Topics: EUROPE


European Peace and Prosperity

by Steven Hause and William Maltby, in Western Civilization: A History of European Society (Cengage Learning, 2004), chapter 32

During 1975 two dramatic events gave Europe greater hope for an age of peace. The first was the end of the Vietnam War. This conflict, the last stage of thirtyyears of fighting to drive Japanese, then French, and finally American armies out of Southeast Asia, ended in April 1975 with the evacuation of the last American officials from South Vietnam and the fall of the Saigon government. Although this long war ended in Communist expansion, it did not greatly worsen cold war relations; instead, it allowed them to improve, especially in Europe where the war had been widely opposed. Despite the conflict in Southeast Asia, détente between east and west—which Chancellor Willy Brandt of West Germany had launched with his Ostpolitik of the early 1970s - had grown; the end of the war permitted even better relations among the United States, Western Europe, the USSR, and China. Détente culminated in the Helsinki Accord of 1975, in which thirty-five nations guaranteed the frontiers of 1945, renewed their support for the United Nations and the peaceful resolution of crises, swore respect for “the sovereign equality and individuality” of all states, expanded economic cooperation, renounced the threat or use of force, and pledged respect for human rights. Like most idealistic treaties—such as the UN Declaration of Human Rights of 1946, the Geneva Conventions, the Kellogg-Briand Pact of 1928, the League of Nations Charter of 1920, and the Hague Treaties of 1899 and 1906—the Helsinki Accord contained no mechanism to enforce its principles during crises, yet still promoted hope. Westerners acclaimed a treaty that obliged the USSR to honor human rights; but Soviet leader Leonid Brezhnev believed that the document still permitted actions such as the invasion of Afghanistan. By the late 1970s Western Europe had also developed a booming economy, which created a standard of living comparable to that in the United States. Recovery from the devastation of World War II had been largely completed by the late 1950s, and thriving European economies began to catch up with the United States during the 1960s. West Germany had become the most prosperous country in Europe, with a GNP larger than France or Britain. The economic miracle of Ludwig Erhart and Konrad Adenauer created the fastest growing economy in German history. The German model of labor relations, in which labor, management, the government, and public opinion shared a strong consensus on supporting a welfare state and promising job security in return for strike- and strife-free production, resulted in a rapidly growing economy. German unemployment fell so low that foreign guest workers (Gastarbeiter) from Turkey and other Mediterranean countries were needed to fill jobs. The German domestic market absorbed most of this production during the 1960s, but Germany increased exports by 1,300 percent during the 1970s. The other EEC states also began exporting more goods. French agriculture prospered so well that France became the world’s second largest food exporter. By the end of the 1970s the European Union had become a major economic competitor of the United States. By 1990 GNP per capita in France ($16,000) and Germany ($18,500) neared that in the United States ($19,800).

Widespread prosperity had two important consequences in Western Europe:

(1) it stimulated closer economic unity, a trend that had been slowly progressing for twenty-five years, and

(2) it facilitated larger commitments to the welfare state.

For the first of these trends, the mid-1970s were an important turning point. The European Community (the EC—the association that grew out of the EEC in 1967, tightening the linkage of France, West Germany, Italy, and the Benelux countries), was the highest degree of European economic integration ever achieved. Negotiations to expand the EC revived in the 1970s, and plans were drafted for adding Britain, Ireland, Denmark, and Norway as the first step toward the economic union of all of non-Communist Europe. The most important (and sometimes the most troublesome) of these states, Britain, finally joined the EC in 1973. In several cases, membership treaties were submitted for public approval in a referendum. A negative vote in Norway kept that country out of the European Community, but British membership was reaffirmed in a public vote in 1975, encouraging a generation of EC growth. The death of General Franco (1975) and the subsequent election of a democratic government in Spain (1977), plus free elections in Portugal (1975) that freed Iberia from the authoritarian governments of the 1930s, allowed the EC to accept both Iberian states, bringing membership to twelve.

Under the leadership of Jacques Delors, who presided over the European Commission in Brussels for ten years (1985–95), and Helmut Kohl, who strongly supported closer unity, Europe moved toward a federal unity and oversaw the transformation of the European Community EC into the European Union (EU) in 1991, when the Maastricht summit outlined a treaty to open European frontiers and establish a single market. By the mid-1990s, the European Union had grown to fifteen members with the addition of Sweden, Finland, and Austria. The fall of the Communist bloc led to a wave of applications from Eastern Europe, and in 1997 plans were adopted for the eventual membership of Estonia, Poland, the Czech Republic, Hungary, and Slovenia; other Eastern European applications (plus one from Turkey) have been put on a slower track.

As the European Union grew, so did its institutions. The first direct elections for the European Parliament in Strasbourg were held in 1979, and a woman, Simone Veil of France, was chosen as its first president. An agreement signed that same year created an integrated monetary system to control exchange rates, the first step toward a common European currency known as the Euro, launched for banks in 1999 and scheduled to replace European currencies such as the German mark and the French franc (but not the British pound) in 2001. The Maastricht Treaty of 1991 created a closer union by opening national frontiers (in 1992) for the free movement of goods, workers, students, or investments.

The European Convention on Human Rights quickly became another important part of the European Union because all potential members were required to subscribe to it and accept the jurisdiction of the European Court of Human Rights. The strict human rights standards for membership create an obstacle to joining the EU for several countries—laws allowing capital punishment or evidence of the use of torture can exclude a country. The closer federation planned at Maastricht was so controversial that many governments held referenda to gain public approval of the treaty. In France, long a leader in the drive toward greater unity, a referendum of September 1992 only approved of the Maastricht Treaty by the narrow margin of 51–49 percent. Prime Minister Thatcher of Britain was the leading critic of the European Union. She attacked the Brussels bureaucracy of “Eurocrats,” the plans for a common currency, the Union’s common social policy (which she denounced as a backdoor route for socialism into Britain), the increasing role of the European Parliament at Strasbourg (at the expense of Britain’s Parliament), and the apparent birth of a European “superstate.”

The second trend encouraged by the new prosperity was the growth of the welfare state and social benefits. Most West European governments, following such examples as Swedish state socialism or the policies of Attlee’s Britain, devoted a significant share of new wealth and production to public services and benefits. In West Germany, both the socialist governments of Willy Brandt (1969–74) and Helmut Schmidt (1974–82) and the conservative government of Helmut Kohl (1982–98) accepted high tax rates as the price of social cohesion. And the benefits of European prosperity have been great: Britain, France, and Germany all established workweeks below thirty-eight or thirty-nine hours for full pay. Britain, France, Germany, and Italy all guaranteed employees and workers a minimum of five to six weeks of paid vacation per year—compared with the two weeks standard in the United States and Japan. German workers had the most exceptional treatment: a minimum of fifty-eight paid days off (eleven-and-one half weeks) per year in combined vacation days and paid holidays. France and Italy established age sixty for retirement at full pay, with age fifty or fifty-five the standard in some occupations. In 1996 Germans were guaranteed 52 weeks of unemployment compensation, or 128 weeks after age fifty-four, at 60 percent of salary. All EU countries except Luxembourg granted pregnant women a minimum of three months of paid maternity leave, with Denmark granting six months. Many countries, led by France, have given free tuition to state universities to all students.

And the entire EU is committed to free, or low cost, medical care for all; some states, led by Germany, include free nursing home care for the elderly. The price of such benefits has been high taxation. European taxation has been so high that in the late 1980s it consumed one-third to one-half of the GNP in Britain, France, and Germany and more than 55 percent in Sweden. And it has been growing: French government spending grew from 44 percent in 1987 to 52 percent in 1995. Although most of the taxation that supports this social system comes from indirect taxes—especially a Value Added Tax (VAT) hidden in the cost of goods—Europeans do notice the cost of these benefits. The unemployment of German workers, for example, is supported by a 3.25 percent payroll deduction from workers’ gross income, matched by a 3.25 percent payment by employers; the lesser benefit in the United States is supported by a 2.3 percent tax on payroll, paid by employers. European conservatives such as Helmut Kohl of Germany tried to reduce spending on social services during the late 1980s and the 1990s, but they accepted both the welfare state and the taxation needed to finance it. Even the socialist president of France, François Mitterand (served 1981–95), who defended the welfare commitment, faced hard fiscal decisions and his government adopted many conservative policies. The French public, however, has been one of the staunchest constituencies for protecting the welfare state. When the conservative government proposed reduced services in 1997, French socialists under Lionel Jospin won an upset parliamentary victory.

Chronology: The Growth of European Union Since 1975

1975 British referendum accepts EC membership

1975 Greece, Spain, and Portugal apply for EC membership

1979 First direct elections to the European Parliament in Strasbourg

1979 Simone Veil elected first president of the European Parliament

1979 The EC creates the European Monetary System (EMS) and European Currency Unit (ECU)

1981 Greece begins five-year phased entry into the EC as tenth member

1983 Governments of the ten EC members sign the Solemn Declaration on unity

1984 European Parliament adopts treaty on creating the European Union (EU)

1985 Spain and Portugal accepted into the EC as eleventh and twelfth members

1985 Single European Act sets 1992 as date for open frontiers and single market

1986 Single European Act adopted in parliaments of all twelve member states

1987 Turkey applies for membership in the EC

1988 Delors Plan outlines closer economic unity and a common currency

1989 EC adopts draft Charter of Fundamental Social Rights

1989 Austria applies for membership in the EC

1990 Cyprus and Malta apply for EC membership

1991 Sweden applies for membership in the EC

1992 Single European Act and Maastricht Treaty create open frontiers and single market: EC becomes the EU

1992 Norway and Finland apply for EU membership

1992 Twelve members of the EU agree to negotiations to expand to sixteen members

1992 Switzerland applies for EU membership

1994 Sweden, Finland, and Austria reach agreements to join the EU

1995 Norwegian national referendum again rejects EU membership

1997 EU adopts plan for Estonia, Poland, Czech Republic, Hungary, and Slovenia to join

1997 Membership plans for Latvia, Lithuania, Slovakia, Romania, Bulgaria, and Turkey postponed

Source: Steven Hause and William Maltby, Western Civilization: A History of European Society (Cengage Learning, 2004), chapter 32

European Parliament in Strasbourg. The 736 Members of the European Parliament (MEPs) are directly elected by EU citizens every five years.