Foreign Relations of the United States, 1955–1957, Western Europe and Canada, Volume XXVII

205. Report Prepared by the Operations Coordinating Board¹

Washington, October 3, 1957.

PROGRESS REPORT ON SPAIN (NSC 5710/1, Approved by the President, May 14, 1957)²

(Period Covered: From March 27, 1957 through October 8, 1957)

A. Summary of Operating Progress in Relation to Major NSC Objectives

1. Summary Evaluation. U.S.-Spanish relations remained cordial, and satisfactory progress was made in meeting U.S. objectives. Despite certain problems enumerated in Section B, the Spanish Government has pursued cooperative policies. Spain’s anti-communist position has remained firm.

a. Construction on bases for U.S. use has continued on schedule and they now possess an emergency capability. However, Spain has demonstrated concern at the location of our bases near major Spanish cities (see Paragraph 4).

b. With the exception of the Navy, which has made slow progress in absorbing U.S. aid due to its budgetary difficulties, the Spanish armed forces utilization of MAP support continues to improve toward satisfactory levels, and their training record is considered excellent.

c. Spanish officials have cooperated fully with OEEC groups studying the question of closer Spanish association, on which the OEEC Council has not yet arrived at a decision. Spanish officials have also shown interest in joining the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Finance Corporation, and have been studying the implications for Spain of the European Common Market and Free Trade Area. Spanish officials have shown increased interest in NATO membership, and there has been some improvement in Spanish relations with France and Great Britain.

d. Security forces remain loyal to FRANCO. There is apparent some limited weakening of the forces normally supporting the Regime in that the Falange and, to a lesser extent, the Church evidence efforts to identify themselves with “popular” ideals. Manifestations of labor, student and other political opposition continue, although they are not considered to constitute a political threat to the Regime as long as a pronounced deterioration of the economic situation can be avoided. On the other hand, in response to increased popular demands for a higher standard of living, the Government has granted wage and other concessions. These demands are continuing and they, among others, are contributing to inflationary pressures, and threaten the economic stability on which political stability partly depends.

2. Need for Policy Review. In view of the above, review of United States policy toward Spain (NSC 5710/1) is not recommended at this time.

B. Major Operating Problems or Difficulties Facing the United States

3. Economic Aid. The Spanish economic situation remains precarious. During the past six months agricultural and industrial production in Spain have continued at high and rising levels, and the Government has taken some steps to combat inflation by reducing the level of public borrowing and by raising the rediscount rate. Nevertheless the inflationary pressures remain strong, and it is very likely that demands for further wage increases will contribute further to the upward movement of prices. The need for outside financial aid continues. This need was recognized in NSC 5710/1 which was approved by the President on May 14, 1957. Our mission in Madrid has estimated that the overall level of commodities programmed for Spain for FY 1958 from Defense Support and PL 480 should approximate $175 million. The executive branch requested $30 million, and the Congress has recently voted $40 million for Defense Support for Spain and, in light of the availability of PL 480 Title I funds and present crop prospects in Spain, a tentative program of approximately $60 million in PL 480 funds is under consideration. Thus, presently projected programs will aggregate about $100 million, plus such amounts as Spain will qualify for from the Development Loan Fund. We will continue to keep Spanish economic and political developments under close scrutiny to evaluate realistic minimum aid programs for Spain, and seek to obtain positive action by the Spanish Government toward stabilizing the economy.

4. Atomic Vulnerability. The argument that our base facilities in Spain increase the likelihood that Spain would be a target for Soviet attack in the event of hostilities has been reiterated by the Spaniards since the time the base rights negotiations for our 1953 agreements were undertaken. During 1956 there was some evidence of growing Spanish Government concern over vulnerability to atomic attack. This year the Spanish military have been pressing us for more advanced air defense weapons, including missiles. In April the Spanish military suggested that a high-level U.S. technical team should visit Spain to study the relocation of bases now located near the major Spanish cities of Madrid, Seville, and Zaragoza. General FRANCO told General Twining that if war comes within the next three years, the U.S. can of course use the bases but that expert officers of both nations should consider U.S. construction of additional bases to supplant the Torrejon base near Madrid and thus reduce its value as a military objective. In late May, the Spanish Ambassador made an official request for the visit of a high level technical team this summer, reiterating at the same time that Spain is sticking to commitments undertaken in agreements with us. A USAF technical team will visit Spain to seek to place Spain’s vulnerability in perspective, compared to that of other countries of the West by providing intelligence on the relative priority of Spain as a target, the effect on Spain of nuclear detonations in Spain or elsewhere in Europe. This team will not discuss or make recommendations concerning air defense or military assistance. The timing of the visit will be established when we know the timing of U.S.-Spanish discussions concerning refined FY 1958 aid programs, and preferably after the activation of the bases.

5. Increased U.S. Military Personnel in Spain. The current U.S. military personnel (including civilian employees and dependents) strength in Spain is approximately 7,000. With the activation of the new bases, now nearing completion, the number of U.S. military personnel in Spain is expected to rise to 19,500 during the next year. The introduction of increased numbers of U.S. personnel into Spain may be the cause of some problems during the adjustment period.

6. Operational Procedures at Bases for U.S.-Spanish Use. Our agreements with Spain provide that all U.S. constructed base facilities in Spain shall be “under Spanish flag and command.” Some of the procedures which will govern operations at the joint-use bases when they are activated, in the near future, remain to be worked out.

Annex A

ADDITIONAL MAJOR DEVELOPMENTS NOT COVERED IN THE OCB REPORT

1. Spain–USSR

a. Repatriates. Of the 2,300-odd Spanish repatriates from the USSR, from 120 to 150 have returned to the Soviet Union and at last report over 300 were awaiting permission to leave Spain. The Spanish Government is making efforts which demonstrate its awareness of the propaganda potential for the USSR if substantial numbers of these persons return to the Soviet Union. These include the creation of an inter-ministerial commission to handle repatriates’problems, efforts to find jobs and decent housing for repatriates, and the expenditure of 1 to 1½ million pesetas ($24–$36,000) monthly in assistance. Except for a few urgent cases, the Spanish Government has frozen exit permits for repatriates.

b. Other Developments. According to the Spanish Foreign Minister the Soviets have continued approaches to Spain during this period seeking to establish some form of official relations. However, the question of the return of the Spanish gold was apparently settled by the USSR in a flat refusal to acknowledge any liability for it which was published by Pravda on April 5. Furthermore, on April 18, a Moscow Radio Spanish language broadcast warned the Spanish people against joining NATO. It told them, in terms similar to recent warnings to NATO members, that any territory used as a base for aggression would be subject to retaliation.

2. Spain–NATO. On March 20th the House, and on April 11th the Senate unanimously resolved: “… that the Department of State should continue to use its good offices toward the end of achieving the earliest possible participation by Spain in the NAT and as a member of the NATO.”³ The sense of this resolution was acceptable to the Executive Branch.

3. Nuclear Power Agreement. On August 16, 1957 Spain and the U.S. signed an expanded Agreement for Cooperation concerning civil uses of atomic energy. This supersedes the July 1955 agreement and authorizes further exchanges of information and sale or lease of up to 500 kilograms of uranium 235 for use in research, experimental power and power reactors over a term of 10 years.

4. FRANCO–Salazar Meeting. Spanish and Portuguese leaders met on July 8 and 9 at Ciudad Rodrigo, near the Portuguese border. This was the fifth such meeting since 1938. They are reported to have discussed their respective relations with Latin American nations, their position with regard to the European Common Market, and their position with respect to the Algerian problem.

5. French-Spanish Conversation. On August 24 M. Maurice Faure, French Minister of State for Foreign Affairs, visited San Sebastian for conversations with Spanish Foreign Minister Castiella. This is the first time since World War II that a French official of cabinet rank has visited Spain and is a further indication of improving French-Spanish relations.

6. Spanish-Moroccan Relations. The course of Spanish-Moroccan relations has been affected adversely by clashes between Moroccan Army of Liberation bands and the Spanish garrison of Ifni which in consequence thereof was reinforced in May. Spanish measures to maintain order have led to Moroccan protests and the King of Morocco instructed his ambassador at Madrid to demand negotiations leading to the return of Ifni to Morocco. The Faure–Castiella conversations of August 24 provoked angry protests in the Moroccan nationalist press and increased tensions between Morocco and Spain.

7. New Commitments for Funds, Goods, or Services. In response to the Spanish request for an additional $30 million of defense support assistance in addition to the $50 million previously authorized for FY 1957, the Spanish Government was informed on June 29 that the U.S. had approved the grant of an additional $20 million in defense support assistance for FY 1957. At this time, the Spanish Government was also reminded of their previous assurances of our expectations that its economic stabilization program would be implemented.

1. Source: Department of State, OCB Files: Lot 62 D 430, Spain 1956–1957. Secret. A cover sheet, an undated memorandum by Staats, a financial annex, and a pipeline analysis are not printed.
2. NSC 5710/1 [6 pages of source text] was not declassified.
3. Ellipsis in the source text.