Economic Recovery in Western Europe

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Economic Recovery in Western Europe

• Marshall Plan aid was used to provide the
  financial underpinnings for the post-war economic
  recovery and expansion of W. Europe.
• This growth lasted until the economic downturn of
  the early 1970s.

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Western and Eastern Europe 1965-1985
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Economic Recovery

• After WWII workers wages lagged behind economic
  growth.
• To meet peoples needs/demand W. European
  governments provided welfare state programs
  (retirement, healthcare, etc.)

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Post-war Great Britain

• The Labour Party directed national policy toward
  solving social problems such as housing, worker
  safety, etc.
• These were big problems since the Industrial Rev.

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Britain, continued

• What did they do?.
• Nationalize the Bank of England, the railways,
  the airlines, and the coal steel industries.
• The government also established old-age pensions,
  unemployment insurance, allowances for
  child-rearing, and the National Health Service.

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Reforms in Europe

• France and West Germany also faced many of the
  same social and economic problems that were found
  in Britain.
• The French communist party was somewhat powerful
  after WWII and forced many socialist reforms.
• West Germany also adopted many similar reforms to
  bring recovery and stability after the war.

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Challenges to the Western European Welfare
State--Germany

• The economic cost of these social economic
  reforms was long debated.
• Then severe recessions plagued Europe in the
  1970s
• Western Europeans found it harder to compete in
  the global market. Why?
• Social Democrats (left-leaning) controlled West
  Germany from 1969-1982
• Willy Brandt initiated ostpolitik with the GDR

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Brandt was brought down by the Guillaume Affair
(spy in his midst)
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Great Britain--From Labour to Conservative

• Starting in 1979 Under Margaret Thatcher (first
  female PM in British history), there was a
  significant rollback of the Br. welfare state.
• The economy improved somewhat, but unevenly,
  leaving northern industrial with a high
  unemployment rate.
• 1982--Falkland War with Argentina

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France--Leaning left to the socialists

• 1. Socialist Francois Mitterand served as
  president from 1981 to 1995
• 2. Major worker reforms vacations, salaries,
  etc.
• 3. Nationalized banks and steel, even insurance
  industries.
• 4. After some difficulties certain efforts at
  nationalization were repealed.

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Italy

• Many coalitions.
• Christian Democrats keep communists at bay.

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Economic Trends in Europe

• Two major economic trends have been important in
  Western Europe in the post-war period
• Economic Integration
• European Union
• France has taken a lead in these movements,
  partly because they believe that tying Germany to
  the rest of Europe is necessary for French
  national security.

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Implementation of Economic Reforms

• 1951 Formation of the European Coal Steel
  Community.
• Goal to coordinate the production of coal
  steel and to prevent some of the economic
  competition that had served as a cause for
  previous 20th century wars.

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Economic Reforms, cont.

• 1958 Formation of the European Common Market
  (now the European Economic Community--EEC)
• 1973 GB, Ireland and Denmark Greece in 1981,
  Spain and Portugal in 1986
• The EEC was established to eliminate custom
  duties among the participating nations and to
  establish a common tariff on imports from the
  rest of the world.
• The EEC is still in existence, today.

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More Reforms

• 1962 Creation of a European Parliament
• Goal to implement common social and economic
  programs in the various member states.
• Duties were nearly non-existent until the
  passage of the Maastrict treaty in 1991.

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European Union

• 1991 Members of the European Union (European
  Parliament) signed the Maastricht treaty in 1991
  in Maastricht, Netherlands.
• Goal to establish a common European currency
  and a central banking structure by 1999.
• The Euro is currently in use in member nations.

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Schengen Agreement
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Destalinization

• Following a power struggle after Stalins death
  in 1953, Nikita Khrushchev took control of the
  Soviet government.
• 1956 At the Communist Partys 20th National
  Congress, Khruschev announced his program of
  destalinization which attacked the crimes of
  Stalin and condemned him, claiming that Stalin
  had deviated from the intentions of
  Marxist-Leninism.
• (note the photo to the left is doctored. The
  shoe has been added for effect.)

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American-Soviet Tensions

• Despite a visit to the US in 1959, tension was
  high between the superpowers.
• 1957 Sputnik
• 1960 U-2 Incident
• 1961 Bay of Pigs Invasion
• 1961 Berlin Wall
• 1962 Cuban Missile Crisis

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Detente

• Since the Cuban Missile Crisis had brought the
  superpowers so close to war, both sides decided
  to embrace a degree of détente, or peaceful
  coexistence.
• Hotline
• Nuclear Atmospheric Test Ban Treaty
• Missile negotiations
• Détente was seen as a sign of weakness in the
  USSR and Khruschev was ousted by 1964.
• 1970s
• ABM Treaty 1972
• Helsinki Accord1975
• Limits of Détente
• Soviet Invasion of Afghanistan
• New Arms Race under Reagan in 1980s (SDI)

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Detente

• 1. Under President Richard Nixon, the US pursued
  a policy of détente (relaxation of tensions)
  toward the Soviet Union.
• 2. Eventually the US and the Soviet Union agreed
  to an arms limitation treaty (SALT I--for
  Strategic Arms Limitation Treaty) in 1972)

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The Brezhnev Years

• Brezhnev replaced Khruschev in 1964 and ruled the
  USSR until his death in 1982.
• Continued openness (greater freedoms, etc.)
• Plagued by bad harvests and unproductive
  workforce, chronic alcoholism, as well.
• Although he did not reinstate the terror of the
  Stalin era, he did seek to once again strengthen
  the role of the Communist party bureaucracy and
  the KGB.
• Brezhnev also clamped down on reform movements in
  the E. European satellite states and called for a
  new cold war.

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The Eastern European Satellites

• Following WWII, the USSR set as a priority the
  establishment of a system of satellite states in
  E. Europe.
• The USSR created the Warsaw Pact in 1955 to
  establish military control of its satellites and
  COMECON to link and control the E. European
  economies.
• Economic conditions remained poor in most E.
  European nations, due to a lack of capital for
  economic development.

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East Germany

• 1953 East German workers demonstrated in the
  streets to protest the governments plan to
  increase productivity (at the cost of the
  workers benefits).
• This economic protest soon turned into a call for
  greater political freedom and directly
  contradicted Soviet policies.
• Soviet-supported E. German troops put down the
  revolt and economic life remained grim for E.
  Germans. Stasi enforced the regimes
  policies
• Walter Ulbricht and later Erik Honeker ensured
  that East Germany had the strongest economy among
  the satellite states. 10th largest in the world.

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The Berlin Wall

• Political and Economic conditions in E. Germany
  and many other Eastern bloc nations remained so
  poor that millions were fleeing through West
  Berlin to freedom in western nations.
• The Berlin Wall was built in 1961 to stop the
  flow of refugees to the west.

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Poland

• 1956 Economic and political conditions similar
  to those found in E. Germany set off a series of
  strikes in Poland.
• The Polish government, working with the USSR,
  sent its troops into the streets to stop the
  strikers.
• This protest brought a slight raise in workers
  wages and was viewed as a success by the people,
  despite the bloodshed.
• The independent labor union, Solidarity, led by
  Lech Walesa continued to demand greater rights
  until the government arrested Walesa in 1981.

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• 1978 Karol Wojtyla, a Polish Catholic cardinal
  was elected Pope John Paul II.
• 1980 A massive strike occurred at the Lenin
  shipyard in Gdansk, where workers demanded the
  right to form an independent trade union.
• 1980 Solidarity formed by Lech Walesa.
• 1980 Solidarity survived the declaration of
  martial law and being outlawed by going
  underground, in part with the aid of the Catholic
  Church.

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Hungary

• 1956 Inspired by the Polish revolt of 1956,
  Imre Nagy of Hungary encouraged a variety of
  reforms.
• Reforms included the creation of a multi-party
  state with Nagy as premier, a call for respect of
  human rights, the ending of political ties with
  the USSR, the release of many political
  prisoners, the creation of Hungary as a neutral
  nation, and the removal of Hungary from the
  Warsaw Pact.

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Hungary, continued

• In response to Nagys demonstrations, the Soviets
  decided to make an example of Hungary to prevent
  it from threatening their control of their whole
  system of satellite states.
• The Soviets invaded Hungary, killing thousands
  and setting up a police state. Reprisals were
  brutal, and gt200,000 refugees fled from Hungary.
  Nagy was hanged.
• The communist government of Janos Kadar enacted
  the most reforms of any communist state.
  Communism with a capitalist facelift.

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Eastern Europe

• Writers such as Vaclav Havel challenged the
  hard-line regime in 1967.
• 1968 Prague Spring led by Alexander Dubcek,
  this reform movement in Czechoslovakia attempted
  to bring about socialism with a human face,
  while still remaining in the Soviet Bloc.
• Brezhnev saw this as a threat to the entire
  Warsaw Pact and initiated the Brezhnev Doctrine
  The USSR would support with all means necessary
  (including military) any E. European communist
  state threatened by internal strife or external
  invasion.
• This was used as justification for the invasion
  of Czechoslovakia, ending reform.