Spain: An Early and Durable Process of Adjustment

Abstract

The Pactos de la Moncloa had established the framework (joint action between government, political parties and unions) and the orientation (heterodox liberal) of the economic policy to be developed by the new democratic regime. These pacts, which were negotiated under the first democratic government formed by the UCD and led by Adolfo Suarez, were naturally to serve as a guide for the economic initiatives of this government (1977–79) and for the second UCD government led by Calvo Sotelo (1979–81). Depending to a large measure on joint social action, the two administrations began applying the stabilization and structural reform policies set out in the Pactos de la Moncloa, while at the same time pursuing, in several respects, an expansionist, demand-side economic policy. During the period 1977–82, the negotiation of the membership treaties,¹ officially begun in February 1979, was to have a limited impact on the adjustment process, since it was centred on examining the problems inherent in the entry of the Iberian countries, and slowed down by various conflicts between the member states.