Arts: Art is the politics of the possible

On the 60th anniversary of the Nazi bombing of the Basque city of Guernica, Elizabeth Nash visits the new Guggenheim museum in nearby Bilbao, while, below, Kathleen Brunner unlocks the meaning of the painting that is Picasso's allegory of the horror of war

From the length of one of Bilbao's sober rectilinear boulevards you can glimpse the Guggenheim modern art museum, its vigorous metallic swoops and twists glinting and shuddering skywards in the pale northern light. The contrast, at first sight incongruous, could not be more fitting.

The American architect Frank Gehry's futuristic fantasy, plonked in the old warehouse area of Spain's principal industrial port, has already, even before its inauguration on 3 October, won the city's heart. Dour Basque citizens, who have little of the breezy gaiety of their southern compatriots, nod and smile approvingly as this fabulous building rampages over a vast stretch of riverside that they have spurned for decades.

Bilbao was a roaring city whose manufacturing heart - ironworks, refining, shipbuilding - was laid waste by recession and changing times. Even today, the spring air is spiked with a salty, sulphuruous tang of old chemistry lab. Gehry wanted his building to honour the city's tough industrial past with shapes of chimneys and ships, of curved gleaming hulls reflected in the steely estuary waters.

The 14bn peseta (pounds 70m) venture is the fruit of a deal between New York's Solomon Guggenheim Foundation and the Basque regional government, together with the provincial government of Viscaya. The Basque taxpayer financed the building and Guggenheim will supply the lion's share - 80 per cent - of the exhibits. They will be drawn, in rotating selection, from its museums in New York and Venice, home to the finest private collection of 20th-century art.

The Basque government adopted the project to help shake the city out of its doldrums and push it towards the next century. The same impulse produced Bilbao's stylish new metro system, Sir Norman Foster's cheerful and user-friendly homage to the beauty of concrete and steel.

The Guggenheim's director, Thomas Krens, promises Bilbao will be his foundation's flagship in Europe, a glittering star in a "constellation" of establishments from New York to Seoul. It has been controversial from the start, not just for the potentially tempestuous partnership of private American and public Basque funds.

But the building is an undisputed triumph - despite a worrying moment when the titanium plates that clothe the undulating walls started to discolour. Now it is the eventual content that causes rumbles of disquiet within Spain's picky art establishment.

The hottest dispute is whether the museum can borrow Guernica, Picasso's masterpiece on the horrors of war, from Madrid's Reina Sofia Museum, for its inaugural exhibition. The painting was inspired by the Nazis' aerial bombardment 60 years ago today of the Basques' spiritual capital just down the road. It has never been exhibited in the Basque country.

The Reina Sofia thinks Guernica, battered by decades of toing and froing before it came to Spain in 1981, is now too fragile to move. The museum recently denied a request from Japan to borrow the painting for a commemoration of the bombing of Hiroshima, and refused an application from France to include it in a Picasso retrospective - despite a personal petition from President Mitterrand to King Juan Carlos. Given the sensitivity of Bilbao's request, the Reina Sofia has now commissioned a report on the state of the canvas, and will announce its final decision next month.

"The 60th anniversary of the destruction of Guernica offers an unrepeatable historic opportunity for Basque people to see this work, the most important painting in 20th-century art, in their own homeland for the first time," Juan Ignacio Vidarte, managing director of the Guggenheim Museum Bilbao, said this week. "This transcends technical considerations. To say it is too fragile is to insult our intelligence. We've made plans to transport it in its frame in a special protective vehicle. It's not problem of cost. We've said we'll pay."

The tug-of-war has become a battle of political will, probably to be resolved by a quiet word in the ear of the Prime Minister, Jose Maria Aznar, should he judge it prudent to bow to pressures from the region's ruling Basque Nationalist Party, who are also partners in his government in Madrid.

The importance of the painting goes beyond the artistic. Locals tell you that hanging a copy of Guernica on their sitting room wall during 40 years of Franco's rule amounted to an act of defiance.

Some whisper that sending Guernica away for up to two years would strip the Reina Sofia of the jewel in its otherwise undistinguished crown: hence its foot-dragging. Braced for possible disappointment, Vidarte argues that the painting would be welcome any time, not just this year.

The problem, says Kosme Maria de Barandano, a university professor of 20th-century art who is close to both the Guggenheim and the Reina Sofia, is that the political appeal for the work from the Basque government and the artistic request from the museum have become intertwined, and the Reina Sofia now has to decide on criteria far beyond its usual museological considerations.

Barandano is more worried about new acquisitions, for which the Basques are contributing pounds 30m over four years, set to form 20 per cent of the museum's collection. The first 23, bought in February, include works by De Kooning, Anselm Kiefer, Rothko and a number of young Basques. Vidarte says these works complement existing Guggenheim holdings.

Barandano regrets that the museum announced the purchases without showing them. "Rothko is one of the great painters of this century," he said this week in Bilbao. "But I'm more interested in the quality of the work than the resonance of the name. Rothkos vary greatly in price and quality: some are very damaged and discoloured. We don't want to end up with his duds."

He also questions the wisdom of acquiring works by Basque artists whose paintings are widely exhibited throughout the region. "They could have bought works of less well-known people. Especially as the Guggenheim has made no commitment to exhibit these works in New York, which would have been a generous gesture of international cultural exchange."

If Bilbao's museum is splendid from the outside, it is even more spectacular inside, prompting the thought that the vast curving galleries could outdazzle the works exhibited within them. Barandano says not: "A big work by Mondrian is not going to be frightened by grand surroundings."

The only doubt is whether the world's art-lovers will make the detour to Bilbao to see this new marvel.