With a leg on each side of the Pyrenees, the Basque Country ranges from the gentle mountain slopes of southern France and the rough Bay of Biscay on the Atlantic coast to the sophisticated cities of Bilbao–home to Frank Gehry’s Guggenheim Museum–and San Sebastián. This is also the last terrorist redoubt in Europe.

Fighting for a mixture of old-fashioned Marxism and secular nationalism, the group named Euskadi Ta Askatasuna (Basque Fatherland and Liberty) is still killing after forty years. ETA has murdered almost a thousand people, kidnapped seventy-seven and held the business class hostage by demanding and collecting millions of dollars in “revolutionary taxes.” Those who refuse to pay face harassment, abduction or even death. Some 5,000 acts of politically motivated vandalism–targeting banks, public property and government offices–were linked to ETA between 1996 and 2000. The organization is on the US State Department’s updated list of global terrorist organizations, along with Hamas and Al Qaeda. Last November London and Washington announced they would freeze ETA’s foreign bank accounts, along with those of twenty-four other terrorist organizations, and in February, the Bush Administration blocked the assets of twenty-one people linked to ETA.

ETA’s violent struggle for its goal of an independent homeland comprising the seven Basque provinces (four in Spain and three in France) continues even as today the Basque Country enjoys considerable autonomy within the Spanish polity. Spanish policemen have been mostly replaced by Basque officers, who are often welcomed as a buffer between the people and the terrorists. The Basque language is taught in schools and widely spoken. The Basque Country collects its own taxes and pays for central government services; controls the educational, judicial and health systems; and has its own premier and Parliament.

Yet, as Spanish Prime Minister José Maria Aznar says, the “Basque question” remains the single most important issue in Spanish politics. The two main parties, the conservative ruling Popular Party (PP) and the Spanish Socialist Party (PSOE), refuse to negotiate with ETA unless it renounces violence. In the wake of the September 11 terrorist attacks in the United States, the government has cracked down harder on the group. And with Spain chairing the European Union since January, Madrid has intensified diplomatic pressure on nations that have in the past given ETA members a safe haven.

ETA was founded in 1959, during the fascist dictatorship of Gen. Francisco Franco, by students who were disgruntled at the moderation of the Basque Nationalist Party (PNV) in the struggle for independence. Its first military action was in 1961–an unsuccessful attempt to derail a train carrying war veterans. The police responded with repression. Many Basques went into exile, while others joined ETA’s struggle. “Thousands [of Basque nationalists] were tortured under Franco. Once it is in your body, it doesn’t go away,” says Joseba Zulaika, an expert on terrorism at the University of Nevada. “They are unable to condemn ETA, because it represents the Basque military response to Spanish fascism, even twenty-seven years after Franco died.”

Nowadays ETA’s funding comes primarily from supporters’ donations and from extortion, kidnapping ransoms and armed robberies. The money is used to finance assassinations, bombings and other urban guerrilla attacks. Even though the group’s rhetoric is Marxist, it behaves like a fascist organization, and it is often compared to one. It gets its basic support from alienated youth, who in another country would probably become skinheads. Social bile, the exhilarating feeling of power and destruction, and dogma absorbed in many cases at home and at school, are what attract new recruits. The new generations are increasingly in charge of the organization and have gradually distanced themselves from the founding leaders. Authorities estimate that only 200 active members–distributed in commando cells–make up the band, and another 2,500 supporters provide them with shelter and infrastructure. According to Manuel Huertas, secretary general of the PSOE in Guipúzcoa province, “ETA is hiding behind the independence flag” but is devoid of ideology. (Recently seized ETA documents name Huertas as an assassination target.)

ETA has expanded the scope of its victims beyond police and the military to include local civilians. They call this policy the “socialization of suffering.” The idea is to exert pressure on different groups so they will demand that the government negotiate. In response, successive governments in Madrid have resorted to state terrorism. During the democratic transition in the 1970s, the infamous Basque-Spanish Battalions killed twenty-nine people supposedly linked to ETA. In the 1980s, under Felipe González’s PSOE government, the Antiterrorist Liberation Group killed twenty-eight, some of them innocent bystanders. Disclosures of what became known as the “dirty war” helped defeat the PSOE in the 1996 general elections, paving the way for the ascension of Aznar’s PP.

In 1998 ETA unilaterally declared a cease-fire after a police campaign that left it vulnerable. This action brought on the collapse of an anti-ETA alliance among the democratic parties. The PNV took as a partner Our Basque Country (EH), at the time ETA’s political arm. This should have paved the way for peace talks, but there was too much lingering distrust. The Interior Minister at the time, Jaime Mayor Oreja, who was in charge of antiterrorism policy, dubbed the cease-fire a “truce trap.” It was later discovered that ETA had been rearming in France, but Zulaika of the University of Nevada points out that the truce was also marred by the arrest of one of ETA’s two negotiators. “Madrid didn’t want [talks] to succeed. And the rearming gave reason to those who were suspicious,” he says. “But peace was alarming, because ETA’s terrorism is much easier to handle. After all, it is only one killing every two weeks. [Without peace] Madrid keeps the moral legitimacy, goes on being the guarantor of law and order, and maintains international support. In peace, nationalists could do anything!” When the truce collapsed in November 1999, so did the alliance between the EH and the PNV.

The September 11 terrorist attacks in the United States, and the revulsion against terrorism kindled by those attacks, had a strong impact on the Spanish government’s fight against ETA. The repression-first approach regained some of its luster both at home and abroad, and Madrid has made strong demands for cooperation from European Union members, some of whom have in the past treated ETA as a nationalist organization deserving respect and protection rather than as a terrorist group whose members should be extradited to face criminal justice. Thousands of demonstrators took to the streets on November 8 to protest the assassination of a Basque judge, José María Lidón, the previous day. The murder came just one day after a car bomb in Madrid injured nearly 100 people. An anonymous eyewitness who tailed the terrorists helped to catch them.

Since the end of the cease-fire in 1999, eighteen ETA commando units have been broken up and fifteen members have been arrested, among them the “historic leader” Iñaki de Rentería, considered the head of the organization. After September 11, the rhythm of arrests in Spain and France has accelerated, but there have also been police failures and counterstrikes: On October 31 twelve members of an organization that provides ETA prisoners with legal assistance were detained, accused of terrorism. In France the police failed to capture the leader of that group, Juan María Olano, when he appeared in a demonstration, even though there was an international warrant for his arrest. He was detained later. Also in October, a pro-ETA, balaclava-helmeted throng attacked San Sebastián City Hall with Molotov cocktails, and a car loaded with eighty-eight pounds of explosives was detonated in the main Court House of Vitoria. Both sites were under police protection. No one was arrested.

Recalling incidents like Olano’s initial escape, socialist Huertas says, “If the international community stops providing shelter to the terrorists, and the [nationalist] PNV takes a firm line, we are on the road to peace. But first the PNV must be willing to share the risks of becoming the terrorists’ targets” by more vigorously opposing ETA. He believes that a firmer stand by Juan José Ibarretxe’s PNV nationalist government in Basque Country can help Spanish endeavors in Europe, where some countries still see the nationalist struggle with sympathy.

In search of a solution for a problem that has cost not only many lives but also 10 percent of the Basque Country’s per capita GDP, politicians of all stripes have tried to crack the same obstinate riddle: Which comes first, peace or self-determination? Basque Premier Ibarretxe has suggested that both aims can be sought simultaneously. He tried to revitalize the coalition of the democratic anti-ETA parties that disintegrated after ETA’s cease-fire, initiating a debate on pacification in October. But in Madrid Aznar remains adamant. “I have nothing to state on the question of self-determination,” he has said. The understanding among some local constitutionalists, as those nonnationalists who support the 1978 Spanish Constitution are known, is that sovereignty for Basque Country can be a subject of future talks, even if they do not agree with it. But peace must come first. “How can we talk? We cannot articulate with pistols in our mouths,” complains Huertas.

Last October ETA issued a communiqué in which it said, “Peace is possible, of course it is, and ETA’s hand will always be open,” but only if Madrid and Paris allowed a vote on independence for the region. “ETA demands no more than this.” Only ETA’s followers took the message as a bona fide offer, and a day after the announcement a small bomb exploded close to a car belonging to a member of the Civil Guard, Spain’s public security force. Later a bomb exploded in Madrid, and then Judge Lidón was shot at point-blank range. Considering its latest strikes, ETA does not seem to be redefining itself. Most of the people I interviewed place their hopes either on the police campaign against ETA or on the proposed talks on self-determination, which would make the terrorists even more obsolete and out of touch.

There are signs of hope, though. One was the sight, after Judge Lidón’s murder, of Basque Premier Ibarretxe marching against ETA alongside his defeated opponents in last May’s elections, Jaime Mayor Oreja of Aznar’s PP, and PSOE president José Luis Rodríguez Zapatero. Another is meeting people like Cristina Cuesta, who was 20 years old when ETA assassinated her father. She is the spokesperson of a pro-peace NGO. “Society would be generous with ETA if they gave up arms,” she says. “I am a republican, but I don’t defend my ideas shooting against monarchists. When terror stops, we can talk about anything.”