Europe prospered in the 1970’s, with more nations adopting the “welfare state” paradigm made popular in Britain by Clement Atlee. Germany continued its variation of the welfare state by emphasizing close cooperation between government, labor unions, and company management.
In 1975, a period of detente (easing of tension) in Europe culminated in the signing of the Helsinki Accords. The Helsinki Accords guaranteed post-1945 borders, pledged respect for state sovereignty, expanded economic cooperation, renounced the threat or use of force (where have we heard that one before? 1928?), and pledged respect for human rights. The Soviets and Americans were among the signees. 1975 also witnessed the Soviets and Americans joining hands in space during the Apollo-Soyuz space flight in July.
Western Europe especially benefited economically from the post-war peace. For the first time in over a century, Europe would end the century having experienced over 50 years of peace without a major war. Germany’s economy boomed so much that the German companies could not find enough workers. To ease the shortage, Germany allowed “guest workers” to enter the nation. Most of the guest workers came from Turkey. By 1990, most of Western Europe was either living at or above U.S. per capita income.
The expansion of the welfare state brought numerous benefits: Germans enjoyed almost 2 months of vacation and holidays per year, while workers in France and Italy could retire at age 60 with full pay. By 1996, Germans were guaranteed 52 weeks of unemployment compensation if they lost their jobs; other countries offered anywhere from 3 to 6 months of paid maternity leave for new mothers. Most European nations offer free or low-cost health care.
European nations expanded the welfare state by heavily taxing their citizens. In Britain, the top income tax rate was 83%.
Europe also had one other major benefit helping it pay for the welfare state model: The United States protected Western Europe by shouldering the burden for defense expenses. At the height of the Cold War, the USSR had more than 5 million troops in its military forces; in 2002, all EU member states combined had a total of 1.6 million troops, ranging from 900 active armed forces in Luxembourg to 260,000 in Germany (Source: Trevor C. Salmon & Alistair J.K. Shepherd, Toward a European Army: A Military Power in the Making? (Boulder, CO: Lynne Rienner Publishers, 2003), 122). Meanwhile, the U.S. maintained an average of 2.3 million troops per year from 1950 to 2000 (Source: Tim Kane, Ph.D., The Heritage Foundation, “Global U.S. Troop Deployment, 1950-2003, available online: http://www.heritage.org/Research/NationalSecurity/cda04-11.cfm, last accessed 5 December 2005). During this time, most of the U.S. troops on foreign soil were stationed in West Germany to prevent any Soviet invasions from Eastern Europe.
As Europe’s population ages, the welfare state model is undergoing significant strain. The benefits promised to the citizens of Europe were possible only while larger numbers of people worked than were retired. With the Baby Boomer population approaching retirement, Europe is experiencing major difficulties in maintaining this model.
Margaret Thatcher
One of the first countries to experience significant difficulties was the nation that started the trend: Great Britain. By 1975, Britain was facing major labor unrest, unemployment, and issues regarding government spending. In 1975, the Conservative prime minister, Edward Heath, lost his post as head of his party to Margaret Thatcher. Thatcher became Prime Minister in 1979 and held the post until 1990.
Thatcher had served in Heath’s cabinet before she replaced him as Tory leader. Thatcher was a lawyer who had specialized in tax issues. Thatcher was also a fiscal conservative who believed Britain could no longer afford the welfare state. As a result, Thatcher began the most sustained effort to curb government spending since Atlee sparked the welfare state movement.
Thatcher first had to tackle Britain’s sky-high inflation. The government tightened the money supply by raising interest rates and passing new indirect taxes. Unemployment went higher, but once inflation dropped down to single digits, the economy began improving. British inflation dropped to 5%, even as unemployment went as high as 12.7%.
Thatcher was more than a fiscal conservative; she was also a military conservative. Although most of Europe was content to allow the Americans to defend them, Thatcher learned the hard way that a military cannot be bought with alliances. In April 1982, the Argentine military government invaded the Falkland Islands, a British colony inhabited by descendants of British settlers. Most of Europe expected Britain to accept defeat, but Thatcher dispatched a naval task force 6,000 miles, led by 2 aircraft carriers (including commandeered luxury liners carrying British troops) to regain the islands. The QE II was pressed into service to carry troops. The war lasted 74 days, but the British beat the Argentinians off the Falklands. Thatcher’s popularity soared, and she was re-elected by a huge majority of British voters.
Thatcher won major battles with the labor unions and curbed their right to strike. When coal miners went on strike, Thatcher proved she was ready; the government had stockpiled enough coal to prevent a shutdown of the power grid as had happened in 1972. Her victories over the unions provided her with a period of economic tranquility. Thatcher then began privatizing major government-owned sectors of the economy, selling major enterprises and eliminating state monopolies. Thatcher encouraged free enterprise in Britain.
Thatcher supported U.S. President Reagan in his efforts to outspend the USSR in the Cold War. When the U.S. bombed Libya in 1986, the American planes used British bases to launch the assault. (French and Spanish officials refused to allow the American planes to cross their air space.)
Thatcher’s forceful leadership style earned her the nickname of “Iron Lady.” Unfortunately, the Iron Lady lost a major vote to increase taxes in 1990 and subsequently lost her post as party leader, mainly over her opposition to closer British integration with the European Union. Thatcher was replaced by John Major in 1990.
The USSR: Breshnev to Gorbachev
Breshnev was determined to maintain Soviet domination of Eastern Europe. The Soviet invasion of Czechoslovakia in 1968 demonstrated the Breshnev Doctrine, by which the Soviets asserted the right to use force to crush any reform movements threatening Communism in Eastern Europe.
Breshnev’s government, however, signed the Helsinki Accords in 1975. Dissidents in several East European nations saw a glimmer of hope in this action. In Czechoslovakia, a group of intellectuals led by Vaclav Havel formed a civil rights organization known as Charter 77. Charter 77 claimed that the Czech government violated the Helsinki Accords by its human rights violations. The government responded by jailing Havel and other civil rights activists in 1979.
In Poland, labor unrest resulted in the most successful rebellion against the Communists. In 1980, food prices led to strikes in the port city of Gdansk. The movement led to the creation of the Solidarity labor movement, joining more than 120,000 workers across the nation. In August 1980, Solidarity went on strike nationwide. Solidarity grew to more than 10 million members under the leadership of Lech Walesa, a Gdansk shipyard electrician. Solidarity won concessions from the government, but the government was overthrown and replaced with a Communist military dictatorship. Solidarity was officially banned.
The Soviets wanted badly to crack down on Poland, but Poland had the ultimate trump card. In 1978, the Roman Catholic Church had elected Karol Wojtyla, Archbishop of Krakow, as pope. Wojtyla ruled the Church under the name of John Paul II.
John Paul II visited Poland in 1979 on one of his first official visits. While there, John Paul met with General Wojciech Jaruzelski, leader of the military government, and stressed his support of Solidarity. The Soviets didn’t dare invade Poland for fear of instigating a papal trip to his homeland. Instead, the Soviets — through their Bulgarian allies — attempted to assassinate John Paul in May 1981.
The Soviets had other troubles in 1981. In 1979, the Red Army had invaded Afghanistan to prop their Communist allies there. What should have been a minor skirmish turned into a major war as the Red Army encountered fierce resistance. The U.S., through the CIA, furnished weapons to the mujahedeen, the Afghan rebels. The U.S. and other Western nations boycotted the 1980 Summer Olympic Games hosted in Moscow. By the time the war ended in 1989, at least 15,000 Soviets were dead along with at least 1 million Afghans.
As all this transpired, the nation was undergoing serious troubles internally. Dissent had been rising since 1962, when Alexander Solzhenitsyn published his book A Day in the Life of Ivan Denisovitch, a stinging expose of conditions in Stalin’s gulags. Solzhenitsyn’s book The Gulag Archipelago resulted in his expulsion from the Soviet Union.
The Soviets had also suffered major economic pressures. The U.S. under President Reagan had renounced former administrations’ policies of detente and had undertaken major military programs to better defend Europe and the United States. Under this policy, known as deterrence, the U.S. began basing medium-range cruise missiles in Europe during the 1980’s, bringing Russia itself within firing range of U.S. weaponry. Then Reagan announced a space-based missile defense that would have negated the entire Soviet arsenal of ICBM’s pointed at America. Frankly, the Americans were outspending the Soviets to the point the Soviets could choose either weaponry or civilian goods. The nation was too poor to afford both as the Americans could do.
Breshnev died in 1982. After a series of aged leaders who all died within a short time of taking power, Mikhail Gorbachev became first secretary of the Communist Party and leader of the Soviet Union in 1985.
Gorbachev faced enormous challenges. Soviet agriculture could no longer feed the population, forcing the Soviet government to import grain — from the United States. This failure compounded the problems in Afghanistan and the economic pressure of the American policy of deterrence. Internal dissent had continued to build, especially after Andre Sakharov, the “father of the Russian hydrogen bomb,” won the Nobel Peace Price in 1975.
Gorbachev realized the Party could no longer rule the Soviet Union and Eastern Europe as Stalin and Breshnev had done. First, Gorbachev replaced 70% of the Party leadership with new, pro-Western reformers. In the 1986 Party Congress, Gorbachev announced a reform plan based on 2 elements:
Glasnost targeted the Soviet cultural and political life. Censorship was ended; TV stations were allowed to broadcast accurate news from Afghanistan and abroad. Perestroika was meant to reform political and economic structures, allowing for more democracy and hopefully leader to greater efficiency in the Soviet economy.
Gorbachev announced a unilateral freeze on medium-range nuclear missiles in his first month in office. Gorbachev attempted to persuade Reagan to abandon the “Star Wars” anti-missile shield in return for a 50% reduction in Soviet arms. Reagan refused. Gorbachev offered to eliminate the entire Soviet nuclear arsenal; Reagan held firm, much to Europe’s chagrin. (Thatcher wholeheartedly supported Reagan.) Instead, Reagan visited West Berlin in June 1987. In a stirring speech, Reagan stood in front of the Berlin Wall and challenged, “Mr. Gorbachev, tear down this wall!”
In 1986, Gorbachev’s government freed dissident Sakharov from internal exile. Dissident Anatoly Shcharansky was freed from a Soviet prison and allowed to emigrate to Israel. In 1987, Gorbachev denounced Lenin’s terror. A few months later, Gorbachev announced plans to withdraw all 120,000 soldiers from Afghanistan. In 1987, Gorbachev announced plans to allow multiple-party elections by secret ballot in the Soviet Union.
Gorbachev had one major problem: The pace of change accelerated far quicker than he could handle. Communists hated him for dismantling the Communist state; reformers hated him because he wasn’t going fast enough. One reformer, Boris Yeltsin, was fired from Communist Party head in Moscow for his criticism of Gorbachev.
In December 1988, Gorbachev announced in a speech at the UN that he planned to reduce the Red Army in Eastern Europe by 500,000 men and 10,000 tanks. (Remember that all of Europe had only 1.6 million troops in 2002.) In October 1989, foreign ministers of the Warsaw Pact renounced the Breshnev Doctrine. On 4 December 1989, Gorbachev stood with U.S. President George H.W. Bush on the island of Malta and declared the Cold War was ended. Gorbachev won the Nobel Peace Prize in 1990.
Eastern Europe Rises Again
With Gorbachev in power, and with the renouncement of the Breshnev Doctrine. Communism was doomed in Eastern Europe. The Communists took power only through Stalin’s heavy hand, and without the Red Army to support them, no Communist party could win popular elections.
Poland led the way. The Communist Party recognized Solidarity in January 1989. Solidarity immediately began pressuring the government for free elections. When the elections occurred in 1989 and 1990, Solidarity won 80% of the vote for the Polish Parliament’s upper house; the Communists held power only because they wrote the rules for the parliament’s lower house. However, the 2 houses joined to elect the President, and Lech Walesa won the presidency in 75% of the vote. The Communist rule of Poland was finished.
Hungary was next. The Communist Party of Hungary saw the end and began reforming the country. The government allowed multi-party elections and gave the country a new constitution that ended the Communist Party’s political monopoly. Party reformers abolished the Communist Party in October 1989 and formed a new party to fare better in elections. In May 1989, Hungary opened the formerly militarized border with Austria, allowing its citizens to travel freely to Western Europe. In January 1990, Hungary and the USSR signed an agreement withdrawing all Soviet troops from Hungarian soil. The Budapest Stock Exchange — the ultimate sign of capitalism — was reopened in June 1990.
Hungary’s decision to open the border sounded the death knell of Communism in Eastern Europe. The staunchest Communist dictator was Erich Honecker of East Germany. Honecker had been a Communist since the turn of the century, and he had ordered border guards to shoot to kill anyone trying to flee to the West. In February 1989, Honecker predicted the Berlin Wall would stand another 100 years.
Honecker forgot to tell the East Germans.
After Hungary opened the border, East Germans suddenly gained an interest in visiting Hungary. Most of them took a one-way trip. The first night Hungary opened the border, 7,000 East Germans fled to Austria and from there to West Germany; 60,000 went the first month. East Germany was soon losing 300 citizens an hour. Honecker called for the Warsaw Pact to invade Hungary, but his call fell on deaf ears. Gorbachev informed Honecker that Soviet troops were not coming.
If an open border drove East German Communists insane, events in Leipzig were worse. By late September of 1989, 5,000 to 10,000 demonstrators were gathering in the town square for evening prayer services at the Lutheran Church of St. Nicholas. Honecker called in the army, but by October, more than 70,000 people were gathering. Hundreds of thousands were soon joining them. Honecker’s rule collapsed that month. On midnight 9-10 November 1989, the new government opened the Brandenburg Gate at the Berlin Wall, formally ending the Cold War in Germany. Germans began tearing down the wall with their bare hands.