Upon the death of General Franco and the subsequent return to democratic government, Spain's first foreign policy priority was to re-enter the international community from which it had been isolated during the Franco regime. To this end the nation actively pursued diplomatic relations with other nations. Spain became a member of NATO in 1982, and has become a major participant in multinational security activities. Spain became a full member of the European Community (now the European Union) in January 1986, further strengthening its ties to its neighbors. The country often coordinates its response to international policy issues through the EU political cooperation mechanism, even on issues outside Western Europe. Spain retains a special identification with Latin America, and advocates the concept of Hispanidad , which emphasizes historical and cultural ties between Spain and Spanish-speaking American nations. Spain also maintains economic and technical cooperation programs with the region. Many of its corporations have major holdings in Latin America. In some of those nations, Spain is the top foreign investor.
Spain has been positioning itself as the gateway between Latin America and Europe, but its relations with some Latin American countries were strained starting in October 1998, when Spanish judge Baltazar Garzon asked British authorities to arrest former Chilean dictator Augusto Pinochet, who was recovering from surgery in London. Garzon was trying to prosecute Pinochet, one of the most notorious dictators of the twentieth century, for human rights violations. Garzon's efforts were applauded nationally and internationally, but it strained relations between Spain and Chile, Spain and Britain (both countries also had issues over Gibraltar in 1999), and other Latin American countries that came to the defense of Chile's sovereignty. Aznar was criticized for twice trying to intervene to prevent Pinochet's extradition to Spain. Chile threatened to end relations with Spain, which is the largest foreign investor in that country. Many Spanish citizens left Chile after being threatened by right-wing supporters of Pinochet. In August 1999, Aznar said he would respect the independence of his country's judicial system and allow Garzon to continue to petition Pinochet's extradition from Britain. While a British judge finally agreed that Garzon could extradite Pinochet to Spain, the dictator was released for humanitarian reasons in March 2000. Spanish judges agreed in early 2000 to investigate human rights cases in Guatemala, and they continued to investigate human rights abuses committed during the Argentinean "dirty war" of 1976–83.
Aznar became the president of the EU in early 2002, serving six months before leadership rotated to another European leader. In this position, he sought to push free market reforms, speeding up full liberalization of energy, transportation and telecom markets. With the introduction of the euro , Aznar supported the creation of a single European financial market.
Spain and the United States have long maintained official and cordial relations. Recent years have seen the strengthening of these ties with the exchange of high-level visitors. The two countries cooperate in NATO and bilaterally in defense and security areas, whereby Spain permits U.S. use of some Spanish military facilities. There is also long-term cooperation in support of aerospace research and exploration. Cultural and educational relations are maintained through both the Fulbright Scholarship program and a U.S. embassy exchange program.
During 2002 and into 2003, Aznar actively supported the U.S. position on disarming Iraq, by force if need be. He was widely criticized for this position, especially from other EU members. In February 2003, he stated that all governments, including Spain, had "the information that the regime of Saddam Hussein, with its biological and chemical weaponry and links to terrorist groups, poses a threat to the peace and security of the world and of Spain." At that time Spain held one of the rotating seats on the United Nations (UN) Security Council, and was caught in the diplomatic struggle between the United States and United Kingdom supporting the use of force on one side, and France, Germany, and Russia opposing war on the other. Public opinion in Spain was firmly opposed to war in Iraq and after it began on 19 March, opinion polls revealed 91% of Spaniards were against the war. Aznar prior to the war had stated Spain would not commit combat troops to fight along U.S. and British troops but he committed 900 troops to assist in medical support and provide anti-mine capabilities.
Spain was involved in a minor international skirmish with Morocco in mid-2002. On 11 July, 12 Moroccan frontier guards landed on the tiny uninhabited island of Perejil— claimed by Spain—and claimed it as Moroccan territory. Aznar stated he would not accept the occupation, and sent troops to evacuate the Moroccan guards. Diplomatic relations only began to improve in December 2002, when the Moroccan and Spanish foreign ministers met to discuss plans for the return of their respective ambassadors.