Image copyright AFP

"Independence for Catalonia? Over my dead body… and those of many soldiers." That was how Francisco Alaman reacted to the 1.5 million strong demonstration in Barcelona last month, with many calling for independence for the region.

It's a view. Quite strongly held not just on the right in Spain but on the centre left. However Alaman is a serving soldier: a colonel. And it wasn't the only incendiary thing he said.

In the week tens of thousands of protesters surrounded parliament, he told the website Alerta Digital:

"The current situation is very similar to 1936, but without blood. Unfortunately, the data indicate that the situation will only get worse in the coming months and years."

Image copyright AP Image caption After the fall of Gen Franco a 'pact of silence' was instituted as part of the transition to democracy

Economics journalists have learned, (thanks to the work of the FT's Gillian Tett), to ask a very brutal and searching question as we parachute into the latest theatre of crisis: look for the social silence. What is staring you in the face but nobody wants to talk about it?

Well Colonel Alaman has answered it.

During the early years of Spanish democracy, forgetting about the Civil War (1936-39) was not just a psychological necessity - it was a political choice.

The "pact of silence" instituted after the fall of General Franco was seen as a price worth paying for rapid, peaceful transition to a functioning democracy - a democracy that, moreover, found space to accommodate a strong, previously clandestine Communist Party alongside the rapidly moderating socialists of the PSOE (Spanish Socialist Workers' Party).

The approach was codified into law, with the 1977 Amnesty Law guaranteeing a blanket immunity from prosecution for those suspected of crimes against humanity during the Franco era and the Civil War.

With Spain now reeling from austerity, its riot police dispensing truncheon blows and rubber bullets against demonstrators and passers-by, the "pact of silence" is falling apart.

Historical memory confronted

The images of violence - not all of them make it onto mainstream television, but the internet does the job - are forcing Spanish people to confront historical memory in a way the various campaigns and lawsuits about the Franco era have not.

For the austerity, and the protests, have summoned the spectre of a clash that defined Spain in the modern period - the clash between liberal modernity and religious, monarchic hierarchy.

This problem haunted the writing of the early modern poets and political theorists in Spain: "A dead, hollow, worm-eaten Spain and a new, eager, ambitious Spain that tends toward life," as the historian Santos Julia puts it.

It's clear now that these two cultures within Spain - as visceral and rooted as the "southern" and "liberal" cultures in the US, or the "intellectual Russia versus peasant Russia" problem - never went away.

But the culture war had seemed suppressed by wealth: the booming economy, the rapid liberalisation of society, and the massive investment in modern infrastructure allowed them to co-exist.

For 30 years after the fall of Franco it was a different Spain - a modernised economy, linked to the European core by its single currency and the Schengen agreement, and benefiting on top of that from its links to the rapidly expanding economies of Latin America.

Image copyright AFP Image caption Protests in Madrid against austerity measures have lasted several days

When the economy took a nosedive, and the first austerity plans were launched, it was striking that the political and social settlement seemed actually to be helping mitigate the effects.

Despite the 50% youth joblessness figures, the family took the strain: people moved in with their parents, borrowed their grandmother's car; in small towns and villages, barter systems sprung up.

And as with high finance the illusion was that complexity reduces risk. The Spanish constitutional settlement, which makes Opus Dei and Pedro Almodovar films two of the country's best known cultural exports, was complex.

Spain's regional government system would also act as a shield to the needy: less than six months ago the Socialist/Left coalition government in Andalucia told me confidently it would soften the impact of austerity measures demanded by the centre. Now it is bust.

'Two Spains'

Now in rapid succession, numerous signifiers of political crisis have appeared: acute class divisions, regional politics, street violence, outright civil disobedience and un-addressed corruption; the removal of migrants' rights to free health care; the sight of uniformed firefighters clashing with riot cops, helmet to helmet, on the streets of Madrid.

With it, you get the resurgence of references to the bloody conflict in which the "two Spains" tried to kill each other.

To the right there are people like Col Alaman.

To the left you get the camisetta Republicana. It's a version of the Spanish soccer team's red and yellow strip with the addition of a big swathe of republican purple: the colours of the flag Franco tore down in 1936.

Beneath this battle of signifiers there is a serious potential for fragmentation in Spain

I first saw one of these in the village of Colmenar, 40km north of Malaga. When Mayor Sanchez Gordillo's roving protest march arrived in the town, I noticed people wearing this unusual football shirt.

The shirt was produced in 2011 as a limited edition for enthusiasts. Now you are beginning to see it a lot around protests.

Beneath this battle of signifiers there is a serious potential for fragmentation in Spain.

Last week the Catalan government called snap elections. The ruling party - the Convergence and Union party - contains a strong minority which advocates outright independence, though informed observers think its leader Artur Mas, will use the election result to extract maximum fiscal autonomy from Madrid.

The smaller far left in Catalonia also supports independence.

The move follows a demonstration that saw 1.5 million Catalans take to the streets, with many calling for the region to become the next country to join the European Union.

Catalan threat

Analysts are split over the significance of the Catalan move.

As the second richest region, with a GDP of 220bn euros a year, it has always been seen as an empty threat to go for full independence, the cynics saying Catalan flirtation with slogans around secession are mere posturing to gain a better fiscal settlement with Madrid.

Others on the ground are saying "this time they mean it".

Either way, the Catalan gambit has triggered responses in Madrid that have shocked a generation lulled by the "pact of silence".

There is Colonel Alaman, threatening to defend "the non-negotiable principle of Spain's unity…even with our lives."

Image copyright Getty Images Image caption The Catalan parliament recently voted for an independence referendum

Next, the AME, an association of retired military personnel, which insisted that "any flicker of secession to be suppressed": those calling for it "will have to respond with all rigour to the grave accusation of high treason under the jurisdiction of military tribunals".

Before the Madrid government has to deal with Catalonia, however, it also has to face two regional elections: in Galicia, which the ruling PP also runs and should hold, and the Basque region - where it is getting complicated.

The Basque Country has traditionally been run by the Basque Nationalist party - a centre right party.

At the last election the socialists won, but in the past year left nationalist forces have managed to form a very effective electoral bloc called Euskal Herria Bildu.

Bildu, for short, is led by figures formerly associated with Herri Batasuna, the political wing of ETA (making it something like a cross between Sinn Fein and the Greek Syriza party).

It currently is running neck and neck with the right wing nationalists and could win - precipitating a constitutional crisis with Bilbao that then sets the scene for one with Barcelona.

Thinking the unthinkable

Before the austerity hit there were a whole series of unthinkables in Spain: that the Civil War divisions, of right and left, could ever be reopened; that the military could ever again intervene into politics (the last time, the Tejero coup of 1981 descended into high farce); that the modernization and growth that Spain enjoyed could ever be reversed; that the federal state could never shatter.

But numerous unthinkables have already begun to happen: the effervescent lifestyle associated with the Spanish miracle has dissipated.

Wherever you go in Spain - from angry Barcelona to angry Bilbao to angry Andalucia, Valencia, the seething estates at the edges of Madrid - you hear outrage at what is seen as economic injustice

Millions of super-cool Spanish youths, who were supposed to be "apolitical" took to the streets in May 2011 in a protest that invented the Occupy tactic. The banks are bust. And the Partido Popular - which always resisted a bailout - is being forced to take one.

Mariano Rajoy's government is now committed to in excess of 90bn euros of austerity in the next two years.

It will work only if the economy shrinks by a relatively meagre 0.5% next year: most commentators believe the shrinkage will be triple that.

And it is a budget that, whatever the best intentions of its designers, hits the poorest in Spain hardest: it hits public sector workers, all wage earners, and only avoids hitting pensioners by dipping into a contingency fund that is supposed to cushion them.

Wherever you go in Spain - from angry Barcelona to angry Bilbao to angry Andalucia, Valencia, the seething estates at the edges of Madrid - you hear outrage at what is seen as economic injustice: hitting the incomes and services of the poorest while bailing out the banks that had become political playthings for the elite.

The unrest of this month certainly moved the markets: bond investors are split, now, between those most worried about the sovereign debt crisis and those trying to price in the risk of state break up or violent unrest.

"These are risks we're used to pricing in the emerging world," bond analyst Nicolas Spiro told me last week; "but not in the developed world."

The crisis has got some commentators asking, is Spain slipping the way of Greece?

But, having reported both situations, I think this is the wrong question.

Greek approach

In Greece the Civil War happened a decade later than Spain and though vicious, took place as part of the onset of the Cold War.

The "story" of the civil war sits alongside the story of Communist-led resistance to Nazism; and the "percentages agreement" between Churchill and Stalin, which placed Greece in the Western camp.

In Greece the Civil War is openly talked about.

In some villages it is still common for the different parties - and by implication the competing survivors from the conflict - to sit in separate kafeneions.

Image copyright AFP Image caption Construction has ground to a halt in developments across Spain

Conversations among those who survived the conflict often drift towards it, as if it were yesterday. And there has been no formal pact of forgetting.

The fact that Greeks overthrew the colonels' regime in 1974 (and staged a "Greek Nuremberg" for the deposed officers) allows Greek people to calibrate modern rightism and leftism against some level of historical accounting.

Contrast this to Spain.

In the Spanish Civil War, the people of Spain were abandoned to a fascist coup by democratic countries more worried about communism than fascism. The British navy famously stood by while Franco's navy sank British merchant ships, while Hitler's Condor Legion bombed Guernica.

Consequent on Spain's neutrality in World War II, Franco was tolerated within the post-war order. And once he died, a managed transition to democracy occurred which left the perpetrators of torture, massacre and more unpunished.

All these factors allowed the events of the Civil War itself to be officially forgotten: there is, even now, no official record of the atrocities.

Corruption

The relevance to today is this: the peaceful transition created a new political system in which the old elite populated both sides of the political spectrum - but without any formal accounting of the events during fascism.

Today it is hard not to see that as one of the roots of the corruption that, as right wing daily ABC said two years ago "is drowning Spain".

It is facile to search for "national" sources of corruption: corruption happens in a market economy everywhere it is allowed to.

Image copyright Reuters Image caption Many Catalans are calling for their region to become a member of the EU

It's been rife, as we now know, in the London and New York financial systems; it was present in the German car industry; it is present across the Italian system of government.

However in Spain the post-Franco settlement gave corruption a particular form.

There is heavy and open nepotism in the appointment of business executives; there is - say foreign business people - an unstated regulatory bias in favour of Spanish-owned large companies.

And there has been mismanagement of resources, leading to the wasteful spending and lax planning that has left numerous Spanish regions with white elephant projects and tens of thousands of unsellable homes, with local banks driven to insolvency as it all went bad.

The 60bn euros bailout of the banks currently underway under-estimates the economic price of such mismanagement considerably.

If Spain is not yet Greece in the intensity of street conflict, and the collapse of old party loyalties, there are other indices on which it is has to cause concern: the potential for a showdown between Madrid and Catalonia is one; the potential for a clash with a government led by left-nationalists in Bilbao is another; the rise of high-profile civil disobedience campaigns such as that launched by Sanchez Gordillo in Andalucia.

And the long-standing cultural and political tendency for movements to bypass official power and set up alternative power structures of their own.

The Greek left was always communist - ie hierarchical: it is even now - in the opposition parties Syriza and the KKE, (and the Democratic Left inside the ruling coalition), shaped by Marxism.

By contrast Spanish radical movements were heavily shaped by anarchism and anti-clericalism: you can see this even in the current movement of the jornaleros - farm workers - in Andalucia, whose distrust of the main socialist party the PSOE goes back, not to last year, but as one told me, "to 1931".

Panglossian attitude

The problem is not that Spain is a "young democracy": young democracies can be vigorous, culturally revolutionary, fun places to be.

No, the problem is that, as Spanish people gaze at TV images of metre-long truncheons being wielded against passers-by in a Metro station, the discourse tends to head straight to where, for 30 years, they have avoided it heading.

In his interview with Alerta Digital, Colonel Alaman gave a very clear example of this. Asked whether the Catalans are "inevitably" nationalist, Col Alaman said:

For the past six months in the euro crisis I have said: 'Spain is the unexploded bomb, Greece the detonator'... You need to move the bomb and the detonator away from each other as far as possible in time and space

"I rebel against the claim that the Catalans have always been nationalists... The Catalan volunteers who made war on the [Francoist] side were far superior in number to those who defended the republic. The Blue Division [a Spanish unit in the Wehrmacht] had nearly 500 volunteers from the region…"

When the reference point for the Catalans' alleged "non-nationalism" becomes their preparedness to fight for Nazi Germany and General Franco, you know the "pact of silence" is not really working.

Spain has the power to explode in a way that Greece does not.

It is a major global economy. Its hitherto strong post-fascist political settlement is rapidly weakening. Its survival as a federal state is under threat.

And there is a perception factor. The Greek political class knows it has messed up; it is never surprised to see negative GDP projections surpassed on the downside; it is reconciled to the emergence of radical parties of the left and right and knows the parties of the centre will have to be reinvented.

But in my numerous contacts with Spanish politicians and economists during this crisis there has been an insistence - which crosses party boundaries - that "everything is alright": Spain is really a strong economy, the white elephant projects are really "infrastructure" which will prove a good investment in the end.

The deficit reduction plan will work. On good days they wake up and convince themselves there will not even need to be formal conditions set in Brussels, Frankfurt and Washington DC.

Is it facile, dangerous even, for foreign journalists to raise this problem of historical memory and immature democracy?

When I've raised it with Spanish politicians I've sometimes felt that it is about as welcome as "mentioning the War" in Fawlty Towers.

However, Col Alaman has mentioned it.

So have the protesters, who continually designate the European Union now a "Fourth Reich".

And we are approaching a crunch point. After five years of property bust, and a year of abject downturn, the Spanish economy is about to be hit by an almighty shock: austerity.

It might work, and it might not.

Right now Mariano Rajoy's government is running Spain as if it is inevitable that the medicine will work; that a Greek-style implosion, with the implosion of mainstream parties and the collapse of social order, is impossible.

For the past six months in the euro crisis I have said: "Spain is the unexploded bomb, Greece the detonator."

You need to move the bomb and the detonator away from each other as far as possible in time and space, so that when Greece "goes off", it will not take down Italy and Spain with it.

Mario Draghi's 6 September bailout proposal - the OMT - is designed to do just that.

Many EU politicians would be at best agnostic about Greek exit from the euro once Spain is stabilised.

But what the politics of protest do, and the politics of regionalism and nationalism accentuate, is to create unpredictability in Spain itself. The danger is that - as Rajoy prevaricates over bailout, and the political temperature crisis - Spain becomes both the bomb and the detonator.

Defusing it is still possible. But we've had a sense last week of what the explosion would look like.