In Spain, a Premier Puts Substance Before Style

Successful policies have economy sparkling

President Clinton may have found Spain's Prime Minister Jos Mara Aznar, whom he recently met at the White House, not quite as he expected.

Mr. Aznar, who last week celebrated his first anniversary as the head of a minority right-wing government, has neither the flamboyance typical of his countrymen nor the charisma of a great political leader. He is an austere figure, a former tax inspector who looks uneasy on a speaker's platform and performs poorly on television.

Yet Aznar, who led his Popular Party to victory over the Socialist Party and its charismatic leader, Felipe Gonzlez, in the 1996 general election, has had the sort of first year in office most national leaders can only dream of. The improvement in the economy has been startling. Inflation and interest rates have tumbled, while the Madrid stock exchange breaks its own records daily.

Aznar, basking in the publicity of his US visit, looks confidently set to see out his four-year mandate.

Little of this could have been predicted when Aznar defeated Mr. Gonzlez, whose Socialist administration had been rocked by a series of corruption and security scandals. The victory was quite narrow, and it took Aznar two months of painful negotiations to win the support of the three regionalist parties from Catalonia, the Basque country, and the Canary Islands that eventually allowed him to form a government May 6, 1996.

It was the first time since the death of dictator Francisco Franco in 1974 that Spaniards had had a right-wing government. Memories of the 40 years of Franco dictatorship - characterized by both internal repression and international isolation - are still fresh. Spaniards have, therefore, kept an eagle eye on Aznar, watching him for signs of authoritarian or liberal excess.

The prime minister, aware that he must firmly establish the right wing's democratic credentials, has trod carefully. He has refused to strike out many of the social laws approved by the Socialists, despite the urgings of the conservative Roman Catholic wing of his party. For example, a Socialist law that, in practice, allows abortion on demand will remain on the statute books.

Aznar has left the trade unions, the Popular Party's traditional enemies, alone. He has been rewarded with an employment pact between unions and employers that reduces the cost of both hiring and firing.

The pact is meant to create jobs in a country that, with 21.7 percent unemployment, has the European Union's highest jobless rate. Gonzlez had tried many times without success to achieve that sort of pact.

The principal black mark in Aznar's book has come from his treatment of the news media.

A bitter battle is being waged with the Socialist-leaning media magnate Jess de Polanco, owner of the Madrid-based El Pas newspaper. The Aznar government, keen to keep Mr. Polanco from extending his control over a swath of media outlets, has raised the sales tax on Polanco's Canal Plus subscription television channel.

At the same time, the government has done all it can to stop him launching a new pay-per-view service that will eventually compete with a rival service offered by state broadcaster RTVE.

Aznar has also replaced the head of RTVE with a former Popular Party deputy, Fernando Lpez Amor, leading to allegations that the broadcaster's two television channels and extensive radio service are being used for government propaganda.

In general, however, Aznar's first year of government has been virtually monothematic. The prime minister is determined that Spain should be in the first group of countries that together create the pan-European currency, the euro, at the turn of the century.

"We will be unshakable in meeting this target," he declared on taking office one year ago.

Aznar immediately announced reduced public spending, a freeze in civil service pay, and the sell-off of state companies.

In Spain, meeting the euro's standards is a popular ambition - supported by business leaders, trade unions, and virtually all opposition parties. The Spanish right, unlike Britain's fractured Conservative Party, is unanimous in its support.

Some analysts, however, muttered that Aznar has set himself an impossible target. Spain, lumbered with a large public spending deficit, could never make the strict economic criteria needed to join the euro club, they said. The general verdict was that, while the target - which meant reducing a deficit of 6.8 percent in 1995 to 3 percent by the end of this year - was not impossible, it was very difficult.

But when the European Union published its April 23 report on how the countries that aspired to euro membership were doing, it said that Spain was firmly on course, having cut the deficit to 4.4 percent last year. At the same time, the inflation rate had dropped from 3.8 to 2.2 percent, and interest rates were down from 7.5 to 5.5 percent. European giants such as France and Italy were not doing so well, the report says. Encouraged by the news, Spain's stock market immediately shot to record highs, marking a 40 percent rise since Aznar took office.

An April 28 poll by the Expansin newspaper showed that economic improvements were already creating a feel-good sensation among ordinary Spaniards. Of those questioned, 79 percent said they expected their family incomes to remain steady or improve over the coming year.

With the economy bubbling away - gross domestic product growth has jumped from 2 to 2.6 percent over the year - Aznar's minority government looks solid for at least another 18 months. The center-right regional parties that keep Aznar in power are delighted with the economy's performance. Entry into the euro should ensure their continued support.

In this atmosphere of economic buoyancy, Spain's companies have launched a major offensive in Latin America. US companies that are eyeing the same booming market have been surprised by both the strength and the nationality of their main competitors. When Aznar and Mr. Clinton met in April, they discussed ways that companies from the two countries could work together in Latin America.

Clinton will himself be traveling to Spain in July, when the Aznar government plays host to the NATO meeting that will bring central European nations into the alliance. The meeting will also see Spain, formerly a second-tier member of NATO, fully incorporating its armed services into the new structure.

For Aznar, who lacks experience in the international arena, it will be a further opportunity to improve his image at home.

For the US and other Western countries, it will be final proof that Spain, 22 years after going through one of the first peaceful transitions from totalitarianism to democracy, is firmly part of their club.

Spain in the 20th Century

1902: King Alfonso XIII assumes the throne.

1923: Alfonso backs law-and-order dictatorship of Gen. Primo de Rivera.

1930: Due to severe economic depression and growing unpopularity, de Rivera resigns. The following year, Alfonso goes into exile without officially abdicating. A republic is proclaimed.

1936: Army officers under Francisco Franco revolt. Three years later, the civil war ends with Franco victorious. The fascist government he establishes remains neutral during World War II.

1955: Spain is admitted to the United Nations.

1969: Franco and the Cortes (parliament) designate Prince Juan Carlos as the future king and head of state.

1975: Franco dies. Juan Carlos sworn in as king.

1977: Free elections are held.

1980: Catalonia and the Basque country are granted autonomy.

1981: The king thwarts a coup attempt by right-wing military officers.

1982-1993: The Socialist Party wins four consecutive general elections, but yields power to a coalition of conservative and regional parties, headed by Jos Mara Aznar, after the March 3, 1996 elections.