Spain: Closer to Europe

That arid square, that fragment nipped off from hot Africa, soldered so crudely to inventive Europe.

Thus Poet W. H. Auden once darkly described Spain, but today the "arid square" of more than 30 million people is growing ever closer to the rest of Europe. Franco long ago took economic power away from the old Falangists who helped him win the civil war. Now El Caudillo, who fancies himself an economist and contributes occasional articles to Madrid newspapers under the pen name "Hispanicus," is steadily giving more authority to a corps of knowledgeable and enthusiastic technicians. The young economists have been raising both living standards and future hopes.

Last week that fact was acknowledged by the Common Market. Because of longstanding political hostility to Dictator Franco, the Six steadfastly refuse to grant Spain the membership he badly wants. But meeting in Brussels, the Market ministers agreed to hold "exploratory talks" on joint economic problems. Spaniards, who had feared a complete turndown and their regime's retreat to isolation, were jubilant.

The Takeoff Point. Viewed against more advanced neighbors, Spain is hardly fat. Per-capita income has risen more than 22% since 1961—but is still only $342, against $1,250 in France and $1,255 in West Germany. A skilled laborer's weekly pay is a slim $18 to $24. Last year's pay raises, provoked in part by bitter strikes, have not been matched by productivity increases, and there is the consequent danger of recurring inflation.

But Spain, like other European na tions before it, has at least reached the takeoff point. The 8,344-mile national railway system is being overhauled at a cost of $1 billion. Unemployment has dropped from 8% in 1959 to 1.5%. About 400,000 men are working in neighboring nations, and the $193 million they sent home last year, along with tourist income, more than offset a chronic trade deficit.

Franco has relaxed regulations on foreign capital, now allows outside companies to control Spanish firms and remit their profits and dividends. Such firms as Leyland Motors, John Deere and Parke Davis have come in. Foreigners can now own Spanish stocks, have bought $200 million worth of them.

New Entrepreneurs. Spain's economists, led by liberal Commerce Minister Alberto Ullastres, 50, intend to keep statistics climbing with a four-year development plan. Under it, production and expansion have been carefully timetabled: $15 billion in public and private investment will be added to Spain's economy, and the gross national product, now $13 billion, is expected to rise 26%.

The emergence of Spain's technocrats has been matched by the appearance of a tough young breed of entrepreneurs. Best-known among them is Eduardo Barreiros, 44, a onetime mechanic who built the nation's biggest automotive company, recently sold 45% of it to Chrysler for $19 million. Onetime Bank Clerk Jose Maria Aristrain, 48, started a scrap-iron business as a sideline, was so successful that he opened foundries, now operates plants that turn out 60,000 tons of steel a year. At 43, Engineer Pedro Duran is the aggressive president of the country's principal ship and locomotive building firm.