CAB80-13 — Page 128

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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT

TO BE KEPT UNDER LOCK AND KEY.

It is requested that special care may be taken to ensure the secrecy of this document.

Сг

113

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SECRET.

C10-S.(40) 466 (J.I.C.)

also J.I.C. (40) 122.

15TH JUNE 1940.

WAR CABINET.

CHIEFS OF STAFF COMMITTEE.

COPY NO

6.27

SITUATION IN SPAIN.

Report by the Joint Intelligence Sub-Committee.

Political.

Until recently the Spanish Government appeared to be decided as to the policy that should be adopted. Franco and a considerable majority gave the impression of being sincerely resolved to remain neutral, though a small minority headed by General Y'ague, Minister for Air and Serrano Suner were in favour of joining the Axis Powers, and it was always feared that Yague and his party might overthrow Franco and drag Spain into the war. Reports which have lately been received that considerable pressure was being brought to bear on Franco by the remainder of the Cabinet have tended to increase this impression. The appointment of General Jordana as President of the Council of State has temporarily strengthened Franco, but there is little doubt that he is now more inclined to follow Mussolini's lead, especially in view of the present situation in France.

It was realised that, in the event of Italy entering the war

a new situation would arise which might make it extremely difficult for Spain to maintain her neutrality. Franco has stated his intention to defend the Balearics against all comers, and considerable preparations have been made to that end, but in the present situation it is uncertain whether effectual resistance to Italian occupation could be made.

Present Position.

Spain has now inade a declaration of non-belligerency.

The occupation of Tangier, however, shows that the present Spanish Government has decided to increase Spanish power and is taking advantage of the situation of the Allies in order to do so, Whether Spain will be tempted to go further, such as to attack Gibraltar and allow herself to become a base for operations against the Allies it is not yet possible to say. The answer may well depend upon whether France continues to fight or not.

Economic Situation.

Spain has not yet recovered from the effects of the Civil War and her internal conditions are extremely bad.

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466 (J.I.C.)

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