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2017 | OriginalPaper | Chapter

3. The Nuclear Business and the Spanish Electric-Banking Oligopoly: The First Steps

Authors: Josean Garrués-Irurzun, Juan A. Rubio-Mondéjar

Published in: The Economic History of Nuclear Energy in Spain

Publisher: Springer International Publishing



Political and economic factors, both national and international, played a major role in implementing the Spanish nuclear program. Among the elements that the literature of the subject has explained in detail, one can find the US policy for the marketing of nuclear reactors, the financial facilities by the Export–Import Bank and the wishes of the Franco regime to break the international isolation and economic backwardness of Spain. However, in the end the electricity companies built the nuclear power plants privately. Therefore, understanding the Spanish nuclear business requires disentangling the companies and entrepreneurs involved and their logic of action within the Spanish industrial fabric from the 1950s through the 1960s, which is the aim of this chapter. The high fixed capital required by utility companies, coupled with the limitations of the Spanish financial system, demanded the participation of banks, which monitored their investments from their own executive teams. Nuclear investment elevated the long-existing symbiotic relationship between electric utilities and banks to a new level, strengthening the electric-banking oligopoly.
Two interesting exceptions are: Joseba De la Torre and M.d. Mar Rubio-Varas, “Nuclear Power for a Dictatorship: State and Business Involvement in Spanish Atomic Program, 1950–1985,” Journal of Contemporary History 51 (2016) and Luis Sánchez-Vázquez, “Uranio, reactores y desarrollo tecnológico: relaciones entre la Junta de Energía Nuclear y la industria nuclear española (1951–1977),” in La Física en la Dictadura. Físicos, Cultura y Poder en España 1939–1975, eds. Néstor Herran and Xavier Roqué (Barcelona: Universidad Autónoma de Barcelona, 2012).
Juan A. Rubio-Mondéjar and Jósean Garrués-Irurzun, “Economic and Social Power in Spain: Corporate Networks of Banks, Utilities and other Large Companies,” Business History 58 (2016): 858–879.
De la Torre and Rubio-Varas, “Nuclear Power for a Dictatorship: State and Business Involvement in Spanish Atomic Program, 1950–1985,” 365–411.
Luis Sánchez Vázquez, La legitimación de la energía nuclear en España: el Fórum Atómico Español, 1962–1979 (Granada: University of Granada, 2010).
A non-exhaustive selection can be found in: Javier Ordónez and José Sánchez-Ron, “Nuclear Energy in Spain. From Hiroshima to the Sixties,” in National Military Establishments and the Advancement of Science and Technology, ed. Paul Forman and José Sánchez-Ron (London: Kluwer Academic Publishers, 1996), 185–213; Francesc Barca Salom, “La política nuclear espanyola: El cas del reactor nuclear argos,” Quaderns d´Historia De l´Enginyeria 4 (2000): 12–44; Ana Romero de Pablos and José Sánchez-Ron, Energía nuclear en España: De la JEN al CIEMAT (Madrid: Ministerio de Ciencia y Tecnología, 2001); Francesc Barca Salom, “Les aplicacions dels isòtops a la indùstria durante el franquisme,” Quaderns d´Historia De l´Enginyeria 7 (2006): 1–44; Francesc Barca Salom, “Nuclear Power for Catalonia: The Role of the Official Camber of Industria of Barcelona,” Minerva 43 (2015): 163–81; Ana Romero de Pablos, “Poder político y poder tecnológico: El desarrollo nuclear español (1950–1975),” Revista Iberoamericana de Ciencia Tecnología y Sociedad 7 (2012): 141–62; Ana Romero de Pablos “Energía nuclear e industria en la España de mediados del siglo XX. Zorita, Santa María de Garoña y Vandellòs,” in La Física en la Dictadura. Físicos, Cultura y Poder en España 1939–1975 (Barcelona: Universidad Autónoma de Barcelona, 2012), 45–63.
M.d. Mar Rubio-Varas, “Nuclear Energy in Spain. A Research Agenda for Economic Historians,” in A Comparative Study of European Nuclear Energy Programs, ed. Albert Presas (Berlin: Max Planck Institute for the History of Sciences, 2011), 71–94; Joseba De la Torre y M.d. Mar Rubio-Varas, “El Estado y el Desarrollo de la Energía Nuclear en España, c. 1950–1985” (working paper, Asociación Española de Historia Económica, Madrid, 2014); Joseba De la Torre and M.d. Mar Rubio-Varas, “Nuclear Power for a Dictatorship: State and Business Involvement in Spanish Atomic Program, 1950–1985,” M.d. Mar Rubio-Varas and Joseba De la Torre, “Spain–Eximbank’s Billion Dollar Client: The Role of the US Financing the Spanish Nuclear Program” (working paper, Asociación Española de Historia Económica, Madrid, 2016).
Antonio Gómez-Mendoza, Javier Pueyo and Carles Sudrià, Electra y el Estado: la intervención pública en la industria eléctrica bajo el franquismo (Pamplona: Thomson-Civitas, 2006). Carles Sudrià and Antonio Gómez-Mendoza, Un siglo de luz: historia empresarial de Iberdrola (Madrid: Iberdrola, 2006).
Esther Sánchez-Sánchez, “La centrale nucléaire hispano-française de Vandellos: logiques économiques, technologiques et politiques d’une decisión,” Bulletin d’Histoire de l’Electricité 36 (2000): 5–30.
Joseba De la Torre and M.d. Mar Rubio-Varas, “La financiación exterior del desarrollo industrial español a través del IEME, c. 1950–1982,” Estudios de Historia Económica 69 (2015): 99–125.
Juan Muñoz and Angel Serrano, “La configuración del sector eléctrico y el negocio de la construcción de centrales nucleares,” Cuadernos de Ruedo Ibérico 63/69 (1979): 127–267.
Atoms for Peace was the name of the speech given by Dwight D. Eisenhower to the UN General Assembly in New York on 8 December 1953.
The President Harry S. Truman signed the Atomic Energy Act (McMahon Act) on 1 August 1946 passing atomic energy control from military to civil hands, brought into force on 1 January 1947.
In Spain, on 28 April 1949, the Nobel award-winner for Chemistry, Theodor Svedberg gave a conference at CSIC (Spanish National Research Council), under the presidency of the Minister of Industry and Commerce, Suanzes, titled “The Man and the Machine” in which the matter of transforming atomic energy, from military to civil use was addressed. ABC, 29 April 1949, 14.
See Chap. 2.
ABC 24-2-1952.
BOE, January 6, 1956. The United States signed nine bilateral agreements: Italy, Switzerland, Denmark, Turkey, Lebanon, Israel, Columbia, Brazil and Argentina.
The North American Nuclear Energy Subcommittee visited Spain in February of 1955. ABC, February 15, 1955, 16.
Both took part in the course on nuclear energy (7 months) in a laboratory in Chicago, titled “operación fraternidad” (operation Brotherhood). Doctor Gutiérrez Jodrá has already spent one year performing nuclear studies in Chicago. La Vanguardia Española, March 11, 1955. In March 1955, for instance, Carlos Sánchez del Río gave a talk called “Pacific applications of nuclear energy)” at Casa de América and ten months prior to that, Manuel Torres inaugurated a course on Social Economy and Politics with the conference “Economic Consequences of Nuclear Energy in the Industrialisation of Spain.” ABC, March 15, 1955, 24 and ABC, May 23, 5, 1954, 56.
A total of 16 Spanish representatives attended this event: seven of which were linked to the National Nuclear Energy Board (JEN), three from the State Administration and six from companies. Among the administrative representatives were the president of the National Institute of Industry (INI)—Suanzes—and the Vice-secretary of the Industry—Suárez. Among the Spanish representatives from private and public companies were: General Eléctrica Española, Iberduero, Hidrola, ENDESA, Hidro-Nitro and Sevillana de Electricidad. BOE, August 6, 1955.
Minutes of the Administrative Board in Iberduero , August 19, 1955, 367.
On this topic, the article of the José María Massip in ABC, April 25, 1956, 35, titled “Towards the economic and social performance of NATO” is illustrative. The idea of using this military organism, through the civil use of nuclear energy is proposed for economic progress and to link developing countries to American interests.
ABC, June 12, 1955, 55: “The United States will help free countries to produce atomic energy for peaceful purposes.” In order to have a more comprehensive overview of the subject matter, see Bertrand Goldschmidt, Las rivalidades atómicas, 1939–1968, trans. María I. Sanz (Madrid: JEN, 1969). See Chaps. 1 and 2.
ABC, October 28, 1955, 37.
ABC, August 21, 1955, 52–53. See Chap. 5.
ABC, September 23, 1955, 34. See Chap. 1.
Decree-Law of 9th February 1951 which establishes rules for its management; BOE, March 14, 1951. The Export–Import Bank of Washington acted as an American Administrative Agent. Decree of the 16 March 1951 which develops BOE, April 4, 1951.
Order of 19 July 1955 which created the Advisory Board of Industrial Reactors. BOE 24-7-1955.
Thus, the CADRI became an advisory body of the JEN, whose vice-president was: J. Mª Otero, and spokesperson: A. Colino (JEN), two representatives of the Industry Ministry, two from INI and, from private areas: J.L. Redonet, L. Torróntegui, J. Mª Oriol, M. Gortázar, A. García Vinuesa, and J. Cervera, and acting as a secretary, F. Goded.
ABC, April 3, 1956, 28.
ABC, June 5, 1956, 56, “Our Economic Situation” from a series of articles titled “Spain before the Atomic Era,” initiated on 27-4-1956 and written by Ricardo de Urgoiti.
De la Torre and Rubio-Varas, “Nuclear Power for a Dictatorship: State and Business Involvement in Spanish Atomic Program, 1950–1985”. Oscar Calvo-González, “American Military Interests and Economic Confidence in Spain under the Franco Dictatorship,” Journal of Economic History 67 (2007): 740–67. Oscar Calvo-González, “Neither a Carrot Nor a Stick: American Foreign Aid and Economic Policymaking in Spain during the 1950s,” Diplomatic History 30 (2006): 409–38.
Rubio-Mondéjar and Garrués-Irurzun, “Economic and Social Power in Spain: Corporate Networks of Banks, Utilities and Other Large Companies”.
The aforesaid phases, such as the fuel cycle, were unrelated to their traditional activity and the sole competence of the state for international security and protection purposes. The two phases of fuel refers to the mining and concentration of uranium, enriching, manufacturing of fuel assemblies (1st Phase), as well as its treatment after waste irradiation and storage (2nd Phase).
ABC, October 8, 1957, 23, on the World Agency of Atomic Energy for peaceful uses. Statements by José Sebastián Erice, Spanish Ambassador in Austria.
It replaced the agreement from 1955 and was ratified on 24 January 1958, BOE February 12, 1958.
As well as the establishment of agreements for material cessions and exportation, including equipment and devices, and furthermore, the provision of services when duly authorized. The Agreement, amended by the Agreement signed on 29th November 1965 was renovated on 20 March 1974. On 20 October 1976 the Peace and Cooperation Treaty between Spain and the United States with different complementary agreements which aimed to maintain nuclear cooperation for peaceful uses of the United States as long as Spain moved towards signing a Treaty to not proliferate nuclear weapons or put all their nuclear facilities under the safeguard of IAEA.
Order of 24 February 1957 which reorganizes the Industrial Reactors Committee. BOE, March 6, 1957. One year later, the Law of 17 July modified article 2 of the decree which founded the JEN, thereby establishing research and exploitation regulations for radioactive minerals by private companies, as they were going to receive radioactive minerals for its concentration and profit, on a par with the JEN “legal personality and administrative and economic autonomy” in comparison to the exceptional legal and economic bases maintained up until then. BOE, July 18, 1958.
In the conference “Towards a Nuclear Industry in Spain” considering the country’s mineral resources and the incapacity of having enriched uranium.
ABC, May 23, 1957, 41. He calculated that the investment made until 1977 would be approximately $2386 million US (UNESA) and $2401 million US (McLain).
The Decree-Law of 25 February 1957 on the reorganization of the State Central Administration which creates the General Management of Nuclear Energy for peaceful purposes in the Industry Ministry which would include everything concerning industrial and peaceful uses of this type of energy. The new General Management of the Nuclear Energy Board was assigned. BOE, February 26, 1957.
ABC, May 23, 1957, 41. In February 1958, on the occasion of the inauguration of the thermal plant of Escombreras, extended the deadline to 1965. ABC, February 27, 1958, 53.
ABC, July 13, 1957, 50.
Manuel Gutiérrez-Cortines, “Las centrales atómicas en los programas de construcción de las empresas eléctricas” (conference declared at the Mercantile and Industrial Union Circle, Madrid, February 1958), 6–7.
Ibid., 8–9.
ABC, February 27, 1958, 53.
Permanent Commission of Vizcaya Bank (hereinafter PC VB), March 16, 1953, 264. Archives of the Bank Bilbao Vizcaya Argentaria Bank (AHBBVA). Bilbao.
Rubio-Varas and De la Torre, “Spain—Eximbank’s Billion Dollar Client: The Role of the US Financing the Spanish Nuclear Program”.
It must not be forgotten that connections with North American teams were present from practically the early stages of the sector; especially with their two signature firms: International General Electric Co. and Westinghouse.
In the case of the Bank of Vizcaya and the Bank of Bilbao, at the beginning of 1951 they aimed to create a linking body to manage the industrial investment policy, providing continuity to the partial collaboration agreement politics which aimed for the exchange of bank shares in their corresponding businesses. See Fig. 3.1.
For example, The New York Times, May 3, 1949, 10, in the article titled “Spain Starts Talks with U.S. on a Loan. Washington Said to Abandon Political Objections to Deal With Export–Import Bank” commented that “Jose Maria Oriol, important industrialist, already has begun preliminary talks with the Export–Import Bank on orders from the Madrid Government” and after cited that “The United Press said that Andres Moreno, chairman of the Hispano-American Bank, left Madrid by plane Monday in connection with the negotiations.”
AHBBVA, PC VB, May 5, 1954, 229–30.
The remaining two were: the energy exchange regulations and presidency of UNESA.
AHBBVA, PC VB, July 26, 1955, 324.
AHBBVA, PC VB, August 4, 1955, 340.
The Bank entrusted the advisors Urrutia and Torrontegui to deal with the matter, “given the huge transcendence it could have for the economic future of Spain.” AHBBVA, PC VB, July 20, 1955, 316.
Gutiérrez Cortines was ex-General Directorate of Standard Eléctrica. AHBBVA, PC VB, July 22, 1955, 320 and AHBBVA, PC VB, August 26, 1955, 364.
AHBBVA, PC VB, September 12, 1955, 388. For clarification purposes, the advisor Torrontegui (chairman of Babcock & Wilcox) held a speech in the Bank on “the possible industrial uses of atomic energy.”
AHBBVA, PC VB, December 10, 1955, 154.
At the end of 1955, JEN discussed the position of the Bank of Vizcaya concerning nuclear energy. AHBBVA, PC VB, October 20, 1955 and AHBBVA, PC VB, December 10, 1955.
AHBBVA, PC VB, December 28, 1955, 128. Torrontegui contacted the English firm Babcock. AHBBVA, PC VB, January 14 1956, 156.
The chairman of Hidrola (Oriol) informed the chairman of Vizcaya of the project of INI. AHBBVA, PC VB, March 2, 223.
The chairman of the Bank of Vizcaya, some days after, discussed the topic with the chairman of Urquijo/Viesgo (P. Garnica Echavarría). AHBBVA, PC VB, March 7, 1956, 231.
Previously, the chairman of Vizcaya held a meeting with Otero to obtain information about his visit to England. AHBBVA, PC VB, March 12, 1956, 238.
AHBBVA, PC VB, March 14, 1956, 241.
AHBBVA, PC VB, August 14, 1956, 38.
AHBBVA, PC VB, August 14, 1956, 38.
AHBBVA, PC VB, August, 17, 1956, 42.
AHBBVA, PC VB, August 16, 1956, 40; AHBBVA, PC VB, August 17, 1956, 42; and AHBBVA, PC VB, August 30, 1956, 62.
AHBBVA, PC VB, July 3, 1956 and AHBBVA, PC VB, September 3, 1956, 71.
The advisor, Torrontegui, provided a fulsome discussion on the impression he had obtained from the American Congress of the Association of Manufacturers and highlighted the need to urgently discuss the matter. Torrontegui was the managing director of the American subsidiary Babcock & Wilcox in Spain, whose main branch was a pioneer in designing and manufacturing nuclear components in the United States. AHBBVA, PC VB, December 21, 1956, 228. AHBBVA, PC VB, December 20, 1956, 226.
AHBBVA, PC VB, December 31, 1956, 242.
AHBBVA, PC VB, January 23, 1957.
AHBBVA, PC VB, January 11, 1957, 260.
The meeting also discussed the authorization for implementing a research company around EIIB on power reactors, to issue expert certificates in nuclear energy (by JEN and EIIB) and in collaboration with the capital goods industry for mounting prototypes. AHBBVA, PC VB, February 2, 1957, 292 and AHBBVA, PC VB, February 4, 1957, 294.
AHBBVA, PC VB, January 16, 1957, 315.
AHBBVA, PC VB, October 15, 1957, 240; AHBBVA, PC VB, October 18, 1957, 246.
The banks of Vizcaya and Bilbao 80 participated in its creation, although later had doubts on their legal implication: doing it directly or using individual front men. AHBBVA, PC VB, December 6, 1957, 304. AHBBVA, PC VB, December 31, 1957, 388.
AHBBVA, PC VB, December 6, 1957, 304.
AHBBVA, PC VB, October 2, 1957, 220. The information INI’s involvement was provided by Oriol.
AHBBVA, PC VB, April 23, 1958, 108.
AHBBVA, PC VB, October 10, 1958, 337; AHBBVA, PC VB, November 27, 1958, 397.
AHBBVA, PC VB, November 14, 1958, 378.
AHBBVA, PC VB, December 5, 1958, 10.
AHBBVA, PC VB, December 5, 1958, 10.
AHBBVA, PC VB, May 1, 1960, 294.
AHBBVA, PC VB, April 7, 1961, 28.
AHBBVA, PC VB, April 10, 1961, 32.
There were 50 bodies as standing members; electrical companies (Hidrola, Iberduero, Viesgo, ENDESA, Hidroeléctrica del Cantábrico, Unión Eléctrica Madrileña, Sevillana or Hidruña); plant managers (CENUSA and NUCLENOR); auxiliary industry (CONUSA, BABCock and Wilcox, TECNATOM, Estudios and Proyectos Eléctricos); JEN; insurance companies (Unión Iberoamericana, La Estrella) and the Bank of Vizcaya. Luis Sánchez Vázquez, La legitimación de la energía nuclear en España: el Fórum Atómico Español, 1962–1979 (Granada: University of Granada, 2010), 99.
The role of the Spanish Atomic Forum as the representative of the nuclear sector in the public arena during the golden years of the nuclear power industry from the 1960s to the 1970s, in: Luis Sánchez Vázquez and Andrés Menéndez-Navarro, “Nuclear Energy in the Public Sphere: Antinuclear Movements vs. Industrial Lobbies in Spain (1962–1979),” Minerva 53 (2015): 69–88.
On this occasion, it is referring to electrical material but it could be applicable to the whole sector.
At the beginning of October 1972, upon the idea of a society of banks that would take part an official tender, the possibility of constituting a mechanical construction society was studied. The managing director of the Bank of Vizcaya (Gortázar) was in favour of giving freedom to subsidiary Babcock & Wilcox, for it to form an alliance with Maquinaria Terrestre y Marítima, Mecánica de la Peña, and Stein et Roubaix, at the same time as he deemed it would be appropriate to offer financial aid to the future society. AHBBVA, PC VB, February 10, 1972, 380. It was the origin of ENSA (see Chap. 2).
The Nuclear Business and the Spanish Electric-Banking Oligopoly: The First Steps
Josean Garrués-Irurzun
Juan A. Rubio-Mondéjar
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