No end to the bad news for the Republic: French prime minister Daladier is serious about his commitment to a "British conservative" peace in Europe, what means that Germany and Italy get whatever they want (and they want a lot, especially Austria and Tchechia). Daladier is threatening to freeze the Republican gold, deposited in France during the Governments retreat from Madrid at beginning of the war, and cutting Spain off his financial resources (another part of the Spanish gold was brought to Russia). Meanwhile Franco was allowed to negotiate with Hitler and Mussolini about credit and how he would pay the lend money back.

Franco's troops make advances on Catalonia, even though the resistance is strong. The Fascist army continues their numerous air raids on Spanish cities.

When the Fascists broke the Republican Aragon Front in March, their fast advance left two Republican divisions, the 31st and 43rd, cut off in the valley of Bielsa. This valley is surrounded on three sides by rough mountains, and opens to the French Pyrenean. While the 31st division disbanded disorderly and fled in panic to France, the 43rd, commanded by Antonio Beltrán and reinforced by loyal soldiers of the disbanded division, put up a stubborn and surprisingly strong resistance against the pressing Fascist army after evacuate the civil population to France.

Antonio Beltrán is in command of roughly 8000 soldiers, they resist constant attacks of an army of around 15.000 Fascists and heavy air raids since the middle of April. Both sides suffer heavy casualties. In the night between the 14th and 15th of May, the division start their most spectacular action:

They give the enemy the impression of an organized retreat during the night, making big fires like to burn heavy war material they can't take with them and a lot of noise, shouting orders, driving trucks away in direction to the French border and finally burning down some prepared houses, so the fire would make a lot of smoke in the morning and make it impossible for the enemy to get a clear sight.

The Fascists, not trusting in what they can't see, start a heavy mortar bombing on the Republican lines in the early morning, but there is no reaction, the lines and the bombed trenches remain quiet. The Fascists advance to the small village of Puyarruego and find it deserted. Getting confident, they march out of the city, over the open field, to enter the Republican trenches. Only when they are a few meters away, they see that these trenches are not empty, too late. The 43rd Republican division launch a devastating attack at the surprised Fascists in close combat, made possible cause members of the division, wounded during the mortar bombings hours before, kept their pain quiet and unattended. The Fascist commanders have no chance to order an retreat.

The next day, the 16th of May, Spanish Prime Minister Negrin comes by plane to visit and honor the soldiers in the so called Bolsa de Bielsa, the news about the events shock and move the world.

Franco orders to wipe out the Bolsa die Bielsa, and German Legion Condor bombers, with support of Italian airplanes, start an enormous mass bombing on Bielsa, new troops are brought in from other frontlines.