WESTERN EUROPE: DECOLONIZATION AND ECONOMIC UNITY AFTER WORLD WAR II

1. WESTERN EUROPE: DECOLONIZATION AND ECONOMIC UNITY AFTER WORLD WAR II

2. Decolonization • With the growth of nationalism in the 1930s and the weakening of empires after WWII, European colonies around the world begin to disintegrate

4. Brits Give Up India • Under the leadership of Mohandas Gandhi, India won independence from the British in 1948 • “Partition and run” was the English strategy as they divided the country between Hindus (India) and Muslims (Pakistan) and left the country

5. Japan Recovers After The War • Japan dominated much of East and Southeast Asia in the late 30s and early 40s • With U.S. aid and business practices, Japan became an industrial leader by 1970 in autos and electronics • Cold War conflicts between the U.S. and USSR in this power vacuum occurred in Korea and Vietnam

6. Japan’s Economy Recovers • West Germany and Japan faced a similar challenge – an occupied nation restoring a shattered economy • The U.S. wanted to preserve their sphere of influence against communist encroachment in Asia • General MacArthur led occupation forces in Japan and led an economic turnaround that saw Japan rise to the 3rd largest industrial nation in the world by 1968

7. Africa Regains Independence • African independence came relatively late: the 1950s and 1960s • While countries like Britain and Belgium yielded their colonies, French held firm especially after their humiliating defeat in Indochina • Finally after a fierce conflict in Algeria, de Gaulle agreed to Algerian independence in 1962

9. Middle East Walks Tight-rope • In the Middle East, the withdrawal of British and French rule and the creation of Israel in 1948 destabilized the area • Egypt and Syria sought Soviet support against the new Israeli state • In 1956 Egyptian president Nasser nationalized the Suez Canal, leading to the Suez Crisis • The British and French fought back until the US/USSR pressured them to withdraw

10. Oil In Iran • Oil in Iran brought the Soviets politicking in the Mid-East after WWII • However, Western oil companies had already won oil concessions in Iran • In 1951, a nationalist Iranian government sought to evict the westerners • The CIA intervened and installed a puppet leader (Shah of Iran)

11. U.S. Protects Latin America • Geographically close to the U.S., Latin America was a region the U.S. was determined to keep out of Communist hands • The U.S. orchestrated an overthrow of Guatemala’s leftist regime (1954) to keep Soviet influence in the Western Hemisphere in check

12. Cuba Falls to Communism • In 1959 a revolution in Cuba produced a communist regime under the leadership of a young lawyer – Fidel Castro • The 1962 Cuban Missile Crisis brought the superpowers to the brink of nuclear war • “Peaceful coexistence” resulted as both sides recognized how close they came to mutual annihilation

13. European Unity • Greater cooperation and regulation were sought by Western European countries after WWII for security and prosperity • Increased welfare programs, unemployment benefits, pensions, public health programs and fair housing policies created a safety net that has become the norm for Western European governments(the Beveridge Report)

14. John Maynard Keynes Influence • Keynes influenced the new social democracies • His believed in governmental planning and responsibility to the citizenry • He thought the government should be responsible for the control and regulation of the economy, check inflation, and reduce boom-and-bust cycles • Deficit spend if necessary

15. The European Economic Cooperative • The chief mechanism for advancing the Marshall plan aid was the Office of European Economic Cooperative (OEEC) • The modernization of economies through centrally coordinated planning made Europe once again a major economic player

16. West German Economy Thrives • The most committed to free-market policies was West Germany • Called -- “A free market enterprise economy with a social conscience” • West Germany became the richest economy in Western Europe and third richest in the world—an “economic miracle”

17. “Benelux” Unites 3 Countries • Belgium, the Netherlands and Luxembourg were the first to establish themselves as an economic unit • Known as “Benelux” – the 3 countries removed customs and erected external tariff barriers

18. Schuman Plan • In the early 1950s, the Schuman plan (created by Robert Schuman and Jean Monnet) joined France and West Germany in Economic Cooperation by pooling all Coal and Steel resources • In 1951, Benelux, France, Italy and West Germany formed the European Coal and Steel Community (ECSC) • The ECSC established a “common market” in coal and steel for its members

19. European Economic Community • In 1957, the same six members created the European Economic Community (EEC) • It was the beginning of what became known as the Common Market • Note: Great Britain was reluctant from the start to join the EEC – they finally relented in 1973

20. Unification of Germany • On the surface, the differences between the GDR and the FRG seemed insurmountable • By the 1980s, West Germany stood as an economic giant – 2nd in foreign trade to the United States (GDR 15th) • East German citizens were lured by the prosperity of the West and increasingly emigrated FRG VS. GDR

21. West Embraces East • The West German government assisted their eastern brethren in shoring up their economy • The strong West German deutsche mark replaced the weak East German currency • Monetary Union prefigured political unification • In October 1990, Germany was reunited

22. The West in the Global Community • The 1970s witnessed rising oil prices, inflation and recession • European nations sought greater cooperation as a response to world markets dominated by the Unites States

23. Politics of Oil • The oil crisis of the 1970s undercut the goals of the common market • OPEC (Organization of petroleum exporting countries) raised prices and cut back production • Inflation resulted • Western European leaders realized great integration was the only defense against the loss of markets

24. Foreign Labor • Foreign labor was an important component of European growth • The permanent presence of foreign workers, many of them erratically employed, came to be seen as a problem by welfare state leaders and politicians of the new right • Europe’s new working class became the brunt of racial antagonism

25. The European Community • The European Community (EC) was created in 1967 by merging the 3 transnational European bodies 1) European Coal and Steel 2) European Economic Community 3) European Atomic Energy Community (Euratom)

26. Toward a Single Europe • In 1985 the EC negotiated the Single European Act (ratified in 1987) • The Act sought a fully integrated market by 1992 • Cut internal and international trade barriers • Standardized labor, trade and utilities • Europe as a “single nation” concept

27. Population of the EC • Rose to 320 million by 1989 • EC joined with the European Free Trade Association (EFTA) in October, 1991 • After the EC adds Scandinavian countries, Austria, Lichtenstein and Iceland – EC now consisted of 380 million consumers The flag for the EC was introduced in 1986

28. The European Union • Established in December, 1991 in Maastricht, Netherlands • 12 EC nations • A common currency would eventually be created to replaced national currencies • A single banking system would be established: European Monetary Institute • A single political body would govern • A common defense system

29. Maastricht Treaty formally signed February 7, 1992

30. “One Currency, One Culture, One Social Area, One Environment” • By January 1, 2002 Twelve of the 15 member nations adopted a single currency - the euro • Britain resisted the euro, but was fully committed to the EU under Thatcher and Major • Major EU expansion came on May 1, 2004 as 10 new nations joined including – Baltic, Balkan and some Mediterranean countries

31. Iron Curtain, Iron Smurtain • The expansion the EU into Eastern Europe helped put an end to the rift that from 1945 onwards, separated the free world from the Communist world • Today the EU has 25 member nations and will Estonia, Slovenia and Lithuania by 2007 • The EU is the largest exporter in the world and its GNP is higher than the U.S.