Spain cultivates its Latin American ties. It moves toward reconciliation after a history of colonization

Ships no longer dock at Palos de la Frontera. Neither do fishing boats or dinghies. Sandbanks have washed their way into the tiny port, and the wooden wharf is worm-eaten and crumbling. Yet, it was here at Palos, which literally means ``the sticks,'' that Christopher Columbus set off on his voyage to discover the new world. The only vestige of Columbus's era is ``La Fontanilla,'' an ancient stone fountain from which sailing expeditions drew their supply of drinking water.

The story of Palos resembles Spain's own pattern of relations with Latin America: grandeur, ruin -- and now, redemption.

As madre patria of a mighty empire, Spain endowed 20 sovereign countries with a common language. At the height of its imperial glory, it is said that Spain had extracted enough gold and silver to pay all of today's Latin American debt. But then came decline, loss of its colonies between 1810 and 1898, and isolation. Today, as Spain emerges from half a century of political instability one of its most cherished ambitions is a reencounter with the Hispanic world.

Hostility toward Spain still exists in areas with high Indian populations, such as Peru, where the native culture -- opposed to espanolismo (``Spanish culture'') -- is exalted as a form of nationalism.

But most Latin Americans will agree that Spain's leyenda negra (``black legend'') of conquest and exploitation is now just part of history.

Spain's political will to reach out to Latin America is manifest with each visiting Hispanic dignitary. Yet, much like the shaky wharf at Palos, the groundwork for real cooperation is still not very good.

``The consequence of Spain's entry into the European Community can only be positive [for Latin America],'' Spanish Prime Minister Felipe Gonzalez M'arquez has said. Spaniards hailed their entry into the EC last January as an opportunity to serve as a bridge between Latin America and the European Community. But following its entry, Spain's purchases from Latin America dropped from 12 to 7.5 percent of its total imports in the first half of 1986. Spanish exports to Latin America, which also fell this year, only represent 5 percent of Spain's total foreign sales.

With Spain's return to democracy in the last 10 years, its impact on Latin America has been more visible in political terms, as a model of peaceful transition. The 1978 visit to Argentina by King Juan Carlos I was seen as an added impulse in bringing back democracy.

Spain has supported the idea of a Hispanic community of nations all on equal footing, but the project has gone no further than the idea stage.

Strongly opposed to what it sees as a US policy of confrontation with Nicaragua, Spain supports the Contadora Group -- Mexico, Panama, Venezuela, and Colombia -- ``as a regional solution to regional problems.'' The question for Spain is whether it could play more of a role as mediator in the conflict.

``We have no vocation of playing King Solomon. We don't want to force things, and we play the role the countries ask us to. We would be willing to do more if needed,'' says Jos'e Lu'is Villareal, a high-ranking Spanish official for Latin American affairs.

Nicaragua's ambassador to Madrid, Orlando Castillo Estrada says, however, ``Spain does not seem to be the most appropriate country to act as mediator. . .Spain does not play an active enough role in Latin America.''

The mid-1970s brought a huge wave of Latin American immigrants fleeing from repressive regimes. Many Argentinian and Uruguayan doctors, psychologists, or teachers who arrived in this period were far more advanced than their Spanish counterparts. Initial receptiveness gave way in some cases to resentment, as Spaniards found there was highly qualified competition for their jobs and faced an influx of people with a well-defined culture who had little ``to learn from Europe.''

Still, Spain's new image is attracting more immigrants, especially Argentinians, despite increasing bureaucratic difficulties on arrival.

Susanna Kesselman, an Argentinian gym teacher living here says, ``Partly due to Spain's transition and also to our own problems and `decadence,' Argentinians idealize Spain now. All the young people dream of coming here.''