Spain During and After World War II: From Neutrality to Isolation

Spain's Opportunistic Adaptation During World War II (1939-1945)

The outbreak of World War II significantly impacted Spain's international political standing and the trajectory of the Franco regime. This opportunistic adaptation to international developments helped solidify Franco's power.

Franco's Position in the War

In 1939, despite strong ties with the Axis powers, Franco declared Spain neutral. However, collaboration with these powers continued. Franco adopted a policy of non-belligerence, leaving open the possibility of supporting Germany. While Hitler's direct requests were declined, Serrano Suñer facilitated Nazi espionage against the British Navy.

Collaboration peaked in 1941 with the deployment of the Blue Division, a volunteer corps, to the Soviet front. As the war turned against Germany, some Spanish military figures, concerned about over-commitment to Hitler, withdrew the division in 1943.

International Blockade and Isolation

The international community largely rejected the Franco dictatorship. The newly formed United Nations denied Spain membership and later advocated for the regime's peaceful removal. The Allied victory posed a threat to Franco's stability. The regime's international isolation culminated in the UN-recommended withdrawal of ambassadors in 1946.

While opposition forces anticipated the regime's downfall, Franco doubled down on his autarkic and repressive policies. The international boycott was portrayed as a conspiracy responsible for Spain's economic woes.

The emerging Cold War shifted Western powers' perspectives. They began to view Franco's Spain as a potential ally.

Autarky and Economic Recession in the 1940s

Spain experienced a severe recession in the 1940s, driven by the lingering effects of the Civil War and Franco's ineffective economic policies.

Impact of the Civil War

The war's demographic impact was devastating, with significant loss of life, imprisonment, and exile. Many specialized jobs remained unfilled, and families sought refuge in rural areas. Physical damage, however, was less severe.

Economic Policy: Interventionism and Autarky

Franco's government aimed to control key economic sectors, most notably through autarky. The regime pursued economic self-sufficiency, believing it essential for true political independence. Foreign investment was restricted, imports minimized, and economic activity centrally planned.

The state-created INI (National Institute of Industry) focused on strategic sectors, but industrial production remained insufficient, necessitating continued food rationing. Agricultural yields declined, which the regime attributed to drought.

Industrial production didn't recover until 1950. Scarcity of capital and technology resulted in an outdated and unambitious industrial sector.

Foreign trade was limited to food imports from countries not participating in the blockade. Official rationing and price controls fueled a black market where prices were significantly inflated.

Bureaucratic intervention and deficit financing strained the state's resources.