Europe in the 1970s Europe in the 1970s &1980s&1980s

Moving right or moving left?Moving right or moving left?

Toward a deeper Europe?Toward a deeper Europe?

New Political Science New Political Science Curriculum Curriculum

Information Meeting Information Meeting 1:00-1:50pm Wednesday, April 11:00-1:50pm Wednesday, April 1

Room SN-2105Room SN-2105  

For returning Political Science Honours, Majors and MinorsFor returning Political Science Honours, Majors and Minors

TopicsTopicsCourse renumberingCourse renumbering

New coursesNew coursesNew requirementsNew requirements

New prerequisite policyNew prerequisite policy"Grandfathered" status"Grandfathered" statusSample course patternsSample course patternsQuestions and answersQuestions and answers

The 1970sThe 1970s

The 1973 Energy Crisis & its impact: The 1973 Energy Crisis & its impact: OPEC oil boycott results in OPEC oil boycott results in • rising pricesrising prices• fuel shortages & car-less Sundaysfuel shortages & car-less Sundays• shift of wealth from the west to oil shift of wealth from the west to oil

producers in the Gulf & elsewhereproducers in the Gulf & elsewhere

Changing economic outlookChanging economic outlook

Sustained economic growth replaced by Sustained economic growth replaced by stagflationstagflation::• Increased unemploymentIncreased unemployment• Increased inflation as oil price increases ripple Increased inflation as oil price increases ripple

through western economiesthrough western economies Declining rates of economic growthDeclining rates of economic growth Increased bankruptcies, especially in basic Increased bankruptcies, especially in basic

industries:industries:• Heavy metalHeavy metal• SteelSteel• ShipbuildingShipbuilding

Solutions:Solutions: Short-run:Short-run:

• Index wages to rate of inflationIndex wages to rate of inflation• Restructure declining industriesRestructure declining industries• Attempts to save jobs, cushion impact on workers and Attempts to save jobs, cushion impact on workers and

employeesemployees However quick fixes don’t work:However quick fixes don’t work:

• Problem runs deeperProblem runs deeper Increased openness, exposure to world economy: Increased openness, exposure to world economy:

competition from competition from • Green field plantsGreen field plants• Newly industrialized countries: Brazil, Asian tigers, even Newly industrialized countries: Brazil, Asian tigers, even

PolandPoland Search for longer-term solutionsSearch for longer-term solutions

• Britain: a turn to the rightBritain: a turn to the right• Netherlands: return to social partnershipNetherlands: return to social partnership• France: swing to the left, then to EuropeFrance: swing to the left, then to Europe

United KingdomUnited Kingdom

Mounting economic problems from the 1960sMounting economic problems from the 1960s Slower rates of economic growthSlower rates of economic growth Aging industrial plant reflectingAging industrial plant reflecting

• Earlier industrializationEarlier industrialization• Relative lack of wartime destructionRelative lack of wartime destruction

Problematic industrial relations - frequent Problematic industrial relations - frequent strikes reflectingstrikes reflecting• Shop-floor powerShop-floor power• Jurisdictional disputes among craft-based unionsJurisdictional disputes among craft-based unions

Attempted SolutionsAttempted Solutions Attempt to imitate French economic planning in Attempt to imitate French economic planning in

the early 1960s:the early 1960s:• Establish National Economic Development Council Establish National Economic Development Council

(NEDC), attempt to elicit cooperation from unions and (NEDC), attempt to elicit cooperation from unions and employersemployers

Attempts by both Labour and Conservatives to Attempts by both Labour and Conservatives to regulate trade unions:regulate trade unions:• ““Battle of Downing Street” (1969): Labour fails to Battle of Downing Street” (1969): Labour fails to

regulate unions – backbench rebels – law is not passedregulate unions – backbench rebels – law is not passed• Conservative government passes Industrial Relations Act Conservative government passes Industrial Relations Act

in 1971in 1971 Trade unions refuse to comply with provisions for Trade unions refuse to comply with provisions for

registration, regulationregistration, regulation Attempt to join European Community (vetoed by Attempt to join European Community (vetoed by

De Gaulle)De Gaulle)

The 1970s: fading consensusThe 1970s: fading consensus

Mounting economic problemsMounting economic problems• Major industries – steel, shipbuilding, Major industries – steel, shipbuilding,

aeronautics – need state subsidies to continue aeronautics – need state subsidies to continue operatingoperating

• Hyper-inflation because of energy crisisHyper-inflation because of energy crisis Parties’ response:Parties’ response:

• Labour, increasingly divided, moves to the leftLabour, increasingly divided, moves to the left re-embraces state ownership, socialism (but party re-embraces state ownership, socialism (but party

divided at all levels)divided at all levels)

• Conservatives, under Margaret Thatcher from Conservatives, under Margaret Thatcher from 1975, move to the right 1975, move to the right

reject state ownership, extensive involvement in the reject state ownership, extensive involvement in the economyeconomy

Prelude to ThatcherismPrelude to Thatcherism Heath government (1970-74)Heath government (1970-74)

• Attempts to regulate unions – failsAttempts to regulate unions – fails• Attempts to avoid subsidies to declining Attempts to avoid subsidies to declining

industriesindustries• 19741974 Miners strike – results in new election Miners strike – results in new election

Labour governments (1974-79)Labour governments (1974-79)• Harold Wilson (1974-76) & James Callahan (1976-Harold Wilson (1974-76) & James Callahan (1976-

79) attempt 79) attempt Social ContractSocial Contract with trade unions: with trade unions: Unions agree to restrict wage demands, provide labour Unions agree to restrict wage demands, provide labour

peace in exchange for longer term benefitspeace in exchange for longer term benefits Social contract succeeds in damping down wage Social contract succeeds in damping down wage

demands from 1976-78demands from 1976-78 Wave of strikes – Wave of strikes – winter of discontentwinter of discontent – breaks out in – breaks out in

19791979

Thatcher and ThatcherismThatcher and Thatcherism

Margaret Thatcher ousts Margaret Thatcher ousts Heath as leader of Heath as leader of Conservatives in 1975Conservatives in 1975

Thatcher’s vision – an end to Thatcher’s vision – an end to the “nanny-state” – a the “nanny-state” – a neo-neo-liberal liberal viewview• State to withdraw from the State to withdraw from the

economyeconomy• Fosters Fosters enterprise cultureenterprise culture• Promotes market relationshipsPromotes market relationships• Preference for monetarism Preference for monetarism

(regulation of money supply (regulation of money supply rather than Keynsianism)rather than Keynsianism)

Thatcher’s policiesThatcher’s policies Privatization of nationalized industriesPrivatization of nationalized industries Elimination of subsidies to declining industriesElimination of subsidies to declining industries Curb trade union powerCurb trade union power

• Regulation of trade unionsRegulation of trade unions• 1984 miners strike1984 miners strike

Trims welfare state (but doesn’t eliminate)Trims welfare state (but doesn’t eliminate) Attacks bastions of Labour Party power:Attacks bastions of Labour Party power:

• Sale of council (public) housing Sale of council (public) housing • Restrictions on local council taxation and spendingRestrictions on local council taxation and spending

Reserved attitude toward the European Union: Reserved attitude toward the European Union: favour larger market but oppose any form of favour larger market but oppose any form of federal Europefederal Europe

Transformation of the party systemTransformation of the party system Conservative Party abandons postwar stance Conservative Party abandons postwar stance

(one-nation conservatism) and embraces neo-(one-nation conservatism) and embraces neo-liberalismliberalism• Favours a weak state – except in the administration of Favours a weak state – except in the administration of

justicejustice Labour initially moves further to the leftLabour initially moves further to the left

• Re-embraces socialism in early 1980sRe-embraces socialism in early 1980s• Following election defeats in 1979, 1983, 1987 begins Following election defeats in 1979, 1983, 1987 begins

move back toward centremove back toward centre Liberals Democrats (formed by merger of Liberals Liberals Democrats (formed by merger of Liberals

and Social Democrats) gain votes in the centreand Social Democrats) gain votes in the centre• Win up to 20% of the popular vote, butWin up to 20% of the popular vote, but• Win few seats under single-member plurality electoral Win few seats under single-member plurality electoral

systemsystem

Transformation of British societyTransformation of British society

Decline of industrial northDecline of industrial north Increased wealth of south, especially Increased wealth of south, especially

around Londonaround London• Growth of the Growth of the CityCity – London’s financial centre – London’s financial centre

Eventual recovery of British economyEventual recovery of British economy• Prosperity of financial and business centre in Prosperity of financial and business centre in

the souththe south• UK as cheap labour zone: able to attract new UK as cheap labour zone: able to attract new

plants on basis of lower labour costsplants on basis of lower labour costs Sharp disparities in distribution of wealthSharp disparities in distribution of wealth

NetherlandsNetherlands Like Britain, mounting economic problemsLike Britain, mounting economic problems Increased inflation results in wage Increased inflation results in wage

indexationindexation Restructuring in ship-building, heavy metalRestructuring in ship-building, heavy metal By early 1980s, mounting unemployment By early 1980s, mounting unemployment

(~20%) reflecting decline of manufacturing(~20%) reflecting decline of manufacturing Problems:Problems:

• Shift from a Shift from a low wagelow wage economy, in which economy, in which incomes had been managed, to a incomes had been managed, to a high wage high wage economy in the 1960s economy in the 1960s

• industries built on the assumption of low wages industries built on the assumption of low wages are no longer viableare no longer viable

Solutions:Solutions: Return in 1982 to revamped system of social Return in 1982 to revamped system of social

partnership:partnership:• Trade unions agree to wage reductions in exchange Trade unions agree to wage reductions in exchange

for reductions in work hours and creation of part-for reductions in work hours and creation of part-time jobstime jobs

• Trade unions and employers associations work Trade unions and employers associations work together to tackle selected problems:together to tackle selected problems:

Retraining workersRetraining workers Finding work for long-term unemployedFinding work for long-term unemployed

Renewed partnership but different from the Renewed partnership but different from the past:past:• Reliance on voluntary rather than compulsory or Reliance on voluntary rather than compulsory or

imposed settlementsimposed settlements• Over time, increased reliance on market Over time, increased reliance on market

mechanisms mechanisms

France: moving left? France: moving left?

Right (Gaullists and allies) Right (Gaullists and allies) control both the Presidency control both the Presidency & National Assembly thru & National Assembly thru 19811981

1981 as turning point: Left 1981 as turning point: Left comes to powercomes to power• Francois Mitterand, leader of Francois Mitterand, leader of

the Parti Socialiste (PS), wins the Parti Socialiste (PS), wins the Presidencythe Presidency

• Dissolves National Assembly, Dissolves National Assembly, secures Socialist majoritysecures Socialist majority

Left in powerLeft in power

Reform labour laws: enshrine right to Reform labour laws: enshrine right to strike strike

Begin to decentralize the French stateBegin to decentralize the French state Attempt to reflate the French economy, to Attempt to reflate the French economy, to

improve workers’ positionimprove workers’ position Rude awakening:Rude awakening:

• Reflation results in balance of payments Reflation results in balance of payments problems, flight of capitalproblems, flight of capital

• Forced to implement austerity measures, cut Forced to implement austerity measures, cut expenditures in 1982 & 1984expenditures in 1982 & 1984

Mitterand’s solutionMitterand’s solution

Renewed interest in European integrationRenewed interest in European integration France with Germany presses for greater France with Germany presses for greater

economic and political integration:economic and political integration:• Currencies linked together in European Currencies linked together in European

monetary systemmonetary system• Single European Act (1987) opens the way for Single European Act (1987) opens the way for

completion of single market:completion of single market: Qualified majority voting (QMV ,voting on the Qualified majority voting (QMV ,voting on the

basis of a weighted majority) replaces national basis of a weighted majority) replaces national veto to speed passage of necessary legislationveto to speed passage of necessary legislation

Impact:Impact: Neither a move to the left nor right, Neither a move to the left nor right, per seper se, but to , but to

another level of governanceanother level of governance Recognition that national solutions no longer Recognition that national solutions no longer

viableviable In response, return to the European project, in In response, return to the European project, in

some sense stalled since the 1960s: some sense stalled since the 1960s: • Attempt, with others, to shift power to a new level of Attempt, with others, to shift power to a new level of

governance in which greater control possiblegovernance in which greater control possible• Renewed transnationalismRenewed transnationalism• Results in Maastricht Treaty (Treaty on European Union, Results in Maastricht Treaty (Treaty on European Union,

1991), 1991), formation of the European Union, formation of the European Union, but not necessarily the deeper Europe which had been but not necessarily the deeper Europe which had been

envisagedenvisaged

European integrationEuropean integration France stalls European project in 1960s France stalls European project in 1960s

• Empty chair crisis (France walks out)Empty chair crisis (France walks out)• Luxembourg Compromise – retain nat’l veto on matters of Luxembourg Compromise – retain nat’l veto on matters of

national importancenational importance Renewed momentum in 1970sRenewed momentum in 1970s

• UK, Ireland & Denmark join in 1973UK, Ireland & Denmark join in 1973• Special powers of ECSC used to deal with over-capacity in steelSpecial powers of ECSC used to deal with over-capacity in steel• First attempts at monetary union –First attempts at monetary union –

Key currencies linked in “snake” – rising and falling together – from Key currencies linked in “snake” – rising and falling together – from 1972-19741972-1974

European Monetary System (EMS)European Monetary System (EMS), established in 1978, established in 1978• Direct elections to European Parliament from 1979Direct elections to European Parliament from 1979

Nevertheless:Nevertheless:• UK a reluctant EuropeanUK a reluctant European• Uncertain if sufficient political will to go forwardUncertain if sufficient political will to go forward

1980s1980s Further enlargementsFurther enlargements

• Greece (1981) Greece (1981) • Spain & Portugal (1986) admittedSpain & Portugal (1986) admitted• EC shoring up new democraciesEC shoring up new democracies

Single European Act (SEA) 1985, 1987Single European Act (SEA) 1985, 1987• Single marketSingle market for goods and services to be completed for goods and services to be completed

by 1992by 1992• Qualified majority voting (QMV) introduced to speed Qualified majority voting (QMV) introduced to speed

legislative processlegislative process More than 300 pieces of legislation required to ensure More than 300 pieces of legislation required to ensure

single market, common product standards, free movementsingle market, common product standards, free movement Paves way for Maastricht Treaty (Treaty on Paves way for Maastricht Treaty (Treaty on

European Union) 1991European Union) 1991

The Maastricht Treaty (1991)The Maastricht Treaty (1991) Establishes the European Union (EU)Establishes the European Union (EU)

• Encompasses separate communitiesEncompasses separate communities• Aim: ‘EAim: ‘Ever Closer Union’ver Closer Union’

Increases Qualified Majority Voting (QMV)Increases Qualified Majority Voting (QMV) Increases powers of European ParliamentIncreases powers of European Parliament Established basis for Established basis for Common Foreign & Common Foreign &

Security Policy Security Policy (CFSP)(CFSP)• High Representative to serve as spokespersonHigh Representative to serve as spokesperson

Provision for single currency by 1999Provision for single currency by 1999• Measures to harmonize currency Measures to harmonize currency • Euro introduced in 2001 in 11 of the (then) 15 member-Euro introduced in 2001 in 11 of the (then) 15 member-

statesstates

Pillar structure:Pillar structure:

Different patterns of decision-makingDifferent patterns of decision-making• Pillar I, Community pillarPillar I, Community pillar

Decisions by qualified majorityDecisions by qualified majority

• Pillar II, Foreign & Security Policy:Pillar II, Foreign & Security Policy: Member states retain veto Member states retain veto

• Pillar III, Justice and Home Affairs:Pillar III, Justice and Home Affairs: New policy areaNew policy area Member-states retain vetoMember-states retain veto

ImpetusImpetus

Growing realization that many Growing realization that many problems require European solutionsproblems require European solutions

Franco-German axisFranco-German axis• France & Germany, with smaller states, France & Germany, with smaller states,

drive process forwarddrive process forward Pressure from large corporationsPressure from large corporations

• Growing need for a single market & Growing need for a single market & uniform product standardsuniform product standards

A wider v. deeper Europe:A wider v. deeper Europe:

European project embraced by elites, European project embraced by elites, particularly in older member-statesparticularly in older member-states

However, not everyone favours a deeper, However, not everyone favours a deeper, federal Europefederal Europe• Denmark: in, but only so farDenmark: in, but only so far• UK: a reluctant EuropeanUK: a reluctant European

Euroskeptism in British Labour PartyEuroskeptism in British Labour Party Mrs. Thatcher:Mrs. Thatcher:

• Favours wider marketFavours wider market• Abhors federal EuropeAbhors federal Europe• Wanted UK’s “money back”Wanted UK’s “money back”

Growing euroskeptic wing in Conservative PartyGrowing euroskeptic wing in Conservative Party

Balance sheet Balance sheet Fears in 1970s that double digit inflation might Fears in 1970s that double digit inflation might

de-stabilize democraciesde-stabilize democracies• Prove unfoundedProve unfounded• Instead, 3Instead, 3rdrd wave of democratization begins with wave of democratization begins with

collapse of dictatorships in Greece, Spain and Portugalcollapse of dictatorships in Greece, Spain and Portugal Stabilizing mechanisms crafted in postwar period Stabilizing mechanisms crafted in postwar period

don’t work as smoothly as before – cf. problems don’t work as smoothly as before – cf. problems of stagflation – but no slide into crisis or of stagflation – but no slide into crisis or depressiondepression• Welfare states provide cushionWelfare states provide cushion

Europe project:Europe project:• more integrated & united than beforemore integrated & united than before• Debate over a wider v. deeper Europe an important stepDebate over a wider v. deeper Europe an important step• Different than Europe in 1914, 1920 or even 1950Different than Europe in 1914, 1920 or even 1950