Bilbao, Spain—Political violence was so rampant in the Basque Country in the mid 1980s that local journalists devised a proforma for the weekly bloodshed. Fill in the blank: policeman/soldier/ guard was killed/injured by a bomb/ bullet. The one constant was that the separatist guerrillas, Euskadi Ta Askata-suna, or Basque Homeland and Freedom (ETA), always claimed responsibility.

It was grim fare, and nowhere more so than in the dying industrial port of Bilbao. The birthplace of ETA was such a noxious casserole of strikes, discontent, and pollution that the fecal gases rising from the Nervion River running through town mirrored the despair of its people. Even the bars seemed gloomier than in the rest of Spain. With 35 percent unemployment due to a decline in the Basques’ lifeblood of ship-building and steelworks, people had less to spend, and besides, with all the viciousness, few were inclined to party.

That was...

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