By Diane Ethier (auth.)
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Additional info for Economic Adjustment in New Democracies: Lessons from Southern Europe
Because of their limits, their contradictory effects8 and the impact of the recession at the beginning of the eighties, the UCD measures were unable to prevent a worsening of the economic crisis. First of all, the stabilization policies did not produce the desired effect. 3 million pesetas. Second, the structural changes were insufficient, with the result that the major problems identified by the Pactos de la Moncloa, including the social security and public corporations deficit, and the uncompetitiveness of industry, still persisted.
In the public sector proper, restructuring took various forms: (a) the liquidation of non-viable companies (including Diajes Ita, Aplesa, Potasas de Navarra); (b) the reduction of production capacity in excess companies, through the complete or partial closure of certain factories (including the aluminum plants of Valladolid and Aviles, the Sagunto blast furnaces, the Enfersa fertilizer company at Puntes de Garcia Rodrigues); (c) the restructuring of an entire industrial sector (such as that of Resol in 1987); (d) the internal restructuring of a branch of a state holding (for example, branches of the INI's electronics and armaments); (e) the merger of enterprises (such as the Alugasa and Endasa aluminum operations); (f) the sale or the ceding of certain companies to other public holding companies (for example, the sale of INI's food companies to Tabacalera in 1988); (g) the specialization or diversification of production; (h) technological modernization; (i) upgrading the effectiveness of product quality management methods; (j) the privatization of companies.
It contained several provisions of a socialist nature, including Article 89, which stipulated that 'the development of the revolutionary process imposes the collective appropriation of the means of production and the confinement of the private sector to a residual role at the economic level', and Article 105 which stipulated 'a progressive and effective socialization of the economy' and announced 'the creation of a socialist society'. The first minority constitutional government of the PSP, directed by the moderate and modernist partisans of Mario Soares, nonetheless adopted a liberal-leaning economic policy.