Originally posted by VooWho
Why did Spain not fight in WW2 for the Axis powers? The rest is for you.
In a nutshell: Spain had a debt to Germany of $212 million for supplies of matériel during the Civil War. But, Spain relied upon United States oil supplies and the US had agreed to listen to British recommendations on this. As a result, the Spanish were told that supplies would be restricted, albeit with a ten week reserve. Any Spanish intervention would rely, inevitably, upon German ability to supply oil. Some of Germany's own activity relied upon captured French oil reserves, so Spanish needs were unhelpful.
In December 1940, Hitler returned to the issue of Gibraltar. He attempted to force Franco's hand with a blunt request for the passage of German troops to attack Gibraltar. Franco refused, citing the danger that Britain still presented to Spanish colonies and choosing to wait until Britain "was on the point of collapse".
Franco was playing both sides of the War. But, probably realized staying neutral or joining the Allies was his best bet.
