I'd like to thank Ignacio Parlade Osborne for providing permission to post this article.
The problem with Spain's role in WWII is that many of the participants in the decisions concerning our neutrality or belligerancy are still alive here, and they claim they smartly avoided entering the war, and so says the "official" history, written during Franco's regime. For instance, Franco's brother in law, Ramon Serrano Su�er, was at the time Foreign Minister and completely pro-axis. He is still alive, giving lectures about how Franco saved Spain from the war.
Well, recent spanish historians have uncovered the fact that that statement is simply false. It's not that Franco didn't want to enter the war, it was just that Hitler didn't want him to. From Hitler's point of view, having Spain as an ally had more drawbacks than benefits. He had Italy's experience of an ally that had to be constantly helped, and Spain's situation was far worse than Italy's.
Spain had to be supplied with weapons, grain, fuel, airplanes, coal... Besides, it's exposed situation in the Atlantic Coast made it also vital that it was well defended, many troops would have to be sent to Spain to garrison it, draining other fronts of troops. Spain could offer little more than its geographical situation, and Hitler wasn't anyway very interested in the Mediterranean.
Franco saw in 1940 the war almost finished, and he wanted to jump in the victor's wagon. He wanted to have an empire (much of the ideological background of Franco's regime was based on Spain's empire of XVI th century) for free, since he thought the war would end soon. He demanded most of Vichy France territories in North Africa. For Germany, conceding that probably meant losing Vichy as a friendly state, something Hitler didn't want.
So, summing up (it's too early in the morning!), Spain was eager to enter the war, but demanded a price Germany was not willing to pay. In fact, Spain wasn't neutral during the first part of the war, just "not belligerant". I have an interesting collection of the Spanish Army Magazine from these years, and gives some insight on the attitude of Spain.
If you want to know more about the subject, I recommend you to read J. Tussell's book "Franco, Espa�a y la Segunda Guerra Mundial", if you can get a copy and can read spanish. It talks about this subject in depth, it even talks of the german submarines resupplying in Spain, among many things.
Regarding the Blue Division, Jason's description is correct. I also recommend the reading of the book he cited ("Hitler's Spanish Legion"). It's very unbiased, and quite funny in some aspects, specially when describing the cultural clash between Germans and Spanish. I read it a long time ago but I still remember some of them, like when the division paraded with condoms in their weapons, protesting the german law that soldiers could not mix with native population (that is, women!).
In fact, many russians from Krasni Bor and other places where the division fought still fondly remember the Spanish. The Spanish didn't have the racist attitude of German troops, they were there just fighting communism, not the Russians "per se". They treated the russian people far better than the germans, even giving them food and shelter. I saw a documentary in which a russian boy at the time still remembered Spanish Christmas songs.
It must be said that, at first, Hitler wasn't over enthusiastic with the Spanish Division. He wanted it just for propaganda purposes ("Europe fights together against bolshevism"). He had had the experience of other volunteers from other countries, whose fighting quality was poor. In fact, when the division arrived to the front, the army group commander (Model, I think) refused to accept it. He was pissed off, because earlier, when the division was marching over a road he had to cross, the Spanish refused to stop so that the general could pass. Just imagine a german division not allowing the Army Group commander to pass!
The germans saw the spanish as an undisciplined gang. They didn't wear their uniforms according to regulations, they growed beards and made jokes about the german sense of discipline. They also tended to play the guitar and sing songs at the door of russian women, something quite shocking for the German High Command. In fact, the germans demanded that attitude to stop, and Mu�oz Grandes replied that he would "do something about it", but didn't, of course.
But most of them where professional soldiers, with more combat experience than their german counterparts. For instance, during the first winter of the war in Russia they taught the germans how a defensive position should be set, because they had tested the german doctrine of defensive deployement during the Spanish Civil War and had found it worthless. Remember that until that time german troops had always been on the offensive, so they had little experience about digging-in in trenches.
I once met a now deceased member of the division, and he told me a lot of things about it, perhaps I'll post them some other day.
Well, I have to go,I hope I have been of some assistance. It's sad nobody here in Spain acknowledges the existance of the division, even in my own Faculty of History. It simply doesn't exist anymore, and has never existed, in nowadays Spain. Talk about "Damnatio Memoriae".
Fro more information see the Additional Blue Division/250 Infantry Division notes page.