1/06/92 Newsweek,pp26-27 INTERNATIONAL The Year of Spain From the Olympics to the World's Fair, it will play host to a global audience. Five centuries ago, two events on the Iberian Peninsula remade the ~KNOWN~ world: Spain expelled the Muslims from their last European stronghold and the Spanish monarchs Ferdinand and Isabella sent an itinerant navigator named Columbus across the Atlantic. As the French intellectual Jacques Attali writes in his book "1492," in that year the Continent "launched itself on the conquest of the universe." The next 100 years would be ~REMEMBERED~ by Spaniards as their Golden Century. Now, as Europe enters on its year of integration, Spain is launching itself anew. The Summer Olympic Games in Barcelona and a vast World's Fair in Seville will show the nation off to a huge global audience. Madrid will be the European Community's official "cultural capital" for 1992, with two new museums adding depth to the world-class collection of the Prado. As Spain once sought greatness through empire, it now seeks a respectable standing among its neighbors across the Pyrenees. A country that has been surviving on sunny beaches and evocations of its history is ~DETERMINED~ to typify the modern and dynamic. If all goes according to plan, 1992 will be at once the Year of Europe and the Year of Spain. Heavy burden: History is still a heavy burden. The dictatorship that reigned for 36 years after the Spanish Civil War was an anachronism. Gen. Francisco Franco tainted the old symbols of patriotism, intensifying fierce regional- even secessionist- ~SENTIMENTS~ that still plague the country's politics. He kept Spain out of World War II but also out of the reconstruction that followed. Spaniards spent the 1950s and '60s, the formative years of postwar Europe, on the outside looking in. It was this ~SENSE~ of isolation that Spanish politicians sought to end after Franco's death. They got crucial help from the restored king, Juan Carlos. In 1981, when military officers tried to stage a coup that would have given Spain enduring status as Europe's banana republic, the monarch's decisive opposition saved the day. A decade later Spain's leaders gather under a banner of banality. "Dramatic things are happening in other countries, not in Spain. And I ~THINK~ this is great," Felipe Gonzalez the 49-year-old Socialist prime minister, told NEWSWEEK. "My heartfelt ~DESIRE~ for many years of my life was that Spain should be considered a normal country, with normal difficulties." The country still has a freshness found nowhere else on the Continent. Even in traditional tourist destinations, there are ~SURPRISES~ in the mingling of Islamic and Roman influences with threads of Gothic, Renaissance, art nouveau, quasi fascism kitsch and postmodernism. In Cordoba, an enormous mosque surrounds a huge cathedral. Granada's Alhambra vies with the Renaissance palace of Charles V. Turn a corner in the sleepy Catalan village of Figueras and you're confronted with the surreal museum of Salvador Dali, which is topped by giant eggs. Madrid and Barcelona are ever more cosmopolitan without losing their air of romance and passion. Trendy denizens of late-night clubs sport makeup to rival Vampirella, listen to songs with titles like "Your Cellulite Turns Me On" and favor shows with transvestites. But flamenco is still going strong and truckers making the long haul north with vegetables grown in the vast greenhouses of Almeria listen to wailing, weirdly melodic sevillanas. It is a distinctive flavor most Spaniards ~WORRY ABOUT~ losing. "When you come into a place like this you have to come on tiptoe, look, smell, hear, feel," says Granada financial consultant Jose Luis Moreno as he wanders through the narrow streets of the old Arab quarter looking out onto the Alhambra. "If [European] integration means 'normalization' I'd rather close the borders." The pace of change has brought ~PAIN~ along with prosperity, and 20th-century vices have made an unhealthy mix with the traditional Spanish ~INCLINATION~ to live for the moment. Drug addiction has be- come a major social problem. Crime, both petty and organized, has risen dramatically. In some of the poor barrios of Madrid, Barcelona and Valencia, vigilante groups have taken to the streets, rounding up junkies and dealers- or beating them up. ~XENOPHOBIA~ is a persistent problem, too. ~GRUDGES~ and ~AMBITIONS~ most often find their expression in peaceable nationalist parties. But the Basque terror- ist organization ETA and smaller groups continue their activities in the name of independence, and with deadly effect. As the West's economy has slowed, so has Spain's, dispelling the ~EUPHORIA~ of the 1980s. "The government ~THOUGHT~ Brussels would solve national problems," says Miguel Herrero, a leader of the conservative Popular Party. "But Brussels is not going to impose the standards Spain needs to be competitive, nor give enough money to make Spain competitive." ~CONFIDENCE~ in the political leadership has waned as well. It has become hard to draw the line, after nine years, between maturity and rot in the Socialist Party. In the most traumatic scandal, Gonzalez's deputy, Alfonso Guerra, was forced to resign amid allegations that his brother was peddling influence. Still, Gonzalez kept him in the party hierarchy. With scandals plaguing the opposition as well, pressure for a cleanup has stalled. No rivals: The prime minister ~ESTIMATES~ it will take another 10 years to finish the task of Europeanizing Spain and, by his own best ~GUESS~ and that of outsiders, he will probably be around to oversee the rest of the transition. "If I had time I'm ~SURE~ I would be ~BORED~" says Gonzalez, "but the fact is that you're on a treadmill and there is no time for that." He remains charming and charismatic, and at the moment has no serious rivals. "Behind Felipe there is nothing," says Juan Luis Cebrian, publisher of the influential daily El Pais. "There are no leaders." The far left is in disarray and the traditional center has virtually imploded. The Socialists' most ~CREDIBLE~ competitor, the Popular Party, is now headed by 39-year-old Jose Maria Aznar,whose youthfulness thus far has made him ~SEEM~ merely callow. For all the uncertainties, Spain can rise to a challenge. The most obvious recent example was October's hastily called Middle East peace conference in Madrid: a logistical nightmare fraught with security risks went off without a hitch. The big bashes next year can be ~EXPECTED~ to do the same. In fact the Spaniards have built a more coherent country than they ~SEEM~ to ~REALIZE~. Many of the liberated nations of Eastern Europe- the ones that seemed to steal the excitement from 1992- are sending envoys to Madrid and Barcelona for tips on coping with newfound freedoms and tricky questions like regiona autonomy. "Spaniards don't really ~BELIEVE~ it, but they have a lot to teach the East," says political scientist Jose M. Maravall. The main lesson: "An ~EXPERIENCE~ of realism, of prudence, of a fair amount of constancy, of an absence of U-turns." Of course, many Spaniards will continue to grumble and fret. But perhaps that is just in the nature of the country. Five hundred years after it helped launch "the conquest of the universe," Spain is still ~DISCOVERING~ itself. But perhaps that is just in the nature of the country. CHRISTOPHER DICKEY in Madrid