Spain's Cabinet Reshuffle Reflects Tilt to Political Center

WHEN Spanish Prime Minister Felipe Gonzalez Marquez called early legislative elections in October 1989, he said his purpose was to give the government the stability it would need through 1992 to prepare for the European Community's single market. By the time the Spanish leader got around to a thorough reshuffling of his Cabinet last week - 16 months after the elections - Mr. Gonzalez appeared to be finally taking his own words seriously.

In his new Cabinet, Gonzalez has muted the predominant left-wing voice of his own Socialist Party, while reinforcing and extending the influence of Carlos Catalan Solchaga, his conservative finance minister.

The government's lean to the political center is seen by analysts not only as reflecting shifts in Spanish electoral preferences, but as an indication that the country's leadership is now serious about bringing Spain's imbalanced and overprotected economy in line with those of its larger European partners.

By naming eight-year Minister of Defense Narcis Serra y Serra as his deputy prime minister, Gonzalez is also seen by many as hinting at whom he would like to see replace him when his term expires in 1993. Gonzalez has said repeatedly he does not plan to seek another term.

The Cabinet reshuffle does leave two important ministries - labor and social affairs - in the hands of Socialist left-wingers. Reports from Spain indicate that Mr. Solchaga would have liked Gonzalez to take his Cabinet even farther to the economic center-right. Still, the new Cabinet puts Solchaga and his followers in charge of about two-thirds of national spending.

The prime minister's Cabinet balancing act indicates a reality of Spanish electoral life of which he is well aware. While the rapidly urbanizing Spanish population is snubbing the electoral left, as witnessed in recent elections, Gonzalez still needs the Socialist Party's largely leftist activists to prepare for 1993's elections.

In that sense, Gonzalez's experience is similar to the second-term electoral predicament of French President Francois Mitterrand. Since the mid-1980s, both leaders have had to contend with a constituency shift to the center, as well as with the rigors of a German-dominated, low-inflation European economy.

For much of the 1980s, Spain was Europe's economic miracle, regularly posting growth rates of 5 percent. That growth fell off sharply last year, first with a steep decline in the tourist industry and then with rising energy costs during the Gulf crisis.

In the aftermath of the Gulf war, some economists are predicting a return to happier days in Spain. But the trouble spots that for years have placed a question mark over the country's entry into the EC's single market remain.

High subsidies of Spanish industry, inherited from the country's isolationist past, continue to inflate government spending and harm the competitiveness required in a borderless Europe.

Wage increases continue well above productivity levels. The Organization of Economic Cooperation and Development says Spain must stick by its goal of holding wage increases to 5.8 percent this year if it wants to bring down inflation and create jobs - priorities, since both inflation and unemployment remain above EC levels.

Gonzalez's resolute insistence on a pro-coalition stance during the Gulf war - in the face of a largely noninterventionist public opinion - has some observers predicting he will push ahead on the economy. Buoyed by evidence that a segment of traditionally isolationist Spain decided in the war's aftermath that "Felipe's" position was correct, Gonzalez appears determined to use the opening to take Spain into Europe.

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