A British Agreement with Spain
Spain has many reasons for wanting to keep the war out of the Iberian peninsula, and not the least of them is the fact that it is an urgent necessity for her to import goods from non-European countries. The preliminary financial agreement that has been signed at Madrid is the first outcome of nego- tiations that have been going on with Great Britain for some time. This country has not the least desire to deprive Spain of any imports which are needed for Spanish consumption. On the other hand she cannot allow Spain to act as an inter- mediary for supplying Germany, and the necessity of blockading the enemy has undoubtedly prevented Spaniards from importing much that they really needed themselves. Under the new agreement funds that had been frozen are now released to facilitate Spanish purchases in the sterling area, and essential imports will be allowed to flow through the British blockade. The necessary assurances have been given that none of these will find their way to Germany or Italy. On the economic side Germany has little or nothing to offer Spain, but Britain can ensure her supplies without which she must suffer severe hardship. General Franco has made his choice. He is bent on keeping his exhausted country out of the war and enjoying the economic advantages of friendship with this country. If Hitler were able to force his hand he would of course lose these advantages.
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