This study interprets and interrelates the major political, economic and security developments in Europe – including transatlantic relations – from the end of World War II up until the present time, and looks ahead to how the continent may evolve politically in the future. It weaves all the different strands of European events together into a single picture that gives the reader a deep understanding of the continent, and of its current and future challenges. The first chapters trace European reconstruction and political, economic and security developments – both in the East and in the West – leading up to the dissolution of the Soviet Union in 1991. Later chapters examine the European Union's reform efforts, enlargement, movement to a single currency and emerging security role; the political and economic changes in central and Eastern Europe, including Russia; the break up of Yugoslavia and the wars that ensued; and the North Atlantic Treaty Organisation (NATO)'s enlargement and search for a new mission. Final chapters deal with forces affecting Europe's future, such as terrorism, nationalism, religion, demographic trends and globalisation.
At the end of World War II, Germany – formerly the dominant power in continental Europe – found itself under the occupation of the victorious powers: the United States, the Soviet Union, the United Kingdom and France. Although tensions would soon arise between the United States and the Soviet Union – resulting in the division of Europe into two hostile blocs – the new situation also offered a unique opportunity for reconciliation and budding co-operation, especially between Germany and France, whose rivalry had underlain both world wars. The Marshall Plan, launched by the United States in 1948, kick-started economic recovery and co-operation in Western Europe, permitting democracy and a market economy to take hold. In Central and Eastern Europe, however, the Soviet political grip hardened, and communist regimes posing as ‘people's democracies’ were installed, emphasising state ownership of the means of production and central planning of the economy. Europe's two halves grew increasingly apart, and a ‘Cold War’ ensued. The establishment of the North Atlantic Treaty Organisation (NATO) under U.S. leadership in 1949 confirmed this division and extended it to the security field.
Reconstruction and reconciliation; confrontation and oppression
Kjell M. Torbiörn
Reconstruction in Western Europe, completed by the early 1950s, led to unbounded optimism about future economic growth and to a strong desire for closer integration. Following the creation of the Council of Europe in 1949 among ten West European countries, six went further in 1951 by founding the European Coal and Steel Community (ECSC). After attempts to set up a European Defence Community and a European Political Community failed in 1954, negotiations between the ‘Six’ (belonging to the overall successful ECSC) in 1957 led to the creation of the European Economic Community. However, West European integration projects and Central and Eastern European adaptation to Soviet communism were overshadowed (and intensified) by pronounced East–West tensions, as expressed in the 1950–3 Korean War, the formal division of Germany into two states with a divided Berlin deep in East German territory and the Soviet Union's rise to nuclear power status together with the United States. Ideology took over from (dormant) nationalism as the prominent geopolitical force, even though tensions were reduced in the mid-1950s following Joseph Stalin's death.
Following the second Berlin crisis and the ‘nuclear brinkmanship’ between the United States and the Soviet Union over Cuba in October 1962, the two superpowers took various steps to diffuse tensions while continuing their ideological struggle with undiminished intensity. The new European Economic Community (EEC) made major progress towards free trade and a common external customs barrier among its members (Belgium, France, Germany, Italy, Luxembourg and the Netherlands), even though its Common Agricultural Policy also led to clashes among them. The United Kingdom joined the EEC in 1973, and the nine-member EEC from this moment on became the main vehicle for West European economic and political integration. The beginnings of ‘big power détente’ over Europe permitted a country such as Hungary to engage in limited market-oriented reforms and, in 1968, led Czechoslovakia towards an open break, soon suppressed, with the Soviet Union. The 1975 Helsinki Final Act marked the beginning of the end of Soviet domination and of the Soviet Union itself.
West European economic recovery after the 1973 oil crisis came quickly, although at the price of high inflation and sizeable government budget deficits. The United States' withdrawal from Vietnam in 1975 did not lead to the feared ‘domino effect’ of communist takeovers in the region, but instead exposed rifts among communist powers. Also in Western Europe, communism became more diversified with the rise of more reformist ‘eurocommunist’ movements in Italy and elsewhere. The nine-member European Economic Community (EEC) became the ‘Twelve’ as it accepted three new Mediterranean members: Greece in 1981, and Portugal and Spain in 1986. Economic underdevelopment in Central and Eastern Europe, and in the Soviet Union itself, led, due to increasingly ill-adapted central planning, to unrest in Poland in 1981. In 1987, the EEC, in an effort to overcome the ‘euro-pessimism’ of the early 1980s, embarked on its ‘1992 Internal Market project’ to eliminate remaining trade and investment barriers by that date. The project coincided with a major new effort to further liberalise world trade: the so-called Uruguay Round.
The fall of the Berlin Wall in November 1989 led, in rapid succession over the next two years, to German unification, Baltic state independence, the dissolution of the Soviet Union and its replacement by Russia and other successor countries, the fall of communism in Central and Eastern Europe, and the dissolution of the Warsaw Pact. Capitalism, liberalised world trade and new electronics technology seemed to have carried the day. The hope of the countries concerned for a new Marshall Plan was not met, but a new European Bank for Reconstruction and Development was meant to fulfil a similar function. In 1993, the European Union (EU) concluded a European Economic Area agreement with various European Free Trade Association countries, tying them closer to it in the areas of trade and investment. The disintegration of Yugoslavia beginning in 1990, and the several wars it led to, posed serious challenges to the EU and the North Atlantic Treaty Organisation (NATO), apart from signifying a tragedy for the people of the region.
While the Russian economy began to slide in the early 1990s under its new leader, Boris Yeltsin, as a result of an uncertain mix of change and standstill, economic reform in Central European transition countries started to bear fruit in the form of higher growth and adaptation to world markets. The European Union (EU)'s Exchange Rate Mechanism (ERM) collapsed in 1993 but was revived in a more flexible form, permitting plans for Economic and Monetary Union to proceed. The conclusion of the Uruguay Round and the establishment in 1995 of the World Trade Organisation meant a major push for Europe towards globalisation and its being exposed to greater competition from emerging non-European economies. Other institutions, such as the Council of Europe, began to form – with the North Atlantic Treaty Organisation (NATO), the EU, and the Organisation for Security and Co-operation in Europe – a rather complicated European ‘security architecture’. All these organisations were faced with immediate challenges, such as successive wars in the former Yugoslavia and in the southern Russian province of Chechnya.
In March 1999, the European Commission, the European Union (EU)'s executive branch, resigned under accusations of fraud, nepotism and mismanagement, leading to intensive soul-searching as to what could be the right form of management for the EU. How could the democratic aspects of the emerging entity be enhanced? How could democracy be improved? How should power be shared among the governments of the member states as represented in the Council of Ministers, the peoples of the Union as represented in the European Parliament and an appointed but political bureaucracy, the Commission? How open and transparent could the EU be, given the many sensitive issues it was now handling, such as foreign policy, security and defence? Rendering answers to these questions more urgent was the arrival, in January 1999, of the Economic and Monetary Union (EMU) and the single currency, the euro, among eleven (and soon twelve) EU states. The EU had clearly taken a major step towards economic and political integration, begging the question to what extent formal political unification would follow that in the monetary field.
The disappearance of the Soviet Union and the end of its hold over Central and Eastern Europe posed the question of the future of the North Atlantic Treaty Organisation (NATO). What continued purpose could NATO serve? How far east could it enlarge without upsetting Russia? NATO's first-ever armed conflict was with Yugoslavia in the spring of 1999. The Kosovo War led to intensified discussion in Europe and the United States over the need for increased European defence spending and operational efficiency within the alliance, and over the prospects of more ‘out-of-area’ peacekeeping or peacemaking operations. The United States and Russia abrogated the 1972 Anti-Ballistic Missile Treaty and concluded the Treaty of Moscow. Russia's relations with NATO became even closer with the creation of a NATO–Russia Council. NATO was not likely to disappear as it was still useful to both sides, but the communality of purpose was not the same as it had been during the Cold War.
A series of European Union (EU) summits – Amsterdam in 1997, Berlin and Helsinki in 1999, and Nice in 2000 – focused on the need for inner reform of the institution against the prospect of future enlargement and new competences. The general tendency was for increased intergovernmentalism, that is, more power in the hands of the EU's Council of Ministers and greater influence for the European Parliament. The Helsinki Summit decided to accept candidacies of thirteen countries (including Turkey) and to start negotiations with twelve (all but Turkey) on an equal basis. An EU Convention on the Future of Europe was consequently held in 2002 with a mandate to make proposals to governments for a new EU constitution in 2003. This would be necessary also to prepare for the ‘big bang’ enlargement decided at a summit in Copenhagen in December 2002. Thorny questions remained, however, such as how to reform the Common Agricultural Policy and EU finances overall in order to accommodate the many new and less-wealthy member states.