Life After Communism

*the End of European Communism Post-war History of Europe Ian Manners Europe has now experienced fifty-five years of peace. It has been divided in two for forty years, and reunited as one for ten years. It has undergone an economic boom for twenty-five years, an economic bust for thirteen years, and economic integration for fourteen years. It has been characterised by social liberalism for twenty years, social crisis for fifteen years and social diversity for fifteen years. The post-war history of Europe is therefore the story of peace and Cold War, Communism and Capitalism, stagflation and integration, and finally social transformation. This story of Europe is one of post-war, in the sense that it is the story of peace. To best comprehend the post-war history of Europe it is useful to imagine the period as a series of episodes interspersed by some fairly major events which allow us to get a broad picture of the changes during this era. The six episodes, which we will focus on here, are, firstly, the immediate post-war phase marked by the rapid shift from war in 1945 to the division of the continent by 1949. Secondly, there is the phase of the so-called ‘golden age’ of the 1950s and 1960s until the social crises of 1968 and the economic crises of 1973 onwards. Thirdly, and in parallel with the golden age, there is the phase of political consolidation of Cold War, communism, democracy and integration during the 1950s to the 1970s. Fourthly there is the phase ending the post-war era in Western Europe as political adaptation occurs to these economic and social crises during the 1980s. Fifthly, during the same period, the fifth phase of reform and revolution occurs in Eastern Europe with the arrival of Mikhail Gorbachev and the departure of communism. Finally, the phase of the ‘new’ Europe after the end of the division of the continent describes the last ten years of transformation and integration. Although this approach allows us to get the best picture, it would be wrong to suggest that these are anything more than episodes in an ongoing story about how Europe rose to become the world’s dominant economic and political power in the period 1500 to 1900, and how it rapidly lost that status in the period 1900 to 2000. Following the European ‘civil wars’ of 1914-1918 and 1939-1945, the post-war period is therefore one of European submission to the role of two superpowers - the United States (US) and the Soviet Union (SU) until 1991. Thus the focus here is predominantly on the history of Cold War Europe which lasted from the late 1940s until the early 1990s. The last ten years of European history have been one of quite radical change away from this fifty year pattern of superpower domination and toward a reunification of a continent centred on itself, but more tightly bound to increasingly global patterns of activity. The rest of this paper considers these six episodes one page at a time, but it must be remembered that this is a broad approach to the period and does not seek to cover all the events or all of the stories. In particular, the relations between Europe and the rest of the world during this period is largely omitted. Thus, important processes such de-colonisation, European migration, and European involvement in wars outside its continent are largely overlooked. For those interested, an introduction to this particular story can be found in Ian Manners, ‘Europe and the World’ in Richard Sakwa and Anne Stevens (eds.) Contemporary Europe (Basingstoke: Macmillan, 2000). Post-War Europe From War to Peace The starting point for our story is the day 8 May 1945, when the war in Europe ends and Europe’s longest period of peace in centuries begins. It is difficult to get a sense of post-war European history without first understanding the impact of war and the transition from war to peace during the late 1940s. The catalogue of physical damage caused by the Second World War in Europe and elsewhere is staggering. The human cost in terms of military deaths was huge but the greatest damage was inflicted on civilians. In addition to being a ‘total war’ involving both military and civilian casualties, the war in Europe was genocidal as the Nazis attempted to exterminate Jewish people and others such as communists, gypsies, homosexuals, and those with disabilities. In total, over 60 million lives were lost during the war, with 12 million deaths in concentration camps - this is roughly the same as the current population of Britain or Thailand. The economic impact was also huge - in just five years Europe slumped from being one of the wealthiest continents to relying on the help from the USA and others simply to feed itself. The capital stock and productive assets of Europe and European companies around the world were practically liquidated as part of the total mobilisation required by the war. Finally, the political impact was equally significant as Germany and Austria were occupied and divided between the four allied powers. Similarly, the Soviet Union annexed huge swathes of land in Eastern Europe, including the Baltic states, half of Poland, and some of Romania, amongst others. The Division of Europe As important as the impact of war were the events of the immediate post-war period of 1945 to 1949, during which time Europe became divided in two between the forces of communism and democracy. Although the four allied powers of the Soviet Union, the United States, Britain and France were ultimately successful in co-operating during the Second World War, this relationship was short lived and actually started to break down even before the war was over. A combination of ideological differences, misunderstandings and conflicting interests in post-war Europe ultimately meant that the US and SU were to fall out over the way in which Germany was dismembered, support for economic reconstruction, and the right to intervene in political events in countries such as Poland, Czechoslovakia, Greece or Italy. On reflection, it was not certain that Europe would have developed the way it did were it not for the desire of the United States to ensure that democracy survived in Europe, particularly in places like France, Italy, Greece and Turkey, all of whom looked susceptible to internal conflict, communism and external intervention in the immediate post-war period. Similarly, the desire of the Soviet Union to secure itself a ‘buffer zone’ of friendly communist states to its west ensured that puppet governments took over in the satellite states of Poland, Czechoslovakia, Hungary, Romania and Bulgaria. A combination of the role of these two new ‘superpowers’ through the development of the Truman Doctrine, the Cominform, the Czech coup, the Marshall Aid programme, and the blockade of West Berlin ensured that by 1949 Europe was clearly divided between two competing power blocs - a division that found its symbolic form in the creation of two separate German states between May and October 1949. Economic and Social Miracle Economic Recovery The division of Europe was to provide the foundation for the rapid economic recovery of Western Europe in the early 1950s. This period of high growth continued during the 1950s and 1960s as was later to be labelled the ‘golden age’ or ‘golden economic summer’ as national economies expanded between 3-5 per cent per year. At least five factors can be identified as responsible for this unprecedented period of growth, although as we will see in the next section on political consolidation, the stability provided by functioning democracies and the role of the United States are also important. The first factor is the economic kick-start provided by the process of reconstruction itself, in particular the input of US finance in the form of Marshall aid, but also the adoption of American manufacturing techniques, and the crucial role of rebuilding confidence in Europe. Secondly, the development of employment practices founded on ideas of full employment and government intervention in the economy ensured that the benefits of this economic growth were shared by all. Thirdly, the expectation of continued growth promoted ‘long-termism’ in the minds, practices and investment ratios of Europeans which, together with highly beneficial technological advances, helped to sustain the productivity boom. Fourthly, the European economy was driven by demand-led growth - a mixture of high domestic demand and high international demand for European goods and products. Finally, the previous factors reinforced the international stability brought about by the 1944 Bretton Woods institutions which ensured fixed exchange rates and a revival of international trade based on the achievements of the General Agreement on Tariffs and Trade. Social Transformation Parallel to this economic recovery was the social transformation of Europe during the 1950s and 1960s as the stifling social patterns of the pre-war period were rapidly liberalised. An interesting question to consider here is the extent to which social transformation was the result of economic recovery or whether the period of continued economic growth was actually made possible by changed social conditions (just as the industrial revolution was accompanied by urbanisation a century earlier). The social transformation during this period was characterised by three features - changed social patterns; the role of the welfare state; and the creation of what became known as the ‘affluent society’. The changed social patterns were felt across Europe, east and west, as the immediate post-war decades saw a baby-boom accompanied by advances in medical technology, as well as the gradual elevation of the status of women in society which had previously represented a critical economic and political failure. In addition, the shrinking of ‘extended’ families to ‘nuclear’ families, together with an increasingly mobile society in terms of migration and transport, and the reduction of class barriers which had symbolised the previous centuries, all led to a more fair and productive society. The role of the government in this new society was also important as post-war European states took onboard the tasks of social provision ‘from the cradle to the grave’ as the welfare state was born. Finally, the affluent society based on markedly increased wealth, consumerism and leisure time was also created. This society took as granted all the gains of the 1950s and 1960s and grew to expect increasing affluence. It was also increasingly well organised and mobilised in its political activities, as seen in the events of 1968. Political Consolidation Cold War Europe The economic and social miracle of the 1950s and 1960s took place in a period of political consolidation characterised by the stand-off of the Cold War in Europe and the contrasting political developments across European states. Churchill’s ‘Iron Curtain’ speech in 1946 was realised by the events during 1949, which ensured continued superpower rivalry in Europe. This relationship alternated between bad and terrible during the events between 1950 and 1956 such as the Korean War, Stalin’s death, discussion over the status of Germany, and the Hungarian uprising. However, these were insignificant compared to the low point of superpower rivalry of 1960 to 1962 during Khrushchev’s uneven premiership involving the 1960 U2 incident, the erection of the Berlin Wall in 1961 and finally the Cuban crisis in 1962. Following Khrushchev’s removal in 1964, Brezhnev’s declaration of his doctrine on intervention in support of communism was demonstrated in Czechoslovakia during 1968. Relations improved with Brant’s Ostpolitik in the 1970s providing one of the major factors leading to détente and the signing in 1975 of the Helsinki Final Act as part of the Conference on Security and Co-operation in Europe (CSCE). Thus, despite the involvement of massive conventional and nuclear weaponry in Europe during the 1950s, 1960s and 1970s, the war remained distinctly ‘cold’ as neither superpower engaged directly with each other. Political Development While international relations between east and west Europe were governed by superpower relations, both democracy and communism consolidated their positions within European states. The post-fascist states of West Germany and Italy succeeded in encouraging democracy to flourish in the 1950s, but it was to take until the 1970s before the arrival of democracy in the authoritarian states of Spain, Portugal, Greece and Turkey. In contrast the period saw communism in Eastern Europe strengthen its grip during the 1950s and 1960s, then slide into decline during the 1970s as the welfare of its citizens ceased to improve. This led to increasing diversity within the communist monolith as countries such as Romania became less dependent on Soviet support. Thus the first three post-war decades saw the consolidation of Europe into three groups of states - firstly there was the NATO countries of western Europe, including West Germany, Britain, Italy, the Benelux states, Denmark, Norway and Iceland. Secondly there were the Warsaw Pact countries of the Soviet Union, East Germany, Poland, Czechoslovakia, Hungary, Romania and Bulgaria. And thirdly there were the neutral and non-aligned countries of Ireland, Switzerland, Austria, Sweden, Finland, Yugoslavia and Albania. Increasingly, from 1951 onwards, this pattern was to be changed by the evolution of the European Community from its origins in the European Coal and Steel Community to the signing of the Treaty of Rome in 1957 creating the European Economic Community and European Atomic Energy Community. During the 1950s these communities only consisted of the wartime combatants West Germany, France, Italy, the Netherlands, Belgium and Luxembourg. However, with the application for membership of Britain, Denmark, Norway and Ireland in 1961, the Community began to play a serious role in shaping Europe from the 1970s onwards. Britain, Denmark and Ireland were finally admitted to the Community in 1973, although this turned out to be a particularly bad year for European co-operation, as indeed was the rest of the decade. Crisis and Adaptation in Western Europe Economic and Social Crisis Despite warnings as early as the late 1960s, the economic and social crisis which struck Europe in the 1970s came as a shock to most governments and their electorates. It would be very easy to simply blame the oil shock of 1973 as causing this crisis, but the reality is somewhat more complex. There are at least five contributing factors to the economic crises and ensuing depression of the 1970s and 1980s. Firstly, there were increasing problems caused by employment practices, unionisation, social militancy and productivity. Secondly, there were problems of international stability and the Bretton Woods system collapsed following the British and US de-valuations in 1967 and 1971, and the Paris conference of 1973. Thirdly, there were the problems of demand-led growth as competition from the Newly Industrialised Countries (NICs) rendered European production non-competitive and domestic demand collapsed. Fourthly, there were the problems of long-term confidence caused by the first oil shock of 1973 (following the Yom Kippur war), and the second oil shock of 1980 (following the Iranian revolution). Finally, the economic and social crisis was deepened by its (mis-)management by governments as well as the social ramifications of economic collapse. The unprecedented combination of stagnating growth and inflating prices was termed ‘stagflation’ and led to a combination of rising unemployment, worsening industrial relations and a crisis of government intervention which formed the basis of post-war politics. Some governments dealt with the crisis more effectively than others, so while countries such as the Netherlands and West Germany were able to gradually reform their economies, Britain practically wiped-out its wealth-generating ability by practising ‘slash and burn’ macro-economic policies which rendered its economy the most volatile in Europe. Political Adaptation From 1980 onwards Europe was forced to adapt to the new economic and social conditions which characterised the end of the golden economic summer. This political adaptation involved coming to terms with economic depression, stagflation, government debt, and finding a way to revitalise Europe’s politics, economies, and societies. In the late 1970s and early 1980s the immediate responses were broadly expansionary, with governments attempting to borrow their way out of crisis, rather than address the problems more directly. However, the 1980s saw a series of politicians come to power who were to lead the way for Europe to adapt and overcome the ‘Eurosclerosis’ characteristic of the period. Beginning with the arrival in office of Mitterrand in France (1981), Kohl in West Germany (1982), and Delors in the European Commission (1984), Europe was able to pull together to chart a way out of the crisis through the creation of the Single Market programme, agreed in the Single European Act (SEA) in 1986. What is interesting here is the extent to which socialist policies of the left (as found in Spain, Portugal, Greece, Italy, and France prior to 1984) ran into the same problems as the monetarist policies of the new-right (as found predominantly in Britain). What became clear during the 1980s is that the solutions to the depression did not lie in national responses. By the end of the 1980s Europe was beginning to find a solution in the free market goals of the SEA, combined with the social market principles of EC Social Policy. However, even before the Single Market had been completed Europe was to face another challenge which would force it to accelerate integration - the end of communism. Reform and Revolution in Eastern Europe Gorbachev’s Reforms The economic and social crisis of the 1970s were not only a western European phenomena - increasingly eastern European communism was also in crisis, one that included a severe crisis of legitimacy as well. In many ways the Helsinki agreements marked the beginning of the end for the Soviet Union as they helped to highlight the failures and inadequacies of communist society, as well as ensured that voices of dissent were heard around the world. As with all political systems in crisis, the logical response was to focus attention on foreign events, as the Soviet Union, the United States, and Britain did spectacularly during the period of the ‘new freeze’ of 1979 to 1988. A combination of the 1979 Soviet Invasion of Afghanistan, the 1981 declaration of marshal law in Poland, and the decisions to introduce intermediate nuclear missiles into Europe led to increased tension as ideological posturing by Brezhnev, Reagan, Andropov, and Chernenko heightened the Cold War conflict. The appointment of Gorbachev as general secretary in 1985 came as a breath of fresh air through Europe as he first established his hold within the party, then introduced his reforms of Perestroika, Glasnost, Demokratizatsiya and ‘new thinking’ in relations with the west. Ultimately, Gorbachev was to find himself caught between the radicalism of reformers such as Yeltsin, the conservatism of the old communists, and the reactionism of nationalists. His means of resolving the nationalities crisis in the Soviet Union was to introduce the Union Treaty in August 1991, although a coup attempt by hard-liners ensured that the treaty was never signed and the USSR dissolved into the Russian Federation. Eastern Revolutions The combination of crises in the communist satellite states during the 1970s and 1980s, and the rising tide of internal dissent, was to ensure that Gorbachev’s impact in eastern Europe was to lead to the end of communism. It is worth remembering that the collapse of communism was due to internal factors in the communist bloc and the role of ‘people power’ in the satellite states, rather than external intervention (indeed no western commentator foresaw the events of 1989). The first cracks in communism were to be seen with the support for Solidarity in Gdansk, the economic reforms in Budapest, and the anti-nuclear protests in Czechoslovakia and East Germany. The debt crisis throughout Comecon, together with Gorbachev’s encouragement, started to lead to pluralism in Hungary and Poland during 1988 and early 1989. In June 1989 the first elections were held in Poland, while in September the first non-communist coalition government came to power. Through late 1989 popular demonstrations against the communist governments led to real ‘people power’ as one-by-one the central and eastern European states installed democratic governments. Following the precedent set by Poland and Hungary, the governments in Czechoslovakia, East Germany, Romania, and Bulgaria were toppled by people power. The fall of the Berlin wall finally came on the 9th November 1989 as the physical symbol of a divided continent was toppled by thousands of jubilant Germans using pickaxes and cranes to shatter the concrete. Once the processes of revolution had been set in motion, it took only a year, from June 1989 to June 1990, for communism to be eradicated in Eastern Europe. The combination of economic decay, collapse of political legitimacy, spread of dissent and people power had ended the Cold War. The New Europe The Walls Come Down The chiselling of walls, the hammering of concrete, and the cutting of barbed wire across Europe in late 1989 and early 1990 led to the renaming of the ‘old continent’ as the ‘new’ Europe. In this concluding episode, it is worth considering what the people’s revolutions across central and Eastern Europe mean and where they have led the fledgling new democracies as they attempted to ‘return to Europe’ in the 1990s. The old Europe was characterised by a static bipolar division shaped by superpower conflict based on nuclear deterrence, with Germany divided at the heart of Europe. The new Europe is none of these things - it is centred instead on a European Union that is deepening its integration, while moving very slowly towards broadening its membership. Interestingly, NATO has redefined itself in the new Europe (unlike its defunct opponent, the WTO) and has expanded to include the new democracies of Poland, Hungary and the Czech Republic. Central Europe has been reborn in the minds of Europeans, with a reunited Germany, an EU Austria, Poland, the Czech Republic, Slovakia, Hungary and Slovenia in the new mittel-Europa. Eastern Europe now has new states such as Moldova, the Ukraine, Belarus, Lithuania, Latvia, and Estonia, some of which have not been independent since 1939. Finally South Eastern Europe has demanded the attention of Europeans as the fragile results of the post-war reconfiguration of the region have descended into nationalist sentiment and bloody conflict reminiscent of the 19th century. The new democracies created by the collapse of the Soviet empire have had to come to terms with the triple transformation in their ‘return to Europe’ - the problems of democratic transition in a region which has little previous experience; the problems of market transition in countries which have suffered communist centralisation for so long; and the problems of social transformation which threaten to punish rather than reward the people of Eastern Europe for their decision to discard communism. And Europe Goes Up If the newness of Europe is about anything, it is not only about overcoming the divisions of the past as the previous section suggests, but it is also about regaining a lost confidence about Europe’s future and its status in the world. Thus the post-Cold War period, apart from some faltering steps in the mid-1990s, has been characterised by the continuing process of building a European ‘edifice’ based around the European Union, but actually signifying the achievement of ‘normality’ of European peoples, states and companies. The building of this Europe is centred on three foundations, all of which appear to contribute to a 21st century Europe which is escaping its past formulation and moving towards a future as a global Europe. The first foundation to this new European construction is the reformulation of the purpose of the European Union away from preventing fratricidal war in Europe towards creating an economic union competitive in global terms. The second foundation to the new European Union is its enlargement from a cosy club of 15 rich western European states to a more encompassing and diverse Union of up to 30 pan-European states in our lifetime. The third foundation is the difficult process of striking a new balance between the comfortable welfare state of social democracy and the uncomfortable liberal state of the free market, in a way which sustains Europe as one of the world’s wealthiest and most egalitarian places to live. *After the Cold War Stumble It!

Life After Communism

*the End of European Communism Post-war History of Europe Ian Manners Europe has now experienced fifty-five years of peace. It has been divided in two for forty years, and reunited as one for ten years. It has undergone an economic boom for twenty-five years, an economic bust for thirteen years, and economic integration for fourteen years. It has been characterised by social liberalism for twenty years, social crisis for fifteen years and social diversity for fifteen years. The post-war history of Europe is therefore the story of peace and Cold War, Communism and Capitalism, stagflation and integration, and finally social transformation. This story of Europe is one of post-war, in the sense that it is the story of peace. To best comprehend the post-war history of Europe it is useful to imagine the period as a series of episodes interspersed by some fairly major events which allow us to get a broad picture of the changes during this era. The six episodes, which we will focus on here, are, firstly, the immediate post-war phase marked by the rapid shift from war in 1945 to the division of the continent by 1949. Secondly, there is the phase of the so-called ‘golden age’ of the 1950s and 1960s until the social crises of 1968 and the economic crises of 1973 onwards. Thirdly, and in parallel with the golden age, there is the phase of political consolidation of Cold War, communism, democracy and integration during the 1950s to the 1970s. Fourthly there is the phase ending the post-war era in Western Europe as political adaptation occurs to these economic and social crises during the 1980s. Fifthly, during the same period, the fifth phase of reform and revolution occurs in Eastern Europe with the arrival of Mikhail Gorbachev and the departure of communism. Finally, the phase of the ‘new’ Europe after the end of the division of the continent describes the last ten years of transformation and integration. Although this approach allows us to get the best picture, it would be wrong to suggest that these are anything more than episodes in an ongoing story about how Europe rose to become the world’s dominant economic and political power in the period 1500 to 1900, and how it rapidly lost that status in the period 1900 to 2000. Following the European ‘civil wars’ of 1914-1918 and 1939-1945, the post-war period is therefore one of European submission to the role of two superpowers - the United States (US) and the Soviet Union (SU) until 1991. Thus the focus here is predominantly on the history of Cold War Europe which lasted from the late 1940s until the early 1990s. The last ten years of European history have been one of quite radical change away from this fifty year pattern of superpower domination and toward a reunification of a continent centred on itself, but more tightly bound to increasingly global patterns of activity. The rest of this paper considers these six episodes one page at a time, but it must be remembered that this is a broad approach to the period and does not seek to cover all the events or all of the stories. In particular, the relations between Europe and the rest of the world during this period is largely omitted. Thus, important processes such de-colonisation, European migration, and European involvement in wars outside its continent are largely overlooked. For those interested, an introduction to this particular story can be found in Ian Manners, ‘Europe and the World’ in Richard Sakwa and Anne Stevens (eds.) Contemporary Europe (Basingstoke: Macmillan, 2000). Post-War Europe From War to Peace The starting point for our story is the day 8 May 1945, when the war in Europe ends and Europe’s longest period of peace in centuries begins. It is difficult to get a sense of post-war European history without first understanding the impact of war and the transition from war to peace during the late 1940s. The catalogue of physical damage caused by the Second World War in Europe and elsewhere is staggering. The human cost in terms of military deaths was huge but the greatest damage was inflicted on civilians. In addition to being a ‘total war’ involving both military and civilian casualties, the war in Europe was genocidal as the Nazis attempted to exterminate Jewish people and others such as communists, gypsies, homosexuals, and those with disabilities. In total, over 60 million lives were lost during the war, with 12 million deaths in concentration camps - this is roughly the same as the current population of Britain or Thailand. The economic impact was also huge - in just five years Europe slumped from being one of the wealthiest continents to relying on the help from the USA and others simply to feed itself. The capital stock and productive assets of Europe and European companies around the world were practically liquidated as part of the total mobilisation required by the war. Finally, the political impact was equally significant as Germany and Austria were occupied and divided between the four allied powers. Similarly, the Soviet Union annexed huge swathes of land in Eastern Europe, including the Baltic states, half of Poland, and some of Romania, amongst others. The Division of Europe As important as the impact of war were the events of the immediate post-war period of 1945 to 1949, during which time Europe became divided in two between the forces of communism and democracy. Although the four allied powers of the Soviet Union, the United States, Britain and France were ultimately successful in co-operating during the Second World War, this relationship was short lived and actually started to break down even before the war was over. A combination of ideological differences, misunderstandings and conflicting interests in post-war Europe ultimately meant that the US and SU were to fall out over the way in which Germany was dismembered, support for economic reconstruction, and the right to intervene in political events in countries such as Poland, Czechoslovakia, Greece or Italy. On reflection, it was not certain that Europe would have developed the way it did were it not for the desire of the United States to ensure that democracy survived in Europe, particularly in places like France, Italy, Greece and Turkey, all of whom looked susceptible to internal conflict, communism and external intervention in the immediate post-war period. Similarly, the desire of the Soviet Union to secure itself a ‘buffer zone’ of friendly communist states to its west ensured that puppet governments took over in the satellite states of Poland, Czechoslovakia, Hungary, Romania and Bulgaria. A combination of the role of these two new ‘superpowers’ through the development of the Truman Doctrine, the Cominform, the Czech coup, the Marshall Aid programme, and the blockade of West Berlin ensured that by 1949 Europe was clearly divided between two competing power blocs - a division that found its symbolic form in the creation of two separate German states between May and October 1949. Economic and Social Miracle Economic Recovery The division of Europe was to provide the foundation for the rapid economic recovery of Western Europe in the early 1950s. This period of high growth continued during the 1950s and 1960s as was later to be labelled the ‘golden age’ or ‘golden economic summer’ as national economies expanded between 3-5 per cent per year. At least five factors can be identified as responsible for this unprecedented period of growth, although as we will see in the next section on political consolidation, the stability provided by functioning democracies and the role of the United States are also important. The first factor is the economic kick-start provided by the process of reconstruction itself, in particular the input of US finance in the form of Marshall aid, but also the adoption of American manufacturing techniques, and the crucial role of rebuilding confidence in Europe. Secondly, the development of employment practices founded on ideas of full employment and government intervention in the economy ensured that the benefits of this economic growth were shared by all. Thirdly, the expectation of continued growth promoted ‘long-termism’ in the minds, practices and investment ratios of Europeans which, together with highly beneficial technological advances, helped to sustain the productivity boom. Fourthly, the European economy was driven by demand-led growth - a mixture of high domestic demand and high international demand for European goods and products. Finally, the previous factors reinforced the international stability brought about by the 1944 Bretton Woods institutions which ensured fixed exchange rates and a revival of international trade based on the achievements of the General Agreement on Tariffs and Trade. Social Transformation Parallel to this economic recovery was the social transformation of Europe during the 1950s and 1960s as the stifling social patterns of the pre-war period were rapidly liberalised. An interesting question to consider here is the extent to which social transformation was the result of economic recovery or whether the period of continued economic growth was actually made possible by changed social conditions (just as the industrial revolution was accompanied by urbanisation a century earlier). The social transformation during this period was characterised by three features - changed social patterns; the role of the welfare state; and the creation of what became known as the ‘affluent society’. The changed social patterns were felt across Europe, east and west, as the immediate post-war decades saw a baby-boom accompanied by advances in medical technology, as well as the gradual elevation of the status of women in society which had previously represented a critical economic and political failure. In addition, the shrinking of ‘extended’ families to ‘nuclear’ families, together with an increasingly mobile society in terms of migration and transport, and the reduction of class barriers which had symbolised the previous centuries, all led to a more fair and productive society. The role of the government in this new society was also important as post-war European states took onboard the tasks of social provision ‘from the cradle to the grave’ as the welfare state was born. Finally, the affluent society based on markedly increased wealth, consumerism and leisure time was also created. This society took as granted all the gains of the 1950s and 1960s and grew to expect increasing affluence. It was also increasingly well organised and mobilised in its political activities, as seen in the events of 1968. Political Consolidation Cold War Europe The economic and social miracle of the 1950s and 1960s took place in a period of political consolidation characterised by the stand-off of the Cold War in Europe and the contrasting political developments across European states. Churchill’s ‘Iron Curtain’ speech in 1946 was realised by the events during 1949, which ensured continued superpower rivalry in Europe. This relationship alternated between bad and terrible during the events between 1950 and 1956 such as the Korean War, Stalin’s death, discussion over the status of Germany, and the Hungarian uprising. However, these were insignificant compared to the low point of superpower rivalry of 1960 to 1962 during Khrushchev’s uneven premiership involving the 1960 U2 incident, the erection of the Berlin Wall in 1961 and finally the Cuban crisis in 1962. Following Khrushchev’s removal in 1964, Brezhnev’s declaration of his doctrine on intervention in support of communism was demonstrated in Czechoslovakia during 1968. Relations improved with Brant’s Ostpolitik in the 1970s providing one of the major factors leading to détente and the signing in 1975 of the Helsinki Final Act as part of the Conference on Security and Co-operation in Europe (CSCE). Thus, despite the involvement of massive conventional and nuclear weaponry in Europe during the 1950s, 1960s and 1970s, the war remained distinctly ‘cold’ as neither superpower engaged directly with each other. Political Development While international relations between east and west Europe were governed by superpower relations, both democracy and communism consolidated their positions within European states. The post-fascist states of West Germany and Italy succeeded in encouraging democracy to flourish in the 1950s, but it was to take until the 1970s before the arrival of democracy in the authoritarian states of Spain, Portugal, Greece and Turkey. In contrast the period saw communism in Eastern Europe strengthen its grip during the 1950s and 1960s, then slide into decline during the 1970s as the welfare of its citizens ceased to improve. This led to increasing diversity within the communist monolith as countries such as Romania became less dependent on Soviet support. Thus the first three post-war decades saw the consolidation of Europe into three groups of states - firstly there was the NATO countries of western Europe, including West Germany, Britain, Italy, the Benelux states, Denmark, Norway and Iceland. Secondly there were the Warsaw Pact countries of the Soviet Union, East Germany, Poland, Czechoslovakia, Hungary, Romania and Bulgaria. And thirdly there were the neutral and non-aligned countries of Ireland, Switzerland, Austria, Sweden, Finland, Yugoslavia and Albania. Increasingly, from 1951 onwards, this pattern was to be changed by the evolution of the European Community from its origins in the European Coal and Steel Community to the signing of the Treaty of Rome in 1957 creating the European Economic Community and European Atomic Energy Community. During the 1950s these communities only consisted of the wartime combatants West Germany, France, Italy, the Netherlands, Belgium and Luxembourg. However, with the application for membership of Britain, Denmark, Norway and Ireland in 1961, the Community began to play a serious role in shaping Europe from the 1970s onwards. Britain, Denmark and Ireland were finally admitted to the Community in 1973, although this turned out to be a particularly bad year for European co-operation, as indeed was the rest of the decade. Crisis and Adaptation in Western Europe Economic and Social Crisis Despite warnings as early as the late 1960s, the economic and social crisis which struck Europe in the 1970s came as a shock to most governments and their electorates. It would be very easy to simply blame the oil shock of 1973 as causing this crisis, but the reality is somewhat more complex. There are at least five contributing factors to the economic crises and ensuing depression of the 1970s and 1980s. Firstly, there were increasing problems caused by employment practices, unionisation, social militancy and productivity. Secondly, there were problems of international stability and the Bretton Woods system collapsed following the British and US de-valuations in 1967 and 1971, and the Paris conference of 1973. Thirdly, there were the problems of demand-led growth as competition from the Newly Industrialised Countries (NICs) rendered European production non-competitive and domestic demand collapsed. Fourthly, there were the problems of long-term confidence caused by the first oil shock of 1973 (following the Yom Kippur war), and the second oil shock of 1980 (following the Iranian revolution). Finally, the economic and social crisis was deepened by its (mis-)management by governments as well as the social ramifications of economic collapse. The unprecedented combination of stagnating growth and inflating prices was termed ‘stagflation’ and led to a combination of rising unemployment, worsening industrial relations and a crisis of government intervention which formed the basis of post-war politics. Some governments dealt with the crisis more effectively than others, so while countries such as the Netherlands and West Germany were able to gradually reform their economies, Britain practically wiped-out its wealth-generating ability by practising ‘slash and burn’ macro-economic policies which rendered its economy the most volatile in Europe. Political Adaptation From 1980 onwards Europe was forced to adapt to the new economic and social conditions which characterised the end of the golden economic summer. This political adaptation involved coming to terms with economic depression, stagflation, government debt, and finding a way to revitalise Europe’s politics, economies, and societies. In the late 1970s and early 1980s the immediate responses were broadly expansionary, with governments attempting to borrow their way out of crisis, rather than address the problems more directly. However, the 1980s saw a series of politicians come to power who were to lead the way for Europe to adapt and overcome the ‘Eurosclerosis’ characteristic of the period. Beginning with the arrival in office of Mitterrand in France (1981), Kohl in West Germany (1982), and Delors in the European Commission (1984), Europe was able to pull together to chart a way out of the crisis through the creation of the Single Market programme, agreed in the Single European Act (SEA) in 1986. What is interesting here is the extent to which socialist policies of the left (as found in Spain, Portugal, Greece, Italy, and France prior to 1984) ran into the same problems as the monetarist policies of the new-right (as found predominantly in Britain). What became clear during the 1980s is that the solutions to the depression did not lie in national responses. By the end of the 1980s Europe was beginning to find a solution in the free market goals of the SEA, combined with the social market principles of EC Social Policy. However, even before the Single Market had been completed Europe was to face another challenge which would force it to accelerate integration - the end of communism. Reform and Revolution in Eastern Europe Gorbachev’s Reforms The economic and social crisis of the 1970s were not only a western European phenomena - increasingly eastern European communism was also in crisis, one that included a severe crisis of legitimacy as well. In many ways the Helsinki agreements marked the beginning of the end for the Soviet Union as they helped to highlight the failures and inadequacies of communist society, as well as ensured that voices of dissent were heard around the world. As with all political systems in crisis, the logical response was to focus attention on foreign events, as the Soviet Union, the United States, and Britain did spectacularly during the period of the ‘new freeze’ of 1979 to 1988. A combination of the 1979 Soviet Invasion of Afghanistan, the 1981 declaration of marshal law in Poland, and the decisions to introduce intermediate nuclear missiles into Europe led to increased tension as ideological posturing by Brezhnev, Reagan, Andropov, and Chernenko heightened the Cold War conflict. The appointment of Gorbachev as general secretary in 1985 came as a breath of fresh air through Europe as he first established his hold within the party, then introduced his reforms of Perestroika, Glasnost, Demokratizatsiya and ‘new thinking’ in relations with the west. Ultimately, Gorbachev was to find himself caught between the radicalism of reformers such as Yeltsin, the conservatism of the old communists, and the reactionism of nationalists. His means of resolving the nationalities crisis in the Soviet Union was to introduce the Union Treaty in August 1991, although a coup attempt by hard-liners ensured that the treaty was never signed and the USSR dissolved into the Russian Federation. Eastern Revolutions The combination of crises in the communist satellite states during the 1970s and 1980s, and the rising tide of internal dissent, was to ensure that Gorbachev’s impact in eastern Europe was to lead to the end of communism. It is worth remembering that the collapse of communism was due to internal factors in the communist bloc and the role of ‘people power’ in the satellite states, rather than external intervention (indeed no western commentator foresaw the events of 1989). The first cracks in communism were to be seen with the support for Solidarity in Gdansk, the economic reforms in Budapest, and the anti-nuclear protests in Czechoslovakia and East Germany. The debt crisis throughout Comecon, together with Gorbachev’s encouragement, started to lead to pluralism in Hungary and Poland during 1988 and early 1989. In June 1989 the first elections were held in Poland, while in September the first non-communist coalition government came to power. Through late 1989 popular demonstrations against the communist governments led to real ‘people power’ as one-by-one the central and eastern European states installed democratic governments. Following the precedent set by Poland and Hungary, the governments in Czechoslovakia, East Germany, Romania, and Bulgaria were toppled by people power. The fall of the Berlin wall finally came on the 9th November 1989 as the physical symbol of a divided continent was toppled by thousands of jubilant Germans using pickaxes and cranes to shatter the concrete. Once the processes of revolution had been set in motion, it took only a year, from June 1989 to June 1990, for communism to be eradicated in Eastern Europe. The combination of economic decay, collapse of political legitimacy, spread of dissent and people power had ended the Cold War. The New Europe The Walls Come Down The chiselling of walls, the hammering of concrete, and the cutting of barbed wire across Europe in late 1989 and early 1990 led to the renaming of the ‘old continent’ as the ‘new’ Europe. In this concluding episode, it is worth considering what the people’s revolutions across central and Eastern Europe mean and where they have led the fledgling new democracies as they attempted to ‘return to Europe’ in the 1990s. The old Europe was characterised by a static bipolar division shaped by superpower conflict based on nuclear deterrence, with Germany divided at the heart of Europe. The new Europe is none of these things - it is centred instead on a European Union that is deepening its integration, while moving very slowly towards broadening its membership. Interestingly, NATO has redefined itself in the new Europe (unlike its defunct opponent, the WTO) and has expanded to include the new democracies of Poland, Hungary and the Czech Republic. Central Europe has been reborn in the minds of Europeans, with a reunited Germany, an EU Austria, Poland, the Czech Republic, Slovakia, Hungary and Slovenia in the new mittel-Europa. Eastern Europe now has new states such as Moldova, the Ukraine, Belarus, Lithuania, Latvia, and Estonia, some of which have not been independent since 1939. Finally South Eastern Europe has demanded the attention of Europeans as the fragile results of the post-war reconfiguration of the region have descended into nationalist sentiment and bloody conflict reminiscent of the 19th century. The new democracies created by the collapse of the Soviet empire have had to come to terms with the triple transformation in their ‘return to Europe’ - the problems of democratic transition in a region which has little previous experience; the problems of market transition in countries which have suffered communist centralisation for so long; and the problems of social transformation which threaten to punish rather than reward the people of Eastern Europe for their decision to discard communism. And Europe Goes Up If the newness of Europe is about anything, it is not only about overcoming the divisions of the past as the previous section suggests, but it is also about regaining a lost confidence about Europe’s future and its status in the world. Thus the post-Cold War period, apart from some faltering steps in the mid-1990s, has been characterised by the continuing process of building a European ‘edifice’ based around the European Union, but actually signifying the achievement of ‘normality’ of European peoples, states and companies. The building of this Europe is centred on three foundations, all of which appear to contribute to a 21st century Europe which is escaping its past formulation and moving towards a future as a global Europe. The first foundation to this new European construction is the reformulation of the purpose of the European Union away from preventing fratricidal war in Europe towards creating an economic union competitive in global terms. The second foundation to the new European Union is its enlargement from a cosy club of 15 rich western European states to a more encompassing and diverse Union of up to 30 pan-European states in our lifetime. The third foundation is the difficult process of striking a new balance between the comfortable welfare state of social democracy and the uncomfortable liberal state of the free market, in a way which sustains Europe as one of the world’s wealthiest and most egalitarian places to live. *After the Cold War