II.

Aznar’s First Term

In government he concentrated on improving Spain’s public finances, to make the country eligible to join the first wave of European Economic and Monetary Union (EMU), beginning with a public-sector wage freeze announced immediately after he took office. Aznar was prominent in a nationwide wave of revulsion after the murder of a young Basque Popular Party councillor by ETA in July 1997. In September 1997 he threatened to block incorporation of central and eastern European states into the EU, if the EU programme of special economic aid to poorer countries (which had benefited Spain) were ended. In September 1998 he responded to the announcement of an indefinite ceasefire by ETA with hints of concessions to secure peace. In February 1999 the Aznar government tightened border controls at Gibraltar to pressurize the British government to review its stance on sovereignty of the territory, although this caused legal action at European level to be considered in June—a solution to the problem of the island's administrative status was eventually signed in April 2000. ETA announced an end to its ceasefire in November 1999, blaming the intransigence of the government in negotiations. Despite this Aznar was re-elected prime minister with an increased share of the vote in the March 2000 election, and he pledged to continue the free market reforms that had created strong economic growth and a reduction in unemployment from 23 to 15 per cent during his first term.