by Norman Stone
By 1950 the Europeans had indeed understood that intra-European trade would have to be promoted. A key, here, lay in Paris. Late in 1948 an international authority had been set up for the Ruhr, an attempt to square the various circles — coal, coke, steel being allocated between exports (partly to France) and the Germans’ own needs. But its budget was limited — under $300 million. The French were not going to be able to control German raw materials in that way, and they would have to alter their strategy. In 1949 the American desire to relaunch Germany was clear enough, and the main point of the French Plan was therefore hopeless. The fact was that Marshall and other money alone let the French import the machinery with which their own Plan could work, and the French needed direct access to the raw materials in Germany (or Belgium).
In 1949 there was rethinking, not least in the head of Jean Monnet, architect of the Plan, and a considerable opportunist. He, like so many of the initial Europeans, was an interesting and even a rather fascinating man. He had not bothered to finish school, made money by selling brandy to Eskimos, got a Soviet divorce, and admired American business (he spent both world wars in the USA, acting for the British or French governments). He would as easily have been director of a French five-year plan as founding father of a sort of New Deal Europe, and his influence was formidable. There were by now many Frenchmen arguing that some closer association with booming Germany was essential. The foreign minister, Robert Schuman, was one (he came from Lorraine and had even served in the German army in the First World War) and he talked comfortably not just to Adenauer but to the Italian, Alcide De Gasperi, who had been a deputy in the Austrian parliament before 1914, when Trieste had been an Austrian port.
In 1949 Monnet and Schuman sensed that France must change course, and make an effort to capture the new Germany before she went off in a completely Atlantic direction. Monnet was already irritated at the French metallurgical industries’ inability or unwillingness to compete. Trade with Germany would put an end to that, and Franco-German reconciliation became the order of the day. Even in the twenties, there had been efforts at co-operation, for French steel, and during the war intelligent technocratic heads — Albert Speer, as German munitions minister, and tubby little Jean Bichelonne, head of industrial production for the Vichy French — had talked ‘Europe’, though the sheer clumsiness of the Nazis had caused French workers to run away and hide. Now there were better-organized Germans, and the Ruhr was working again. Collaboration could go ahead without the old collaborators — in fact, on the French side, the Free French had just stepped into their shoes. The French proposed a European Coal and Steel Community, in May 1950, and told the British only at the last minute, just as the British had informed them of the devaluation of 1949 at the last minute. The Germans had agreed in advance. True, their industrialists did not necessarily want to have their hands tied, but a political argument was all-important: ‘Europe’ would be Germany’s way of becoming respectable again. Konrad Adenauer, anyway a product of the western-leaning and mainly Catholic Rhineland, therefore overrode objections.
The heavy industry of western Europe was to be run through some multinational body. It would take charge of coal and steel, set prices, govern cartels, allocate production quotas and generally preside over trade, which would of course be free of tariffs. At this time, Belgium and Luxemburg were major producers of coal and steel, and their adhesion was important; at the same time Italy, re-emerging, and surprisingly strongly so, as an economic power, also needed access to coal and iron, of which she had little. As with all such international arrangements, the details were difficult and complicated, because in each country there were lobbies and interest groups wanting special treatment. The French metallurgical industrialists had long been used to protection; the Belgians subsidized wages in the older, and sometimes nearly obsolete, mines of the French-speaking Borinage country, around Mons and Namur, so that the miners there could match those of the Kempen district, where the mines were very new, productive and in Flemish-speaking country. Such subsidies could not be squared with the rules of competition of an international community, supposed to create ‘a level playing field’. An equalization fund would have to be set up, so that in effect the Germans compensated the Borinage miners whose coal sold at a loss. Even Luxemburg made for difficulties, as its iron and steel needed protection from the Ruhr. In 1951, after difficult negotiations on such points, a treaty established the European Coal and Steel Community. There was a High Authority, sitting in Luxemburg, in some pomp and grandeur, interpreters chattering away. There was a court of arbitration. There was a ministerial council, taken from member country governments, and an assembly of deputies. There were provisions for the Authority to store, say, scrap metal in case prices fell below a certain level. The organization even had a flag — blue for steel, black for coal, six yellow stars representing the member countries (Italy had joined). With adaptations — the black was dropped, as it stood for political Catholicism — this became the flag of the future Europe.
4. The NATO System
‘The Czech coup’ brought an immediate hardening of Western attitudes, and the ratchet effect of the Cold War moved on: in three years, it led to a full-scale war, though not the one that had been expected. In 1947 there had already been a military side to this. In March of that year, the British and French concluded an alliance, the Treaty of Dunkirk. It was supposedly designed against Germany, but its real point was of course defence against the Soviet Union, and there was a further concealed point of importance: no-one entirely trusted the Americans, who were extracting hard bargains for any economic help that they gave, and who were even, still, imposing 50 per cent tariffs on European imports. The British and French responded with efforts to refloat their overseas empires, and again feared, quite rightly, that the Americans were not in sympathy. Again, there was the nuclear element. The British had taken the decisive steps in the making of the atomic bomb, and had presented the secret to the Americans, a good year before they had come into the war, but they had then cut out the British, who proceeded with a bomb of their own. France, lacking coal, was also extremely interested in nuclear energy (and proceeded very successfully with it). Dunkirk therefore had an anti-American aspect.
More generally, ideas of European unity were in the air: Churchill had made a well-publicized speech at Zurich in September 1946 calling for it and in January 1948 the Foreign Secretary, Ernest Bevin, echoed him, after the London conference on Germany had failed. This time round, given Soviet intransigence, the Americans sympathized. In December 1947 the three Western foreign ministers reviewed the whole situation and agreed as to the problems — Greece under great pressure, Germany still in collapse, the Italian Communist Party perhaps on the verge of taking power at the next (April) election. In effect Bevin was proposing an American military alliance, and had secretly made this proposal late in January. The Americans had told him that they would do nothing unless the Europeans themselves united, and it was in that sense that Bevin spoke. He was adamant as to the nature of the Soviet threat, of police state totalitarianism, and proposed a rather vague ‘Western European Union’ which did indeed develop in 1948-9 (and became less vague six years later, when Italy and Germany were included). Now, in March 1948, a Brussels Pact brought in the Low Countries, ‘Benelux’, with a permanent committee of defence ministers, and in September a staff was set up, at Brussels, under Field Marshal Bernard Montgomery. In April there was already an Anglo-Canadian draft plan for extension of the Pact to the USA, though the American role was mainly financial, to help rearmament, and without provision for an American command, let alone bases on European soil. But a US military mission was present and in July it took part in deliberations. There was a formal problem, that the USA could not make peacetime alliances, but that was got round by the ‘Vandenberg Resolution’ (June), which — with some sleight of hand as to the wording — allowed the USA to make them after all, provided they were undertaken in connection with the United Nations.
In that context, the Americans publicly announced that they would co-operate in the Brussels Pact. The American guarantee was an essential ingredient for the French as well — they would accept the German state, creation of which had been formally resolved upon at London, on 4 June — provided that there were an American presence to prevent the Germans from growing too independent. Now, the old Second World War associations came alive again: Eisenhower, Montgomery, the French all knew each other well, and they co-operated again. Here was the start of NATO, and of much else, as Atlantic ties multiplied and thickened. Trade unions co-operated in a free association. The American trade unions (the AFL, or American Federation of Labor, had merged in 1946 with the CIO, or Congress of Industrial Organizations) were now strongly anti-Communist (their leader, Walter Reuther, having worked for two years at a Ford plant in Nizhny Novgorod, and thus knowing his Soviet circumstances) and the Western trade unions set up an organization of their own, challenging the older international one, which the Communists had taken over. There were generous provisions for cross-Atlantic student exchanges and scholarships, particularly with Britain, so that the elites could get to know each other, or even that foreign students in the United States would go back to their own countries and teach the natives how to do things. To win over the intelligentsia, American subsidies went to Preuves in France and Encounter in England (via Melvin Lasky, who had a German wife). These magazines were very good indeed, and writers appeared in them for prestige, not for the fees. On another level, Reader’s Digest promoted simple-minded American patriotism and anti-Communism, and was translated into many languages. It paid well, and was widely read. After the fall of Communism, a famous American commentator, at the time something of a fellow-traveller, remarked that Reader’s Digest had been a better guide to what was going on than anything else. The CIA, set up on a British model, also came into its own around this time.
One vital part of the new order was a restored Germany. The London conferences in February-March and April-June had recommended this on 4 June. One great difficulty was with France: would her parliament accept this restitution of the hereditary enemy? The American Senate’s adoption of the Vandenberg Resolution on 11 June was reassuring: there would be an American presence in Europe to contain Germany, and the London recommendations went through Paris, though by only eight votes — one of the deciding moments of French history, in that the main danger was now recognized as Soviet, and the way forward, the elaboration of a pan-European system which the French would have a lead in managing. In July the German federal states were authorized to set up a ‘parliamentary council’ which would write a constitution. In this period the Allies received another great fillip. The Italian elections of mid-April 1948 were decisive, and the Communists lost. There were (and are) cries of ‘foul’, because of covert activity by CIA men such as Michael Ledeen or Edward Luttwak, who knew the country well. But there had already been the considerable counter-example of the Czech coup to deter anyone on the moderate Left from voting for the Communists, Marshall aid was at stake, and, besides, the Americans were in a position to save the Italian minority of Trieste from absorption in Yugoslavia. The Christian Democrats, under the European-minded De Gasperi, swept the board.
The Cold War took a further ratchet in Germany, and a configuration was then set, for the next two generations. ‘Trizonia’, now that the French (formally in April 1949) had included their zone in ‘Bizonia’, was being turned into a state, but this could not be done with the old Reich currency, which had become dramatically valueless. The whole economy was distorted, as banks could not operate with it, and a vast proportion of exchanges took place in the black market, with which by now all Germans were familiar. Controls existed on food prices but the result was that food vanished from the shops: sellers could not afford to sell at these giveaway prices, and the same was true for most other goods. As ever with inflations, cheats and parasites were rewarded; far from there being a social revolution in Germany, people with property were rewarded for just sitting on it, as it went up in value. But there would be no economic recovery — outside the black market — until the currency was reformed; at a British suggestion, this was undertaken, and in great secrecy new banknotes were printed for the Deutsche Mark. This turned out to be an enormous success, because shop windows all of a sudden were filled, at last, with goods.
Would it be extended to the western sectors of Berlin? All along there had been friction in the German capital, as the Russians attempted to force Social Democrats and Communists into a single party, which they could control. In the western parts of the city, a referendum at the end of March 1946 rejected it by an enormous majority. Early in 1946 there were still many people in the British administration who reckoned that they should just cut their losses and concede Berlin to the Russians, while building up their own zone, and even the American commander, Clay, who became a subsequent West German hero, was not sure. Late in 1946 there returned (from exile in Ankara) a remarkable soon-to-be Lord Mayor, Ernst Reuter. He and his rival Willy Brandt were strongly anti-Communist, having (like Bevin) had ugly experiences of their tactics, and even the Popular Front nostalgics in the SPD were silenced as the Soviet oppression and kidnappings went ahead. Besides, the British were having to pay £80 million per annum for their own occupation zone, and Soviet reparations demands seemed designed to wreck the economy, or even to make the British pay more. The Western Allies could not give up Berlin if they wanted to remake a Germany of their own, and a British adviser, Alec Cairncross, was responsible for the new currency. On 20 June 1948, a Sunday, the new Deutsche Mark came in, the old Reichsmark was scrapped. Money savings were almost wiped out but each German got forty of the new Marks.
It was the signal for collision. By now western Berlin was seen by the Western powers as part of their own territory, and the currency was to be introduced there as well. The Soviet zone operated along entirely different principles, and there prices did not play the same part: such goods as were available were paid for in the old paper in any event, and prices were fixed by decree or Plan. The Russians protested against the process, and on 30 March began to make difficulties for Allied vehicles going to and from West Berlin. On 16 June they walked out of the Kommandatura, the joint body managing affairs for Germany, cut the railways on 23 June, and on 10 July closed the canals. Here, there was a difficult point, because there were no treaty arrangements as regards Western access by land to Berlin. There was, however, legally a right to passage by air, and there followed a remarkable episode. By air, with aircraft landing, skimming the rooftops, every few minutes, two and a half million people were fed and even heated by coal over eleven months by an Anglo-American effort. American warplanes, capable of delivering nuclear bombs, now reoccupied the wartime airfields in eastern England, and there were rumours of war. From full-scale war, Stalin shrank, and he never turned off Berlin’s water supply, which would indeed have caused the place to surrender. But he had done enough to make the Americans formally support the new military structure being set up at Brussels, and in the following year it was turned into NATO, the North Atlantic Treaty Organization, with an American commander. There was almost no opposition to the demands for rearmament that were now heard in the United States. The ‘National Security State’ emerged, in later years much bemoaned, but at the time an apparently obvious outcome of the Soviet challenge.
In May 1949 the affair was uneasily settled. Stalin now half froze West Berlin. There were strict controls as to Allies’ access but traffic went ahead, and the half-city survived as an island. The West built it up, and turned it into an advertisement: it was artificial and heavily subsidized, but, because of its peculiar status, Germans wanting to escape to the West could easily just pass through Berlin, and millions did. In the end it became a slow-acting embolism in the entire arterial system of European Communism. In that sense the West had won.
Now there were better-organized Germans, and the Ruhr was working again. The European Coal and Steel Community became a m
uch more practical step towards European unity than anything proposed by the British. They themselves, invited to join, refused. At the time, British miners’ wages were much higher, and the British were looking at different markets. They feared competition from lower-cost Continental coal (in practice, American coal was cheaper) and Bevin, when consulted, just said that the Durham miners would not stand for this. Later on, the British attitude to this emerging Europe seemed purblind, foolhardy. But Britain, with still strong imperial or ex-imperial connections, with exports booming, with an important position in Atlantic affairs and a sizeable force fighting in Korea, had solid interests elsewhere, and in 1951 very few people took developments in Europe with the seriousness that they, in hindsight, merited. No-one in 1950 foresaw the rapidity with which England would decline.
In practice the ECSC was not particularly successful. In a world of trade liberalization, it was at the mercy of imports, and, of all paradoxes, American coal imports were needed in Germany because the speed of her recovery meant that she needed all of her own coal. Much the same happened with metal: there was a ‘scrap mountain’ because it could not be sold at the cheap rates on offer elsewhere. The Korean War brought a boom for steel: 50 per cent of Belgian output was exported and, as the historian Alan Milward says, the ECSC ‘virtually collapsed’; without the formal creation of a European Economic Community later on, it ‘would probably have been unable to find a common course of action’. Another British commentator, John Gillingham, is even more dismissive. So was Jean Monnet himself. He recognized that the organization was not going anywhere, went to Luxemburg less and less, and faced attempts even to push him out. He did in fact resign in 1955.
