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unofficial intimations from the US and other countries that while improved relations
with the Spanish people were desired, basic liberalization of the policies of the Spanish
Government was essential to progress toward this objective.
External influences unfavorable to the regime lie chiefly in the practical and
psychological disadvantages of the exclusion of Spain from the UN and its related
international organizations. The Spanish Foreign Office failed, with certain excep-
tions, in a campaign to win return of ministers and ambassadors to Madrid before the
UN General Assembly of September 1948. Despite some favorable international devel-
opments, Franco's prestige both at home and abroad is still impaired by diplomatic
isolation.
Other external influences detrimental to stability are Spain's failure to gain inclu-
sion in the European recovery program and the rejection of Portugal's proposal to bring
Spain into the framework of the Western European Union. The tolerance of the
French
Government toward the Spanish Government-in-exile and the encouragement given by
the French and British Socialist parties to Indalecio Prieto's initiative for a non-Com-
munist coalition movement against Franco have also been of concern to the regime.
By permitting opposition groups to remain in France, the French have provided them
with a well located base for their operations and ready access to press and radio. The
British Government has not concealed its preference for the restoration of a constitu-
tional monarchy, although it evidently contemplates no direct intervention in favor of
Don Juan.
The attitude of the Vatican also is somewhat unfavorable to Franco. The Pope
has received Don Juan and approves his claim to the Spanish Crown. Certain Vatican
statesmen fear that a general upheaval will take place in Spain when Franco's dictator-
ship ends and are apprehensive as to the effect on the stability of the government of his
current financial and economic policies. As a means of peaceful transition to a suc-
cessor government, they would favor an accord between Franco and Don Juan, whereby
Franco would prepare to retire voluntarily, so as to make possible the establishment of
a regime under which Spain can be integrated into the Western European Union and
participate in the European recovery program. Certain former leaders of Spanish
thought have been studying for the past two years the possibility of forming a Chris-
tian Democratic Party in Spain in case of political liberalization. Some members of
the Spanish hierarchy are known to favor these endeavors, of which the Vatican is
informed.
Franco's control of the Government will be endangered only if some of the high
Army, Church, or Falange leaders become seriously alarmed over the deterioration of
the national economy, in which case some combination of these elements might act
against him. In such circumstances, the succession might be determined through
seizure of power by a coup d'état backed up with force, although a precedent exists in
Spanish history for the voluntary retirement of a military dictator. General Primo de
Rivera withdrew when his policies were definitively rejected by the Army leaders after
the nation's bankers had withdrawn their financial support from his Government. It
is improbable that the three groups named above would act with unity against Franco;
he well understands how to keep a balance between them and there appears to be no
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20
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"ocrText": "SECRET\nunofficial intimations from the US and other countries that while improved relations\nwith the Spanish people were desired, basic liberalization of the policies of the Spanish\nGovernment was essential to progress toward this objective.\nExternal influences unfavorable to the regime lie chiefly in the practical and\npsychological disadvantages of the exclusion of Spain from the UN and its related\ninternational organizations. The Spanish Foreign Office failed, with certain excep-\ntions, in a campaign to win return of ministers and ambassadors to Madrid before the\nUN General Assembly of September 1948. Despite some favorable international devel-\nopments, Franco's prestige both at home and abroad is still impaired by diplomatic\nisolation.\nOther external influences detrimental to stability are Spain's failure to gain inclu-\nsion in the European recovery program and the rejection of Portugal's proposal to bring\nSpain into the framework of the Western European Union. The tolerance of the\nFrench\nGovernment toward the Spanish Government-in-exile and the encouragement given by\nthe French and British Socialist parties to Indalecio Prieto's initiative for a non-Com-\nmunist coalition movement against Franco have also been of concern to the regime.\nBy permitting opposition groups to remain in France, the French have provided them\nwith a well located base for their operations and ready access to press and radio. The\nBritish Government has not concealed its preference for the restoration of a constitu-\ntional monarchy, although it evidently contemplates no direct intervention in favor of\nDon Juan.\nThe attitude of the Vatican also is somewhat unfavorable to Franco. The Pope\nhas received Don Juan and approves his claim to the Spanish Crown. Certain Vatican\nstatesmen fear that a general upheaval will take place in Spain when Franco's dictator-\nship ends and are apprehensive as to the effect on the stability of the government of his\ncurrent financial and economic policies. As a means of peaceful transition to a suc-\ncessor government, they would favor an accord between Franco and Don Juan, whereby\nFranco would prepare to retire voluntarily, so as to make possible the establishment of\na regime under which Spain can be integrated into the Western European Union and\nparticipate in the European recovery program. Certain former leaders of Spanish\nthought have been studying for the past two years the possibility of forming a Chris-\ntian Democratic Party in Spain in case of political liberalization. Some members of\nthe Spanish hierarchy are known to favor these endeavors, of which the Vatican is\ninformed.\nFranco's control of the Government will be endangered only if some of the high\nArmy, Church, or Falange leaders become seriously alarmed over the deterioration of\nthe national economy, in which case some combination of these elements might act\nagainst him. In such circumstances, the succession might be determined through\nseizure of power by a coup d'état backed up with force, although a precedent exists in\nSpanish history for the voluntary retirement of a military dictator. General Primo de\nRivera withdrew when his policies were definitively rejected by the Army leaders after\nthe nation's bankers had withdrawn their financial support from his Government. It\nis improbable that the three groups named above would act with unity against Franco;\nhe well understands how to keep a balance between them and there appears to be no\nSECRET\n20"
}