§ Mr. Mander
asked the Secretary of State for Foreign Affairs whether he has any statement to make with reference to the recent speech by General Franco, in which he showed marked hostility to this country?
§ Mr. Eden
Yes, Sir. Since the conclusion of the Spanish Civil War, His Majesty's Government have been anxious to do everything in their power to promote the economic recovery of Spain, and to assist the Spanish people in their work of reconstruction. They considered that they could best contribute to this object by encouraging the revival of Anglo-Spanish commercial relations. Accordingly on the 18th March, 1940, they signed with the Spanish Government the Anglo-Spanish Trade and Payments Agreement and the Anglo - Spanish Loan Agreement providing for the advance of £2,000,000 to be spent in liquidating arrears in the Anglo-Spanish clearing dating from before the Civil War and of a further £2,000,000 for the purchase of foodstuffs and raw materials necessary for Spanish reconstruction.
On 30th July, 1940, my right hon. Friend the Minister of Economic Warfare stated that it was not our policy to extend the blockade to neutral countries so long as supplies could reach those countries without the risk of falling into the hands of the enemy, that we were prepared to grant navicerts on such a scale as to allow imports adequate for domestic consumption, and further that it was the policy of His Majesty's Government not merely to allow such supplies to pass through our controls, but also to assist neutral countries to obtain them. On 7th April last, His Majesty's Government concluded with the Spanish Government at their request a supplementary Loan Agreement, providing for an additional loan of £2,500,000. This money was also required for the purchase of essential raw materials and foodstuffs, and His Majesty's Government had hoped to be able to arrange for certain facilities to be made available for purchases in the sterling area and in other parts of the world.
His Majesty's Government have now noted that General Franco, in his speech to the Falange National Council on 17th July, displayed complete misunderstanding not only of the general war situation 1075W but also of British economic policy towards Spain. If economic arrangements are to succeed there must be good will on both sides, and General Franco's speech shows little evidence of such good will. His statement makes it appear that he does not desire further economic assistance for his country. If that is so, His Majesty's Government will be unable to proceed with their plans, and their future policy will depend on the actions and attitude of the Spanish Government.