"All things are possible in Spain now after the death of Franco," Jorge Guillen, the Spanish poet, said yesterday. Guillen, who left Spain when Generalissimo Francisco Franco came to power, was last week named the recipient of the Cervantes Prize, the highest literary award of Spanish-speaking nations.

Guillen has lived in voluntary exile in the United States since the end of the Spanish Civil War, and his works were prohibited in Spain during the Franco regime.

Juan Marichal, professor of Romance Languages and Literatures, said Sunday Guillen's selection shows the increasing political openness of post-Franco Spain and a "recognition that many of the most important people in Spanish culture have been in exile." Marichal called the awards--which carries a $75,000 stipend--"the Nobel Prize of Spanish-speaking peoples."

Marichal said the Spanish government has always controlled the selection of the Cervantes Prize winner. This year, in a move to involve the Latin American countries, the government allowed the Association of Spanish-Speaking Academies to make the selection. Approximately 20 academies of the Spanish speaking nations are members of the group.

The academies voted overwhelmingly to select Guillen, Marichal said. Even Argentina, the birthplace of Jorge Luis Borges, the other major candidate for the prize, voted for Guillen.

Guillen was censored by the Franco government even though his writings are not political and he is not a political activisit. Marichal said the Franco regime feared the 83-year-old poet because he is a liberal.

Today the situation is becoming more open in Spain, Guillen said. "The censorship has not been abolished theoretically, but it has been practically," he said.

Although he has lived mainly in the U.S. since 1938, Guillen said he has gone back to Spain almost every year without en- countering difficulties with the government there. He now lives in Cambridge with his wife and his daughter's family.

Honors

Guillen was the Norton Lecturer at Harvard in 1957-58, a post awarded to artists "of high distinction and preferably of international reputation." He has also won other major literary awards in this country.

Between 1941 and 1957, Guillen taught Spanish literature at Wellesley College, where he is now professor emeritus.

His poetry centers on the theme of man's projection into the world, not the interior life, he said. His major work is a 1700-page collection of poems called "Aire Nuestro" or "Our Air."

Guillen said he has done most of his work in the U.S. He has been content to write away from his homeland, he said, although he added, "As a poet I would prefer to have my own language around me."

He said he has enjoyed living in the U.S., especially in New England. He said he does not like the winters here, but that he prefers "the cold to the Spanish dictatorship.