility suffered when he came off second best in the State of the Nation debate in the Congress of Deputies in May 1998. Rumours that relations between Borrell and the party apparatus were difficult were already rife when, in a further devastating development, it emerged that officials responsible to Borrell during his period as a minister were facing allegations of corruption. Borrell’s response was to resign in May 1999, leaving Almunia to lead a ­demoralised PSOE into a general election then less than a year away. In a further attempt to stamp his own mark on the party, Almunia entered into negotiations with the Communist-­led United Left on a limited agreement intended to present joint candidatures to the upper chamber of parliament, the Senate, just weeks before the election, called for March 2000. Given the traditional enmity between the two parties, the development was something of a watershed, facilitated by the departure of Felipe González from the PSOE leadership and Julio Anguita from the leadership of United Left. The mutual contempt felt by González and Anguita had previously precluded any such rapprochement between the two main political forces on the left. The fact that the step was considered necessary in order to mobilise PSOE voters who might otherwise not turn out to vote at the general election indicates the lack of confidence felt within the leadership as the general election approached. The electorate considered the development rushed, opportunistic and, ultimately, unconvincing. Moreover, the shift further enhanced the PP’s credentials as the force of moderation. Almunia pressed on with the initiative, even though prominent figures within the Socialist leadership found it difficult to understand what benefit the party would gain from the agreement. González, and the powerful presidents of the autonomous regions of Castilla-­La Mancha and Andalucía, José Bono and Manuel Chaves, privately made clear their reservations (Almunia, 2002: 463–4). Recognising his responsibility for the doomed enterprise, Almunia resigned from the leadership on election night once the scale of the party’s defeat at the March 2000 general election became apparent: the PSOE obtained its worst result since 1979, gaining 34 per cent of the vote (125 seats) to the PP’s 44.5 per cent (184 seats) in the 350-­seat Congress of Deputies. An initiative that had emerged partly as a result of a leadership crisis therefore served to deepen that crisis. With the benefit of hindsight, the PSOE’s narrow defeat at the 1996 general election proved to be a mixed blessing to the party, given that it effectively served to postpone the PSOE’s renewal sine die. The party’s lack of internal dynamism, its closed and its sclerotic internal organisation and its sluggishness with respect to its capacity to react to new events during its time in opposition all posed daunting challenges which the party had proved incapable of meeting (Méndez Lago, 2000: 344–6).

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At the PSOE’s 35th Congress, held four months after the election defeat, the party finally felt impelled to carry out a thorough self-­critique, and resolutions were passed which pulled no punches on the causes and consequences of its two successive general election defeats (PSOE, 2000: 5–7). Internal instability, lack of unity and uncertain leadership had all led to a haemorrhage of popular support. The majority of Spaniards remained satisfied with José María Aznar’s PP government, which had taken full advantage of the upturn in the Spanish economy which had been apparent since the mid-­1990s. The government’s recent capture of an overall parliamentary majority threatened the further marginalisation of the PSOE, which had been guilty of navel-­gazing, losing sight of the needs of the electorate. Questions such as the renewal of the party’s organisation and leadership, and procedures for the selection of party leaders had been of limited interest to the average Spanish voter, who all too often had reacted by deserting the party. Furthermore, the party’s focus on the promotion of policies for particular regions of the country had led it to neglect the development of a coherent political project for Spain as a whole – an indirect criticism of the harm caused by the growing influence of regional party bosses within the leadership. Consequently, the party had adopted confused and contradictory policy positions. The PSOE had also been ineffective in conveying to the Spanish electorate the scale of its achievements in office, instead focusing defensively on its failures. People now accepted its welfare achievements as irreversible, and the PP government had been sufficiently prudent to curb the scale of its welfare reforms, in particular limiting further privatisation of the health and education systems. With respect to its electoral base, the party had lost the vital support of the urban middle classes, thereby becoming divorced from the key sector of Spanish society. Consequently, it increasingly relied on the support of the less-­educated, low-­income sectors of the electorate. Exhausted after its long period in government, it had also lost energy and direction and was poorly focused. It had shown itself singularly ineffective as an opposition force at all levels, from local level to national, and had to present an effective opposition if it were to be viewed by the electorate as ­deserving a return to office. The scale of the PSOE’s defeat at the 2000 general election provided the context for Rodríguez Zapatero’s surprise victory in the leadership contest which took place at the Congress. Pessimism at the party’s prospects contributed towards the most profound changes within the party leadership since González had been elected General Secretary in 1974. The party apparatus’s initial response to the 2000 general election defeat was nevertheless to favour José Bono, who had won five consecutive overall majorities as President of the autonomous region of Castilla-­La Mancha since 1983. He was viewed as a figure capable of imposing much-­needed order at the top. The influence of regional party chiefs, or barones, had grown significantly within the party throughout the 1990s. The relaxation of Alfonso Guerra’s grip on the party apparatus, the ongoing process of political decentralisation in Spain and the inability of Almunia and Borrell to impose themselves on the party, had all contributed towards this development (Méndez Lago, 2000: 141; López Alba, 2002: 59–61). Bono, and those other figures who had

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continued to win regional elections, most notably Manuel Chaves, President of Andalusia and Carlos Rodríguez Ibarra, President of Extremadura, had therefore emerged as significant figures within the PSOE. The victory in the 1998 primaries of the party outsider, Josep Borrell, over González’s choice and consummate apparatus figure, Joaquín Almunia, had nevertheless already indicated that party members had become less amenable to direction from above. Borrell’s victory had owed much to the support of ordinary party members, the ‘bases’. Although Bono had never served as a minister, he was generally viewed as forming part of the González generation of leaders whose considerable past achievements by no means promised future progress. In the eyes of many PSOE members, the nadir of the 2000 general election defeat demanded no less than a thorough renewal of those at the top. The Congress ended with the election as party General Secretary of José Luis Rodríguez Zapatero, who narrowly defeated the favourite, José Bono. Rodríguez Zapatero was relatively unknown, not only amongst the population as a whole, but within the party itself. Being something of an unknown quantity to the general population was nevertheless no great disadvantage given the extent to which the previous generation of PSOE leaders had been tainted by accusations of corruption. Rodríguez Zapatero had joined the PSOE as an 18-­year-­old in 1979. He studied law at León University and remained there as a lecturer in Constitutional Law before becoming, at 26, the youngest parliamentary deputy for León in northern Spain at the 1986 general election. He became General Secretary of the party’s León federation in 1988, but his career at the national level was nevertheless hardly meteoric. Most notably, he failed to obtain even the most minor governmental post under Felipe González’s premiership and only gained a seat on the party’s most influential body, the Federal Executive Committee, a year after the party’s defeat at the 1996 general election, and then only as a junior member (vocal). He had nevertheless served with some distinction as the PSOE’s representative on the Parliamentary Public Administration Committee under Almunia’s leadership of the party, playing a key role in ensuring that those who had fought on the Republican side during the civil war secured the same pension rights as those who had fought for Franco (Campillo, 2004: 50). Although born into a relatively comfortable, middle-­class family – his mother was the daughter of a paediatrician and his father was a lawyer – Rodríguez Zapatero had little reason to sympathise with the Franco regime. His paternal grandfather, Juan Rodríguez Zapatero Lozano, a military officer and Socialist sympathiser, had been executed by Franco’s rebels a month after the uprising which sparked off the Civil War. The death left an indelible mark on the family, and Rodríguez Zapatero has indicated that his decision to join the PSOE was linked to the memory of his grandfather (Calamai and Garzia, 2006: 9). Rodríguez Zapatero had initially expressed his support for Bono when the President of Castilla-­La Mancha indicated his readiness to stand for the leadership days after the election defeat (López Alba, 2002: 24). He was nevertheless forced to withdraw his backing when he decided to involve himself in a rival bid for the leadership launched by the younger generation of party figures, who

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presented themselves under the name of Nueva Vía (‘New Way’ – an amalgam of Tony Blair’s ‘Third Way’ and Gerhard Schröder’s ‘Neue Mitte’). Rather than possessing a desire to replicate the ideological positions of the British Labour Party or the German SPD, the choice of name instead sought to emphasise that generational change was necessary to move on from the González era. Indeed, Blair’s brand of ideology found little favour within the PSOE due its economically liberal character (López Alba, 2002: 150). This relatively hostile sentiment within the party towards Blair’s New Labour had also been exacerbated by the close ­relationship between the British Prime Minister, Tony Blair, and Aznar. In addition to Rodríguez Zapatero, the grouping included other members of the younger generation of parliamentary deputies, such as Jesús Caldera, Jordi Sevilla and José Blanco, and party officials, such as Trinidad Jiménez. Originally, the group’s strategy had limited itself to ensuring that a leadership headed by Bono would contain younger elements (De Toro, 2007: 68). Such a limited aim was abandoned when it was felt that the party leadership itself could be secured. Whereas González’s standing within the party had been such that he had been able to engineer Joaquín Almunia’s appointment as his successor in 1997, the relative power vacuum at the top of the party following Almunia’s resignation, followed by that of the entire membership of the Executive Committee, offered a window of opportunity which the group could not resist. Although an interim body, known as the Political Committee (Comisión Política), had been established under one of the other leading barones, the President of the autonomous region of Andalusia, Manuel Chaves, to provide temporary leadership of the party and oversee the election of a new leader, it was not in a position to dictate who Almunia’s successor would be. Although Bono immediately established himself as favourite, he was not unbeatable. The debacle of the primaries under Almunia had effectively put an end to the decisive influence of the party apparatus on the appointment of the party leader. The disorientation of the party apparatus therefore contributed towards it being unable to ensure the victory of its chosen candidate, Bono. From amongst the grouping of younger PSOE figures, Rodríguez Zapatero emerged as the most outstanding individual with a genuine chance of beating Bono. As a member of the party’s campaign team for the local, autonomous and European elections in 1999, he had also been responsible for the party’s relations with the media. Moreover, he was also almost a decade younger than Bono. Rodríguez Zapatero was nevertheless aware that he was unknown beyond León and the parliamentary group itself and therefore sought to gauge possible support for a leadership bid by touring numerous party federations throughout the country. Only when he had done this and obtained a positive response did he declare his candidacy for the post of PSOE General Secretary on 25 June 2000, less than a month before the start of the Party Congress. During this period, Rodríguez Zapatero and his group of supporters decided to drop the Nueva Vía label. The justification for the jettisoning of the term was that their aim, in the run-­up to the Congress, was not simply to represent a single group within the party, but rather to embody the party as a whole (Calamai and Garzia, 2006: 44).

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The aim of obtaining the party leadership had now superseded the more modest objective of securing a position of influence within the party. An indication of the caution which had characterised Rodríguez Zapatero’s strategy since the general election defeat in March 2000 was the fact that he was the last of the candidates to declare that he would be standing for the leadership. In addition to Bono, the other candidates were Matilde Fernández, a parliamentary deputy until the recent general election, who had been Social Affairs Minister between 1988 and 1993, viewed as representing the guerrista wing of the party, and Rosa Díez, Member of the European Parliament, who had fronted the party’s campaign for the European Parliament the previous year. Given the opposition of the so-­called guerristas, allies of the former Deputy Prime Minister, Alfonso Guerra, to Bono’s candidacy, and their recognition that their own candidate, Matilde Fernández had little chance of victory, the transfer of their votes to Rodríguez Zapatero became a key element in the final result. The Congress was held between 21 and 23 July 2000 and was attended by 995 delegates representing the party’s 350,000 members. Three out of four of the delegates were attending their first Congress, thereby ensuring that the result would not necessarily be predictable. So as to ensure a free and secret vote, voting booths were provided – for the first time ever at a PSOE Congress (López Alba, 2002: 340). The new General Secretary would be elected following a single round of voting, which would take place two hours after the last of the candidates had delivered a half-­hour address. As soon as the Congress began, it became clear that only two of the candidates had a realistic chance of victory – Bono and Rodríguez Zapatero. Rosa Díez’s prospects had been compromised by her failure to put together an effective campaign team and her leadership bid simply failed to gather momentum in the run-­up to the Congress. Matilde Fernández failed to retain even the support of many of her guerrista colleagues, who calculated that a vote for Rodríguez Zapatero was more likely to deny victory to José Bono, the bête noir of the ­guerristas (Carvajal and Martín Casas, 2005: 272). Party folklore subsequently suggested that Rodríguez Zapatero’s speech to the Congress was the deciding factor in his victory. Whilst Díez, Bono and Fernández emphasised the poor shape in which the party found itself following the March 2000 general election, Rodríguez Zapatero enthused his audience by his very optimism. His phrase, ‘I’m convinced we’re not in such a dire state’ (‘Estoy convencido que no estamos tan mal’) struck a chord with delegates. He stressed that whilst it was true that the party had just lost the general election, it had still been able to secure eight million votes, and had obtained impressive results at the previous year’s European, autonomous region and local elections, retaining a strong ­presence throughout Spain. The impact made by Rodríguez Zapatero’s speech would nevertheless have been worthless without the tireless work put in by his campaign team in identifying support from delegates. Whereas those delegates at the upper levels of the party followed the tacit instruction to support Bono’s bid, those serving the party at the local level were attracted by his chief rival’s discourse, which emphasised

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the need to provide local government with greater resources. As a prominent member of Rodríguez Zapatero’s team, José Andrés Torres Mora, has explained, Who supported Zapatero? Basically local government figures: mayors, councillors . . . People who have their own power. Who supported Bono? People who enjoyed power vicariously: general secretaries, autonomous government delegates . . . People who inhabit grand buildings. Zapatero is supported by people in towns and small cities. (Quoted in De Toro, 2007: 100)

Cultivation of the female vote and that of younger delegates was also significant, as was the role played by antipathy towards Bono from those fearing the consequences of a Bono leadership. Not only guerristas, fearing Bono would marginalise them even further were he to win, were prepared to support Rodríguez Zapatero’s candidacy, but also individuals who feared that a Bono victory was unlikely to bring about greater democratisation within the party. The support provided by Pasqual Maragall’s PSC (Partit dels Socialistes de Catalunya), and the fact that the leader of the largest federation, that of Andalusia, Manuel Chaves, allowed his members a free vote, were further important elements in the final result. Nevertheless, the only president of an autonomous region to support Rodríguez Zapatero was Francesc Antich, leader of the Baleares regional government, whilst Emilio Pérez Touriño, General Secretary of the Galician branch of the PSOE, was the only regional party leader (López Alba, 2002: 256, 371). Despite his emphasis on providing the party with a new start, Rodríguez Zapatero still ensured he publicly acknowledged the contribution made by Felipe González during his speech to the Congress, when he commented, ‘There is no question of hiding behind Felipe, nor hiding Felipe away.’ Given the iconic status of González within the party, such a protestation of loyalty was little short of obligatory. Nevertheless, it was clear to delegates that one of Rodríguez Zapatero’s attractions was the fact that he had not been linked to the less attractive aspects of the PSOE’s period in government, most notably, the party’s involvement in instances of corruption. The final result was extremely narrow, with the votes of just nine delegates separating Rodríguez Zapatero from Bono: he gained 414 votes (41.69 per cent) against Bono’s 405 votes (40.79 per cent). Matilde Fernández gained just 109 votes (10.98 per cent), whilst Rosa Díez came last, with just 65 votes (6.55 per cent). In 2007, Díez would leave the party to establish her own political party, Union for Progress and Democracy (Unión Progreso y Democracia – UPyD). The new PSOE Federal Executive Committee which emerged from the Congress contained just four survivors from its predecessor, who had resigned after the 2000 general election defeat – Rodríguez Zapatero himself, Manuel Chaves, Micaela Navarro and Consuelo Rumí. The party’s leading body largely consisted of young (i.e. under forty years of age) Rodríguez Zapatero loyalists, and was able to obtain the endorsement of over 90 per cent of Congress delegates. The party therefore provided a mandate to enable the new General Secretary to make a decisive break with the González era and mount the kind of effective opposition to the PP government which had been so markedly absent during Aznar’s first term in office.

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The PSOE under Rodríguez Zapatero, 2000–4 The challenge facing Rodríguez Zapatero was considerable. Taking over the leadership at a historical low point, he had to move the party on to a definitive post-­González era whilst engineering an effective opposition to a PP government whose unity, discipline and unquestioned leadership were reminiscent of the qualities displayed by the PSOE when it entered office in 1982. The style of opposition advocated by Rodríguez Zapatero differed markedly from that of his predecessors, being notably less confrontational. Tangible results of this more constructive form of opposition included the PSOE’s readiness to reach agreements with the government in several key areas. In the field of terrorism, a PSOE initiative entitled the Anti-­Terrorism Freedom Agreement (Acuerdo por las Libertades y contra el Terrorismo) was signed with the government in December 2000, whilst the PSOE also proposed measures aimed at streamlining the legal process, leading to a deal being reached between Rodríguez Zapatero and the government in May 2001. Despite this strategy of ‘constructive opposition’ (oposición útil) attracting significant criticism within the PSOE itself, with several prominent party figures, including Felipe González, voicing their concerns, the party continued its recovery. Rodríguez Zapatero put in commendable performances at both the State of the Nation Debate in July 2002 and the Debate on the Government’s Budget three months later. By this stage, the PSOE had drawn level with the government according to opinion polls, a considerable achievement bearing in mind that the party had gained 10 per cent less of the vote than the PP at the March 2000 general election. The PSOE gradually abandoned its strategy of oposición útil throughout the course of 2002 in response to the government’s adoption of an increasingly aggressive stance. Government efforts to push through labour legislation with minimum parliamentary debate in June, which led to a general strike, an unpopular reform of secondary education, and the government’s inept handling of the environmental damage caused by the sinking of the oil tanker the Prestige off the coast of Galicia in November 2002, were key elements in the shift in the PSOE’s strategy. It was nevertheless in the field of foreign affairs that the PSOE was able to establish its credentials as a party in touch with public feeling, most notably with regard to government’s support of the US-­led invasion of Iraq, a move which was opposed by the majority of the population. Rodríguez Zapatero and other prominent Socialist leaders attended massive demonstrations throughout Spain in the run-­up to the war, provoking a bitter response from the government, which accused the PSOE leader of being a ‘radical’, unworthy of holding the responsibilities inherent in the post of opposition leader. Given that opinion polls indicated that over 90 per cent of the Spanish population was opposed to Spanish participation in the conflict, it appeared that he, rather than Aznar, reflected majority public opinion Despite the unpopularity of Aznar’s policy on Iraq, the PP was able to hold its own at the municipal and Autonomous Community elections held in May 2003, with the PSOE gaining just 160,000 more votes than the governing party

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throughout Spain. The result suggested that, despite public dissatisfaction with the government’s policy on Iraq, the PP remained on course to secure a further victory at the general election due in March 2004. The PSOE could nevertheless gain considerable satisfaction from the fact that the leader of the PSC, Pasqual Maragall, was able to gain the Presidency of the Catalan Generalitat in November 2003 after twenty-­three consecutive years of Convergència i Unió (CiU) supremacy, thanks to a three-­pronged alliance, or Tripartito, with the left-­wing Iniciativa per Catalunya Verds – Esquerra Alternativa (ICV-­EA) and Esquerra Republicana de Catalunya (ERC). Satisfaction at the result in Madrid was nevertheless marred by the revelation in January 2004 – just two months before the general election – that the ERC leader, Josep-­ Lluís Carod Rovira, had met ETA representatives in France. The fact that ETA declared a ceasefire – limited to Catalonia – after the meeting placed Rodríguez Zapatero firmly on the defensive. The government accused him of being in charge of a party which governed in Catalonia in coalition with a leader who had seen fit to negotiate a ceasefire exclusive to the region. Tension between Rodríguez Zapatero and the PSC grew when Maragall was forced to expel Carod-­Rovira from his government in Barcelona. Rodríguez Zapatero could nevertheless justifiably claim by the time of the election that he had not only engineered a clean break with the González era, but also consolidated his leadership on the basis of a unity within the party which had hitherto been notably absent. Furthermore, the PSOE had been able to offer a responsible opposition which had shown a willingness to reach agreement with the government on matters of national importance. The chief point of disagreement was on the question of the PP government’s support for the war in Iraq. In its programme for the election, the PSOE described the conflict as ‘an illegal war based on a mass of deliberate lies and falsehoods’. Spanish troops would only remain in Iraq if the occupation were placed under UN control (PSOE, 2004a: 23–4). If nothing else, this pledge lodged in the minds of the Spanish electorate as the election approached. Much has been written on the particular circumstances in which the March 2004 general election took place (for more detailed coverage of the election see Barreiro, 2004; Chari, 2004; Closa, 2004b; Noya, 2004; Paramio, 2004; Ramiro, 2004; and Sanz and Sánchez-­Sierra, 2005). Three days before the election, almost two hundred people died in bombings of commuter trains in Madrid, with many more seriously injured. Research indicates that the terrorist attacks did have a decisive effect on the general election (Michavila 2005: 32–3). Although the effect was small in percentage terms, it was sufficient to change the result. The effect of the attacks led to the mobilisation of 1,700,000 voters who felt impelled to vote on account of the bombings and the emotive aftermath, increasing participation by 4 per cent. Four chief factors are identified as contributing towards the final result: the existence of a latent desire for a change of government, the state of shock caused by the attacks, a desire to punish the government for taking part in the war in Iraq, and the manipulation of information both by and against the government.

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It is nevertheless significant that the PSOE’s internal polling suggested that even before the terrorist attacks, the PSOE was level-­ pegging with the PP (Paramio, 2004: 165; PSOE, 2004c: 10; Campmany, 2005: 259). Sufficient for our purposes will be a synthesis of the main conclusions reached by those who have considered the very special circumstances of the 2004 general election in more detail. These include the following points:

• During its final term in office, the PP government sought to transform Spain’s

status within the international community, thereby securing a place amongst the leading group of EU countries and as a key interlocutor of the US. • Spanish society had little appetite for the human, political and economic costs likely to stem from this ambition and the government neglected to explain its strategy sufficiently clearly to a population which amply expressed its scepticism in opinion polls (Calduch Cervera, 2004: 25).1 • The government’s popularity was placed at risk by its adoption of a less consensual, more authoritarian, approach following its capture of an overall majority. • Surveys indicate that Spanish society continues to be unequivocally pro-­ European and mildly anti-­American. With respect to the government’s response to the 11 March attacks, it can be argued that:

• The terrorist attacks and the government’s subsequent inept news manage-

ment and perceived lack of transparency served to mobilise voters who, in other circumstances, might not have actually voted, to do so against the PP. • The circumstances in which Spaniards went to the polls meant that foreign policy was a key issue for many voters, capable of neutralising in many minds the government’s considerable domestic policy achievements – most notably its successful handling of the economy. In ‘normal’ circumstances, the PP’s economic competence might well have been sufficient to obtain victory in a general election.2 Given the special circumstances in which the election took place, turnout was unusually high at just under 76 per cent, 7 per cent higher than in 2000. Yet despite gaining over eleven million votes, more than at any time during its history, the PSOE, which won 164 parliamentary seats – sixteen more than the PP  – was still twelve seats short of the 176-­seat total necessary for an overall majority. Rodríguez Zapatero nevertheless had ample reason to be satisfied with the result: he had won a general election at the first attempt, a feat which had hitherto only been achieved by Adolfo Suárez in 1977. The PP had a more unenviable record as the first party in receipt of an overall majority to lose a general election. Notes 1 According to a survey carried out by the Spanish government’s own polling organisation, the Centro de Investigaciones Sociológicas (CIS) (Sociological Research Centre) a

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month before the US-­led invasion of Iraq, 91 per cent of the Spanish population indicated its opposition to a military ‘solution’ to the conflict; two months later, following the invasion, a quarter of those polled indicated that they had participated in an anti-­ war demonstration (Sanz and Sánchez-­Sierra, 2005: 5, 13) 2 It took the terrorist attacks to force foreign policy to the fore. Writing shortly before the attacks, one commentator noted, ‘As can be seen during the campaign, the thesis is once again confirmed that foreign policy issues remain absent from the political debate and fail to attract the interest of public opinion’ (Calduch Cervera, 2004: 34). According to a CIS survey following the election, as many as 30 per cent of Spaniards claimed that the terrorist attacks of 11 March had an influence on their vote to a greater or lesser extent (a lot, quite a bit, appreciably) (Noya, 2004: 2).

8

Zapatismo: progressive ideology in a post-­social democratic world?

This chapter seeks to capture the essence of the distinctive policies in several areas implemented by the Rodríguez Zapatero government between 2004 and 2011. Whereas, as we will see in Chapter 10, which will consider economic policy in greater detail, continuity characterised the PSOE’s economic policy orientation as it broadly maintained the policy framework inherited from the previous PP government, its policies beyond the economic field were both innovative and original, particularly with respect to civil and gender rights. The enormity of the international financial and economic crisis after 2008 served to accentuate questions linked to the downturn over all other issues, thereby shifting attention away from the Rodríguez Zapatero government’s considerable achievements. This chapter will therefore identify the government’s key policy accomplishments in areas ranging from civil and gender rights to the issue of historical memory and the attempt to honour the memory of those who had suffered repression at the hands of the Franco dictatorship both during and after the Civil War. It will be shown that, in adopting this distinctive set of policies, the PSOE was able to differentiate itself not only from the PP at a time when economic policy in the era of globalisation offered less margin for manoeuvre, but also from the Felipe González-­era party. A theoretical basis for Zapatismo Rodríguez Zapatero and members of his immediate circle readily acknowledged their debt to US academics such as John Rawls and Benjamin Barber, and the Princeton-­based Irish academic, Philip Pettit. In his work, A Theory of Justice (1971), Rawls proposes a theory of ‘justice as fairness’, which is based on the belief that social inequality can only be justified if it is of benefit to the least advantaged. This theory was further developed in his Political Liberalism (1993), in which he argues that each person has an equal claim to equal basic rights and liberties. Rodríguez Zapatero acknowledged the left’s debt to Rawls with respect to its need for a theory of justice (Calamai and Garzia, 2006: 75–6). Benjamin Barber’s major work, Strong Democracy: Participatory Politics for a New Age stresses the importance of the role of citizens in democratic governance

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via a renewed focus on civil society. Its working premise is that politics trumps economics and that strongly established democracy can assure sufficient e­ quality and justice to coexist with a variety of economic systems, even where the market permits or even fosters inequality (Barber, 2003: xii). An indication of the closeness of the relationship between Barber and Rodríguez Zapatero is that the American academic contacted the PSOE leader shortly after the party’s general election victory in 2004 to offer his congratulations (Trillo-­Figueroa, 2005: 217). Even closer to Rodríguez Zapatero was Philip Pettit,1 who established himself as the Spanish Prime Minister’s mentor in much the same way as Anthony Giddens was considered Tony Blair’s ‘guru’. In his major work, Republicanism: A Theory of Freedom and Government (1997), Pettit proposes a conception of political freedom, or ‘non-­domination’, which demands that nobody should be capable of interfering arbitrarily in the choices made by another individual. The definition of liberty as non-­domination is defined as follows: ‘the condition of liberty is explicated as the status of someone who, unlike the slave, is not subject to the arbitrary power of another, that is, someone who is not dominated by anyone else’ (Pettit, 1997: 31). The PSOE government’s application of the idea is particularly apparent in the area of individual and social liberties, including gender equality and actions aimed at addressing the problem of domestic violence. The Director of Rodríguez Zapatero’s office during his period as opposition leader, and PSOE deputy, José Andrés Torres Mora, has commented, ‘We had simple political and theoretical instincts and Pettit offered us the analytical background which helped place them within a systematic framework’ (Calamai and Garzia, 2006: 132–3). A form of ‘citizens’ socialism’, which aimed to broaden civil rights, therefore formed the basis of Rodríguez Zapatero’s political project after he became PSOE leader in 2000. The development of a new, distinctive, set of policies was particularly important given the PSOE’s disappointing performance at the 2000 general election. Analysis after the election indicated that roughly one million left-­wing voters abstained, while another million switched their vote to the PP. Demobilisation of left-­ wing voters was the highest since 1986 (Méndez Lago, 2006: 433). Participation at the election was 7.5 per cent below that of the 1996 general election, and half of those who abstained viewed themselves as being either on the centre-­left or left, with just 9 per cent of those not voting considering themselves on the right or centre-­right. This disparity suggests that the fall in participation offered the PP a significant proportion of its 10 per cent advantage over the PSOE (Paramio, 2004: 155). Whilst in opposition, the PSOE sought to construct a new political project which benefited from the input of a range of social groups via the establishment of extensive dialogue. These groups included professionals and young people, those from within feminist and environmental groups, and those from groups normally described as constituting minority or marginal groups, such as immigrant groups and lesbian and gay associations. The strategy proved effective, given that their electoral support proved to be decisive in the party’s victory in the special ­circumstances of the 2004 general election (Paramio, 2004: 163–4).

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To conclude, the PSOE government under Rodríguez Zapatero was notable for elements of both continuity and change with respect to previous PSOE and PP governments. In the field of economic policy, there was a pragmatic decision to promote continuity with respect to the economic policies established under the previous PP government in order to sustain macroeconomic stability, although this stability was lost during the PSOE’s final term in office (2008–11). In the non-­economic sphere, the PSOE utilised social democratic and social liberal elements to implement a domestic policy which focused on the extension of civil and gender rights. Policy regarding the protection and extension of civil and gender rights As we have seen, the PSOE under Rodríguez Zapatero placed considerable emphasis on the question of extending citizens’ rights. Very broadly, related measures may be viewed in terms of Pettit’s concept of ‘non-­domination’. Whilst these initiatives might be interpreted as being little more than a low-­cost gesture of little practical benefit to the general population, it would be a mistake to underestimate their significance within the Spanish context. Such measures were fiercely opposed by the Catholic Church, an institution which retains a degree of political clout. The government’s actions were not, therefore, without political risk, although this did not prevent it from presenting its actions as the latest manifestation of the social modernisation which the PSOE has historically sought to promote, alongside its efforts to achieve Spain’s economic modernisation. In its 2004 election programme, the PSOE had pledged that, once in government, the first legislation it intended to place on the statute book would be ­concerned with the question of domestic violence (PSOE, 2004a: 93–4). A Special Government Delegation on Domestic Violence was established to co-­ordinate action on the issue, special courts to hear relevant cases were created, and over €500 million were earmarked to be spent on the issue, divided between seven separate ministries. The government viewed the offence as being a flagrant violation of human rights, whilst women were also being denied their full rights as citizens. Promising to provide adequate resources to ensure application of the legislation, the bill became law in December 2004 with cross-­party support. The party also guaranteed parity between men and women on its electoral lists, whilst the Prime Minister ensured that women occupied half of cabinet seats. María Teresa Fernández de la Vega was also appointed First Deputy Prime Minister, the first time in Spanish history that a woman had occupied the post. Furthermore, an Equality Ministry (Ministerio de Igualdad) was established in 2008, although budgetary pressures led to the ministry being merged into the Ministry of Health, Social Services and Equality in 2010. Further proposals included a Law on Equality between Men and Women, passed in March 2007. This legislation was considered necessary in order to ensure a more effective application of the right of equality before the law enshrined in Article 14 of the Constitution. The law stipulates that no gender will be able to account for less than 40 per cent of candidates on lists for elections to the Congress of Deputies, local councils, European Parliament and the legislative bodies of Autonomous Communities.

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Legislation was also passed in July 2005 which allowed marriage between persons of the same sex and gave lesbians and gays the right to adopt. The law on divorce was also liberalised the same month, attracting, as we have seen, considerable criticism from the Catholic Church, which had already opposed the government’s plan to drop compulsory religion classes from the curriculum. The government’s response to the Church was to stress the non-­denominational character of the Spanish state as established in the 1978 Constitution. The government viewed it as being a basic civic responsibility to limit the political or legal promotion of religion. Another important piece of social legislation concerned the provision of state assistance to those unable to care for themselves. The Dependency Law, passed in November 2006, guaranteed state assistance to elderly people and those suffering from severe disabilities, including mental illness. The government estimated that around 1,125,000 people would qualify for assistance under the terms of the law. Given that family members to some extent constitute a de facto branch of the welfare state in Spain, the offer of financial help was likely to prove popular. Home help, dedicated day and night centres and residential care were provided to those qualifying for assistance. The measure meant that many who would otherwise have had to leave their jobs in order to look after dependants no longer had to do so. The government, which initially invested over €12 billion in the initiative, indicated that it would lead to the creation of 300,000 jobs, many of which were likely to be taken up by immigrants. In its editorial on 2 December 2006, the Spanish newspaper El País judged the initiative to be the most important piece of legislation passed by the government. Moreover, it was viewed as ‘the greatest advance in the extension of social rights since public healthcare was universalised’ (El País, 2 December 2006: 16). For its part, the government described the measure as providing the welfare state with a ‘fourth pillar’, joining existing provision in health care, education and pensions. The question of immigration proved to be more controversial, with the government receiving particular criticism for its decision to regularise, after a t­ hree-­month registration period between February and May 2005, the status of over 700,000 immigrants who had previously been working within the black economy. A report published by the Prime Minister’s Financial Office in November 2006 examined the link between immigration and the Spanish economy (Oficina Económica del Presidente, 2006). Spain’s immigrant population had quadrupled between 2000 and 2006 from just below one million to four million, with a clearly favourable effect on economic growth: almost half of GDP growth between 2002 and 2006 was due to the effects of immigration. The process of immigration being experienced by the Spanish economy was characterised as being the most significant social and economic change over recent years. No other OECD member had witnessed such a massive increase in the proportion of immigrants within its population as Spain between 2000 and 2005. The sectors of the economy employing most immigrants included construction – which has been at the heart of Spanish economic growth over recent years – business, the hotel and catering industry, and domestic work. The decline in the numbers of people working in industry and

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agriculture had been checked due to the influx of immigrant workers, who also injected a degree of flexibility into the Spanish labour market, given that they are paid on average 30 per cent less than Spaniards. Moreover, the report found that the influx of immigrants would decrease the tax burden on future generations of Spaniards, whilst also contributing towards the sustainability of the welfare state. To conclude, the PSOE under Rodríguez Zapatero viewed the extension of individual citizens’ rights as being a core element of its governmental responsibility. The elimination of discrimination was presented as being a key concern for a government engaged in building a stronger, more democratic, society. The promotion of freedom, equality and solidarity was identified as being a key aim of contemporary social democracy, constituting nothing less than a historic advance towards greater tolerance, social justice and individual freedoms – all viewed as being fundamental social democratic goals. Historical memory: más memoria y poca concordia As has been seen, Rodríguez Zapatero has been keen to identify himself with the ideas of political philosophers such as Rawls, Barber and Pettit and has sought to apply those ideas to Spanish society. Concepts such as the necessity of ensuring that all individuals possess basic rights and liberties, and that they should be protected from all forms of ‘domination’ and arbitrary power have particular resonance in the area of ‘historic memory’. One of the defining features of Spain’s transition to democracy was the so-­called ‘pacto de olvido’ whereby there existed – across the political spectrum – a tacit agreement not to engage in any claims concerning the violation of human rights under the Franco regime (Aguilar, 1996, 2002). There had been no official parliamentary condemnation of Franco’s coup, nor any tribute to Franco’s victims until Rodríguez Zapatero became Prime Minister. It was thought that any attempt to re-­visit the past, much less seek to call people to account for their actions during the Civil War and Francoist dictatorship, would only serve to re-­open old wounds, if not de-­rail the transition itself. Rodríguez Zapatero himself has commented that the transition was carried out on the basis of ‘mucha concordia y poca memoria’(‘an abundance of harmony and a dearth of memory’). People were entitled to know what had happened to their relatives, and the country would be the better for the government having recognised the rights of victims within its project of contemporary democracy (Calamai and Garzia, 2006: 57). The appointment of a PSOE leader from a different generation to those who guided the party through the transition enabled a re-­evaluation of the issue to take place, which is not to say that he does not have his own reasons for showing a particular interest: as we have seen, Francoist forces had executed Rodríguez Zapatero’s own grandfather, a Socialist military officer, during the Civil War. Amongst the measures proposed by the government was the provision of financial support to those still seeking to find relatives’ remains. There would be no prosecutions linked to actions committed during the period in question. The culmination of the government’s activities with respect to the issue was

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the Historical Memory Law (Ley para la Recuperación de la memoria histórica), passed in October 2007. The legislation aimed to honour the memory of those who had suffered repression at the hands of the dictatorship both during and after the Civil War. It also proposed the removal of Francoist symbols from public buildings. The government dedicated €69 million to the initiative, 20 million of which would go to victims in the form of pensions and allowances. Although the government argued that its actions with regard to the issue would serve to improve the quality of Spanish democracy, opponents of the initiative, including the PP, responded by accusing the government of acting prematurely, in that it had failed to ensure a consensus on the issue before acting. Significantly, Rodríguez Zapatero has indicated that his insistence on the importance of historic memory should not stretch to the actual phenomenon of Francoism itself. As he has commented, ‘It makes sense for the Spain of today to leave behind forty years of Francoism once and for all. It’s a page of our history which shouldn’t take up much space, for the good of our country and its future’ (Calamai and Garzia, 2006: 58). Such outspoken comments were likely to cause discomfort even with the PSOE, contrasting as they did with the relative caution displayed by Felipe González on related issues when he was PSOE leader. Rodríguez Zapatero’s actions nevertheless indicated his readiness to differentiate the PSOE of the twenty-­first century from the party of the past. The question of historic memory therefore provided the Prime Minister with a further ­opportunity to place his own stamp on the party and modify its image. Constitutional affairs: autonomy statutes and the Basque peace process The reform of the autonomy statutes was one of the most controversial of all the measures introduced by the PSOE government. Indeed, the reform of the Catalan Statute even led to the threat of a reappearance of the military on Spain’s political stage. The Head of the Spanish Land Forces, José Mena Aguado, remarked in December 2005 that the military might have to act in accordance with Article 8 of the Constitution, which refers to its ‘mission’ to defend the sovereignty, independence and territorial integrity of Spain, as well as its constitutional order. Mena was placed under house arrest for a week for having broken his duty of neutrality as a member of the armed forces. Both pragmatism and a degree of ideological commitment help to explain the PSOE government’s policies on the issue. Dependent on the parliamentary support of the radical Catalan nationalists of Esquerra Republicana de Catalunya (ERC), which won eight seats at the March 2004 general election, the government was not in a position to dismiss demands for greater autonomy. It is nevertheless important to stress that the PSOE’s own stance on the issue of relations between central government and the autonomous regions evolved markedly in the decade after the party lost office. When Felipe González held the post of opposition leader between 1996 and 1997, he accused the PP government, then dependent on the parliamentary support of the Catalan and Basque nationalist parties, of yielding too easily to nationalist demands, particularly with respect to financial

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issues. Indeed, the issue was the chief focus of the PSOE’s opposition during this period (Aizpeolea, 1996: 128). The PSOE’s rhetoric on the issue softened under González’s successor as PSOE leader, Joaquín Almunia, and the party was able to capture the presidencies of the Balearics and Aragon at the regional elections of June 1999 thanks to alliances with other, smaller parties. In both cases, the party had obtained appreciably less votes than the PP. It was the shattering general election defeat of 2000 which led the PSOE to a full-­scale re-­appraisal of policy. If the party were to entertain thoughts of returning to government, it would have to be more open to the demands of nationalist parties. Given that the PP government, in receipt of an overall majority from March 2000, adopted an increasingly antagonistic attitude towards the regions, the PSOE was able to occupy the ‘nationalist-­friendly’ political space vacated by Aznar. At the PSOE’s Political Conference in July 2001, the party emphasised its desire to work towards a federalist model for Spain, whilst the party’s Territorial Committee confirmed the strategy in November 2001. Meeting in August 2003, the Territorial Committee produced a document entitled, La España Plural: La España Constitucional, la España Unida, which can be considered the culmination of the shift in policy over previous years. In the document, the party backed reform of the autonomy statutes and pledged to offer the autonomous regions representation within the Spanish delegation to the Council of Ministers. Following its victory at the March 2004 general election, the first major development in the reform of the autonomy statutes concerned the proposed reform of the Basque Statute. Popularly known as the Ibarretxe Plan, named after the President of the Basque Country, Juan José Ibarretxe, the proposed reform was narrowly approved by the Basque parliament in December 2004. However, when the initiative came before the Congress of Deputies in January 2005 – the 1978 Constitution stipulates that reform of autonomy statutes requires the approval of the Spanish parliament – it was overwhelmingly rejected. Seeking to establish a status of ‘free association’ between the Basque Country and Spain, the proposal was viewed as breaching the framework of the Constitution. The plan was effectively placed on hold in April 2005, when Ibarretxe’s Basque Nationalist Party lost four seats in the Basque regional elections, which the Basque President had sought to present in terms of a de facto referendum on his plan. The issue served to indicate that, despite the opposition PP’s accusations that national unity was being endangered, the PSOE’s support for reform of regions’ autonomy statutes had strict limits. Whilst a number of statutes had been reformed relatively smoothly by 2007, the revised Catalan Statute caused a degree of controversy on a number of levels. Firstly, the PP opposed the proposed statute throughout the entire process. The party not only rejected the version proposed by the Catalan parliament, which was amended significantly when it reached the Congress of Deputies, but also the final version, which entered into force in August 2006. The PP claimed that the government had rejected the kind of bipartisan approach between two major political parties which had hitherto prevailed in this most important area of policy. Moreover, the party was unhappy that, even in the event of its return to government, it would be unable to amend the statute, since only Catalonia itself

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had the power to propose such a reform. In December 2006 the PP proposed to reform the Constitution when it regained office so as to correct this situation (PP, 2006: 1). Any criticism of the process by the PP was nevertheless to a degree undermined by the fact that several of the regions taking advantage of the opportunity to update their statutes were governed by the PP. The definitive version of the statute was undoubtedly a considerable advance on the 1979 version. The preamble referred to ‘the national reality of Catalonia as a nationality’, the Catalan judicial system was strengthened, and representatives of the Generalitat would be able to participate directly in Spain’s delegations to the EU. The Generalitat would be allowed to retain half of income tax and VAT raised in the region, whilst Spain’s investment in infrastructure in the region would be decided in accordance with the contribution made by Catalonia to Spain’s gross GDP over a period of seven years. Moreover, Article 61 of the statute mentions that it is within the competency of the Catalan parliament to request that central government transfers or delegates functions or powers within the framework of Article 150 of the Constitution. This was particularly significant, given that it could be interpreted as being a way of obtaining competencies which had formerly been viewed as being exclusive to the Spanish state. It is noteworthy that the government indicated its willingness to re-­define Article 150 in order to address this question. Difficulties were also experienced between the government and the Catalan branch of the PSOE, the PSC (Partit dels Socialistes Catalans), which backed the version passed by the Catalan parliament which was extensively amended when it reached the Congress of Deputies. The President of the Generalitat, Pasqual Maragall, was also reprimanded by the government in August 2006 for suggesting that, thanks to the introduction of the reformed statute, the Spanish state now had no more than a ‘residual nature’ in Catalonia. Such a statement only served to justify the PP’s criticisms of the statute. Such was the PP’s concern about the Catalan Statute that it appealed to the Constitutional Court in July 2006 on the grounds that it contravened the 1978 Constitution. The Constitutional Court ruled in June 2010 that several of the statute’s articles were invalid, and, most notably, indicated that ‘the only nation acknowledged by the Constitution is the Spanish Nation’. Tensions between the PSOE and the PSC became apparent following the Catalan regional elections held in November 2006 when, once again, no single party obtained an overall majority. It was rumoured that the government would have preferred the establishment of an alliance between the PSC and Convergència i Unió, with the latter, having gained more seats, as the senior partner, rather than a repetition of the Tripartito which had governed the region since 2003. If true, this would have meant that Rodríguez Zapatero, already with one eye on prospective allies following the next general election in 2008, would have been happier to see Convergència i Unió’s Artur Mas as President of the Generalitat rather than the PSC’s José Montilla. In the event, Rodríguez Zapatero was unable to impose his will on the PSOE’s Catalan sister party and the PSC was able to renew the Tripartito, with Montilla as President.

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Opponents of the reform of the autonomy statutes feared that increases in the competencies of the autonomous regions breached the spirit – if not the letter – of the Constitution. Actual reform of the Constitution requires the endorsement of a three-­fifths majority in each house of parliament. Considering that the Spanish state was responsible for an increasingly smaller percentage of public spending, due to the fact that responsibility for such significant items as health and education had been devolved to the regions, it was clear that the margin for further financial transfers was limited. Moreover, the economic and financial crisis which intensified during the PSOE’s second term in office under Rodríguez Zapatero ensured that all levels of government had to contribute towards reining in Spain’s public deficit. Even more contentious than the reform of the statutes of autonomy was the government’s decision to pursue a peace process with the Basque terrorist group, ETA. The organisation has weakened considerably over recent years. Arrests of suspected members has proceeded apace, the political wing of the organisation, Batasuna, was declared illegal in accordance with the Law on Political Parties in 2002 and an indication of the group’s declining operational capabilities was the fact that it had been able to kill just three people in 2003, and none since. ETA had been capable of killing over 100 people a year at the start of the 1980s. The PP therefore advocated the continuation of this hard line, which it viewed as being the only way of achieving a lasting peace, and vehemently opposed the government’s decision to initiate contacts with the organisation. The government’s response was to indicate that current conditions provided a highly favourable opportunity to put an end to the terrorist threat, most notably the combination of the organisation’s weakness, the declining social support for violence within the Basque Country and the scale of popular revulsion at all forms of terrorism – ­particularly after the attacks of 11 March 2004. All parties, with the exception of the PP, gave their support to a resolution in the Congress of Deputies in May 2005 backing dialogue between the government and ETA on the proviso that the organisation abandon its weapons. ETA declared its ceasefire on 22 March 2006. According to an article published in El País the following day, contacts had begun as early as 2002, when the PSOE was still in opposition, with the President of the Basque Socialist Party, Jesús Eguiguren, meeting the leader of Batasuna, Arnaldo Otegi (El País, 23 March 2006: 16). If true, this meant that the PSOE, whilst still in ­opposition, had agreed to meet representatives of an illegal organisation. The peace process experienced difficulties throughout 2006. Reports of the involvement of suspected ETA members in the theft of weapons in southern France, continued disturbances throughout the Basque Country involving ETA sympathisers, and the ongoing extortion of money from businesses in the region all served to paralyse the process. Moreover, the government refused to release any of those convicted of having carried out crimes on behalf of the organisation, or transfer them to prisons within the Basque Country, because the organisation had failed to show unequivocally that it had abandoned violence. The entire process was in any case brought to an abrupt end in December 2006 when ETA placed explosive devices in the car park of Madrid Barajas airport’s

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new Terminal 4, killing two people. With the government having staked its reputation on the issue, the blow to its credibility was considerable, particularly given that the PP’s opposition to the government had focused primarily on Rodríguez Zapatero’s anti-­terrorist strategy, together with the alleged threat posed to Spain’s unity by reform of autonomy statutes. ETA officially declared an end to its ceasefire in June 2007 and several instances of terrorism followed, including the killing of a former PSOE councillor in the Basque Country, who was shot dead just two days before the March 2008 general election. It was nevertheless by now apparent that ETA had become a relatively feeble organisation which had been unable to withstand the tough approach adopted by the government after the Barajas attack. The announcement that the organisation had declared a permanent ceasefire in January 2011 was hardly met with surprise by a population which was now more concerned about the deteriorating economic situation. One of the PSOE’s most important achievements – ensuring the renunciation of violence of an organisation responsible for the killing of over 800 people since the 1960s – ­therefore barely gained the recognition it deserved. With respect to the implementation of policy in this area as a reflection of the philosophical underpinnings favoured by Rodríguez Zapatero, it was possible to argue that the unity and plurality of Spain were not viewed as incompatible: indeed contemporary Spain required that both elements be respected. Benjamin Barber’s concept of strengthening democracy might be cited in defence of the PSOE government’s initiatives with respect to reform of autonomy statutes, whilst Pettit’s idea of non-­domination is also relevant, given central government’s desire to ensure that the grievances of regions are not allowed to develop into feelings of alienation from a central power perceived as intransigent. Likewise, Pettit’s emphasis on what he terms the ‘dispersion-­of-­power’, one of the ingredients of which is identified as being the decentralisation of power under a federal system of government, is also significant (Pettit, 1997: 178–9). Rawls’s ‘difference principle’ is pertinent here, given the onus on society to address the needs of the worst off – which, in this case, could be interpreted as the needs of Spain’s poorer autonomous regions. The reform of the autonomy statute of one of Spain’s wealthier regions, such as Catalonia, should not be allowed to damage the well-­being of a poorer region, such as Extremadura. The Spanish Constitution provides further justification for the maintenance of solidarity between the regions. Article 2 states that the Constitution, ‘recognises and guarantees the right to autonomy of the nationalities and regions which form the Spanish nation and solidarity between them all’, whilst Article 138.2 states: ‘the differences between the Statutes of the various Autonomous Communities Regions may, under no circumstances, imply economic or social privileges’. In this connection, Rodríguez Zapatero emphasised that any reform of autonomy statutes must respect two key principles: the equality of each citizen and solidarity between the different communities which make up the Spanish state (Calamai and Garzia, 2006: 53). Social liberal concepts therefore contributed to the PSOE’s policies with respect to constitutional affairs. Unlike the UK’s Labour Party, which found the full consequences of the devolution of power to Scotland and Wales difficult to digest,

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the PSOE government identified the extension of regional competencies as being one of its defining policies and has not baulked at giving its full support to the process. However, as we have seen, the Socialist government’s endorsement of further devolution of power from the centre did not prevent it from rejecting initiatives which it views as being fundamentally anti-­constitutional, most notably the Ibarretxe Plan. The risks involved were considerable and the questions of the peace process and reform of autonomy statutes provided the PP with much of its political ammunition before the economic downturn in 2008 offered even greater ­opportunities to decry the government’s record. Conclusion With economic stability apparently assured – at least until the downturn of 2008 – the PSOE government was able to display a significant degree of innovation with respect to policies in other areas, particularly in the field of civil liberties. Here, a coherent set of reforms was introduced, which many in the previous generation of the party leadership had considered unrealisable. Although the PSOE may have accepted the scale of the constraints imposed on economic policy, it had greater margin of manoeuvre regarding citizens’ freedoms. In the areas considered above – the protection and extension of civil and gender rights, historic memory and constitutional reform – the government recognised and positively embraced its duty to protect and maintain individual freedoms. The guiding principle was that government should embrace the challenge of ensuring that no section of the community should have to experience neglect of its well-­being. In a practical sense, this implied that the government felt duty-­bound to address the requirements of various sectors of the community. These ranged from victims of domestic violence to the surviving relatives of those who suffered at the hands of an authoritarian dictatorship decades earlier; from gay couples seeking to marry or adopt, to those – often women – who were unable to remain in the labour market due to having to care for relatives. Moreover, this emphasis on individual rights contributed towards the fact that Rodríguez Zapatero’s cabinet throughout his entire period in office consisted equally of men and women, which remains an almost unique achievement. Moreover, reform of regions’ autonomy statutes enabled the consolidation of Spain’s status as one of the continent’s most decentralised states. Although critics of the government’s reforms in the area of civil rights have characterised them as being a gesture of little practical benefit to most people, the government’s initiatives found broad favour with the public. Likewise, for all those who claim that the government’s handling of the ‘historic memory’ issue has unnecessarily antagonised opponents of the initiative, there are others who are grateful to the government for acknowledging their relatives’ suffering after many decades of official neglect. The government’s strategy, aimed at putting an end to ETA terrorism and bringing up to date regions’ autonomy statutes, may also be viewed as a further aspect of its attempt to extend rights. Ensuring that

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there were no more victims of national terrorism and securing the cohesion of the Spanish state by accommodating the demands of regions within a coherent framework appropriate to the twenty-­first century were both key practical elements of this strategy. The PSOE was therefore able to redefine itself under Rodríguez Zapatero. Whilst the tenets of ‘liberal capitalism’ were broadly accepted to preserve macroeconomic stability, a distinctive centre-­left political identity was preserved via the application of ‘social liberal’ precepts which have enabled the party to reinvigorate its political project and make a genuine difference. The PSOE government was able to reassess the role of the State in relation to civil society and, in the process, empower citizenship by extending personal freedoms. ‘Quality of existence’ issues were consequently addressed alongside concerns about macroeconomic stability. Practical support for the emergence of a more diverse and tolerant society was therefore a key achievement of the PSOE government which should not be underestimated: since the turn of the century, the current PSOE leadership had effectively salvaged and re-­invented Spanish social democracy on the basis of a new, progressive, political project. As Gamble and Wright have commented, ‘The successful social democratic parties have been those which have been able to find ways of connecting their practical reforms with a larger story of what they stand for and are trying to achieve’ (Gamble and Wright, 1999: 2). In this connection, the PSOE government was imaginative with regard to revising the role of the State with respect to civil society. On this basis, political parties – even social democratic ones – can still make a difference within their national contexts. Furthermore, the PSOE under Rodríguez Zapatero appears to provide a case study with respect to how to recover the electorate’s support by means of clearly differentiating itself from its own past and the record of its predecessor in government via generational, ideological and programmatic renewal. Unfortunately for the PSOE, these achievements were effectively sidelined as the economic and financial crisis dominated the party’s final term in office. With many concerned about keeping their jobs within a labour market in which almost one in four people were unemployed, and the country seemingly at the mercy of the bond markets, broader questions of civil and gender rights appeared to be secondary issues, despite their undoubted significance. Chapter 10 will consider the PSOE’s handling of the economy as the country lurched from boom to bust. Notes 1 Philip Pettit has written and contributed to two books which consider Rodríguez Zapatero’s record in office: Examen a Zapatero, Temas de Hoy, Madrid, 2008 and, with José Luis Martí, A Political Philosophy in Public Life: Civic Republicanism in Zapatero’s Spain, Princeton University Press, Princeton, 2010.

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Foreign and security policy under Rodríguez Zapatero

Zapatero

Instrumental in securing and consolidating Spain’s membership of the EU during its period in office between 1982 and 1996, the PSOE was critical of the more explicitly nationalist discourse adopted by the PP government between 1996 and 2004. In its manifesto for the March 2004 general election, the PSOE contrasted the constructive approach towards European integration adopted by the governments led by Felipe González with the confrontational stance which characterised much of José María Aznar’s period as Prime Minister. According to the document, Spain had become obstructive and divisive under the PP, which had rejected European federalism in favour of an essentially intergovernmental union dependent on the US in the fields of foreign and security policy (PSOE, 2004a: 17). Spain’s re-­entry into the international community during the post-­Franco period was carried out on the assumption that Spain’s influence was fundamentally linked to its incorporation into the process of European integrations and the ‘Europeanisation’ of its interests and national objectives (Jiménez Redondo, 2006: 71–82). The PSOE shared Ortega y Gasset’s aphorism that Europe offered the solution to the historic problem of Spanish backwardness and isolation, a sense of being ‘different’ to the rest of the continent – as had been all too balefully illustrated during the Franco regime. The Spanish population shared the PSOE’s enthusiasm for Europe and concepts such as modernisation, welfare, pluralism and rationality became virtually synonymous with Spain’s Europeanisation. Moreover, although the end of the Cold War threatened to shift the European Community’s attention away from the South to the East, thereby again threatening to marginalise the country and damage its interests, the PSOE under González retained its enthusiasm for European integration. Emphasis was placed on remaining at the heart of the European ‘project’, despite the scale of the challenges which this stance necessitated, most notably the need to meet the Maastricht Treaty convergence criteria so as to participate in the single currency. The adoption of a more realistic, and belligerent, stance in the defence of national interests characterised the PSOE’s stance in the period between the signing of the Maastricht Treaty in 1992 and the PSOE’s departure from office in 1996.

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This chapter aims to examine the PSOE government’s stance on foreign and security policy, and the degree to which it differed from that of the PP government under José María Aznar. The divergence of approaches with respect to the question of bilateral relations with the US, and Spain’s strategy concerning the EU, serve as the backdrop to the chapter. Firstly, it will seek to explain the PP government’s shift away from the favourable approach towards integration of its Socialist predecessor and to evaluate the success of a strategy more overtly geared towards the defence of national interests, even to the point of backing the US-­led invasion of Iraq, despite the opposition of the overwhelming majority of Spaniards. Secondly, it will assess the reorientation of policy under José Luis Rodríguez Zapatero’s Socialist government between 2004 and 2011. The divergence between the PP and the PSOE on the question of attitudes towards European integration is significant given that, hitherto, the EU has not provided the basis for any serious political cleavages in Spanish politics (Closa and Heywood, 2004: 243). This chapter is therefore a contribution to the literature on what has been referred to as the ‘new paradigm’ for Spanish foreign policy under the PP (in addition to Closa and Heywood, 2004, see Barbé, 1999; Heywood, 2003; Chari et al., 2004; Closa, 2004b; Paramio, 2004; and Sanz and Sánchez-­Sierra, 2005) and its reversal under the PSOE. An accusation made about Rodríguez Zapatero is that he not only failed to increase Spain’s profile on the international stage, but also appeared to have little interest in the foreign policy sphere. The chapter will therefore also consider the significance of initiatives associated with Rodríguez Zapatero in the field of foreign policy, most notably the United Nations Alliance of Civilisations, launched by Rodríguez Zapatero following a speech he gave to the UN General Assembly in September 2004. From federalism to intergovernmentalism: the PP’s strategy on EU integration, 1996–2004 The PP’s entry in office in 1996 posed a fundamental challenge to the essential guidelines which had governed Spanish foreign policy since the death of Franco (Closa, 2004a). Thenceforth policy centred on a re-­alignment with the US and the adoption of a more aggressive stance within the EU directed towards reinforcing Spain’s position with respect to leading EU member states. Explicit emphasis was placed on the defence of national interests and Spain’s individual influence, be it economic or in terms of voting capacity within the EU. Although the PP government’s slim parliamentary majority constrained its freedom of manoeuvre in the field of foreign policy during its first term (1996–2000), Aznar was still able to differentiate his policy from the previous Socialist government in several respects. Spain was finally incorporated into NATO’s military command structure shortly after the PP general election victory (with the full support of the PSOE), whilst official co-­operation was suspended with Cuba. Both developments found favour with Washington, which Aznar visited for the first time a year into his premiership. Aznar also defended the

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bombing of Iraq by the US and Britain in 1998, despite criticism from other EU member states. This alignment with the Anglo-­Saxon bloc represented a change in terms of the security policy hitherto implemented by the PSOE governments under Felipe González, and marked a defining moment with respect to Spain’s attitude towards the Franco-­German axis (Barbé, 1999: 175; 2001: 59). Despite these developments, an eminent PP commentator on Spanish foreign policy was justifiably able to conclude, when evaluating the PP’s first term in office, that the most notable feature had been ‘the continuity of the current government’s foreign policy with that of its predecessors. A continuity in its basic outlines which is not only based on the permanence of Spanish interests, but also on acceptance across a broad political consensus’ (emphasis in original) (Herrero de Miñón, 2000: 51). It is nevertheless worth pointing out that this concept of the existence of a long-­standing political consensus in Spanish foreign and security policy is itself debatable. As one commentator has argued, ‘the government cannot be charged with having broken a consensus which was never explicitly articulated by the main political parties with parliamentary representation and which has never been clearly and unequivocally apparent to Spanish society’ (Calduch Cervera, 2004: 35) Less debatable is the PP’s shift away from the previous Socialist government’s federalism in favour of an intergovernmental approach towards the EU, particularly during the party’s second term in office when it was in receipt of an overall majority. This shift has been interpreted as being a function of the increasingly critical attitude towards federalist models of integration displayed throughout the EU from the mid-­1990s, as well as reflecting the increasingly instrumentalist view of the EU expressed in opinion polls in Spain, together with ‘Eurosceptic’ attitudes displayed by the PP government. Spain’s relationship with the EU was therefore conditioned by both structural international factors and domestic political factors (Closa and Heywood, 2004: 242). This intergovernmental approach towards institutional affairs primarily focused on economic questions and domestic and foreign security matters (Torreblanca, 2004). The intergovernmental vision of the EU was most notably apparent in the PP government’s refusal to countenance any amendment of the Nice Treaty. Aznar interpreted attempts at the IGC to propose a system of ‘double majority’ voting as a direct attack on Spain. At the European Council Meeting in Brussels in December 2003, the Spanish government made little attempt to present its stance in terms of defending the interests of the EU as a whole: Spanish national interest was the sole concern. Despite Aznar’s close relationship with Tony Blair, the UK Prime Minister had no compunction in making clear his continuing recognition of the priority status awarded to the Franco-­German axis. With London, Paris and Berlin co-­ordinating their approach towards the new Constitution, there was no place for an increasingly isolated Madrid. Moreover, the PP government’s stance seemed likely to contribute towards a further increase in anti-­EU ­sentiment throughout Spanish society (Closa, 2004a). There was nevertheless a contradiction at the heart of Aznar’s stance on

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Europe, albeit one which did not rein in Aznar’s ambitions on the international stage. Indeed Aznar announced his intention to put Spain forward for membership of the G-­8. As Jiménez Redondo has argued, ‘one could not try to be a “big” country, participate in the leadership of the European Union, declare principles and demand compliance, and, at the same time, continue to be a country ­dependent on structural funds’ (Jiménez Redondo, 2006: 89). Just months later the PP went into the March 2004 general election campaign with a manifesto in which it pledged to maintain ‘Spain’s influence on the enlarged European Union’s new institutional architecture’. This made a clear contrast with the PSOE’s pledge in its own programme to provide its full support for the draft Constitution, which it interpreted as ‘an extraordinary step towards a political union with a federal orientation’ (Torreblanca, 2004). The PP’s emphasis on the influence it had been able to exert on the i­ nternational stage was prominent throughout its manifesto: The Popular Party government has successfully strengthened Spain’s influence and weight on the international scene. Spain today enjoys a prestige and international credibility which corresponds to the effort which has been put in . . . Popular Party governments have been guided by the wish to exercise greater power within the European Union, and join that group of countries which drives the European project forward. (PP, 2004: 303, 307)

Of course, the government’s efforts to defend the Nice Treaty status quo with respect to voting rights in the Council of Ministers was hardly the central issue when the general election was held. When Spaniards went to the polls on 14 March 2004, just three days after the Al-­Qaeda terrorist attacks on Madrid, the nation was still, understandably, in a state of shock. Uppermost in their minds were both the inept response of the government to the crisis and the implications of the intensification of bilateral relations with the US during the PP’s second term in office, to which we will now turn. The development of bilateral relations between Spain and the US and the general election of 14 March 2004 Concerns about the shift in foreign policy were expressed by many prominent commentators in the field, including Celestino del Arenal, who argued, ‘Aznar’s foreign policy model was unsustainable both in the medium and long term with respect to the defence of the national interests of a medium-­sized power such as Spain, whose interests are mainly focused on Europe’ (Arenal, 2004). Given this, how is the PP government’s decision to deepen relations with the US and support its war in Iraq to be explained? With respect to theoretical approaches which seek to elucidate the factors behind Aznar’s support for the US-­led war against Iraq, Heywood (2003) has suggested the use of three analytical frameworks – two-­level games, liberal i­ ntergovernmentalism and neo-­realism. The two-­level game approach is employed to suggest that, at the domestic level,

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Aznar sought to gain support for his decision to back the US-­led war in Iraq by linking Washington’s ‘global war on terrorism’ with his own uncompromising stance on the Basque separatist group, ETA. Given that, as Heywood points out, opinion polls shortly before the municipal and Autonomous Community elections in May 2003 indicated that just 17 per cent of Spaniards believed that the government’s support for the war in Iraq would change their voting intention, Aznar’s somewhat risky strategy appeared not to have had too detrimental an impact on the party’s electoral prospects. It was in this context that the government had reason to feel confident that the issue of Iraq would be unlikely to inflict undue damage at the general election due in early 2004. Likewise, Heywood suggests that a liberal intergovernmentalist approach interprets the PP government’s pro-­Atlantic stance in terms of a tactical manoeuvre in preparation for the 2004 Intergovernmental Conference. Opposed to the ‘social Europe’ advocated by Paris and Berlin, Aznar instead emphasised economic policy agendas based on market liberalisation and labour market deregulation shared with the UK under Tony Blair, and beyond the EU, with the US under George W. Bush. This London–Madrid axis would serve as counterbalance to the traditional Paris–Berlin axis which had served as a template for policy under the Socialists. Finally, a neo-­realist focus on state power, understood primarily in terms of economic capacity and international capacity, suggests that Aznar’s support for the war in Iraq aimed to secure for Spain a position as one of the EU’s leading powers. According to this approach, the inclusion of Spain in transatlantic dialogues, most notably the meeting in the Azores between Bush, Blair and Aznar on the eve of the war with Iraq on 16 March 2003, served as confirmation of Spain’s elevation from mere middle power status. Heywood concludes that ‘Aznar appears to have adopted a strategy of hoping that if Spain behaves like a major power, people will end up believing that it is one: the evidence suggests that the Spanish population is some way from buying into such a view’ (Heywood, 2003: 40). Closa also adopts a neo-­realist interpretation, suggesting that Aznar’s government maintained a neo-­realist view of international relations, as opposed to the federalist discourse adopted by its predecessors (2004a: 4). The adoption of a more assertive foreign policy stance was also linked to the enhanced credibility enjoyed by Spain within the international arena after it comfortably qualified for participation in the single currency during the PP’s first term in office, avoiding the risk of a two-­speed Europe and the marginalisation of the country (Jiménez Redondo, 2006: 82, 85). Aznar himself appears to bear out this interpretation. In his memoirs, he criticises the fact that, until the PP entered office, Spain had been ‘a slightly second-­rate country. The best that could be hoped for was to keep up with the leading group, standing out a little, but never taking the lead. And that is what changed: the readiness to accept responsibilities . . . I do not want Spain to be sidelined by History’ (Aznar, 2004: 151). Aznar therefore had no compunction in awarding the title, In the Vanguard of Europe to one of the chapters in his book. He also expresses much pride in the fact that

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‘Bush’s first visit to Europe after he was elected President was to Spain. It was not Great Britain, or France, or Germany. He began his European tour in Madrid. His commitment to the struggle against terrorism was absolute. It was just a few months before the events of September 11th’ (Aznar, 2004: 154). The events in the US effectively transformed Spanish foreign policy into a defence and security policy aimed at supporting the hegemonic role of the US throughout the world, whilst the Atlantic relationship took on a strategic quality viewed as being essential for the defence of national interests (Jiménez Redondo, 2006: 94–6, 133). One of the key concerns of Spanish domestic policy, the threat posed by Basque terrorism, fused with foreign and security policy as Aznar sought US support in the fight against terrorism. The connection between US support for the campaign against ETA terrorism and Spain’s support of the US policy on Iraq was therefore significant. Shortly after 9/11 Aznar insisted that there was no fundamental difference between ETA and Al-­Qaeda, which ultimately led him to high-­profile support for Bush’s invasion of Iraq (Woodworth, 2004: 177). It is also noteworthy that, unlike González and his team of advisers, who looked to France, Germany and, to a much lesser extent, the UK as a cultural reference, Aznar was culturally and ideologically more attracted towards the Anglo-­Saxon world, most particularly, the US. The increasing globalisation of the economy, which had by now replaced the Cold War as the defining feature of the international system, further reinforced Aznar’s shift (Jiménez Redondo, 2006: 84). The opportunity of becoming a privileged interlocutor of the US, allied to the possibility of obtaining help from George Bush in confronting terrorism in Spain, was too good to miss. Shortly before the 2004 general election, Aznar told the Wall Street Journal that, before 9/11, Spain’s European allies had abandoned Spain to its own devices in its campaign against ETA. Subsequently, international co-­operation was forthcoming, particularly from the US. Significantly, Aznar criticised France’s failure to help Spain against ETA. Antipathy towards France and, to a lesser extent, towards Germany was also provoked by Aznar’s rejection of the Paris–Berlin axis’s emphasis on a ‘social Europe’. For Aznar, the EU was experiencing a degree of stagnation which undermined its competitiveness and capacity for international leadership (Jiménez Redondo, 2006: 98). An economic liberal, like his allies Tony Blair and Italy’s Silvio Berlusconi, Aznar sought to further liberalise the EU economy, whilst also seeking to place more emphasis on the adoption of a tougher line with respect to the terrorist threat. On the latter point, Aznar was an enthusiastic proponent of reducing illegal immigration and increasing the EU’s jurisdiction with respect to judicial and police powers. Aznar and Blair in particular worked together on the promotion of labour market flexibility and economic liberalisation throughout the EU, leading to their bilateral statement on the need for more deregulation at the European Council Meeting in Vienna in 1998. This was followed by a further joint declaration the following year, again concerning labour market flexibility. This initiative led to both governments giving their full backing to the so-­called Lisbon Agenda in March 2000, which aimed to make the EU ‘the most competitive and dynamic

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knowledge-­driven economy by 2010’. This strategy indicated Aznar’s rejection of the paternalist, corporatist and, generally, state-­led economic policies advanced by the EU’s traditional Franco-­German axis. Further points of dispute between Madrid and Paris and Berlin included Aznar’s support for President Bush’s refusal to sign up to the Kyoto Treaty on greenhouse gas emissions, the US President’s rejection of the International War Crimes Tribunal and the US advocacy of an anti-­missile shield. An even greater impact was made by the Wall Street Journal’s publication of a letter written by Aznar and Blair and signed by the heads of government of six other EU member states (Italy, Portugal, Denmark, Hungary, Poland and the Czech Republic) in January 2003. Coming just two months before the US invasion of Iraq, the outspoken support for US military action did little to foster unity within the EU. Aznar later stressed that the letter aimed to challenge the Franco-­ German attempt to present their opposition to US military action in Iraq as the position of the EU as a whole (Aznar, 2004: 155–6) Aznar’s strategy was based on the belief that the closer Spain was to the US, extending and globalising Spain’s national interests, the easier it would be to transform the country into a great power. However, although Aznar’s Atlanticist shift improved Spain’s political contacts within the international system and enabled the country to tackle important challenges, there was ultimately no transformation in Spain’s international status. Spain would remain of marginal interest to the US, and would be unable to reconcile its status as a recipient of EU Cohesion and Structural Funds with its desire to present itself as a great power. Moreover, Aznar’s desire to present the country as a leading actor on the international stage was not shared by the majority of the Spanish population, which, rather, viewed Spain in more realistic terms as a medium-­sized power with limited interests (Jiménez Redondo, 2006: 88, 99–102, 130). Given the above, Aznar’s adoption of a quasi-­presidential approach in which he reserved for himself power over the elaboration, execution and control of policy, and his government’s failure to communicate and justify the shift in policy, the PSOE was presented with the prospect of making progress at the government’s expense. Moreover, the long-­standing identification of the PSOE with European integration – which remained popular with the majority of Spaniards – offered Rodríguez Zapatero a further opportunity. The following section will therefore consider the elaboration of the PSOE’s foreign and security policy under the leadership of Rodríguez Zapatero from 2000. The PSOE’s foreign and security policy, 2000–11 The PP’s capture of an overall majority in 2000 led to the adoption of a less consensual, more high-­handed style which reflected badly on José María Aznar personally. Indeed, during the course of just one year – 2001 – it has even been suggested that Aznar’s government managed to destroy much of the credit gained during its entire first term in office (Romero, 2002: 98).

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The field of foreign policy certainly offered the PSOE the opportunity to differentiate itself in terms of its opposition to a governmental policy which appeared to sacrifice the continuation of good relations with the EU in favour of an Atlanticist shift in policy for which the majority of the public had little affection. The PSOE’s criticism of the government’s support for the unilateral actions of the US administration in Iraq found a receptive public. Moreover, the sober, responsible style of opposition employed by Rodríguez Zapatero gave additional credibility to the PSOE’s criticism of government policy (Paramio, 2004: 163). The approach of the PSOE was to establish a foreign policy more appropriate to the capacity of a medium-­level country such as Spain and re-­establish the EU, the Mediterranean and Latin America as the three traditional axes of Spanish foreign policy. Whereas the PP government had vainly sought to establish a great power capacity which bore no relation to the means at the country’s disposal, the PSOE would return to a more familiar and popular set of norms put in place under the PSOE’s previous period in office under Felipe González. Such a shift nevertheless carried its own set of risks. Whilst the PSOE’s intention appeared to be to re-­establish the foreign and security positions established between 1982 and 1996, there was a sense in which the PSOE under Rodríguez Zapatero was seeking to re-­establish norms which no longer applied. Most importantly, with respect to EU policy, Rodríguez Zapatero appeared to base his policy on a reading of the ideological and political situation in Europe which remained rooted in the past. The complexity of the situation in Europe went beyond questions related to the war in Iraq and relations with the US (Jiménez Redondo, 2006: 153). In his investiture speech on 15 April 2004, Rodríguez Zapatero indicated his intention to re-­orientate Spanish foreign policy back towards its traditional priority areas, namely the EU, the Mediterranean and Latin America: I want to make it very clear that Spain will assume its international obligations to defend peace and security. This we will do always, with just one condition: actions must be based on a prior decision by the United Nations or another competent international body. In any case, the deployment of the Spanish Armed Forces to missions outside Spain will always be decided after due consultation with Parliament.

There would be: A return to consensus-­based foreign policy decisions; the prioritizing of a European vision in our policies; a commitment to the immediate approval of the European Constitution; preferential attention to Latin America and the Mediterranean; scrupulous respect for international legality; and the confirmation of the United Nations as a guarantor of international peace and security, all of which constitute the fundamental goals of the new foreign policy. (Rodríguez Zapatero, 2004: 15–17)

Three days later the incoming Prime Minister confirmed the withdrawal of the 1,300-­strong Spanish military contingent in Iraq, an operation which was completed by the end of May 2004. It is likely that one of the factors which contributed to the hastiness of the withdrawal was the fact that the Spanish base at Najaf, south of Baghdad, had come under serious attack from the so-­called Mahdi Army

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in early April 2004. The insurgent action was part of a campaign to destabilise the country in the run-­up to the handover of power to the new Iraqi government in June 2004. The likelihood of casualties, despite members of the Spanish contingent having originally been sent to the region as ‘non-­combatants’, was therefore high. Given that the Spanish military contingent was poorly equipped to carry out the offensive strategy advocated by US military strategists, and being obliged to go beyond its original mission of contributing to the stabilisation and reconstruction of the country, Rodríguez Zapatero judged that withdrawal should be completed forthwith (Aizpeolea, 2004: 36). Indeed, the US military forces that arrived in Najaf in the wake of the Spanish withdrawal immediately became involved in fierce clashes with insurgents. As though to emphasise the re-­establishment of the priority status of the Paris– Berlin axis in Spanish foreign policy, the new Prime Minister’s first trips abroad within Europe were to Germany on 28 April and to France the following day. In Berlin, the Spanish Prime Minister commented, I offered the Spanish people a pro-­European option. That option represents the recognition of what France and Germany represent as the Union’s driving forces and of our wish to be close. For me, there is no new and old Europe, just a united Europe. (El País, 29 April 2004: 16)

In Paris, the French President, Jacques Chirac, announced the creation of a new Berlin–Paris–Madrid axis, whilst Rodríguez Zapatero expressed his wish to return to the heart of the construction of Europe. In its manifesto for the elections for the European Parliament in June 2004 the PSOE further underlined its pro-­European vocation, contrasting it with the critical stance of the previous government. Under the PP government, Spain had ceased to be a leading player in the construction of Europe, and had destroyed the political consensus which had existed before it entered office. The anti-­European policy of the PP government – which blocked the Constitution and promoted division within the EU due to the war in Iraq – had isolated and weakened Spain in Europe. From being a country with firm and supportive allies both politically and economically, starting with Germany and France, Spain under the PP had been marginalised, losing influence. The PP had acted in the face of widespread public and political opposition. It had also promoted a right-­wing neoliberal vision, and had sought to subordinate the EU with respect to the Bush administration, which had acted in breach of international law (PSOE, 2004c: 5–6). In the election, the PSOE was able to secure a narrow advantage over the PP – 25 seats to the PP’s 24. Later that month the Socialist government was able to contribute towards the EU being able finally to reach an agreement over the question of Qualified Majority Voting in the Council of Ministers, as well as secure approval of the draft Constitution at the European Council meeting in Brussels on 17–18 June 2004. Spain became the first EU member state to hold a referendum on the new Constitution on 20 February 2005, with 77 per cent of those voting being in favour, on a low turnout of just 42 per cent. Jacques Chirac lent his support to

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the Spanish government’s campaign in favour of the Constitution on a visit to Madrid shortly before the referendum. Rodríguez Zapatero reciprocated, being awarded the honour of being the first Spanish Prime Minister to address the French National Assembly on 1 March 2005. In his speech, Rodríguez Zapatero defended the rule of law, implicitly criticising the unilateral actions of the previous government in the area of foreign and security policy: It is true that Europe is growing, enlarging itself, but it is the direct opposite of a classical empire, because the Union is a community based on Law and is so in the fullest sense: it has renounced the temptation to impose its rules on its members by the use of force. Its only force is the Law. It thereby expresses, in my opinion, the ideal of an International Community which has respect for legality (Rodríguez Zapatero, 2005).

The European ‘project’ was nevertheless dealt a blow when referenda on the Constitution in France in May 2005 and in Holland the following month resulted in its rejection. This setback, which effectively placed the process on hold, was compounded by the failure to reach a deal on the 2007–13 Financial Perspective at the European Council Meeting in Brussels on 16–17 June 2005. When agreement was finally reached at the European Council Meeting in Brussels on 16–17 December 2005, Rodríguez Zapatero was able to secure a deal which meant that Spain would remain a net recipient of EU funds until 2013. Rodríguez Zapatero’s decision to return to the Paris–Berlin axis paid dividends given that the alliance formed with France and Germany at the summit proved to be decisive in Spain obtaining its goals (Chislett, 2006: 3) Spain’s success at the summit was particularly remarkable given that, shortly afterwards, the Spanish Prime Minister claimed that the country’s economic muscle meant that it deserved to be part of the G-­8 Group of Nations (El País, 27 December 2005: 40) Meanwhile, relations between Spain and the US remained strained. The US Deputy Secretary of State, Robert Zoellick, paid a visit to Madrid in April 2005 at which he expressed concern at the Spanish proposal to sell arms to President Hugo Chávez’s Venezuela. The issue was to cause controversy throughout 2005 and 2006 and led to the cancellation of the sale of twelve military aircraft to Venezuela due to the refusal of the US to provide parts. Zoellick nevertheless acknowledged the value of Spain’s continuing role in Afghanistan, and President Bush sent a letter to Rodríguez Zapatero in April 2005 thanking Spain for its contribution to security in the country. Four months later, seventeen Spanish military personnel were killed in a helicopter crash in Afghanistan. The US expressed condolences to the families of those involved in the incident. By the start of 2007, Spain had over 700 troops in the country, the eighth largest contingent. The Spanish government nevertheless refused to increase its commitment, despite calls from the US and the UK at the NATO summit in Riga in November 2006. Furthermore, Rodríguez Zapatero refused to countenance any changes in the rules of engagement established for the mission. Most particularly, he rejected Spanish troops being moved from their base in the north-­western Herat region of the country to more unstable

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areas in the south, unless exceptional circumstances  – decided by the Spanish government – required such a development. The reasoning appeared to be that neither the operational capacity of the Spanish contingent, nor the support of Spanish public opinion, were sufficient for Spain’s mission to be transformed from one of peacekeeping to actual military engagement. May 2005 also witnessed a meeting in Washington between the US Defence Secretary Donald Rumsfeld and his Spanish counterpart José Bono. Although Rumsfeld returned to the question of the proposed Spanish arms sales to Venezuela, which he described as ‘a mistake’, he indicated that the US administration was looking to move on from the bad feeling caused by the withdrawal of Spanish troops from Iraq (El País, 4 May 2005: 22). Spain nevertheless pressed on with the sale of €1.7 billion of military equipment to Venezuela in early 2006. Whilst no foreign policy initiative was likely to have had the impact of Rodríguez Zapatero’s decision to withdraw Spanish troops from Iraq following the 2004 general election, his co-­sponsorship, with the Turkish Prime Minister, Tayyip Erdogan, of the UN Alliance of Civilizations, constituted Rodríguez Zapatero’s most prominent proposal in the field of foreign policy. In his first speech at the UN General Assembly in September 2004, Rodríguez Zapatero proposed the establishment of a body which would promote dialogue between the Western and the Arab and Muslim worlds. Rodríguez Zapatero viewed his initiative as being complementary to the legal and security measures being taken with respect to the region, with an emphasis on developing a rational, humanist, democratic and optimistic narrative capable of going beyond the idea of a clash of civilisations between Islam and the West (Calamai and Garzia, 2006: 63). Essentially an attempt to institutionalise his concept of the superiority of moral prestige over military intervention, the UN Alliance of Civilizations struggled to establish itself as much more than a talking shop of little practical value. Interviewed by El País in January 2002, the PP’s Foreign Minister commented that he had always viewed the initiative as being somewhat ‘ethereal’. The failure of the Alliance of Civilizations to make any impact during the Arab Spring of 2011 had been an eloquent testimony to its essential irrelevance (El País, 22 January 2012: 13). Jiménez Redondo has advanced a convincing critique of the PSOE’s foreign and security policy under Rodríguez Zapatero (Jiménez Redondo, 2006: 137–60). In a chapter entitled, ‘The Deconstruction of Aznarism’, he indicates that the PSOE under Rodríguez Zapatero sought to portray the PP’s period in office as being an aberration during which the government had unilaterally broken a consensus on foreign and security policy which dated back a quarter of a century. The PSOE’s programme for the 2004 general election pledged a return to a policy more apposite for a country such as Spain, which would be directed towards European integration, the rejection of the responsibilities implicit in the adoption of an inappropriate great power status, and the return to a foreign policy based on moral prestige and ‘soft’ power. Unilateral action, such as that taken with respect to Iraq, would be replaced by a multilateralism which would be employed under the auspices of international organisations such as the UN, which would

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serve as a counterbalance to the use of US-­led military force. The emphasis was therefore moral and normative and was translated into policy during the PSOE’s period in office from 2004. Critics of Rodríguez Zapatero’s shift nevertheless condemned the loss of Spain’s more prominent role on the international stage. In order to compensate for the decline in Spain’s credibility in the foreign policy arena, Rodríguez Zapatero had increased Spain’s contribution to peacekeeping forces in Afghanistan, as well as agreeing to train Iraqi police, legal officers and other officials in Spain. Rodríguez Zapatero had viewed the Franco-­German axis as an alternative both to the US and the neoliberal model. Nevertheless, with respect to Rodríguez Zapatero’s favouring of the Franco-­German axis within the EU, both countries impressed on him that he could not automatically expect support for the continuation of financial transfers to Madrid, although, as we have seen, Franco-­German support was essential with respect to the 2007–13 Financial Perspective at the European Council Meeting in Brussels in June 2005. Moreover, both countries were vocal in their criticism of the PSOE government’s decision to regularise the position of some 700,000 previously illegal immigrants in 2005. The conclusion drawn by Jiménez Redondo is that Rodríguez Zapatero did not establish his own alternative foreign policy model, but rather, opted for a discourse notable for its emphasis on distancing Spain from the US with respect to foreign policy. Essentially, Rodríguez Zapatero had adopted a policy which was the antithesis of the realism inherent in Aznar’s approach. An alternative interpretation of Rodríguez Zapatero’s approach was that he was all too realistic in terms of seeking to promote a foreign policy which was more likely to appeal to the anti-­US prejudices and pro-­European sentiments which were a feature of the majority of the Spanish population. Given that opinion polls indicated that the PSOE was well behind the PP in the run-­up to the 2004 general election, Rodríguez Zapatero’s discourse was an attempt to maximise the PSOE’s popularity amongst the electorate. With the PSOE’s final term in office being concerned primarily with the economic crisis, foreign and security policy became even less of a priority than it had been between 2004 and 2008. It is therefore somewhat ironic that a party which attracted international attention on account of its stance on foreign and security policy during its first weeks in office, i.e. the decision to withdraw Spanish troops from Iraq, chose to adopt a relatively low profile in the foreign policy sphere during the rest of its period in government. Foreign policy concerns had contributed towards the victory of the PSOE in March 2004. It was domestic policy, as regards the public perception of the government’s handling of the economic and financial crisis after 2008, which will be the focus of the next chapter. Conclusion Writing just a month after the terrorist attacks on Madrid and the subsequent PSOE victory in Spain’s general election, Celestino del Arenal recommended that Spain adopt a new style of foreign policy. This should be agreed around the basic axes of Spanish foreign policy concern and have the support of Spanish society; it

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should maintain an equilibrium between its European and transatlantic dimensions; it should ensure that there is substance behind relations with Latin America and the Mediterranean; it should be realistic about the resources at Spain’s disposal; it should be uncompromising against terrorism, but should be just as forthright in its defence of international legality and the leading role of the UN; its credibility should be guaranteed by virtue of being founded on the achievement of a consensus between the main parliamentary forces, which still allows each government to leave its particular stamp; it should seek to unite and not divide in the defence of democracy and human rights at an international level (Arenal, 2004). Although the PSOE government under Rodríguez Zapatero had some success in re-­orientating Spanish foreign and security policy towards the kind of aims outlined above, foreign policy – with the notable exception of the decision to withdraw Spanish troops from Iraq weeks after entering office in 2004 – took a back seat to domestic policy, most particularly during the party’s final term in office. Although criticised for his relative neglect of foreign policy, Rodríguez Zapatero could nevertheless respond that his approach had ultimately been more realistic than that of his predecessor, José María Aznar. Whilst it had been possible to return Spain to ‘the heart of Europe’, Rodríguez Zapatero was forced to confront a European Union which, with the intensification of the international economic crisis from 2008, posed as many questions of Spain as it provided answers. If anything, Rodríguez Zapatero faced a more challenging foreign policy arena than Aznar. In this sense, Spain’s relationship with the EU achieved a degree of maturity which had been lacking hitherto. This transformation in Spain’s relationship with the EU serves as the backdrop to the difficulties encountered by the government in responding to the economic crisis, to which we will now turn.

10

Nemesis: economic policy under the PSOE and the road to defeat The

When the PSOE comfortably won the March 2008 general election, gaining a vote even higher than the previous historic peak obtained when the party entered office in 2004, there was ample reason for satisfaction. With Spanish economic growth outpacing the EU average since the mid-­1990s, unemployment had been brought down to 8 per cent and the party’s programme for the 2008 general election contained a pledge to create two million new jobs so as to secure full employment within four years (PSOE, 2008: 10, 22). During the bulk of the party’s first term in office (2004–08) Spain had enjoyed a budget surplus, and public sector debt was amongst the lowest in the EU. At the end of the previous year, the EU’s statistical office, Eurostat, had announced that Spanish per capita income had overtaken that of Italy for the first time, leading the Spanish Prime Minister, José Luis Rodríguez Zapatero, to suggest that France might provide the next realistic target.1 In his inauguration speech following the PSOE’s victory, Rodríguez Zapatero claimed that the successive surpluses in the public accounts would enable the economy to absorb the impact of the downturn in economic activity which was already becoming apparent and ensure that there would be no need to resort to either increased taxation or cuts in social provision.2 Furthermore, as we have seen in Chapter 8, the government had implemented a number of important reforms in the area of civil and gender rights which were amongst the most progressive in Europe. Four months after the election, 98 per cent of delegates at the party’s 37th Congress endorsed Rodríguez Zapatero’s leadership. It is therefore understandable that Rodríguez Zapatero was able to establish a degree of control over the party and government even greater than that enjoyed by his socialist ­predecessor as Prime Minister, Felipe González, between 1982 and 1996. At the November 2011 general election, the PSOE obtained under seven million votes, almost four and a half million fewer than in 2008, and almost four million behind the victorious PP. The PSOE obtained just 29 per cent of the vote, compared to the PP’s 45 per cent, and its capture of just 110 of the 350 parliamentary seats, a loss of 59, gave the party its lowest total since the establishment of democracy following Franco’s death. Whilst the PP’s vote increased by just over half a million votes compared to 2008, it obtained 186 seats and a comfortable overall majority.

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The fate suffered by the Spanish Socialist government at the 2011 general election provides a case study of a government effectively rendered unelectable by the impact of the economic crisis. Stating that he would put in place all economic reforms considered necessary to stave off the kind of bail-out required by Greece, Ireland and Portugal, Rodríguez Zapatero implemented a severe austerity package, prominent amongst whose measures was an average 5 per cent reduction in civil servants’ salaries, the slashing of public sector investment, the freezing of pensions and the extension of the retirement age from 65 to 67. Moreover, he presided over a vertiginous increase in unemployment, which affected almost five million people, 22 per cent of the active population – the highest level in fifteen years. This statistic, which was the highest in the eurozone, included almost half of under-­25s. The Prime Minister announced in April 2011 that he would not be standing for a third term and the task of leading the party into the general election, which he brought forward to November 2011, four months earlier than expected, was entrusted to the former Interior Minister and First Deputy Prime Minister, Alfredo Pérez Rubalcaba. Given this legacy, it is unsurprising that Rubalcaba struggled to gain a hearing from an electorate angered by the government’s seeming impotence in the face of the challenges posed by the economic crisis. Following the election, the PSOE struggled to come to terms with the scale of its defeat, and prepared to analyse the reasons for the collapse in party support as well as proposing a way forward in opposition. The party’s 38th Congress, held in February 2012, constituted the first step in this process, although opinions within the party were mixed as to whether the decision to go ahead with the election of a new leader within three months of such a historic defeat was overly hasty. Given that the PSOE faced the prospect of a long time in opposition, some felt that the party should take a considered approach in order to ensure that the right person was selected, rather than being unduly concerned about a temporary power vacuum within the leadership. In the event, the party opted for continuity, with Rubalcaba defeating the former Defence Minister, Carme Chacón, in the election for the post of PSOE General Secretary. After such a crushing defeat, it was incumbent on the PSOE to carry out a process of renewal capable of ‘detoxifying’ the PSOE ‘brand’ and re-­establishing its credibility as a party of government. As we have seen, the party’s most recent experience of opposition between 1996 and 2004 provided lessons in this regard. During José María Aznar’s first term in office between 1996 and 2000, the PSOE had turned in on itself and squandered the regenerative opportunities offered by opposition, before the poor result obtained in 2000 forced the party to carry out a process of generational, ideological and programmatic renewal which served as the basis for the general election victories of 2004 and 2008. However, this process would be complicated by the fact that Rubalcaba, and other prominent figures within the party leadership, had served in Rodríguez Zapatero’s government and had seen their own credibility undermined by association. Throughout the 2011 general election campaign, Pérez Rubalcaba was constantly reminded that he had been a key figure in a government which had brought about economic collapse and the creation of

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five million unemployed. Furthermore, in 2000, unlike in 2012, the election of a leader did not take place within the context of an international economic crisis which called in question the very foundations of Spain’s socio-­economic model. The following questions will be considered during the course of this chapter. How are we to account for this slump in the PSOE’s fortunes over such a relatively short period of time? And how accurate is it to suggest that the economic crisis was the sole reason for the PSOE’s poor showing at the 2011 general election? The chapter is structured as follows. The first section considers the situation in which the Socialist government found itself after its re-­election in 2008 with respect to its main achievements and challenges. The second section covers the government’s reaction to the economic crisis during its second term in office 2008–11, most particularly after the onset of the Greek sovereign debt crisis in May 2010. The Conclusion then seeks to provide an appraisal of the PSOE government’s performance, together with an attempt to identify its chief failings. On the edge of the precipice: the PSOE government in 2008 Given the innovative nature of many of its policies throughout its first term in office between 2004 and 2008, as discussed in chapter 8, the economy was the one area which was notable for continuity, rather than change, with respect to the policies of the previous PP government under José María Aznar between 1996 and 2004. Rodríguez Zapatero was keen to stress that he was not minded to put at risk economic stability. Interviewed in 2005, he argued, ‘A modern left programme is based on a well-­managed economy with public accounts in surplus, moderate taxes and a limited public sector’ (quoted in Girauta, 2010: 226). Endorsement of the government’s economic policy was provided by the Organisation for Economic Co-­operation and Development, which highlighted fiscal prudence and beneficial structural reforms as explanatory factors for the economy’s robust performance in terms of growth, employment and public finances (OECD, 2007: 1). The continuation of the economic boom, which stretched back to the mid-­ 1990s, was a key element in the PSOE’s re-­election in 2008. The broad parameters of economic policy had been put in place by José María Aznar’s PP governments between 1996 and 2004, and, with Spanish economic growth easily outpacing the EU average, there appeared to be little incentive for the Socialists to reject an economic growth model based on the construction sector. With the budget in surplus, public sector debt below 40 per cent, and unemployment falling to below the EU average, any major deviation from an economic growth model which appeared to provide economic stability appeared unnecessary. With the benefit of hindsight, it was clear that the model favoured by both the PP and PSOE governments contained the seeds of its own destruction. Between 1994 and 2006, almost eight million new jobs were created in Spain, an annual average of almost 600,000. Between 2004 and 2006, Spain created 3 per cent of new jobs in the EU-­25, compared with 27 per cent by the four biggest economies (France, Germany, Italy and the UK) (Chislett, 2008: 30). Many of these jobs

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were linked to the construction sector, which accounted for 10 per cent of GDP by 2007, well above the 5 per cent average figure of Spain’s EU partners (O’Kean, 2010: 19). Employment in the construction sector rose from 1.2 million in 1996 (9 per cent of the labour force) to 2.7 million (13 per cent of the labour force) in the second quarter of 2007. This meant that there were almost as many people employed in construction as there were in the whole of the industrial sector in 2007 (Salmon, 2010a: 46). At the heart of the property boom lay the low interest rates maintained by the European Central Bank since the turn of the decade. Banks, companies and households took on increased levels of debt as real interest rates, i.e. nominal interest rates minus inflation, effectively became negative between 2002 and 2006 (Juan, 2011: 23–4). Given that the fate of Rodríguez Zapatero’s government was, ultimately, to be inexorably linked to the economy’s dependence on the construction sector, and related high levels of indebtedness, it is noteworthy that the PSOE’s programme for the 2004 general election identified the dangers inherent in such reliance. Reference was made to the ‘cult of bricks and mortar’; the ‘escalation of private sector indebtedness, of both families and companies’; and ‘the current risks concerning the Spanish economy, which is highly indebted and geared towards bricks and mortar’ (PSOE, 2004a: 103–4). Moreover, Miguel Ángel Fernández Ordóñez, Governor of the Spanish Central Bank from 2006, and Miguel Sebastián, Industry Minister throughout Rodríguez Zapatero’s second term in office, both warned as early as 2003 of the dangers of excessive debt, the fallout from an eventual drop in demand within the construction sector, and the fact that construction was crowding out investment in other areas, such as high-­tech activity sectors of the economy (Juan, 2011: 32–3) Addressing the parliamentary finance committee in June 2011, Fernández Ordóñez claimed that the Spanish Central Bank’s warnings had been ignored by successive governments: ‘If more attention had been given to what the Bank of Spain had been saying for ages, for example during the property bubble, when different governments and opinions suggested that there was nothing to worry about . . .’3 In addition to this dependence on the construction sector, the economy displayed a number of important weaknesses, including a current account deficit that reached 10 per cent of GDP in 2007, the second largest quantitative amount in the world after the US, indicating the Spanish economy’s dependence on external funding (Andrés et al., 2011: 70). Particularly affected was the private sector in the form of businesses and households. The economy also suffered from low levels of productivity, weak indicators related to the knowledge economy, a high degree of dependence on imported energy, and a dual labour market in which one-­third of the labour force was employed on short-­term contracts with little or no protection, whereas the other two-­thirds were protected by measures which made it expensive for companies to adjust to changing labour market conditions (Salmon, 2010a: 40). All these factors would contribute towards the steep increase in unemployment in the period after the 2008 general election. The PSOE’s victory in that election was nevertheless never in doubt, given that the very buoyancy of the economy had the effect of dampening down debate

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on economic policy. However, once the election was out of the way, Rodríguez Zapatero’s government proved to be singularly ineffective in recognising the seriousness of the economic downturn, acknowledging its own errors and acting with sufficient alacrity to put in place an effective response to the crisis, failings which will be considered in the next section. The PSOE and the economy from 2008 to 2011: into the abyss Whereas the swift deterioration in Spain’s economic situation in the period after the 2008 general election presented Rodríguez Zapatero with a number of daunting challenges, his reaction to the economic downturn – particularly during its early stages – did much to erode his credibility as Prime Minister, and that of his party. Initially playing down the gravity of the situation, Rodríguez Zapatero rejected the term, ‘crisis’, favouring ‘economic slowdown’, and his ministers were forced to follow his lead, even when the depth of the downturn was becoming clear. A year after the general election, in March 2009, Rodríguez Zapatero claimed, ‘We’re amongst those suffering least from the crisis and we’re going to come out of it first. The unemployment and deficit figures will be sorted out and the most vulnerable won’t suffer’ (quoted in Girauta, 2010: 228). Moreover, Rodríguez Zapatero made further pledges which he was ultimately unable to fulfil. Austerity measures which he had previously emphatically ruled out were later implemented in an even more rigorous form than when first mooted, as policy appeared to be made on the hoof, without any strategic vision. The impression was one of ineffectiveness, improvisation and, ultimately, impotence as even those sectors of the population which had previously been sympathetic to the PSOE were left feeling confused and disillusioned. Addressing the PSOE’s Federal Committee a month after the 2008 general election, Rodríguez Zapatero taunted the PP that even the most pessimistic forecasts for unemployment still indicated a figure below the lowest level of unemployment – 11 per cent – achieved under Aznar between 1996 and 2004. Later in the same speech, Rodríguez Zapatero commented, ‘Now we’re going to see why it was so important for us to have managed our public accounts so brilliantly.’4 The relative health of the public finances certainly did provide the government with a margin for manoeuvre with respect to providing a fiscal stimulus for an economy which slipped into recession in the latter half of 2008. Despite Rodríguez Zapatero’s boast, unemployment increased to 14 per cent by the end of 2008, underlining the speed of the downturn. The initial response of the international economic community to the economic and financial crisis, as illustrated at the G-­20 meeting of finance ministers held in Washington in November 2008, was to boost growth via fiscal and monetary measures. The Spanish Socialist government’s economic policy response should be seen within this context. In relative terms, its fiscal stimulus package was one of the largest implemented by governments seeking to address the economic crisis, reaching €42 billion between 2008 and 2009, equivalent to 4 per cent of GDP, approximately 2 per cent for each year (Presidencia del Gobierno, 2010:

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12, 41). Measures included increased funding for local authority infrastructure projects to the tune of €13 billion between 2008 and 2009; support for small businesses in the form of government sponsored loans; and help for vulnerable social groups, including the unemployed and those experiencing difficulties repaying their mortgages (Salmon, 2010b: 84–5). The decision to give a €400 rebate to all of those paying income tax – regardless of their income – was a further component of the package. The fact that this latter measure was announced in the run-­up to the 2008 election laid Rodríguez Zapatero open to charges of populism. A further measure which attracted much criticism when the economy began to experience difficulties was the government’s decision to launch a scheme in July 2007 whereby all those giving birth to, or adopting, a child – once again, whatever their financial circumstances – were given €2,500 from public funds. The initiative was withdrawn at the end of 2010. With the public deficit rising steadily throughout 2009, disagreements emerged within the government over the direction of economic policy. The Governor of the Spanish Central Bank, Miguel Ángel Fernández Ordóñez, appointed by the Socialists in 2006, called for a thorough reform of the Spanish labour market and, in particular, the country’s system of collective bargaining, but was snubbed by Rodríguez Zapatero, who refused to countenance a reduction in the costs associated with laying people off (Chislett, 2009: 6). Similar disagreements led to the replacement of Pedro Solbes, Finance Minister since Rodríguez Zapatero entered office, with Elena Salgado in April 2009. He had been at odds with Rodríguez Zapatero for expressing misgivings about the relaxation of budgetary restraint linked to the funding of fiscal stimulus measures favoured by the Prime Minister. In a radio interview in September 2009, Rodríguez Zapatero claimed that the worst of the crisis was already over (Zavala, 2010: 219). It would have been more accurate to have acknowledged that, by the autumn of 2009, the scope for discretionary spending had diminished considerably, as the financial markets began to reflect concerns over the scale of public sector deficits, forcing governments to draw up austerity measures. In Spain pressure was building for the government to identify a strategy to contain public expenditure and reduce the public sector deficit, which had reached 11 per cent of GDP by the end of the year, mainly due to the sharp decrease in tax revenue, the rise in the number of people requiring unemployment benefit, and the cost of the fiscal stimulus measures. As early as February 2009, the European Commission, in accordance with the excessive deficit procedure of the Stability and Growth Pact, had issued a warning to Spain over the size of its deficit, necessitating a shift from fiscal stimulus measures to cuts across the public sector, in pay, employment and investment, so as to meet the target figure of 3 per cent of GDP by 2013 (Salmon, 2010a: 43). The relative timidity of the measures contained in its Sustainable Economy Bill, unveiled in November 2009, which attempted to establish a new economic model to replace the discredited construction-­based approach, gave the impression that the government was starting to be overtaken by events. The initiative consisted of a package of measures aimed at securing a more competitive model of production

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which would be more economically and environmentally sustainable. Concerned with measures on the transparency of pay packages for the directors of publicly quoted companies, sustainable tourism, the streamlining of the convoluted process of setting up a business, and ensuring that local and regional governments make more prompt payment to suppliers in an effort to prevent further business failures, the package was generally viewed as falling far short of its stated objectives. Most notably, it failed to provide the structural reforms required in such areas as the labour market, education, the country’s energy model and pensions, all of which would have to be addressed in order to produce a genuine change of economic growth model.5 The shock engendered by the release of worse-­than-­expected economic indicators in January 2010 and revelations concerning the Greek sovereign debt situation served to prompt the government into taking further action on the economy. With the number of unemployed totalling 4.3 million, just under 19 per cent of the labour force, the government announced an ambitious austerity plan which aimed to reduce the deficit to 7 per cent of GDP in 2011, a cut of more than €50 billion over a three-­year period, €10 billion of which would be contributed by local and regional governments. Most prominent among the proposals was the decision to increase the retirement age from 65 to 67 in order to guarantee the sustainability of the public pensions system. With the Greek sovereign debt crisis coming to a head in May 2010, the entire financial and economic crisis took a turn for the worse, which, for Spain, marked a turning point, and, for Rodríguez Zapatero and his government, a point of no return. Previous attempts to play down the scale of the crisis, allied to Rodríguez Zapatero’s claims that Spain was well placed to withstand its most harmful effects, were now viewed by many throughout Spain as evidence of a government which had, at best, been mistaken, and, at worst, been in denial over the gravity of the situation. Rodríguez Zapatero thenceforth had little option other than to announce a new round of austerity measures on 12 May as market pressures intensified due to concerns about the growth prospects of the Spanish economy and the effect on its capacity to meet its deficit reduction targets. President Obama added his voice to the European Commission’s demands for robust action from Rodríguez Zapatero. Interviewed by the Spanish newspaper El País in November 2010, Rodríguez Zapatero indicated that he had been left with little choice other than to intensify the economic austerity programme. Had he not done so, ‘the following day market instability and doubts about sovereign debt, including our own, would have placed us in a difficult situation . . . the markets were capable of placing our solvency in question’. At this stage, therefore, the crisis developed from being largely linked to the downturn in the construction sector to centring on Spain’s sovereign debt. In the same interview Zapatero ruefully recalled how, in the period before the economic crisis, he had been criticised for having run successive budget surpluses, ‘because a Socialist Government should invest and increase public spending . . . in the markets, the perception of our public accounts was excellent’.6

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The government agreed to reduce the deficit by 1 per cent of GDP more than had been agreed on four months before, i.e. from 7 per cent to 6 per cent by the end of 2011. This necessitated a further package of cuts, which included an average 5 per cent reduction in civil servants’ salaries in 2010, followed by a pay freeze in 2011; a pensions freeze in 2011, albeit exempting those in receipt of the minimum pension; an extra saving of €1.2 billion by local and regional governments; a €6 billion reduction in public sector investment; and a €600 million cut in development aid between 2009 and 2010. Moreover, limits were placed on the coverage of the Dependency Law. The aim was to save a further €15 billion over the period 2010–2011. The measures obtained the approval of parliament by a single vote. The response of public sector workers was to hold a strike in June 2010 to protest against the austerity package. The threat of a strike did not prevent the government from proposing further measures the same month, including a reduction in the amount of redundancy pay received by those on permanent contracts. This initiative was viewed by some as being a missed opportunity to carry out a more thorough reform of the labour market, including a modification of the system of collective bargaining. Relations between the government and trade unions had by now deteriorated to such an extent that a general strike was held in September 2010, although the strike was generally viewed to have been only moderately successful. The trade unions nevertheless claimed that the strike contributed towards the government agreeing to sign a tripartite agreement with the trade unions and Employers’ Organisations, the Social and Economic Agreement, in February 2011. Although the agreement retained a retirement age of 65 for those who had worked for 38 years, it set a marker for an extensive reform of the collective bargaining system, the rigidities of which hampered the ability to respond to periods of economic downturn. Rodríguez Zapatero’s government nevertheless failed to follow through with a thorough reform of the labour market, and the issue was effectively pushed back until after the general election. By the autumn of 2010, the government’s situation was looking sufficiently perilous for there to have been some doubts as to whether it would be able to gain parliamentary approval of its 2011 budget, although a deal was eventually struck with the Basque Nationalist Party (PNV) and the Canary Coalition (CC). This support was necessary in that the failure to approve the budget might have forced the government to bring forward the general election. Any satisfaction enjoyed by the government quickly dissipated when the Catalan branch of the Socialist Party, the Partit dels Socialistes de Catalunya (PSC), which had been in office since 2003 as part of a centre-­left coalition, obtained its worst ever result at regional elections in November 2010, gaining just 18 per cent of the vote, a fall of 9 per cent compared to the last regional elections in 2006. The result was particularly worrying for Rodríguez Zapatero in that support in Catalonia had been a vital element in his general election victories in 2004 and 2008. Six months later, the PSOE obtained its worst results ever in local and regional elections, gaining just 28 per cent of the vote, almost exactly the percentage it

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would subsequently obtain at the general election in November 2011, and almost 10 per cent behind the PP, which obtained over two million more votes. Only the national level of government now eluded the PP, which at this point was able to consider the realistic prospect of achieving an overall majority at the general election. One month before the local and regional elections, in April 2011, Rodríguez Zapatero had announced that he would not be standing for a third term as premier. By now viewed as a liability to his party and government, he agreed to remain Prime Minister until the general election, which, in July, he declared would take place on 20 November 2011, four months earlier than expected. The former Interior Minister and First Deputy Prime Minister, Alfredo Pérez Rubalcaba, accepted the poisoned chalice of leading the party into the election in June, the month after the only other candidate with a realistic chance of beating Rubalcaba in any primary election for the leadership, Carme Chacón, declared she would not be standing. Any Socialist hopes that the economic situation might stabilise in time for the election were thwarted by a further deterioration in the eurozone crisis in August 2011, when the European Central Bank had to step in to buy Italian and Spanish bonds as yields increased. An indication of the pressures which the EU was exerting on Spain was provided the same month, when Rodríguez Zapatero unexpectedly announced that Article 135 of the Spanish Constitution would be amended so as to include a clause limiting the budget deficit and the level of public debt. Payment of the deficit would be prioritised over all other considerations. This development proved to be a foretaste of the agreement reached at the Brussels European Council Meeting in December 2011 on the tightening up of rules concerning the maintenance of balanced budgets. The initiative obtained the support of the opposition PP, which claimed that it had long advocated such a move, and was pushed through within a matter of weeks. So hastily was the measure adopted that there was very little public debate on this key development. Moreover, Rubalcaba’s task of differentiating the PSOE from the PP in the run-­up to the election was also complicated by the proposal. Once again, the imperatives imposed by the economic crisis contributed towards the impression of ­incoherence within the PSOE leadership. Although throughout the general election campaign the PSOE made much of Rubalcaba’s credentials as a safe pair of hands in difficult times, the deterioration in Spain’s economic situation, most graphically illustrated by unemployment edging inexorably towards five million, effectively meant that the PSOE’s candidate faced an impossible ask. Although Rodríguez Zapatero was notable by his absence throughout virtually the entire campaign, his baleful legacy was all-­pervasive in a country which appeared to be at the mercy of the bond markets as confidence in Spain’s capacity to cover its debts evaporated. The government’s refusal to acknowledge the seriousness of the impact of the crisis on Spain and take the necessary steps to allay the effects of the downturn – a denial which lasted for well over a year – together with pledges not to make the kind of cuts that eventually proved to be necessary in order to address the public sector deficit,

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as well as a marked reluctance to accept responsibility for what had happened, meant that the PSOE entered the campaign under the most challenging of circumstances. The fact that, under the Socialists, Spain had not required a bail-out similar to that requested by Greece, Ireland and Portugal, was a victory of sorts, but was hardly the kind of achievement likely to attract votes. Given that the PSOE’s results were almost uniformly disappointing throughout Spain, even in what had long been considered the Socialist strongholds of Catalonia and Andalusia, the party was faced with having to come to terms with a vastly diminished status as a political force. The PSOE has traditionally experienced greater difficulty in maintaining the loyalty of its voters than the PP, which has been able to obtain around ten million votes at all general elections since its victory in 1996. The PSOE vote has been more volatile, with the party obtaining less than eight million votes in 2000, and as we have seen, less than seven million in 2011. The mobilisation of its vote has therefore been more of a challenge for the PSOE than the PP. According to analysis of opinion polls carried out by the polling organisation Metroscopia for the Spanish newspaper El País, just 60 per cent of those who voted for the PSOE in 2008 remained loyal in 2011, whilst around 90 per cent of those voting for the PP in 2008 did so again in 2011, together with over two and a half million new voters, one and a half million of whom had voted for the PSOE in 2008. Moreover, the austerity measures announced by Rodríguez Zapatero in May 2010 provoked a steep fall in support for the PSOE. The difference in voting intention between the PSOE and PP in March 2010 was an average of 3.4 per cent; by the time of the general election campaign in 2011 the difference had increased to an average of 13.4 per cent, which proved to be below the actual difference of almost 16 per cent between the two parties, a record since the establishment of democracy after Franco’s death. Altogether, 3.9 million people who had voted for the PSOE in 2008 transferred their vote to other parties in 2011, whilst half a million former PSOE voters abstained.7 Conclusion Speaking the week after the general election defeat in November 2011, Rodríguez Zapatero addressed the party’s Federal Committee and argued that the economic crisis had been the key factor in the PSOE’s poor performance. He also acknowledged that the government had made mistakes both in its handling of the crisis, as well as in its failure to communicate to the public the reasons behind the many difficult actions it had been forced to take. In particular, no comprehensive, coherent narrative was produced to explain the need for an intensification of the government’s austerity programme after May 2010. He stressed, nevertheless, that the government had done what was necessary and that, given how difficult the conditions were, there had been no alternative.8 Whilst any analysis of the decline in support suffered by the PSOE between 2008 and 2011 must award a central role to the effects of the economic crisis, it would be misleading to suggest that the crisis was the sole reason for the resounding defeat suffered by the party at the November 2011 general election. If the

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PSOE is to re-­establish its status as a party worthy of returning to government, it will have to carry out a far more thorough process of self-­criticism. Ever since Rodríguez Zapatero was elected to the post of General Secretary at the PSOE’s 35th Congress in July 2000, he was able to impose a level of dominance over the party which not only discouraged criticism from within the party’s ranks, but which, during his first term, led him to display a level of self-­confidence which proved fatal once boom turned to bust during his second term. Precious time was lost when, instead of acknowledging the intensification of the crisis, the government instead sought to deny that any such crisis existed, despite ample evidence to the contrary. Although when the PSOE entered office in 2004, it rightly criticised the economic growth model’s excessive dependence on the construction sector, and expressed concerns about the excessive levels of debt taken on by both households and businesses, it failed to produce an alternative strategy. In particular, the government could have taken steps to prick the property bubble but chose not to. Initiatives such as the €400 tax rebate – announced just weeks before the 2008 general election – also laid the government open to charges of engaging in gimmicks geared towards bribing the electorate at a time when it was already becoming clear that the economy was running out of steam. The party’s first term in office had also been more concerned with civil and gender rights, rather than correcting weaknesses within the Spanish economy. Whilst it would be wrong to suggest that genuine achievements were not made during this period – the legalisation of gay marriage and adoption, and the Law on Equality between Men and Women are just two of the measures which deserve to be acknowledged as being genuinely progressive – it was nevertheless the case that the government was also guilty of making proclamations which had little relevance to people’s daily lives. At the same time, the government, which, after all, was a social democratic government, failed to award the same level of prominence to its redistributive credentials. This is not to say that the government did not have a number of notable redistributive achievements to its credit – the Dependency Law was quite rightly viewed as establishing the welfare state’s ‘fourth pillar’, adding to existing provision in health care, education and pensions. Conversely, Rodríguez Zapatero was guilty of comments which appeared to contradict the party’s centre-­left essence. Addressing the PSOE’s Federal Committee in September 2005, he had claimed that ‘lowering taxes is a left-­wing policy’. Another criticism in the economic arena is that the devolution of power to Spain’s autonomous regions, which progressed considerably during the PSOE’s first term in office in the form of the reform of several regions’ autonomy statutes, served to complicate the government’s efforts to control the public deficit, given many regions’ reluctance to rein in spending. In this connection, it is important to recall that the local and regional levels of government are responsible for half of all public spending. Many also felt that, in promoting regional interests via the reform of autonomy statutes, Rodríguez Zapatero had at times neglected the national interest. Rodríguez Zapatero had famously remarked that he would support any ­proposed

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reform of the Catalan Statute which met with the approval of the Catalan parliament. In actual fact, the Spanish parliament in Madrid introduced extensive amendments to the draft agreed in Barcelona before the final, somewhat diluted, version became law in 2006. A further indication of the sensitivity of the regional question was the fact that Carme Chacón’s possible candidacy for the post of PSOE General Secretary was criticised after the general election by the former Deputy Prime Minister, Alfonso Guerra, and the former President of the Congress of Deputies, José Bono, who claimed that, as a Catalan, and a prominent member of the PSC, she would have difficulty speaking on behalf of Spain. The neglect of the party’s natural supporters, who had been particularly badly hit by the economic crisis, is a further criticism which can be made. Given the scale of the crisis, it is understandable that the government was not always able to maintain its ideological coherence, but it is nevertheless the case that many natural PSOE supporters were left confused and dismayed by the government’s actions. The government failed to explain clearly why it acted as it did, why it believed its actions to be in the national interest, and what the consequences of its failure to act would have been. In this respect, Felipe González had been far more effective than Rodríguez Zapatero in explaining his government’s actions both to the PSOE and the broader electorate during his period in office, including important shifts in policy, such as the U-­turn on Spanish membership of NATO during González’s first term in office between 1982 and 1986. In particular, he had been adept at stressing that the national interest would always come before the party’s interest. Rodríguez Zapatero was never able to develop a similar narrative, although it is important to stress that he was leading the country during its worst economic crisis in many decades. Like many other political parties, the PSOE was also accused of having lost touch with the electorate. Although by no means a unique case, prominent Socialist figures were accused of being ‘professional politicians’ divorced from the man in the street and unfamiliar with the day-­to-­day struggles of people whose income barely stretched to the end of the month. As the party looked to its statutes and resolutions in preparation for the election of a new leader in the aftermath of its general election defeat, the electorate felt alienated from byzantine procedures which appeared to have little to do with their own concerns. In essence, the PSOE had become too inward-­looking, and needed to be receptive to the views and concerns of those within the population who had traditionally looked to the party to bring about a progressive process of modernisation underpinned by a sense of fairness and freedom. One of the most worrying aspects of the PSOE’s decline was the loss of support amongst the younger members of the electorate. With almost half of under-­25s being unemployed, it is hardly surprising that the party struggled to obtain the youth vote. Many young people had been alienated from the entire political process, and the protests which started in Madrid on 15 May 2011, before spreading throughout the country, reflected the view of many young people that neither the PSOE nor the PP truly represented them. Recapturing a significant proportion of the youth vote will be one of the PSOE’s biggest challenges over the coming years.

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Mistakes had also been made during the general election campaign. Although Rodríguez Zapatero maintained a low profile throughout the run-­up to Spain going to the polls, the fact that he remained, in addition to being Prime Minister, General Secretary of the party, served to undermine Rubalcaba’s authority as the PSOE’s candidate at the election. Rodríguez Zapatero’s decision to push through changes to the Constitution, apparently without consulting fully with Rubalcaba, was a particular case in point. The overall effect was to add a degree of ambiguity concerning Rubalcaba’s status which was reminiscent of the uneasy Aznar–Rajoy tandem which reacted so ineffectively to the terrorist attacks which dominated the final days of the 2004 general election campaign. The fact that Rubalcaba had been a leading member of Rodríguez Zapatero’s government also meant that he was viewed as being complicit in the many errors which it had committed. The refusal to apologise for those errors during the campaign further undermined his party’s capacity to attract votes. Furthermore, any attempt to present the PSOE as a more progressive alternative to the PP was also hampered by the electorate’s all-­too-­fresh memories of the cuts imposed by Rodríguez Zapatero. Notes 1 Diario de Sesiones del Congreso de los Diputados, Num. 309, 19 de diciembre de 2007: 15380. 2 J.L. Rodríguez Zapatero, Discurso de investidura del 8 de abril de 2008. 3 El País, ‘Si hubiesen escuchado al Banco de España. . .’, 22 June 2011: 22. 4 ‘Zapatero: “La peor previsión sobre el paro será major que la que tuvo el PP”’, El País, 27 April 2008: 26. 5 B. Abellán, ‘El Gobierno deja de lado las grandes reformas en la Ley de Economía Sostenible’, El País, 28 September 2009: 20. 6 El País, ‘Entrevista al Presidente del Gobierno’, 21 November 2010: 17–18. 7 El País, ‘El PP debe la mayoría absoluta más al colapso del PSOE que a su resultado; Las medidas anticrisis y la fidelidad a la baja, claves del bacatazo del PSOE’, 22 November 2011: 14–15. 8 J.L. Rodríguez Zapatero, Intervención ante el Comité Federal, 26 November 2011.

11

Conclusion

Given the scale of the PSOE’s general election defeat in 2011 it is clear that the project put in place by Rodríguez Zapatero following his election to the post of PSOE General Secretary in 2000 had run its course, and the party faces the prospect of a long period in opposition. In order to re-­establish its credentials as a party of government, the PSOE must construct a credible narrative which starts from the basis of acknowledging these and many other errors committed under Rodríguez Zapatero, before setting the foundations for a new project which responds to the demands of a population which has been left feeling vulnerable and insecure. With no end to the economic crisis in sight, and the likelihood of the incoming PP government having to intensify and add to the austerity measures introduced by the PSOE, it is by no means certain that Mariano Rajoy will be any more adept than Rodríguez Zapatero at retaining his popularity and that of his party. Having left office, the PSOE could nevertheless lay claim to having been the political party which, more than any other, had engineered the modernisation of Spain. That same goal of making good the gap between Spain and its European neighbours had characterised the party throughout its long history, going back to the dawn of the twentieth century, under the leadership of Pablo Iglesias. Whereas progress was painstakingly slow, the PSOE had been able to establish itself as the driving force behind the modernisation project which constituted the essence of the Second Republic between 1931 and 1936. Socialists continued to play a leading role throughout the Civil War, with Francisco Largo Caballero and Juan Negrín occupying the post of Prime Minister during the conflict. Such had been the prominence of the PSOE during this period that the party paid a high price in terms of incarceration, exile and execution under the repressive Franco regime and the party proved itself to be ineffective under the conditions of dictatorship. By the time that Felipe González gained control of the party in 1974, there appeared little to suggest that the PSOE would, just seven years after Franco’s death, establish a prominence within the Spanish political arena which would be preserved for almost another three decades. Able to establish the PSOE as, firstly, Spain’s chief party of opposition, and

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secondly, the dominant force within the Spanish party system, González made use of the framework provided by European integration, ranging from preparations for membership to the need to secure participation in the single currency, to underpin progress towards Spain’s ‘normalisation’. Whilst such a goal might appear modest, in the context of Spanish history normality constituted a historic achievement. Responding to a series of questions I put to him whilst researching a previous work, González commented that he identified Europe with progress, and with modernity in the political and economic sphere: ‘Entering Europe meant consolidating democracy and also opting for a more open economic model, a social market economy (i.e. accompanied by a welfare state), as designed and implemented by both social democrats and Christian Democrats, and, in short, a more open, modern and fair society’. Use of this modernisation/Europeanisation motif enabled the party to broaden its electoral appeal at a time when social democracy was on the defensive before the apparent dynamist of the New Right, prominently represented by the likes of Mrs Thatcher in the UK and Ronald Reagan in the US. Despite the favourable nature of the political environment in which it operated, the PSOE was able to achieve four consecutive general election victories, only being dislodged from office by the narrowest of margins. In 1982, González’s lieutenant, Alfonso Guerra, had commented that the PSOE government would transform the country to such an extent, ‘that not even her mother will recognise her’. His prediction proved to be prescient. For all the progress made under the PSOE governments led by Felipe González, the issue of corruption left a stench which only dissipated after the party was routed at the 2000 general election. Belatedly opting to move on from the González era, the PSOE, under the leadership of José Luis Rodríguez Zapatero, was able to engineer a return to office and carry out a programme of modernisation in the field of civil and gender rights which complemented the economic modernisation secured by González. Moreover, Rodríguez Zapatero was able, at a time when the economy was booming, to place himself firmly within his party’s social democratic tradition of defending the welfare state, as was most notably illustrated by the Dependency Law approved during his first term in office. The Rodríguez Zapatero government will nevertheless be remembered less for its notable achievements in the field of civil and gender and rights, or social provision, than for its apparent impotence with respect to the economic crisis which dominated the party’s final term in office. Rodríguez Zapatero’s was not the only government to witness a haemorrhage in its support as a result of the crisis, but the rapidity with which the government lost its credibility was particularly remarkable. During this period, the PSOE government provided a case study of the degree to which, currently, democratically elected governments have become subservient to the demands of the international financial markets. Under pressures exerted by the EU, the IMF and the bond markets, the PSOE government possessed little margin for manoeuvre when it agreed to intensify its austerity programme in May 2010. The indecently swift reform of the Constitution in the summer of 2011 – apparently at the behest of Chancellor Merkel – gave the impression that Spain’s elected representatives now barely paused to explain

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their actions to the public, even as regards the amendment of the country’s most important legal text. The overall effect was to put paid to any lingering hope that the PSOE might avoid defeat at the 2011 general election. To the disappointment of social democrats throughout Europe, rather than favouring the revival of the centre-­left throughout the continent, the international economic crisis generally had the effect of reinforcing the position of the centre-­right as electorates throughout Europe appeared to place more faith in conservative solutions. As the neo-­Keynesian solutions which had been employed in the early phase of the crisis to prevent an international economic meltdown were gradually abandoned, those politicians advocating austerity as the sole means of stimulating economic growth generally found favour with their electorates. Nicolas Sarkozy’s presidential election defeat in France at the hands of the Socialist François Hollande in May 2012 nevertheless contributed to the impression that the second decade of the twenty-­first century would prove uncomfortable for incumbents of all political affiliations. This bald fact indicates the gravity of the economic crisis, raising the possibility of a loss of faith in the entire political class, as elected representatives appear incapable of re-­establishing the dominance of the political, over the financial, sphere. The economic crisis destroyed Spain’s hopes of establishing itself as a leading European nation. Much of the progress made in the period of almost four decades since Franco’s death has been lost and with a quarter of its working-­age population unemployed – including over half of those under the age of 25 – and the country lurching back into recession in the third quarter of 2011, it is difficult to be hopeful about Spain’s future. Nevertheless, Spain has faced similar, seemingly insurmountable, challenges in its recent past and emerged triumphant. The transition to democracy and the economic modernisation carried out by the PSOE under Felipe González during the party’s first term in office between 1982 and 1986 in preparation for the rigours of European integration displayed the country’s powers of recovery. A recovery – albeit not a swift one – cannot be ruled out. As we have seen throughout this book, the PSOE has similarly been notable for its historic resilience. The party should nevertheless guard against complacency. Not noted for its internal democracy, possessing a party organisation which has been surpassed by that of the PP over recent years, and as incapable as other political forces of devising a viable economic growth model capable of replacing the construction-­based model which lies at the heart of Spain’s current woes, the PSOE is confronted with considerable challenges. Given the economic pressures now being exerted on Rodríguez Zapatero’s successor as Prime Minister, Mariano Rajoy, who has been forced to introduce successive austerity packages since gaining office, in addition to requesting a €100 billion bail-out of the Spanish banking system from the EU, it is essential that the PSOE, under the leadership of Alfredo Pérez Rubalcaba, swiftly comes to terms with its diminished role. The constraints upon the government are such that the lack of an effective opposition constitutes a further element in the country’s vulnerability. As one of Spain’s most important institutions, it is incumbent on the PSOE, for the good of the country, to renew itself in order to continue to play a key role in Spain’s modernisation.

Appendix Party organisation, membership and general election results 2000–11

Party organisation Statutes and party structure The Federal Statutes approved at the PSOE’s 38th Congress in February 2012 describe the party as having a federal structure composed of local, municipal and provincial levels, which, in turn, form regional parties or federations based on Spain’s seventeen Autonomous Communities (Heading 3, Chapter 1: Article 15). Alongside this territorial structure, the party has a complementary arrangement based on thematic ‘Sectorial’ Organisations covering the following areas aimed at facilitating the direct participation of members in the party’s operations: Education; the Environment; Citizens’ Participation; Health; the Information Society; and Entrepreneurs, Social Economy and Self-­Employed Workers. The party’s leading bodies at both the regional and national levels are the Congress, the Committee and the Executive Committee. The Federal Congress (Congreso Federal) is the party’s sovereign body, and has the power to modify the party’s statutes. Its major functions include the formulation of policy, monitoring the operations of the Federal Committee and the Federal Executive Committee (Comisión Ejecutiva Federal), and the election of members of the Federal Committee (Comité Federal). Delegates to the Congress, numbering between 500 and 2,000, are selected at Regional Congresses, at the party’s Youth Organisation (Juventudes Socialistas) and by each of the Sectorial Organisations. The Federal Congress, which is convened by the Federal Committee, meets every three to four years. Although the Federal Committee is, officially, the party’s leading body during the period between congresses, it is, in practical terms, of less significance than the Federal Executive Committee (see below). It has 65 members. Automatic members include the membership of the Federal Executive Committee, party general secretaries at all territorial levels and the President of the Parliamentary Socialist Group. In addition, members are elected by the Federal and Regional Congresses. Responsibilities include the development of policy between congresses; monitoring the operations of the Federal Executive Committee; drawing up and approving the party’s general election manifesto; and selecting the party’s

208

The Spanish Socialist Party

prime ministerial candidate. The Federal Committee meets at least three times per year. The Federal Executive Committee is in reality the party’s most important body and is tasked with applying and managing party policy. Responsible for ­day-­to-­day party operations, it can convene itself as and when required, meeting on numerous occasions throughout the year. Its decisions are adopted in accordance with a simple majority of those present. The members of the Federal Executive Committee are voted for by simple majority at the Federal Congress and it is composed of the President and General Secretary of the party, the Deputy General Secretary and fifteen departmental secretaries responsible for areas including the party’s internal organisation; economic and employment policy; education and culture; and the EU. Finally, there are twenty members without portfolio, or vocales. The federal party body responsible for policy with respect to the autonomous regions is the Territorial Council (Consejo Territorial). It meets every other month and its members include the General Secretary of the Federal Executive Committee, the secretary for the party’s internal organisation, the secretary for policy concerning the autonomous regions, and the general secretaries of regional federations. Finally, the six-­member Federal Ethics and Guarantees Committee (Comisión Federal de Ética y Garantías) is concerned with the rights and duties of members and monitors internal primary elections. Party membership The Federal Organisational Secretariat is responsible for supervising and bringing up to date membership figures. There are two levels of membership: ‘militants’ (militantes), who pay party dues, and ‘sympathisers’ (simpatizantes). With respect to the profile of PSOE members, the party no longer collates information regarding the professional background of members, although figures dating back to 1989 described 43.5 per cent of members as being ‘manual workers’, 34 per cent as ‘middle class’, and the remainder not forming part of the working population (Méndez Lago, 2000: 225). The Organisational Secretariat of the PSOE nevertheless provided the author with figures on the number of members (Table 1) and on the age and gender of members (Table 3).

209

Appendix Table 1  PSOE membership, 2000–11 Year

Total membership

2000 2004 2011

407,821 460,000 617,087

Sources: Méndez Lago, 2006: 29 and data provided to the author by the PSOE’s Organisational Secretariat.

Table 2  Membership Figures in September 2011 Number %

Militants

Sympathisers

Total

217,610 35.26

399,477 64.74

617,087 100

Note: The total number of provincial branches was 4,614. Source: PSOE Organisational Secretariat.

Table 3  Age and gender profile of PSOE members in September 2011 Age % 65

Militants

Sympathisers

Male

Female

Male

Female

3.48 14.82 33.42 13.64

2.81 10.47 15.91 5.46

1.76 13.33 30.48 19.93

1.51 9.78 15.22 7.99

Source: PSOE Organisational Secretariat.

7,918,752 10,321,178 1,263,043 970,421 353,953 306,268 248,261 – 206,255 194,715 – 119,290 100,742 75,356 – – –

34.16 44.52 5.45 4.19 1.53 1.32 1.07 – 0.89 0.84 – 0.51 0.43 0.33 – – –

125 183 8 15 7 3 4 – 1 1 – 1 1 1 – – –

seats 11,026,163 9,763,144 1,284,081 835,471 420,980 208,688 235,221 – – 652,196 – – 80,905 94,252 61,045 – –

votes 42.59 37.71 4.96 3.23 1.63 0.81 0.91 – – 2.52 – – 0.31 0.36 0.24 – –

%

75.66 

2004

164 148 5 10 7 2 3 – – 8 – – 1 1 1 – –

seats 11,289,335 10,279,010 969,946 779,425 306,128 212,543 174,629 303,535 – 298,139 – – – – 62,398 – –

votes 43.87 39.94 3.77 3.03 1.19 0.83 0.68 1.2 – 1.16 – – – – 0.24 – –

%

73.85

2008

169 154 2 10 6 2 2 1 – 3 – – – – 1 – –

seats 6,973,880 10,830,693 1,680,810 1,014,263 323,517 183,279 143,550 1,140,242 – 256,393 333,628 – – – 42,411 125,150 99,173

votes

28.73 44.62 6.92 4.17 1.33 0.75 0.59 4.69 – 1.05 1.37 – – – 0.17 0.51 0.4

%

71.69

2011

110 186 11 16 5 2 2 5 – 3 7 – – – 1 1 1

seats

Source: Spanish Interior Ministry.

Key: PSOE = Spanish Socialist Workers’ Party; PP = Popular Party; IU-­LV = United Left-­Greens; CiU = Convergence and Union (Catalonia); EAJ-­PNV = Basque Nationalist Party; BNG = Galician National Bloc; CC-­PNC = Canary Islands Coalition-­Canary Islands Nationalist Party; UPyD = Progress and Democracy Union; PA = Andalusian Party; ERC = Catalan Republican Left; AMAIUR = Radical Basque Separatist Coalition; IC-­V = Initiative for Calalonia/Greens; EA = Basque Solidarity; CHA =Aragon Council; Na-­Bai/GBAI = Yes Navarra; Compromís-­Q = Q Commitment; FAC = Citizens’ Forum

PSOE PP IU-­LV CiU EAJ-­PNV BNG CC-­PNC UPyD PA ERC AMAIUR IC-­V EA CHA Na-­Bai/GBAI Compromís-­Q FAC

%

68.71

% turnout

votes

2000

Year

Table 4  General election results 2000–11

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Index

Al-Qaeda 3, 181, 183 Almunia, Joaquín 71, 141, 155–9, 172 Altamirano, Carlos 25 Anguita, Julio 156 Arias Navarro, Carlos 26, 39 Autonomous Communities 2, 86, 89–90, 92, 99, 100–1, 133–4, 143–52, 156, 157, 159–62, 168, 171–2, 174–5, 182, 201, 207, 208 Azaña, Manuel 19 Aznar, José María 3, 11, 72, 75, 93, 99, 125, 132, 140, 143, 155, 157, 159, 161, 162, 172, 178–84, 188–90, 192, 193, 195, 203

Comisiones Obreras (CC.OO., Workers’ Commissions) 21, 55, 59 Constitutional amendment of 2011 187, 199 Convergència i Unió (CiU, Convergence and Union) 163, 210 Corruption 2, 5, 7, 16, 72, 73–5, 77, 79, 84, 87, 124, 149, 153, 156, 158, 161, 205

Barber, Benjamin 11, 166–7, 170, 175 Berlusconi, Silvio 183 Besteiro, Julián 17–18, 20 Blair, Tony 11, 159, 167, 180, 182–4 Blanco, José 159 Bono, José 156, 157–61, 188, 202 Borrell, Josep 155–8 Boyer, Miguel 61, 67, 85 Brandt, Willy 25–6

European Union/Community (EU/EC) 2, 5, 17, 33–53, 55–7, 59–60, 62, 83, 88, 89–109, 111–139, 140, 141, 147–52, 154, 164, 173, 178–90, 191–4, 199, 205–6 Euskadi Ta Askatasuna (ETA) 97, 174, 182

Caldera, Jesús 159 Calvo-Sotelo, Leopoldo 31, 40, 42, 90, 93, 95, 104, 109, 145 Carrero Blanco, Admiral Luis 39 Carrillo, Santiago 26, 27 Chacón, Carme 192, 199, 202 Chaves, Manuel 156, 158, 159, 161

De los Ríos, Fernando 17–18 Dependency Law (Ley de Dependencia) 4, 6, 9, 13, 169, 198, 201, 205 D’Estaing, Giscard 41–2 Díez, Rosa 160–1

Fernández, Matilde 160–1 Fernández de la Vega, María Teresa 168 Fernández Ordóñez, Francisco 47, 113, 119, 128 Fernández Ordóñez, Miguel Ángel 194, 196 Foot, Michael 25 Franco, Francisco 1, 7, 20, 21, 23, 24, 26, 27, 28, 33, 34, 35, 37, 39, 44, 45, 69, 93, 112, 140, 141, 143, 144, 158, 170, 179, 191, 200, 204, 206

225

Index regime 2, 3, 13, 15, 20, 21, 23, 24, 26, 27, 28, 30, 33, 34, 35, 37, 38, 39, 44, 45, 56, 58, 60, 73, 82, 90, 102, 112, 141, 158, 166, 170, 171, 178, 204 González, Felipe 1–2, 3, 5, 6, 7, 8, 15, 21, 22, 23, 29, 30, 31, 33, 34, 53, 59, 66, 68, 70, 71, 73, 75, 84, 85, 86, 90, 92, 93, 94, 95, 98, 99, 100, 106, 107, 112, 113, 115, 117, 118, 122, 123, 124, 127, 134–5, 136, 140, 141, 142, 143, 146, 152, 153, 154, 155, 156, 157, 158, 159, 161, 162, 163, 166, 171, 172, 178, 180, 183, 185, 191, 202, 204, 205, 206 alleged involvement in ‘dirty war’ 74 anti-Americanism 102 appointment of finance ministers 61 commitment to Economic and Monetary Union 8, 97 Cuba 132 EC-Latin American relations 125 EC membership negotiations 45–9 Marxism 24, 27–8, 103 modernisation 56 NATO-EC link 109 NATO U-turn 50–1, 108–9 social democracy 9–10 SPD 25–6 trade unions 59 General strike 1988 67, 68–9, 71, 78, 84 Growth and Stability Pact 9, 11 Guerra, Alfonso 21, 22, 26–30, 61, 67–8, 74, 85, 155, 157, 160, 202, 205 Historical Memory Law (Ley para la Recuperación de la Memoria Histórica) 170–1 Hollande, François 206 Ibarretxe, Juan José 172, 176 Iglesias, Pablo 1, 15–18, 23, 26, 204 International Monetary Fund (IMF) 35, 59, 205 Izquierda Unida (IU, United Left) 72, 93, 97, 152 Jiménez, Trinidad 159 Juan Carlos I, King 25, 153

Kohl, Helmut 47, 99, 122–3 Largo Caballero, Francisco 17–20, 204 Llopis, Rodolfo 20, 22, 34, 37, 44, 45 López Rodó, Laureano 35 Maastricht Treaty 2, 62, 68, 78, 82, 83, 97–9, 115, 136, 140, 178 convergence criteria 9, 71, 77, 78, 84, 149, 151–2, 153, 178 Merkel, Angela 205 Mitterrand, François 22, 25, 42–3, 47, 49–50, 56, 82 Moncloa Pacts 59–60 Morán, Fernando 43, 47–8, 49, 51, 52, 106, 141 Navarro Rubio, Mariano 35 Negrín, Juan 20, 204 Nenni, Pietro 25 North Atlantic Treaty Organisation (NATO) 2, 6, 31, 42–3, 47–8, 50–1, 90, 92, 93, 96, 102–113, 115–16, 117, 134–7, 141, 154, 179, 187, 202 Nueva Vía (New Way) 159 Obama, Barack 12, 197 OECD (Organisation for Economic Co­operation and Development) 9, 54, 57, 58, 63, 69, 169 Palme, Olof 25 Partido Comunista de España (PCE, Communist Party) 17, 19, 21, 22, 24, 26, 28, 30, 32, 45 Partido Popular (PP) 3, 5, 11, 14, 65, 72, 74, 75, 93, 98, 100, 125, 130, 132, 134, 137, 139, 140, 143, 147, 149–57, 161, 163, 164, 166–8, 171–6, 178, 179, 180–2, 184–6, 188–9, 191, 193, 195, 199–200, 202–3, 204, 206, 210 Partit dels Socialistes de Catalunya (PSC) 161, 163, 173, 198, 202 Pérez Rubalcaba, Alfredo 1, 4, 192, 199, 203, 206 Pettit, Philip 11, 166–8, 170, 175, 177 Prieto, Indalecio 18–20, 44

226Index Primo de Rivera, General Miguel 17–18 Pujol, Jordi 152 Rajoy, Mariano 14, 65, 203, 204, 206 Rawls, John 11, 166, 170, 175 Redondo, Nicolás 22, 59–61 Rodríguez Zapatero, José Luis 3–5, 6, 7, 9–14, 75, 80, 155, 160, 161, 170, 173, 174, 175, 176, 177, 179, 187, 188, 189, 190, 204–6 economic policy 191–203 family background 158 historical memory 170–1 membership of Nueva Vía 159 opposition leader 162–4, 184–5 orders withdrawal of Spanish troops from Iraq 185–6 party career before becoming leader 158 party leadership campaign 157–61 philosophical influences 166–8 Senate reform 149 Roldán, Luis 74 Rubio, Mariano, 74 Salgado, Elena 196 Sarkozy, Nicolas 206 Schröder, Gerhard 159 Sebastián, Miguel 194

Sevilla, Jordi 159 Solbes, Pedro 61, 95, 196 Solchaga, Carlos 61, 67, 71, 85, 86, 87, 132 SPD (Sozialdemokratische Partei Deutschlands – German Social Democratic Party) 25–6, 48, 159 Suárez, Adolfo 26, 28, 31, 39, 40, 41, 42, 93, 95, 145, 164 Tierno Galván, Enrique 24, 28 Torres Mora, José Andrés 161, 167 Ullastres Calvo, Alberto 35 Unión de Centro Democrático (UCD, Democratic Centre Union) 1, 6, 25, 27, 30, 31, 33, 40, 42, 43, 44, 46, 48, 54, 55, 56, 57, 59, 81, 84, 90, 93, 94, 95, 96, 103, 104, 108, 109, 117, 143, 144, 145, 151 Unión General de Trabajadores (UGT, General Workers’ Union) 15, 18, 19, 20, 22, 55, 58, 59, 61, 85 Unión Progreso y Democracia (UPyD, Union for Progress and Democracy) 161, 210 Western European Union (WEU) 92, 97, 105, 112–16, 136–7 World Bank 35