The economic relations between Nazi Germany and Franco Spain, 1936-1945

During the course of the Spanish Civil War Nazi Germany's intervention on behalf of General Francisco Franco and his fellow insurgents became increasingly dominated by economic considerations. National Socialist policies vis-à-vis Nationalist Spain developed into a programme of large-scale economic exploitation. Under the command of Hermann Goring two companies were founded in Spain in late July 1936 (HISMA) and in Berlin in early October 1936 (ROWAK) to take control not only of National Socialist supply operations for Franco but also of the whole economic relationship between Nazi Germany and Nationalist Spain. During the course of the civil war HISMA/ROWAK managed to alter the trading pattern between Spain and Germany away from mainly fruit imports towards a substantial increase in raw material supplies. As British companies controlled most of the pyrite and iron ore mines of Spain and were therefore directly affected by Franco's redirection of ore exports to Germany, this development was challenged by the British government. The Nazi regime was only partly successful in reducing non-German economic influence in Spain. Aware of the temporary nature of Franco's dependence on German war matériel, Hermann Goring initiated the MONTANA project in 1937 to build up a German-owned mining empire in Spain. While the purchase of Spanish mines by HISMA/ROWAK was reluctantly accepted by Franco in late 1938, the Nazi regime was left with very little time to proceed even further with its economic "colonization" of Spain. The outbreak of war in September 1939 put an effective halt to German-Spanish economic relations until the defeat of France in summer 1940 led to a reopening of rail links to Spain. Subsequent - unsuccessful - negotiations on a Spanish entry into the war were dominated by economic considerations. From 1941 onwards an increasing trade and clearing imbalance developed in favour of Spain. Germany was desperate to import certain goods from Spain, particularly wolfram ore, a vital raw material for German armaments producers. Yet, the Allied economic warfare campaign in Spain led to huge price increases and during the period 1942 to 1944 the Nazi regime found itself forced to export growing amounts of war matériel to Spain. The Allied invasion of France in 1944 finally led to the effective end of German-Spanish trade relations, although both regimes tried to maintain them until Hitler's final defeat.