How Wall Street shaped Spain's economy under Franco

How Wall Street shaped Spain's economy under Franco

On October 10, 1963, US Treasury Secretary Douglas Dillon told the Spanish ambassador Antonio Garrigues a revealing phrase: "Your success is our success and that of the entire free world." The remark, recorded in documents from the time, sums up the relationship between Franco's regime and American financial capital. But the turn toward Washington did not begin that day: it was the culmination of a process that started in 1959 with the Stabilization Plan.

The Stabilization Plan: opening up or surrender?

In July 1959, Trade Minister Ullastres presented a memorandum to the IMF and the OEEC that transformed the Spanish economy: from a closed one, with administered prices and regulated foreign trade, to an open one, with price flexibility, free capital movements and liberalized trade. The postwar autarky —imposed in part by the blockade of the victorious powers of World War II— was abandoned. The official argument was the need for growth after years of isolation. But in Spanish financial circles, the decision went by another name: the "internationalization" of capital.

It was no whim. The banking and landowning oligarchy that won the Civil War in 1939 controlled credit and production. They themselves demanded liberalization in order to expand and access international markets. As a contemporary analysis noted, the financial power that had grown rich under autarky was the one that later pushed to open up the economy. The paradox is clear: those who benefited from protectionism were the ones who led the opening.

Opus Dei, the CIA and the bases: the price of the dollars

Opus Dei was no stranger to this operation. Several technocrat ministers of the organization —Ullastres, López Rodó, Navarro Rubio— were the architects of the plan. Behind them, the United States saw a strategic opportunity in the middle of the Cold War. In exchange for IMF credits and American aid, Franco accepted the installation of military bases on Spanish soil. A pact that, in the view of several economic historians, mortgaged national sovereignty.

The bases were justified as part of the West's defense against the Soviet bloc, but their presence was a symbol of subordination to Washington. During the Yom Kippur War in 1973, the Spanish government went so far as to deny US aircraft carrying support to Israel the use of the bases, a gesture of independence that did not last long. The White House had already set its sights on another figure: Prince Juan Carlos.

The succession: Juan Carlos, the White House confidant

According to declassified documents, Juan Carlos became a confidant of the US administration. He provided details about Franco's moves in the Sahara and asked for help in getting the dictator to step down. Washington saw in him the ideal successor to get NATO to accept Spain's accession and to keep the military bases. The prince, who at the time held no real power, became the United States' bet for the post-Franco era.

The Spanish economy did grow during the development years, yes. But at the cost of a financial and military dependence that many analysts consider the regime's true legacy. The "Spanish miracle" had a price: the sale of sovereignty in exchange for dollars and technology. As a contemporary analysis quips, "Franco fought communism with American weapons and Texaco oil." And when he died, the system was already designed so that nothing would really change. The question that remains is: who was really in charge?

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