Chapter 30 - After the Fall: The Western World in a Global Age, Since 1985

Western Europe and the Search for Unity

After the revolutions of 1989, Western Europe faced new political possibilities and challenges. Germany was once again united, delighting the Germans but frightening their neighbors. At the same time, new opportunities for thinking of all of Europe as a political entity also emerged. Eastern Europe was no longer cut off from Western Europe by the Iron Curtain of the Cold War.

GERMANY RESTORED With the end of the Cold War, West Germany faced a new challenge. Chancellor Helmut Kohl had benefited greatly from an economic boom in the mid1980s. Gradually, however, discontent with the Christian Democrats increased, and by 1988, their political prospects seemed diminished. But unexpectedly, the 1989 revolution in East Germany led to the reunification of the two Germanies, leaving the new Germany, with its 79 million people, the leading power in Europe. Reunification, which was accomplished during Kohl’s administration and owed much to his efforts, brought rich political dividends to the Christian Democrats. In the first all-German federal election in 1990, Kohl’s Christian Democrats won 44 percent of the vote, while their coalition parrners, the Free Democrats, received 11 percent.

But the excitement over reunification soon dissipated as new problems arose. All too soon, the realization set in that the revitalization of eastern Germany would take far more money than was originally thought, and Kohl’s government was soon forced to face the politically undesirable task of raising taxes substantially. Moreover, the virtual collapse of the economy in eastern Germany led to extremely high levels of unemployment and severe discontent. One reason for the problem was the government’s decision to establish a 1: 1 ratio between the East and West German marks. This policy raised salaries for East German workers, but it increased labor costs and caused many companies to hire workers abroad. East Germans were also haunted by another memory from their recent past. The opening of the files of the secret police (the Stasi) showed that millions of East Germans had spied on their neighbors and colleagues, and even their spouses and parents, during the Communist era (see the Film & History feature above). A few senior Stasi officials were put on trial for their past actions, but many Germans preferred simply to close the door on an unhappy period in their lives.

As the century neared its close, then, Germans struggled to cope with the challenge of building a new, united nation. To reduce the debt incurred because of economic reconstruction in the east, the government threatened to cut back on many of the social benefits West Germans had long been accustomed to receiving. This in turn sharpened resentments that were already beginning to emerge between western and eastern Germany.

In 1998, voters took out their frustrations at the ballot box. Helmut Kohl’s conservative coalition was defeated in new elections, and a new prime minister, Social Democrat Gerhard Schroder (GAYR-hahrt SHRUR-duh) (b. 1944), came into office. But Schroder had little success at solving Germany’s economic woes, and as a result of elections in 2005, Angela Merkel (AHNG-uh-luh MERK-uhl) (b. 1954), leader of the Christian Democrats, became the first female chancellor in German history. Merkel pursued health care reform and new energy policies at home while playing a leading role in the affairs of the European Union. After new elections in 2009, she began a second term as Germany’s chancellor and has led the EU nations in attempting to solve the financial problems of several EU members including Greece, Italy, Spain, and Portugal.

POST-THATCHER BRITAIN While Margaret Thatcher dominated British politics in the 1980s, the Labour Party, beset by divisions between its moderate and radical wings, offered little effective opposition. Only in 1990 did Labour’s fortunes seem to revive when Thatcher’s government attempted to replace local property taxes with a flat-rate tax payable by every adult to a local authority. Though Thatcher maintained that this would make local government more responsive to its electors, many argued that this was nothing more than a poll tax that would enable the rich to pay the same rate as the poor. In 1990, after antitax riots broke out, Thatcher’s once remarkable popularity fell to an all-time low. At the end of November, a revolt within her own party caused Thatcher to resign as Britain’s longest-serving prime minister. She was replaced by John Major, whose Conservative Party won a narrow victory in the general elections held in April 1992. His government, however, failed to capture the imagination of most Britons.

In new elections on May 1, 1997, the Labour Party won a landslide victory. The new prime minister, Tony Blair (b. 1953), was a moderate whose youthful energy immediately instilled new vigor into the political scene. Adopting centrist policies reminiscent of those followed by President Bill Clinton in the United States (see “The United States: Move to the Center” later in this chapter), his party dominated the political arena into the new century. Blair was one of the prominent leaders in forming an international coalition against terrorism after the terrorist attack on the United States in 2001. Three years later, however, his support of the U.S. war in Iraq, when a majority of Britons opposed it, caused his popularity to plummet, although the failure of the Conservative Party to field a popular candidate kept him in power until the summer of 2007, when he stepped down and allowed the new Labour leader Gordon Brown (b. 1951) to become prime minister. Elections held in early May 2010 were inconclusive: the Conservatives won the largest number of seats in Parliament but were twenty short of a majority. When Brown resigned a few days after the elections, Conservative David Cameron (b. 1966) became prime minister on the basis of a coalition with the Liberal Democrats.

FRANCE: RIGHT AND LEFT Although François Mitterrand was able to win a second term as president in 1988, France’s economic decline continued. In 1993, French unemployment stood at 10.6 percent, and in the elections in March of that year, the Socialists won only 28 percent of the vote as a coalition of conservative parties gained 80 percent of the seats in the National Assembly. The move to the right in France was strengthened when the conservative mayor of Paris, Jacques Chirac (ZHAHK shee-RAK) (b. 1932), was elected president in 1995 and reelected in 2002.

By 1995, resentment against foreign-born residents had become a growing political reality. Spurred by rising rates of unemployment and large numbers of immigrants from North Africa (often identified in the public mind with terrorist actions committed by militant groups based in the Middle East), many French voters advocated restrictions on all new immigration. Chirac himself pursued a plan of sending illegal immigrants back to their home countries. He said, “France cannot accept all of the wretched of the earth” (see the box on p. 878).

In the fall of 2005, however, antiforeign sentiment provoked a backlash of its own, as young Muslims in the crowded suburbs of Paris rioted against dismal living conditions and the lack of employment opportunities for foreign residents in France. After the riots subsided, government officials promised to adopt measures to respond to the complaints, but tensions between the Muslim community and the remainder of the French population have become a chronic source of social unrest throughout the country-an unrest that Nicolas Sarkozy (nee-kohl-AH sar-koh-ZEE) (b. 1955), elected as president in 2007, promised to address but without much success.

Growing concern over the European debt crisis (see “The End of Excess” later in the chapter) and Europe’s financial problems led the French to move to the left and elect Socialist candidate François Hollande (frahn-SWAH oh-LAHN) (b. 1954) as president on May 6, 2012. Hollande has vowed to raise taxes on the wealthy, regulate banks, and address the economic crisis.

CORRUPTION IN ITALY Corruption has continued to trouble Italian politics. In 1993, hundreds of politicians and business leaders were under investigation for their involvement in a widespread scheme to use political bribes to secure public contracts. Public disgust with political corruption became so intense that in April 1996, Italian voters took the unusual step of giving control of the government to a center-left coalition that included the Communists. In recent years, Silvio Berlusconi (SEEL-vee-oh bayr-loo-SKOH-nee) (b. 1936), owner of a media empire, has dominated Italian politics, even though he became a politician primarily in order to protect his own business interests. Although he lost to Socialist Romano Prodi (roh-MAH-noh PROH-dee) (b. 1939) in a close election in 2006, Berlusconi again became prime minister after new elections in 2008, only to resign in 2011. In the wake of the European economic crises, Italy faced severe economic shortfalls and chose the Italian economist Mario Monti (MAHR-yoh MAWN-tee) (b. 1943) to replace Berlusconi. In his first six weeks in office, Monti passed new legislation that raised the retirement age, increased property taxes, and simplified the tax code. His efforts at reform proved socially and politically unpopular, however, and he resigned as prime minister at the end of 2012. Elections in 2013 led to the formation of a coalition government under Enrico Letta (b. 1966), a center-left politician.

The Unification of Europe

With the addition of Austria, Finland, and Sweden in 1995, the European Community (EC) had grown to fifteen members. The EC was primarily an economic union, not a political one. By 2000, it contained 370 million people and constituted the world’s largest single trading entity, transacting one-fourth of the world’s commerce. In 1986, the EC had created the Single Europe Act, which had opened the door by 1992 to a truly united internal market, thereby eliminating all barriers to the exchange of people, goods, services, and capital. This was followed by a proposal for a monetary union and a common currency. The Treaty on European Union (also called the Maastricht Treaty after the dty in the Netherlands where the agreement was reached) represented an attempt to create a true economic and monetary union of all EC members. On January 1, 1994, the EC renamed itself the European Union (EU). One of its first goals was to introduce a common currency, called the euro, adopted by twelve EU nations early in 1999. On June 1, 1999, a European Central Bank was created, and as of January 2013, the euro had officially replaced seventeen national currencies. The euro serves approximately 327 million people and has become the world’s second largest reserve currency after the U.S. dollar.

A major crisis for the euro emerged in 2010, when Greece’s burgeoning public debt threatened the bankruptcy of that country as well as financial difficulties for many European banks. To avoid financial disaster, other EU members, led by Germany, labored to put together a financial rescue plan for Greece (see “The End of Excess” later in this chapter). Subsequently, other countries in the Eurozone including Italy, Spain, Portugal, and Cyprus also experienced financial problems.

GOALS In addition to having a single internal market for its members and a common currency, the European Union also established a common agricultural policy, under which subsidies are provided to farmers to enable them to sell their goods competitively on the world market. The policy also provides aid to the ED’s poorest regions as well as subsidies for job training, education, and modernization. The end of national passports gave millions of Europeans greater flexibility in travel.

The EU has been less successful in setting common foreign policy goals, primarily because individual nations still see foreign policy as a national prerogative and are reluctant to give it up to an overriding institution. Although EU foreign ministers meet periodically, they usually do not draw up a uniform policy. Nevertheless, the EU did create a military force of 60,000, to be used chiefly for humanitarian and peacekeeping purposes. Indeed, the focus of the EU is on peaceful conflict resolution, not making war.

In 2009, the EU ratified the Lisbon Treaty, which created a full-time presidential post and a new voting system that reflects the size of each country’s population. It also provided more power for the European Parliament in an effort to promote the ED’s foreign policy goals.

PROBLEMS As successful as the European Union has been, problems still exist. Europeans are of ten divided on the EU. Some oppose it because the official representatives of the EU are not democratically accountable to the people. Moreover, many Europeans do not regard themselves as “Europeans” but remain committed to a national identity. The European economic crisis has also exposed the weakness of the EU. The adoption of the euro removed trade barriers, but the countries that use the euro do not have a unified monetary policy. The European Central Bank does not serve all nations equally, as the Governing Council and the Executive Board make decisions communally, and members tend to vote in favor of national interests instead of pro-European interests. Europeans will need to unify politically to solve their economic problems. Despite these problems, a majority-although not a large one-of the members remain committed to the EU.

TOWARD A UNITED EUROPE At the beginning of the twenty-first century, the EU established a new goal: to incorporate into the union the states of eastern and southeastern Europe. Many of these states are considerably poorer than the older members, which raised the possibility that adding these nations might weaken the EU itself. To lessen the danger, EU members established a set of qualifications that require a candidate for membership to demonstrate a commitment both to market capitalism and to democracy, including not only the rule of law but also respect for minorities and human rights. Hence, joining the EU might well add to the stability of these nations and transform the dream of a united Europe into a reality. In May 2004, the EU took the plunge and added ten new members: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Their addition enlarged the population of the EU to 455 million people. In January 2007, the EU expanded again as Bulgaria and Romania joined the union and in July 2013, Croatia joined (see Map 30.3).

The United States: Move to the Center

After twelve years of Republican administrations, the Democratic Party captured the U.S. presidency in the elections in November 1992. The inability of George H. W. Bush (b. 1924), Ronald Reagan’s successor, to deal with the deficit problem, as well as an economic downturn, enabled Democrat Bill Clinton (b. 1946) to become president. The new president was a southerner who claimed to be a “new Democrat”-one who favored fiscal responsibility and a more conservative social agenda-a clear indication that the rightward drift in American politics had not been reversed by his victory. During his first term in office, Clinton reduced the budget deficit and signed a bill turning the welfare program back to the states while pushing measures to provide job opportunities for those Americans removed from the welfare rolls. By seizing the center of the American political agenda, Clinton was able to win reelection in 1996, although the Republican Party now held a majority in both houses of Congress.

Clinton’s political fortunes were helped considerably by a lengthy economic revival. At the same time, a steady reduction in the annual government budget deficit strengthened confidence in the performance of the national economy. Much of Clinton’s second term, however, was overshadowed by charges of presidential misconduct stemming from the president’s affair with a White House intern. After a bitter partisan struggle, the U.S. Senate acquitted the president on two articles of impeachment brought by the House of Representatives. But Clinton’s problems helped the Republican candidate, George W. Bush (b. 1946), win the presidential election in 2000. Although Bush lost the popular vote to Al Gore, he narrowly won the electoral vote after a highly controversial victory in the state of Florida decided ultimately by the U.S. Supreme Court.

The first four years of Bush’s administration were largely occupied with the war on terrorism and the U.S.-led war on Iraq. The Department of Homeland Security was established after the 2001 terrorist assaults to help protect the United States from future terrorist acts. At the same time, Bush pushed tax cuts through Congress that mainly favored the wealthy and helped produce record deficits reminiscent of the Reagan years. Environmentalists were especially disturbed by the Bush administration’s efforts to weaken environmental laws and impose regulations to benefit American corporations. In November 2004, after a highly negative political campaign, Bush was narrowly elected to a second term. From 2005 to 2007, Bush’s popularity plummeted drastically as discontent grew over the Iraq War and financial corruption in the Republican Party, as well as the administration’s poor handling of relief efforts after Hurricane Katrina.

The many failures of the Bush administration led to the lowest approval ratings for a modem president and opened the door for a dramatic change in American politics. The new and of ten inspiring voice of Barack Obama (b. 1961), who campaigned on a platform of change “we can believe in” and ending the war in Iraq, resulted in an overwhelming Democratic victory in the elections of 2008. The Democrats were also aided by the dramatic collapse of the American financial system in the fall of 2008. Obama moved quickly in 2009 to deal with the worst economic recession since the Great Depression. At the same time, Obama persuaded Congress to pass a sweeping health care bill to provide most Americans with medical insurance and to enact legislation aimed at regulating the financial institutions that had helped bring about the financial crisis. He also emphasized the need to combat global warming and the decline in the educational system. Obama was reelected for a second term in the fall of 2012.

Contemporary Canada

The government of Brian Mulroney, who came to power in 1984, sought greater privatization of Canada’s state-run corporations and negotiated a free trade agreement with the United States. Bitterly resented by many Canadians, the agreement cost Mulroney’s government much of its popularity. In 1993, the ruling Conservatives were overwhelmingly defeated, and the Liberal leader, Jean Chretien (ZHAHNH kray-TEN) (b. 1934), became prime minister. Chretien’s conservative fiscal policies, combined with strong economic growth, enabled his government to have a budgetary surplus by the late 1990s and led to another Liberal victory in the elections of 1997. Charges of widespread financial corruption in the government, however, led to a Conservative victory early in 2006, and Stephen Harper (b. 1959) became the new prime minister.

Mulroney’s government had been unable to settle the ongoing crisis over the French-speaking province of Quebec. In the late 1960s, the Parti Quebecois (par-TEE kay-bek-KWA), headed by Rene Levesque (ruh-NAY luh-VEK), ran on a platform of Quebec’s secession from the Canadian union. To pursue their dream of separation, some underground separatist groups even resorted to terrorist bombings. In 1976, the Parti Quebecois won Quebec’s provincial elections and in 1980 called for a referendum that would enable the provincial government to negotiate Quebec’s independence from the rest of Canada. Quebec voters narrowly rejected the plan in 1995, however, and debate over the province’s status continues to divide Canada.

Next Reading: 30-4 New World Order or Age of Terrorism?