The Moncloa Pacts () (full title: the Agreement on the Program of Sanitation and Reform of the Economy and the Agreement on the Program of Legal and Political Action) were economic and political agreements to address inflation and unemployment during the

Spanish transition to democracy The Spanish transition to democracy, known in Spain as (; ) or (), is a period of History of Spain, modern Spanish history encompassing the regime change that moved from the Francoist dictatorship to the consolidation of a parliamentary system ...

and were signed on October 15, 1977 at the

Palacio de la Moncloa The Palace of Moncloa (), also known as Moncloa Palace or La Moncloa, is the official residence and workplace of the President of the Government (Spanish: ''Presidente del Gobierno''), a position usually known in the English language as the Prime ...

by representatives of the major labor unions — the

Unión General de Trabajadores The Unión General de Trabajadores (UGT, General Union of Workers) is a major Spanish trade union, historically affiliated with the Spanish Socialist Workers' Party (PSOE). History The UGT was founded 12 August 1888 by Pablo Iglesias Posse i ...

(UGT) and the Confederación Nacional de Trabajadores (CNT) and the government. The objective was to reduce the foreign deficit and reduce inflation. After signing, the Pacts were ratified by Spain's Congress of Deputies on October 17 and the Spanish Senate on November 11.

Economic problems

Spain's first democratically elected government faced many economic issues when it was elected in June 1977. These included the petrol crisis of 1973 (which had taken some time to reach Spain), the rise of unemployment to 7% exacerbated by a return of emigres to Spain after the death of

Francisco Franco Francisco Franco Bahamonde (born Francisco Paulino Hermenegildo Teódulo Franco Bahamonde; 4 December 1892 – 20 November 1975) was a Spanish general and dictator who led the Nationalist faction (Spanish Civil War), Nationalist forces i ...

, inflation rising to 40%,

capital flight Capital flight, in economics, is the rapid flow of assets or money out of a country, due to an event of economic consequence or as the result of a political event such as regime change or economic globalization. Such events could be erratic or ...

in the last years of the dictatorship, businesses that had become used to the

corporatism Corporatism is an ideology and political system of interest representation and policymaking whereby Corporate group (sociology), corporate groups, such as agricultural, labour, military, business, scientific, or guild associations, come toget ...

and interventionism of Franco's regime and the legalisation of unions which sometimes took a confrontational stance in the face of a wage freeze and devaluation of the peseta.

Previous conversations

Before the Pacts

Adolfo Suárez Adolfo Suárez González, 1st Duke of Suárez (; 25 September 1932 – 23 March 2014) was a Spanish lawyer and politician. Suárez was Spain's first democratically elected Prime Minister of Spain, prime minister since the Second Spanish Republi ...

had engaged with Socialist Party leader

Felipe González Felipe González Márquez (; born 5 March 1942) is a retired Spanish politician who was Prime Minister of Spain from 1982 to 1996 and leader of the Spanish Socialist Workers' Party from 1974 to 1997. He is the longest-serving democratically- ...

and Communist Party leader

Santiago Carrillo Santiago José Carrillo Solares (18 January 1915 – 18 September 2012) was a Spanish politician who served as General Secretary of the Communist Party of Spain (main), Communist Party of Spain (PCE) from 1960 to 1982. He was exiled during ...

. His goal was to establish a more stable government since he lacked a majority in the parliament. For its part, the Opposition, as well as a portion of Suarez's own government, the Union of the Democratic Centre (UCD), wanted a

constituent assembly A constituent assembly (also known as a constitutional convention, constitutional congress, or constitutional assembly) is a body assembled for the purpose of drafting or revising a constitution. Members of a constituent assembly may be elected b ...

Negotiations

Enrique Fuentes Quintana at Suárez's behest engaged in talks with the newly legalized unions such as

General Union of Workers A general officer is an officer of high rank in the armies, and in some nations' air and space forces, marines or naval infantry. In some usages, the term "general officer" refers to a rank above colonel."general, adj. and n.". OED Online. Mar ...

and

Workers' Commissions The Workers' Commissions () since the 1970s has become the largest trade union in Spain. It has more than one million members, and is the most successful union in labor elections, competing with the Unión General de Trabajadores (UGT), which is ...

(''CC.OO'') in order to reduce industrial conflict. The

(''UGT'') and the CNT were at first opposed to the proposals for a pact. However the CNT was the only body who wholly rejected it. The agreements meant that the unions and the left would accept a wage freeze and moderate their demands in return for promises of fiscal, legal and institutional reform such as a property tax and income tax, parliamentary control of the media, measures to put a break on housing speculation, a review of the Military Justice Code and improved social security and free education.

Results

Inflation did fall and the deficit showed a marked fall but unemployment kept rising and there was no reduction in strikes. In addition there was no oversight of the promises for structural reforms and many were shelved or were cut dramatically. The success of the Pacts was more political than social or economic as the left accepted thereby that their claims in future would be "bound by the constraints of the market economy" and the Government had the legitimacy and consensus to move forward with drafting the Constitution.

References

Bibliography