Spain's Economic Miracle and the Decline of Francoism (1957–1975)

Economic Growth and Social Transformation (1957-1960s)

The technocrats prevailed, and members of Opus Dei assumed significant posts in Franco's 1957 cabinet. Measures proposed by these technocrats were incorporated into the Stabilization Plan of 1959, which aimed to:

• Curb inflation.
• Reduce government economic controls.
• Bring Spanish economic policies and procedures in line with European standards.

The plan laid the basis for Spain's remarkable economic transformation in the 1960s. During that decade, Spain's industrial production and standard of living increased dramatically. The effects were profound. Foreign investment entered the country, attracted by low production costs and the absence of trade union freedom. The stabilizing measures established in 1959 and the liberalization of the borders caused the emigration of Spaniards, who were attracted by the employment opportunities and better salaries offered by the European economic boom.

The commercial opening, together with the low competitiveness of the Spanish economy and the great need for capital goods and raw materials, produced a chronic deficit in the balance of trade. Rapid economic development had significant political and social consequences, including:

• The emergence of a larger and better-educated middle class than had ever existed in Spain.
• The formation of a new urban working class.
• An unprecedented degree of foreign cultural influence, which had a marked impact on Spanish society.

Opposition to the Franco Dictatorship and Regime Liberalization

Technocrats had hoped that greater economic prosperity would eliminate hostility toward Francoism, but tension between an increasingly dynamic Spanish society and the oppressive regime resulted in growing domestic opposition throughout the 1960s. The expanding industrial labor force became increasingly militant. Workers organized clandestine commissions, and strikes and bombings were indications that Franco would not be able to maintain his repressive grip on the labor force indefinitely.

Opposition manifested across several sectors:

• Regional Discontent: Escalating violent protests arose in the Basque region and Catalonia.
• Students: Agitation grew among students who resented the structures of Franco’s regime.
• Clergy: Priests were increasingly vocal in their attacks on the oppressive aspects of Francoism.

The unrest of the mid-1960s did not seriously threaten Spain’s stability. Franco felt the regime was secure and economically booming enough for a slight loosening of his authoritarian control.

Minimal Liberalization and Succession

The Organic Law of the State (1966) provided this minimal liberalization while solidifying Franco’s political system. Other key legislative changes included:

• The Law on Religious Freedom (1967), which eased restrictions on non-Catholics.
• The modification of censorship laws via the 1966 Press Law.

In July 1969, Franco provided his regime with a greater degree of legitimacy and continuity by naming as his successor a legitimate heir to the throne, Prince Juan Carlos de Bourbon.

The Crisis of Late Francoism (1969–1975)

The closing years of Franco’s regime were marked by increasing violence and unrest. The anticipation of the dictator’s demise and his increasing incapacity destabilized the country. There was ongoing conflict between those who sought to liberalize the regime in order to secure its survival and those of the "bunker mentality" who resisted reforms.

A state of exception was declared, during which freedom of expression was among the suspended constitutional rights. Spain appeared to be returning to the repressive policies of the 1940s. This had international repercussions and threatened negotiations with the US for the renewal of an agreement on US military bases. Franco lifted the state of exception in March 1969, but the government’s efforts to achieve legitimacy had been seriously undermined.

The Rise of ETA and Political Assassination

The most virulent opposition to the Franco regime in the late 1960s and early 1970s came from the revolutionary Basque nationalist group, ETA (Basque Fatherland and Freedom). This extremist group used terror tactics and assassinations to gain recognition of its demands for regional autonomy.

The ETA’s most daring act was the assassination in December 1973 of Luis Carrero Blanco, whom Franco had appointed as his first prime minister. Carrero Blanco had personified the hardline Francoism.

International Issues: Gibraltar and North Africa

A more complex problem was the fate of Gibraltar. The question of sovereignty, revived in the 1960s, endangered friendly relations between Britain and Spain. Franco was optimistic about his potential for maintaining a powerful position for Spain in North Africa, but in the following decades, Spain’s position there eroded further.

Spain was in a state of crisis by the time of Franco's death in 1975, despite his legacy of peace and order achieved through authoritarian rule.