Paradiplomacy and stateless nations: 
a reference to the Basque Country

Unidad de Políticas Comparadas (CSIC)
Working Paper 01-06
André Lecours and Luis Moreno
Concordia University and Spanish National Research Council (CSIC) 

"One of the less often discussed features of multinational societies is the effort of their constituent segments to become active internationally. Regional governments developing a foreign policy and conducting international relations, a phenomenon sometimes called ‘paradiplomacy’, is not unique to multinational societies; however, it is in this type of societies that the international activity of regions is most intense. This article argues that this is because paradiplomacy is primarily a function of stateless nationalism."

Summary Introduction Nationalism and the International Agency of Regions Paradiplomacy and Opportunity Structures Basque Nationalism 

Summary

One of the less often discussed features of multinational societies is the effort of their constituent segments to become active internationally. Regional governments developing a foreign policy and conducting international relations, a phenomenon sometimes called ‘paradiplomacy’, is not unique to multinational societies; however, it is in this type of societies that the international activity of regions is most intense. This article argues that this is because paradiplomacy is primarily a function of stateless nationalism. 

It suggests that the processes of nationalism (identity construction, interest definition/articulation and political-territorial mobilization) logically lead to regional governments seeking the development of an international personality, and specifies the theoretical links. 

It argues that paradiplomacy serves as a means for identity- and nation-building; that it sustains and promotes specific interest definitions such as cultural preservation; and that the inter-governments conflicts it involves provides opportunities for political-territorial mobilization. 

The article also suggests that the link between nationalism and paradiplomacy is conditioned by domestic and international opportunity structures: institutional and constitutional contexts; national representational arrangements and foreign policy agenda; continental regimes; the structure of the international system; and so on. 

In other words, structural contexts can provide opportunity for action for, and impose constraints on, regions, and therefore shape the ability of segments of multinational societies to operate on the international scene. These theoretical arguments will be highlighted using the case study of the Basque Country. The empirical analysis draws from statements about international relations contained in the programmes of Basque nationalist parties. 

1. Introduction 

One of the less commonly discussed features of multinational societies is the effort of their distinctive segments to become active internationally. This is most noticeable in Canada where Québec has developed considerable international contacts since the 1960s, and where Aboriginal populations have taken their claims to international forums. 

It has more recently become a striking characteristic of the Belgian political system as the Flemish and Walloon governments have, since the formal federalization of 1993, developed their own foreign policy and conducted their own international relations. 

In Spain, Catalonia and the Basque Country have been developing, according to the provisions of their own Statutes of Autonomy, a significant international presence. These developments have not gone unnoticed per se; rather, they have been associated with seemingly similar outcomes in other decentralized countries such as Australia, Germany and the United States and treated under the wider rubric of paradiplomacy, that is, the foreign policy/international relations of regional governments. 

There is nothing inherently flawed in considering the international activity of Québec, Flanders or Catalonia in relation to that of Queensland, Baden-Wurtemberg, and California, nor is it necessarily problematic to view all of those cases as instances of paradiplomacy. 

However, the tendency of theorists of paradiplomacy to view federalism as the most important explanatory variable for the international activity of regions generates an incomplete, even inadequate understanding of the phenomenon. Indeed, this position fails to recognize, and account for, the qualitative difference between this outcome in multinational and in nation-states. 

It marginalizes the importance of nationalism in explaining the breadth, scope and intensity of regions international activity in the former and its absence, or lesser prominence in the latter. Consequently, paradiplomacy, at least in its most developed form, needs to be re-conceptualized through a theoretical linkage with sub-state or stateless nationalism. 

This paper shows how nationalism logically leads regional governments to seek international agency.  The first section argues that paradiplomacy is a likely consequence of the existence of a strong nationalist movement because it provides opportunities for identity/nation-building, political-territorial mobilization and the promotion of regional interests. This does not mean that stateless nationalism is a necessary condition for paradiplomacy, or that the intensity of a region’s international activity is a straightforward function of the strength of a nationalist movement. 

Domestic and international structural contexts play an important role in conditioning the consequences of nationalism for regions operating internationally, and also in determining the likelihood of paradiplomatic activity in the absence of nationalism. This section suggests that regional autonomy, constitutional frameworks and the national foreign policy agenda are the crucial elements of this domestic context while political and/or economic continental regimes and the behaviour of foreign states and regions represent key elements of the international environment shaping paradiplomacy.

The third section examines the case of the Basque Country. It begins by discussing Basque nationalism and then shows how it is at the core of historical as well as contemporary Basque paradiplomacy. In addition to linking nationalism in the Basque Country to paradiplomacy, this section highlights the importance of such elements of the institutional environment as the EU, the French Pays Basque, the Basque Centres, the Autonomous Community system, and the Spanish foreign policy agenda in explaining and shaping Basque international relations. 

2. Nationalism and the International Agency of Regions 

Territorial forms of politics in advanced industrialized societies are undergoing a fundamental change with respect to their relationship with the ‘external.’ Domestic elements such as cultural diversity, institutional configurations, national and regional patterns of economic development and elite behaviour are still central to the study of regionalism and nationalism, but international processes, most importantly globalization and the construction of continental regimes, can no longer be marginalized. How can the international realm be integrated into a discussion of territorial politics? There are two angles. 

The first, and most straightforward, is to include variables such as global economic/technological change and supranational integration into an explanation for the presence and nature of nationalist/regionalist movements in Western societies. 

This angle of analysis has been the most popular as scholars are increasingly recognizing the importance of establishing causal relationships between external variables and domestic outcomes. It generally leads to suggestions that contemporary territorial politics is transformed by the international context, and therefore qualitatively different from earlier regionalist and nationalist movements (Keating, 1998; Moreno, 1999, Loughlin et al, 2001). 

A second, less visible and less discussed type of linkage between territorial politics and the ‘external’ involves domestic territorial units projecting themselves onto the international scene and, consequently, becoming international actors. In other words, another perspective on integrating international processes to territorial politics is to consider the latter an explanatory variable for one particular international process, namely the international relations of regions.

Regional governments operating beyond national borders is not a new phenomenon. Many American states from the South developed an international presence as early as the late 1950s to stimulate export and attract foreign investment while their Northern counterparts followed in the mid-1970s for similar reasons (Kincaid, 1999). 

Québec became internationally active in the wake of the 1960s Quiet Revolution; other Canadian provinces, most importantly Ontario and Alberta, did the same, albeit in a much more limited fashion, in the 1970s (Bélanger, 1994; Bernier and Thérien, 1994). 

The first Basque government (1936-1939) sent delegations abroad and had contacts with foreign governments, diplomats and other interlocutors in the context of the Spanish Civil War (Ugalde Zubiri, 1999).

Nevertheless, the international activity of regional governments, often called paradiplomacy, has acquired new prominence in the 1990s. In all of the cases previously mentioned, and others such as Australian states (Ravenhill, 1999), the scope and intensity of paradiplomacy has greatly increased in the last few years. 

Regions open offices and conduct ‘trade missions’ abroad; become involved in regional/international organizations; participate in regional/international conferences; establish bilateral relationships with states and other regions; and so on. This new prominence is the result of both domestic and international change: domestically, crucial processes include a surge in territorial politics and institutional transformations towards de-centralization, while internationally they correspond to economic globalization and the construction of supra-national institutions. Of foremost importance is the fact that these processes feed off each other to put pressure on central states and empower regions. 

Although the literature on paradiplomacy is still in its infancy, the new prominence of the phenomenon has not gone totally unnoticed. Indeed, new publications have added to the empirical scope of existing studies, and raised new questions about the meaning of regional governments acting internationally (Aldecoa and Keating, 1999; Palard, 1999). 

However, one key proposition has remained about paradiplomacy: federalism constitutes its most important theoretical determinant. 

This linkage probably derives from the fact that scholars of federalism were the first to write on paradiplomacy, and that international relations specialists who have also taken interest in the topic tend to have as their central research question the role of constituent units in the foreign policy-making of federal states (Michelmann and Soldatos, 1990; Hocking, 1993). 

While there is most certainly a connection between federalism and paradiplomacy, the idea that the former can essentially explain the latter is questionable. Constituent units of federal (or decentralized) states may conduct paradiplomacy, but not all regions of a same state develop international personalities. Furthermore, those regional governments which have been most active internationally (Québec, Flanders, Wallonia, Catalonia, the Basque Country) share one common feature: nationalism. 

Empirical evidence shows that regions which have been most successful in becoming international agents are penetrated by strong nationalist movements. Indeed, nationalism involves three processes (Lecours, 2000) which can be logically and functionally related to paradiplomacy. 

The first process is identity construction and consolidation. Nationalism is a form of identity politics. It involves establishing boundaries between groups by providing objective markers such as language with subjective meaning. Identities are constructed and consolidated through a variety of mechanisms whose relative importance vary from one situation to another: cultural change, institutional development, socio-economic transformations, or political context/competition.

 However, above and beyond these structural variables, the articulation, and therefore construction, of the identities underlying nationalism is ultimately the product of discursive practices. Creating and shaping national identities necessitates ‘speaking the nation’, that is, promoting the idea of a national community. These claims have most impact when put forward by political leaders since, in the context of liberal-democracies, they combine popular legitimacy with policy-making powers. 

The development of a region’s international presence constitutes for nationalist leaders an additional opportunity to build and consolidate a national identity. Indeed, the discourse of international relations is one of nations and, considering that states and nations, are systematically conflated, so is international relations practice. In other words, the very definition of international agents, at least with respect to territorial-institutional units, entails nationhood. From this perspective, the development of an international agency on the part of a regional government is full of symbolic meaning, and therefore an attractive strategic option for nationalist leaders. 

There are forms of paradiplomacy which are more significant than others with respect to identity construction and consolidation, namely those involving most specifically, albeit implicitly, a recognition by one or more sovereign states of the legitimacy of a region as an international actor. Bilateral relationships with states, as the closest thing to traditional diplomacy, are particularly important symbolically. So is participation in regional and international organizations/conferences. 

The relevance for identities of these acts of paradiplomacy is not limited to the acts themselves; as important is the fact that these highly visible paradiplomatic activities give nationalist leaders the opportunity to play to their domestic audience. They provide a scene from which nationhood can be proclaimed most forcefully, as foreign, regional or even international focus offers legitimacy and discursive/communication opportunities. 

In short, through paradiplomacy, regions can both behave as nations and present themselves as such. 

The second process of nationalism is the definition and articulation of regional/group interests. Indeed, the development of subjective communities associated with the erection of boundaries between groups involves not only identities but also a specific conception of the common good, or at least the identification of certain elements which should be promoted and/or defended. In turn, the regional/group interest definition is linked to, and becomes an integral part of, the collective identity. 

There are generally two dimensions to this definition. The first is centred on culture. In building and shaping identities, nationalist movements emphasize and politicize cultural distinctiveness; consequently, they tend to define the ‘national interest’ primarily in terms of cultural protection/preservation. The second dimension is more clearly ideological. The emergence of nationalist movements tends to be associated with, and supported by, ideologically-specific political forces. This has been the case in Flanders, where the Flemish Movement is strongly associated with the Christian-Democracy, and in Québec where nationalism is close to trade-unions and left-leaning organizations. As a result of these linkages, nationalist movements, and the regions they seek to represent, although never monolithic, often have an ideological personality. 

Processes of interest definition and articulation are highly intelligible in international politics. After all, traditional foreign policy is fundamentally about the definition, defence and promotion of a (state) national interest. This is why the interest component of paradiplomacy is the most straightforward and visible; indeed, regional governments operating on the international scene adopt state-like discourses, that is, they express preferences in the context of a ‘national interest framework. 

These preferences may be ideological in nature, and therefore lead regional governments to take stand on such issues as free-trade or the social nature of the European Union. In such cases, the issues put forward by paradiplomacy may be understood in terms of domestic dynamics surrounding nationalism. Paradiplomacy preferences may also follow the cultural aspect of interest definition. In fact, cultural defence and promotion tend to be the most important issues of paradiplomacy because they are central to its underlying force, nationalism. 

Paradiplomacy extends the domestic struggles of nationalist movements for cultural preservation into international politics. 

The Québec government, for example, expresses concerns over the linguistic nature and consequences of such international processes as globalization and the liberalization of trade, a preoccupation stemming from its domestic struggle for the prominence of French in Québec society. Culture therefore shapes the foreign policy agenda of regional governments, including targeted interlocutors. Flanders’ paradiplomacy focuses on countries such as the Netherlands, Surinam and South Africa where there exists a cultural kinship (Massart-Piérard, 1999). 

The third process of nationalism is political-territorial mobilization. Nationalism is a form of politics, and therefore is fundamentally about power. The development of nationalist movements is the product of power struggles between and within groups. It involves most importantly competing political elites claiming to speak on behalf of communities, that is, presenting themselves as their ‘true’ and legitimate voice. 

In liberal-democracies where political legitimacy ultimately emanates from civil society, nationalist leaders seek popular support, in the form of political mobilization, to substantiate their various claims (representation, policy, institutional arrangements, and so on). 

The peculiar feature of nationalism compared to other forms of politics is that mobilization has to have a territorial basis; indeed, nationalist leaders need to structure mobilization in a way that transcends social cleavages and emphasizes a commonness linked to territory. 

Political-territorial mobilization, although generally sporadic and fluctuating in intensity, is necessarily a feature of nationalism because it underlies both claims for power and for policy/institutional change. The power of nationalist leaders rests on the prominence, even the hegemony, of nationalism as a form of politics. In turn, this state of affair is itself conditional to popular support, as is the ability of these leaders to bring about policy and institutional change corresponding to their specific claims, usually formal recognition/distinct status, autonomy, federalization or independence. 

Political-territorial mobilization as a process of nationalism may be logically related to regional governments looking to develop an international agency. The peculiarity of paradiplomacy as a form of international expression is its highly conflictual domestic dynamic. Paradiplomacy does not merely feature conflict over the definition of foreign policy objectives as is the case for traditional (state) diplomacy; it also involves struggles over the very expression of the foreign policy. States rarely welcome the idea of regions ‘going abroad’; in fact, they tend to oppose it vigorously. Some regional political forces may adopt a similar attitude. 

Consequently, paradiplomatic activity, particularly in its most visible forms (regional-international conferences, bilateral relationships with states, and so on), present nationalist leaders with opportunities to stimulate political-territorial mobilization because it pits the region against the centre, and sometimes regional nationalist forces against non-nationalist ones. Since foreign policy is one of the last reserved domain of the state, paradiplomacy represents, in the context of domestic politics, a statement about power. It can therefore be understood not only as the emergence of new actors on the international scene, but also as the most recent dimension of historical territorial conflicts whose most prominent and acute manifestation is nationalism and nationalist mobilization. 

Paradiplomacy is closely linked to political-territorial mobilization not only because it represents an additional variable in political conflicts and power struggles which tends to provide opportunities for stimulating this process, but more specifically because it can serve as a tool for achieving domestic policy objectives. The development of a strong international personality gives regional leaders a prestige that can be used as leverage in negotiations on constitutional and institutional change. 

In fact, a region which is very active internationally projects the notions of distinctiveness and autonomy in a way that may lower the degree of contention surrounding certain regional claims and demands. In the special cases where institutional change sought by a regional government is independence, international activity becomes a functional necessity. Secessionist forces need to establish an international network and present their project to foreign states in the hope of obtaining formal recognition following an eventual declaration of independence. 

3. Paradiplomacy and Opportunity Structures 

Nationalism is the single most important variable conditioning paradiplomacy. Regions where there are strong nationalist movements are much more likely to develop an international presence than regions where no such movement exists. Also, the paradiplomacy of the former is generally more intense and extensive than that of the latter. However, structural contexts, both domestic and international, also play an important role in determining the likelihood of regions becoming international actors because they provide opportunities for action while imposing constraints. These contexts also shape paradiplomacy agendas because they dictate the type of opportunities available to regional governments. 

Three elements of the domestic structural context are particularly important in conditioning the international agency of regions. The first is the level of autonomy enjoyed by a regional government. As previously mentioned, the literature on paradiplomacy has typically considered the linkage between federalism and the international activity of regions to be of foremost importance. 

While we have argued that nationalism is the critical variable, the structure of territorial distribution of power also needs to be considered. 

Federations, and some other decentralized systems such as Spain’s Autonomous Communities and devolution in the United Kingdom, create regional agents. In turn, this agency is susceptible to developing an international dimension, and the greater the regional autonomy, the better the opportunity for paradiplomatic activity. This means that the active paradiplomacy of Québec and Flanders, while primarily explained by nationalism, is also shaped by the decentralized structures of the Canadian and Belgian federations. Similarly, the weaker international presence of American and Mexican states, while primarily the result of the absence of nationalist movements, is partially attributable to the more centralized federalism in the United States and Mexico. 

The constitutional framework accompanying these institutional arrangements represents a second element of the domestic structural context that shapes paradiplomacy. Typically, constitutions are not conducive to regions operating in the international arena; they tend to make international affairs the reserved domain of the central state. 

Some constitutional frameworks are particularly austere in this respect and, as a consequence, make paradiplomatic activity quite difficult. 

Mexico’s constitution, for example, explicitly forbids regions to sign agreements with foreign powers. The stranglehold of the federal government on international relations stemming from this original 1917 provision was further reinforced in 1988 when the constitution was modified to give the president power over ‘foreign policy’ rather than the narrower ‘diplomatic negotiations’ (Julián Durazo-Hermann, 2000). 

At the other end of the spectrum are the (rare) constitutions which explicitly give regional governments power over some aspects of international affairs. 

These constitutional frameworks remove a crucial obstacle for regions to access the international sphere and, as a result make paradiplomacy more likely. The 1993 reform of the Belgian constitution, which included a transfer of power to the constituent units with respect to international affairs, triggered a flurry of international activity from governments in Flanders, Wallonia and the French-speaking Community. 

Finally, the focus of a national foreign policy, and of international affairs more generally, also conditions the opportunities for paradiplomacy. In a context where strategic and military issues are emphasized, regions have little to say since defence policy remains the exclusive prerogative of central states. 

There is more room for regions to find their way onto the international scene if cultural and economic issues are more prominent, as regional governments often have, in virtue of the domestic distribution of power, an initial interest and some degree of empowerment with respect to these matters. It is no coincidence that paradiplomacy has become more important since the end of the Cold War; indeed, the breakdown of the conceptual categories of ‘high’ and ‘low politics’ has rendered national foreign policy agendas less hierarchical and therefore more likely to attract the attention of regions. 

It is interesting to note that these three sets of domestic opportunity structures which complement nationalist movements in analyzing the origins and nature of paradiplomacy tend to be most favourable when these movements exist. In other words, the domestic structural context can not always be neatly separated from nationalism. Great regional autonomy is often, although not always, the product of nationalism. Constitutions that give regions power over international affairs are likely to have their roots in nationalist conflicts as is the case for Belgium. Culture as a foreign policy issue may be important to various types of states, but particularly for multinational ones which tend to be naturally sensitive to cultural differences. 

The international agency of regional governments in the West is also shaped by at least two sets of international structures. The first set of structures is continental regimes. In Europe, the EU represents a political regime which provides regions with the opportunities and impetus to act beyond national borders. It does so in at least three ways. At the broadest level, the EU has fundamentally changed the nature of the West European state by capturing some of its sovereignty. In doing so, it has changed the way political actors view the state, from a coherent, monolithic unit serving as the only possible linkage between inside and outside to a perforated entity, and invited previously domestic actors such as regional governments to take advantage of the new openings to access the international scene. 

Second, EU policies such as structural adjustment programs which make regions their central units build regional governments as potential international actors by establishing a conceptual and political link with the ‘outside’. Third, the EU, through the Committee of Regions, offers immediate channels for regional governments to become international actors (Hooghe and Marks, 1996). Not only does the Committee present regions with a concrete opportunity to operate beyond national borders, but it also draws regions which might not have the means or motivations to actively seek an international role. In other words, the EU can be seen not merely as an opportunity structure, but indeed as a force behind the very international agency of some West European regional governments. 

Of course, the EU is also an economic regime. As such, it also shapes the relationship between regions and the ‘outside’, as does less developed free-trade structures like those existing in North America. Continental economic integration, and the larger process of globalization, has diminished the capacity of states to structure the domestic economy, including and perhaps most importantly their ability to tackle issues of territorial economic inequalities and discrepancies. 

Consequently, states losing power to market forces is a particularly significant development for regions (Courchene, 1998). In response to this weakened leadership of central states in governing the economy, many regional governments have taken upon themselves to actively seek to attract foreign investment and promote exports. These are core objective of most, if not all paradiplomacies, and they involve some international network/action: offices abroad, trade missions, and so on. Economic integration and liberalization of trade, because they come with a set of norms and rules, also involve challenges to forms of socio-political and cultural organizations that may be specific to some regions. Consequently, some regional governments (Québec for example) have viewed the development of an international voice as a necessary condition for dealing effectively with these processes. 

The second set of international structures shaping paradiplomacy is the state system. Regional governments are generally excluded from formal bilateral and multilateral relationships. In fact, traditional diplomacy has been built around the sovereign state, and the rules and procedures which structure it have further reinforced the hegemonic role of states as actors of international politics. However, states are increasingly willing to have bilateral relations with regional governments. Flanders, for example, has signed co-operation agreements with Canada, the United States, South Africa, Russia and Japan (Massart-Piérard). 

Some states have in fact developed particularly significant relationships with foreign regions. France, for example, treats the Québec premier very much like a head of state, and deals with the province in a fashion approximating its traditional bilateral relations. These opportunities for regional governments to enter into formal relationships with states give them new legitimacy and enhances their international personality. Finally, bilateralism in paradiplomacy is not limited to state-region relations; in fact, the bulk of paradiplomatic activity occurs between regional governments, that is, in the form of inter-regional and trans-border/transnational relationships. 

The Four Motors of Europe, an organization composed of the regions of Rhône-Alpes, Lombardy, Catalonia and Baden-Whrttemberg which seeks closer economic, social and cultural cooperation, is a well-documented instance of this type of paradiplomacy. Bilateral relationships between regions trigger a dynamic process which is central in developing the international activity of regions: indeed, because these relationships are not contingent on foreign states recognizing regions as international actors, they offer great potential for the autonomous development of regional governments’ international legitimacy, an outcome which in turn fosters these same transnational relationships. 

4. Basque Nationalism 

The precedent theoretical arguments will be highlighted, in the following sections, using the case study of the Basque Country. The first empirical section reviews relevant historical events with the purpose of framing the nature of political nationalism in the contemporary Basque Country. It also presents some reflections on the crucial 2001 Basque elections, with special attention given to the analysis of the electoral claims put forward by the main Basque parties. The second case study section ties in Basque nationalism with the paradiplomacy of the government of the Basque Country. 

The Basque Country is geographically situated at the Western end of the Pyrenees and covers territories in both Spain and France. The most populated area of the Basque Country is in Spain, which is a compound state incorporating various degrees of internal ethnoterritorial plurality. 

Modern political unification of Spain took place by means of a dynastic union under the Catholic Kings in 1469 (Isabella of Castile and Ferdinand of Aragon). However, its constituent territories (crowns, kingdoms, principalities, dominions, or provinces) maintained their autonomous existence. The incorporation of such territories to the Hispanic monarchy was achieved at an early stage of the European Modern Age, centuries before the processes of national homogenization was carried out by other European monarchies. 

Prior to the union of the Catholic Kings, the Castilian princes had brought through conquests and royal marriages the unification of Leon and Castile (1230), as well as the incorporation of the Basque provinces of Guipuzcoa (1200), Alava (1332) and Biscay (1379). According to Salvador de Madariaga (1979), the three Basque provinces were not constituent units of the Basque Country. This has rather been a modern political creation. But all three provinces took good care of their fueros, or local rights and traditions, before and after they joined the Castilian Crown: “They would not recognized Lord or King without the prior and solemn pledge for honouring their fueros” (Pi i Margall, 1911: 251). 

During the XIX Century, many territories of Spain, particularly those with a strong historical identity and a tradition of self-government, perceived liberal centralism as unnatural and stifling. This, in turn, provoked these regions to demand the restitution of their fueros or ancient rights to autonomy. Navarre, the Basque provinces and Catalonia contested attempts at centralist reform most vehemently. The circumstances of the time ensured that the rebel Carlists were able to benefit from the peripheral hostility towards government in Madrid. 

After the Carlist defeats in the civil wars of 1833-40, 1846-48, and 1872-1875, the Basque Nationalist Party (Partido Nacionalista Vasco–Euzko Alderdi Jetzalea, PNV-EAJ), was founded in 1895 by an early Carlist, Sabino de Arana Goiri. In its early stages, Arana’s nationalist proposals developed in the province of Biscay, not in the whole of the Basque Country, with the label of bizkaitarrismo. In 1893 Arana published Bizcaya por su independencia (Independence for Biscay). A the beginning of the XX century, the PNV-EAJ was less successful in contesting elections than the Catalanist Lliga and in obtaining a class-wide support, partly because of its religious emphasis and its ethnocentric claims. Early Basque nationalism stressed traditional community values that were opposed to bourgeois industrial society, the effects of which involved a considerable influx into the Basque Country of migrants from the rest of Spain. 

Primitive Basque essentialism of a racist character was the ideological basis of early Basque nationalism, which combined with powerful populist elements and ethnoreligious exclusivism to produce a discourse quite distinct from that of Catalan nationalism. This latter ideology was more intellectual and less folkloric, and has always been less secessionist. It possibly provoked greater resistance than Basque nationalism because it offered an alternative view of Spain, something which the Basque frequently turned its back on. Both nationalisms, however, could be seen as political manifestations of a vigorous and prosperous periphery, which contrasted with the inept and parasitical centralism of the Spanish state to which it was subordinated. 

In spite of its short existence, the Second Republic (1931-39) contributed largely to the resolution of ethnoterritorial conflicts in Spain. The most notable improvement was the constitutional design of the state following a regionalized model, situated somewhere between a unitary and a federal state. This led to Statutes of Autonomy for Catalonia, the Basque Country and Galicia. 

Three days after the proclamation of the Second Republic in 1931, an assembly of Basque mayors gathered by José Antonio Aguirre, leader of the Basque Nationalist Party, claimed their right to autonomy within a Spanish federal republic, by the legendary Oak of Gernika. Months later, another assembly of mayors met in the city of Estella (Lizarra) and passed the proposal for a Statute of Autonomy, ratified also by the Navarran local councils and the Carlist representatives. Nevertheless, parliamentary approval of the proposal by the Spanish Parliament was thornier than the Catalan Statute. 

A new Statute project for the Basque Country was prepared in 1932, but rejected by the Navarran local councils. By the end of the following year, the statutory project did not include Navarre and was supported in a referendum by 47 per cent of Alavese, and almost 90 per cent of Biscayans and Guipuzcoans. The proposal was put forward in the Spanish Parliament in December of 1933, but two years later it had still not been passed. After the left-wing victory of the Popular Front in the February 1936 elections, the members of parliament for the Basque Country presented the proposal approved by referendum in October 1933 once more to Parliament. By the beginning of the Civil War, the Parliamentary Commission had practically completed its approval. On 1 October 1936, the Basque Statute of Autonomy was passed, with similar rights and powers to that of Catalonia. 

After the Civil War, the country fell firmly into the hands of a deeply centralist reactionary coalition, which had even ‘imperialist’ pretensions. The end of the dictatorship did not occur until General Franco died in 1975. Paradoxically, Franco’s dictatorship provided the atmosphere necessary for today's regionalism, autonomism, and nationalism, although it remains true that, strictly speaking, separatism and federalism have older roots. The ability of sub-state nationalism to overcome ideological and political divisions manifested itself in cases of substantial consensus among the forces opposing the Francoism. 

In the Basque Country, the secessionist guerrilla group ETA found considerable popular support, and given the oppressive political circumstances, became intertwined with the democratic movement. In 1973, ETA assassinated Admiral Carrero Blanco, Franco's Prime Minister, appointed by the dictator to become his political heir. Those who then advocated political violence against the Franco dictatorship were not regarded without sympathy by many sectors of the population, and not only in the Basque Country. With the advent of liberal democracy, many of these people would eventually distance themselves from ETA and the intensification of its actions. The military nucleus of ETA continued to insist that the militants of the Basque national liberation movement were the only victims of police torturers and of the representatives of centralist oppression. 

The democratic of 1978 Constitution was made possible by a wide inter-party agreement. Conservatives, Centrists, Nationalists, Socialists and Communists ended up hammering out an agreement for the implementation of the federalizing Estado de las Autonomías. The accepted solution took the form of an unwritten pledge to extend the procedures of political dialogue and consociationalism into the future. This open model of asymmetrical federalization did not presuppose the ways and means by which the different ‘historical nationalities (Basque Country, Catalonia, Galicia) and regions could finally be articulated (Moreno, 2001). 

During 1978-98, Spain has witnessed a deep process of decentralization and regional self-government. Spanish mesogovernments have the final budgetary say in the running of ab novo programmes, which have been the product of their own political initiative. Table 1 shows the territorial re-allocation of public spending in the last twenty years, with an impressive expansion of regional expenditure. Despite claims put forward by local authorities and municipalities to have a greater share of the total public expenditure, the increase has so far been of little more than 3 per cent, whereas regional spending has climbed 30 percentage points. 

The exercise of home rule implies the setting of budgetary priorities within the aggregate of policies and services to be complied statutorily. Certainly, the Basque Country and Navarre with a system of fiscal quasi-independence have been able to fund more generously their policies. The financial system of concierto allow them to collect main taxes such as income tax, corporation tax and VAT and, since 1997, those corresponding to ‘special taxes’ (petrol, tobacco and spirits). Thus, Basque and Navarran institutions collect practically all taxes. 

Subsequently, they transfer a previously agreed quota to the Spanish central treasury. These transfers represent compensation for Spanish common expenditure, and to cover the costs of running those state administrative bodies. Consequently, the per capita level of public expenditure in the Basque Country is much higher as compared to the Spanish mean. Compared with the autonomous public spending in Catalonia, the Basque per capita expenditure is 1,8 higher (NB. According to 1995 data, the mean non-financial per capita spending carried out by Catalonia and Galicia was 228,378 Ptas., which compared to 417,256 Ptas. in the Basque Country). 

During this period of home-rule-all-round (1978-2000), the situation in the Basque Country has been highly conditioned by political violence and, in particular, by an intensification of the terrorist strategy carried out by ETA. A third of all the assassinations by ETA occurred during the critical period of transition to democracy (1978-80). 

A second wave of terrorism coincided with the formation of a nationalist/non-nationalist coalition government by PNV-EAJ and PSE/PSOE. Such a course of action has followed the action-repression-action spiral first deployed by ETA during late Francoism, and which aimed at consolidating a counter-state and counter-society --the latter of some numerical significance-- operating with their own laws and code of conduct (Letamendía, 1994). 

As a reaction to this strategy of violence, a Basque democratic inter-party platform in search for consociational solutions to achieve peace was articulated. During the period 1988-98, all major democratic parties operating in the Basque Country set up the Pacto de Ajuria Enea with the aim of co-ordinating their policies against terrorism. This Pact was in line with the societal reaction against ETA’s terrorism (Llera, 2000). 

On 12 September 1998 the Pacto de Lizarra (Estella), inspired by the 1998 Good Friday Agreement in Northern Ireland, was signed by the Basque nationalist parties'