Moncloa Pacts

Moncloa Pacts
   The Moncloa Pacts, which derive their name from the prime minister's official residence where the discussions took place, were a series of agreements signed on 25 October 1977 by representatives of the political parties which had recently, been elected to the parliament in June 1977. The pacts were initiated by the Vice-President in charge of Economic affairs, Enrique Fuentes Quintana, as a way of controlling the economy which, in the early years of democracy, was suffering from spiralling wage costs, high inflation and the adverse effects of the oil crisis on the balance of payments. The importance of the Pacts, however, transcends the economic: they represented the first attempts at a political consensus stretching across all the parliamentary parties. They also acted as a precursor for the model of social partnership which was to be adopted subsequently by employers and trade unions and which was to lead to a series of national bargaining agreements from 1980 to 1986, in which collective responsibility and wage restraint were to be prevailing features.
   The Pacts, while best remembered for their economic measures, also included political reform. On the political side they swept aside many of the constraints which still remained from the Franco legacy, addressing for example the need for increased freedom of speech and association and the reorganization of the police. At the same time the economic proposals sought to modernize the economy and included reforms in public spending, taxation and the financial system, measures to improve foreign trade and proposals for a new framework for industrial relations. Some measures were short term and others, such as industrial restructuring, were seen as much longer term. They asked for moderation and constraint by all groups in the interests of democracy and although, on the Left, the PCE and PSOE subscribed to them, critics in later years were to say that the working classes bore a disproportionate amount of the sacrifice and gained little from them.
   The success of some of the measures was immediate and far reaching: inflation levels dropped from 26.4 percent in 1977 to 16 percent in 1978 and monetary reserves doubled. Moreover, the restructuring which was to go on throughout a large part of the 1980s brought efficiency gains to industry. The price of this, however, was continuing high unemployment. Nevertheless, there is no doubt that the improvements in the Spanish economy that were achieved as a result of the Pacts, together with the political consensus, provided the economic and political stability over the following year which enabled the parliamentary parties to concentrate on drawing up the constitution of 1978, finalized in December. Hence it can be seen that the Pacts played an important role in helping to consolidate the fledgling democracy.
   Further reading
   - Carr, R and Fusi, J.P. (1979) Spain: Dictatorship to Democracy, London: Allen & Unwin (a clear analysis of the transition, including the Moncloa Pacts).
   - Preston, P. (1986) The Triumph of Democracy in Spain London: Methuen (an exceptionally readable and lively account of all aspects of the transition).

Encyclopedia of contemporary Spanish culture. 2013.

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