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SECRET SECTION III FOREIGN AFFAIRS 1. BASIS OF PRESENT FOREIGN POLICY. The foreign policy of Spain is dominated by two considerations: Franco's desire to sustain his regime and overcome international opposition to him, and fear of Com- munist power and Soviet expansion. International opposition to Franco is based on disapprobation of the totalitarian and anti-democratic character of his regime and on the fact that, from the installation of his Government until the collapse of Hitler Germany, he maintained cordial rela- tions with the Fascist nations which were fighting to destroy the Western democracies. His relations with other countries are to a large extent influenced by economic necessity. To ensure the stability of his government, Franco must halt national economic deterioration and restore the productive capacity and foreign trade position of his country. For these objectives, he must have imports of industrial equipment. Im- ports of food are necessary and the politically powerful Spanish Army needs imported military equipment. He hopes to obtain credits for and allocations of these goods and supplies by inducing the Western Powers, especially the US, to abandon their opposition to his regime and thereafter provide aid. His efforts toward obtaining inclusion of Spain in the European recovery program and other international projects or obtaining US credits directly, have consisted SO far mainly of propaganda intended to convince the Western democracies that Spain under his rule is necessary to them as a bulwark against the USSR. Bilateral trade agreements have been negotiated with various countries and will supply part but not all of the goods Spain needs. 2. SIGNIFICANT INTERNATIONAL ISSUES. Resolutions and recommendations of the United Nations showing their disfavor and reluctance to deal with Franco isolated Spain diplomatically and economically. The UN Conference on International Organization at San Francisco, and subsequent international conferences, made it plain that these nations did not propose to admit Spain, while ruled by Franco, to membership. For three years, therefore, the Franco Government has been in the position of an international outcast. Maintaining normal friendly relations with only a handful of nations, Spain has confronted two blocs, both committed to the proposition that Franco must be replaced. The bloc led by the USSR has advocated the application by the UN of strong measures, including economic sanctions, against Franco. The majority of nations, however, including the US and the UK, have opposed direct intervention, questioning the legality of such action and distrusting its consequences. They have taken the position that the Spanish people themselves must act to replace the present regime with a government based on the consent of the governed, and have recommended the adoption of policies by the present 43 SECRE

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    "ocrText": "SECRET\nSECTION III\nFOREIGN AFFAIRS\n1. BASIS OF PRESENT FOREIGN POLICY.\nThe foreign policy of Spain is dominated by two considerations: Franco's desire\nto sustain his regime and overcome international opposition to him, and fear of Com-\nmunist power and Soviet expansion.\nInternational opposition to Franco is based on disapprobation of the totalitarian\nand anti-democratic character of his regime and on the fact that, from the installation\nof his Government until the collapse of Hitler Germany, he maintained cordial rela-\ntions with the Fascist nations which were fighting to destroy the Western democracies.\nHis relations with other countries are to a large extent influenced by economic\nnecessity. To ensure the stability of his government, Franco must halt national\neconomic deterioration and restore the productive capacity and foreign trade position of\nhis country. For these objectives, he must have imports of industrial equipment. Im-\nports of food are necessary and the politically powerful Spanish Army needs imported\nmilitary equipment. He hopes to obtain credits for and allocations of these goods and\nsupplies by inducing the Western Powers, especially the US, to abandon their opposition\nto his regime and thereafter provide aid. His efforts toward obtaining inclusion of\nSpain in the European recovery program and other international projects or obtaining\nUS credits directly, have consisted SO far mainly of propaganda intended to convince\nthe Western democracies that Spain under his rule is necessary to them as a bulwark\nagainst the USSR. Bilateral trade agreements have been negotiated with various\ncountries and will supply part but not all of the goods Spain needs.\n2. SIGNIFICANT INTERNATIONAL ISSUES.\nResolutions and recommendations of the United Nations showing their disfavor\nand reluctance to deal with Franco isolated Spain diplomatically and economically.\nThe UN Conference on International Organization at San Francisco, and subsequent\ninternational conferences, made it plain that these nations did not propose to admit\nSpain, while ruled by Franco, to membership. For three years, therefore, the Franco\nGovernment has been in the position of an international outcast. Maintaining normal\nfriendly relations with only a handful of nations, Spain has confronted two blocs, both\ncommitted to the proposition that Franco must be replaced. The bloc led by the\nUSSR has advocated the application by the UN of strong measures, including economic\nsanctions, against Franco. The majority of nations, however, including the US and\nthe UK, have opposed direct intervention, questioning the legality of such action and\ndistrusting its consequences. They have taken the position that the Spanish people\nthemselves must act to replace the present regime with a government based on the\nconsent of the governed, and have recommended the adoption of policies by the present\n43\nSECRE"
}