The
Age of Despondency and Redress in Europe
In
the third section of his book, Tony Judt underscores the continent’s transition
from a dichotomy between Eastern and Western Europe into the multilateral
political system we see today. To understand the changes of these years, it is
necessary to discuss three conditions that provoked public disdain for the
‘eurosclerosis’ that ensued during the 1970s and 1980s. The first deals with
Europe’s newfound economic independence from U.S. monetary policy. The second
event refers to Europe’s realization of its increasing dependency on the
international economic system. The final point addresses the general public’s growing
displeasure in the management and administration of its political leaders.
The
economic boom of the 1960s was the result of European investments three decades
earlier and the U.S.-born Marshall Plan for economic recovery in the post-war
years. But by the 1970s, two events provoked a major economic downturn. The first
was the U.S. decision to abandon the fixed exchange rate system: the second, the
oil crisis after the Yom Kippur War.
In
1971, U.S. president Richard Nixon unilaterally declared the nation’s switch
from the fixed exchange rate system to a floating rate system. This change was
motivated by increasing Vietnam War costs, a growing federal deficit, and an increasing
fear that foreign holders of U.S. currency (including Europe’s central banks)
would “seek to exchange their dollars for gold, draining American reserves” (p.
454, Judt).
In
Europe, moving to a floating exchange rate “introduced an unprecedented element
of uncertainty” away from “the social harmony in the age of rapid growth”
during the preceding two decades and afforded by the U.S. funded Marshall Plan (p.
455, Judt). Leaving the 1944 Bretton Woods system caused inflation rates to
soar. European governments responded by enacting “deliberately reflationary
policies: allowing credit to ease, domestic policies to rise, and their own currencies to fall” (p. 454,
Judt). But as prices fell, the costs of imports rose. This trumpeted Europe’s
growth, as labor began demanding wage increases from governments that could not
keep up with the price ratcheting. Thus, wages remained inert while national
leaders scrambled to find another country to replace the U.S. dollar as their market’s
standard currency.
The
oil crisis of 1973 brought with it even further economic slow down. In the days
after the Yom Kippur War began, Egypt and Syria retaliated against the U.S. and
Europe for supporting Israel. Major Arab oil-exporting states then imposed oil
embargos on Israel’s Western allies. This “increased the price of petroleum by
70 percent” (p. 455, Judt).
This
crippled Europeans, whom had grown “accustomed to readily available and
remarkably cheap fuel” in the 1960s (p. 455, Judt). The imbalance of low economic
growth, coupled with artificially induced price increases caused Europe to
enter a decade of unprecedented “‘stagflation’” (p.456, Judt).
Both
economic shocks forced Europe to try to resolve these issues as
quasi-independent countries. Governments tried to maintain “full employment…compensating
in its absence with wage increases for those in work, social transfers for
those out of work and cash subsidies” for businesses (p. 460, Judt). But the
states soon realized that to remain globally competitive, they needed to
establish a transnational “‘snake in a tunnel’: an accord to maintain
semi-fixed ratios between their currencies” (p. 461, Judt). This lead to the
Economic Monetary System, (EMS), which was to act as a “grid of fixed bilateral
exchange rates” underwritten by the “anti-inflationary priorities of the German
economy” (p. 461, Judt). This effectively deprived “governments of their
initiative in domestic policy” by obliging conformity to multilateral economic practices, but brought
economic stability via setting the Deutschmark as the new “currency of reference”
(p. 461, Judt).
The
third and most salient motivational cause for the revival among EU leaders to form
a supranational institution through which European states could coordinate and
stabilize their economies relative to each other came from the public backlash
of dissatisfaction with current pseudo-independent policies.
The
backlash from the hard-hit middle classes came from all over Europe. People began
to resent and doubt about the perceived omnipotence of the social welfare state
in the wake of stagflation. The abasement of that generation’s sense of social
security and political livelihood is best summarized in the following quote:
“It was an age depressingly aware of having come after the big hopes and ambitious
ideas of the recent past, and having nothing to offer but
breathless and implausible re-runs and extensions of old thoughts. It was,
quite self-consciously, a ‘post-everything’ era, whose future prospects
appeared cloudy” (p. 478, Judt).
Yet
again in European history, the public felt betrayed by their leaders and the
ideologies they espoused. But the 1970s and 1980s were not only strained
financial times for the West—in these years the Soviet bloc experienced a
dichotomous fall yet further into disparity. By the mid 1980s, “the economy,
which had hardly grown through the course of the 1970s, was now actually
shrinking: always qualitatively lagging, Soviet output was now quantitatively
inadequate as well” (p. 595, Judt).
This
continental recession caused Europeans to solidly abandon the tenants of its
old canons and replace it with “a new political vernacular-or, rather, a very
old one, freshly rediscovered” (p. 564, Judt). That old vernacular was the language
of rights and liberties, ideals which were already “inscribed in every
European constitution, not least those of the Peoples’ Democracies” (p. 564,
Judt).
In
the West, this ideological revanchism came via the reappearance of Conservatism
and nationalism, as its supporters feared the further secessions of state power
to supranational bodies. But while countries such as Northern Ireland, Italy,
Spain, and Switzerland abruptly experienced neo-nationalist violence, Western
Europe was fortunate to avoid revolution. Most of these campaigns were quelled
by negotiating with politicians to achieve their policy goals and soon became
marginal national issues.
Overall,
“the net effect…was not to polarize society…but rather to deprive politicians
of all sides [of the ability] to cluster together in the safety of the middle
ground” (p. 477, Judt). No longer could Europe’s citizens so blindly trust
their national leaders to protect them from suffering the pitfalls of a rapidly
globalizing world economy.
In
the East, however, the rejuvenation of democratic ideals gained momentum for
the oncoming demands for Soviet reform. Fed up with the social injustices of
the Soviet Union, Czech protestors wrote a petition in 1979. The draft, called
“The Charter of Workers’ Rights, ” requested that Moscow correct its mistakes
failing to “implement the human rights provisions” of its national
constitution, the Helsinki Accords, and the UN’s “covenants on political,
civil, economic, and cultural rights, all of which Prague had signed” (p. 569,
Judt).
This
was an unprecedented effort at Party opposition. Rather than “engaging the
Communist authorities, the new opposition was deliberately talking past them”
(p. 567, Judt). By presenting their demands as a legal issue, rather than blame their injustices on the incorrigible faults of the Communist
system, Party leaders saw no way to circumvent answering their demands without appearing to
deliberately ignore fundamental portions of Communist doctrine. Before
Communist leaders could stop it, the seeds of resistance were sown anew, and not
long afterwards, a series of political debacles forced the reformist Party
leader Mikhail Gorbachev to abandon, once and for all, all endeavors to resuscitate
his dying state.
Together,
these three events symbolize the anticlimactic experience of this period in
Europe. The economic slowdown confirmed latent fears that Europeans held about
their future during the unprecedented affluence of the 1950s and 1960s. Just as
many suspected, the economic growth of those decades was unsustainable, given
the infancy of the consumer market, the poorly administered trade practices of
the European Economic Community, and the rapidly increasing interdependencies
of the European states.
Both
the abandonment of the 1944 Bretton Woods system and the Arab oil embargos
taught Europeans a valuable lesson about just how sensitive they have become to
global economic fluctuations. Such sensitivity seems to be the price for
capitalist expansion, and up until these years, Western leaders had
romanticized capitalism to the point where it was widely accepted as the ‘guiding
savior’ for the ravaged economies in the postwar years. Yet, as with all other
doctrines that entered into European colloquium and gained the faith of its
citizens, Western Europeans were once again fiscally admonished for
over-crediting their nation-based political system as having the ability to
bypass any economic contingency. Overall, the peaceful disintegration of Soviet
Russia and these economic challenges revived incentives to find a new, more
practical approach to solving the increasingly complex problems of a continent
headed towards increasing globalization. By 1989, the colloquial stage had
indeed been set for fulfilling the post-nationalist goals that had been long sought
after by so many leaders in the last century.
Bibliography
Judt, Tony. Postwar: A History of Europe Since 1945. Penguin: New York. 2006.
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