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Economic Recovery in Western Europe


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. – PowerPoint PPT presentation

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Title: Economic Recovery in Western Europe

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.

Western and Eastern Europe 1965-1985
Economic Recovery
  • After WWII workers wages lagged behind economic
  • To meet peoples needs/demand W. European
    governments provided welfare state programs
    (retirement, healthcare, etc.)

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.

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.

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.

Challenges to the Western European Welfare
  • The economic cost of these social economic
    reforms was long debated.
  • Then severe recessions plagued Europe in the
  • 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

Brandt was brought down by the Guillaume Affair
(spy in his midst)
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

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    nationalization were repealed.

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

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.

Implementation of Economic Reforms
  • 1951 Formation of the European Coal Steel
  • 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.

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.

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.

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.

Schengen Agreement
  • 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
  • (note the photo to the left is doctored. The
    shoe has been added for effect.)

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

  • Since the Cuban Missile Crisis had brought the
    superpowers so close to war, both sides decided
    to embrace a degree of détente, or peaceful
  • 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)

  • 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)

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.

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
  • Economic conditions remained poor in most E.
    European nations, due to a lack of capital for
    economic development.

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
  • Walter Ulbricht and later Erik Honeker ensured
    that East Germany had the strongest economy among
    the satellite states. 10th largest in the world.

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.

(No Transcript)
  • 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
  • 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.

  • 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

  • 1956 Inspired by the Polish revolt of 1956,
    Imre Nagy of Hungary encouraged a variety of
  • 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.

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.

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
  • This was used as justification for the invasion
    of Czechoslovakia, ending reform.