The Atlantic and Its Enemies

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 much 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.

There was another blind alley. What was to be done with Germany on the international level? France was divided; both Right and Left opposed any forward move. Nevertheless, a centrist government, at American prompting, went ahead. Monnet’s deputy, René Pleven, by now prime minister (though not for long) proposed another supra-national arrangement, a European Defence Force (it went back to 1950, and Monnet urged this in part because he wanted another iron in the fire during the lengthy and arduous negotiations over the ECSC). At first the idea was to delay German rearmament, but then came another ambition, to put German troops under French officers in a European Defence Community (EDC), in its way not dissimilar to the ECSC. On its own the EDC arrangement was hardly necessary. It was to be small, and would not operate independently of NATO; in any case in 1953, even before the treaty was to be ratified, the Americans had adopted a new strategic doctrine, that of enormous nuclear response to a Soviet attack, such that any European Defence Force (EDF) would only be of trivial importance. On the other hand, the EDF would be supported by a proto-government with four ministries and a great deal of money to spend on armaments — a European ‘military-industrial complex’ as President Eisenhower later called the American version. The foreign ministers of the six ECSC nations initialled this treaty in May 1952. The French socialists insisted on the EDC’s having a political supervisory body, and negotiations started for a European Political Community out of that, with the same paraphernalia as the ECSC. Defence budgets doubled in the first year of the Korean War (to $9bn) and in a ‘Mutual Security Program’ the US supplied defence aid as well, in fact not much less than the Marshall Plan itself. It was really the Americans who pushed for the EDC, and no-one was enthusiastic. In July 1954, after two years’ acrimonious exchanges, and two months after France’s catastrophic defeat at Dien Bien Phu in Vietnam, the French parliament failed to ratify it. ‘Europe’ had been foiled again, it seemed, but in fact the EDC was superfluous. German rearmament went ahead anyway, Germany joining NATO in 1955, and NATO itself did what the EDC had been supposed to do. On Christmas Eve in 1954 the French assembly rejected German membership of NATO but then, on 30 December, bizarrely allowed Germany into what was now to be called the ‘Western European Union’ under the Brussels Pact. A threat that there would be a separate treaty with Germany then allowed her into NATO as well. There had been a crisis in the alliance, but not one, in the end, of any significance. Dulles greatly exaggerated when he remarked that a ‘disaster’ had been avoided, of an ‘isolated’ France and a ‘neutralized’ Germany, Europe dominated by the Russians. The crisis such as it was was easily enough settled. But again Monnet and his friends had been disappointed, and they needed something else.

There was another strand to ‘Europe’, and it also closely involved France. Monnet could see that nuclear energy was becoming important, and France, lacking coal, had been forward with it. Now he proposed a European Atomic Community, ‘Euratom’ (the Brussels Exhibition in 1958 with the huge ‘Atomium’ as its centrepiece). This was a step too far. The American atomic agency preferred to deal separately with the European countries and they anyway lacked the uranium and the specialized knowledge, which the Americans, outside diplomatic circles, were not inclined to share. Euratom never achieved anything. But the idea of a customs union now came up again — yet another idea that was originally American and even went back to 1947. The Benelux countries were at the mercy of their larger neighbours, Germany especially. They were enthusiastic about anything that made for a supra-national authority that would bind France and especially Germany, and they were also anxious that the British should be involved as a counterweight. Now, the Dutch foreign minister proposed a customs union.

The suggestion was taken up by an Italian foreign minister with a desire to lay down supra-national rules that would prevent Italian politicians from indulging in sharp practices. With a constituency in Sicily to impress, he invited major representatives to discuss the Dutch idea. They met in an old Dominican monastery near Messina, at Taormina, in May 1955. The French wanted German machinery; the Germans wanted respectability; and Euratom was at least worth discussing. As ever, the British hung back. They sent an intelligent, well-informed and linguistically talented official, Russell Bretherton, who sucked an avuncular pipe in some scepticism as the others talked in their high-flown way; then he wished them well and took his leave. Later on, there was much criticism at this missed opportunity. Of the failure to link up with the ECSC, Alan Milward remarks that the then Labour government was ‘too complacent and too much a product of British history to understand what was happening in France’; besides it suspected ‘neo-liberalism’, i.e. Erhardian anti-socialism, in the various ‘European’ ideas. As to Bretherton’s departure from Messina, other commentators also shake their heads, and suggest that Great Britain missed a chance to create a ‘Europe’ that would have suited its purposes better than the Europe that did emerge. There is truth in these criticisms, but in the end they are anachronistic. In the mid-fifties the British were doing quite well, were even selling fashionable motor cars, were reconstituting their foreign investments, even beyond the pre-war level. The trading agreements with the Commonwealth worked quite well, and food was quite cheap, while markets were available for exports.

At any rate the other Europeans came quite quickly to an agreement, and set up a conference at Venice for the following May and June to work out details. Experts settled these and on 25 March 1957 the Treaty of Rome (strictly speaking, ‘treaties’) established the European Economic Community, or EEC (and the ineffectual Euratom). It entered into force on 1 January 1958. The preamble, a sort of Catholic aftershave, stated grandly that the aim was integration and even unification within a set period. Institutions were taken from the ECSC — a council of ministers, an arbitration court and a High Authority, though it was called a ‘Commission’ because by now most people had had enough of Monnet’s ambitiousness. The first president — such was his title — was German. Adenauer would have preferred Wilhelm Röpke, a good liberal who had had much to do with the remaking of Germany but instead had to make do with Walter Hallstein, who taught commercial law. He was a chilly figure who, asked what he should be called, said he would prefer it if he were called ‘Professor’.

He was too frosty to deal with the French combination of acuteness and arrogance that he now encountered. The new Community, as with its predecessor, followed French lines. The Germans were simply anxious to be accepted. Provided that the customs area, free trade and competition meant what they said, they would accept French proposals as regards institutions. These reflected French ways, which meant ‘top-down’ behaviour, complete with ‘directives’ that were composed by functionaries on high and then communicated for obedience by the member states’ governments. French civil servants referred to the people as les administrés and in French circumstances, given the periodic ungovernability of the country, this was not inappropriate. But these institutions were conceded because the other member states recognized that France faced particular difficulties with a customs union. She still had a large African empire, and had made some effort to integrate it with the French metropolis. Much of her agriculture was very poor and backward, and would not face competition. Some of her industry — Lorraine steel, for instance — had flourished but there were still large parts of it that would collapse if exposed to German and even Italian trade on level terms. There was a further French fear that, given the capital mobility that a customs union must mean, there would be yet another ‘flight from the franc’. At varying intervals, the bourgeoisie famously put its money into suitcases and headed for the Swiss border: this had happened when a left-liberal and anti-clerical government (led by Émile Combes) took over in 1905, and had been repeated with the Popular Front government of 1936. With the troubles of 1947, it had happened again, and French governments knew very well that their best-laid plans could go awry because the money fled. This was one reason for their readiness to devalue, a course of action that at least made the suitcases (some of them no doubt filled with black-market profits from the war) lighter. One way and the other, the French were not wholehearted about the Community, and they had to be placated. There were also fears for the ‘social benefits’ which had been awarded to French workers after the war. These were expensive for the patrons and they thought that cheaper-wage countries would have an unfair advantage. The ‘benefits’, such as wage equality of the sexes, would have to be ‘harmonized’. Few people in France were therefore particularly enthusiastic about a customs union, and on the whole the idea went ahead mainly because, otherwise, it was clear enough that France was going nowhere; it was Germany that led the pack. In 1954 France had been humiliated in Vietnam, and now she was being further strained as a vicious terrorist war went on in Algeria. France needed friends. It helped that in 1955 a lively anti-European figure, Pierre Mendès France, lost office at this time, punished for being right. It also helped that the head of the French delegation, Robert Marjolin, was a remarkable man with long experience as head of the Organization for European Economic Co-operation (OEEC), and he managed the negotiations very well — tacitly telling the other Europeans what they should say, so that he could manage the French behind him.

He extracted the concessions, and the French interest ensured that the Community would not just spend its money in Brussels, its supposed capital, but in Strasbourg and, for some matters, Luxemburg as well, which, in time, meant absurd amounts of time wasted on travel. At a dramatic turn in the negotiations, Adenauer went to Paris in secret, agreed that the French empire could be associated, and that Germany would contribute to a development fund for it; he then in public overrode the German delegation and told it to make progress on ‘harmonization’, i.e. say ‘yes’. There were further plans for the EEC tariffs to be reduced, and for a common external tariff to be imposed even against other Europeans’ goods within four years. The French peasant was to be looked after by a common policy, i.e. artificially high prices for food, and a Common Agricultural Policy did indeed emerge in 1962. It made food prices inside the EEC greater than outside by half again, and is still with us, making a cow or even a tree more expensive than a student.

When the British representative at Messina had left the discussions early, it was because he could see no future for them as far as his own country was concerned. In the first place the British imperial or ex-imperial territories still looked promising, and they had preferences as regards tariffs. Apart from anything else, this meant that food in England was cheaper than elsewhere, because New Zealand and Australia had low-cost farming. But in any case it was a peculiarity of British history that the rural or village population was vastly smaller than that of any other European country — in 1900 only 8 per cent, whereas in France the figure stood closer to 50 per cent and even in industrialized Germany 40 per cent. It was a decisive difference, explaining everything else, from the weakness of the native culinary tradition to the Industrial Revolution. The English, though not the Scots, had never had formally to abolish serfdom, because it just went, and the last vestige of it, an archaic exchange of labour rent called copyhold, went in 1925 (whereas slavery, in the sense of owning a slave on English soil, had been declared illegal in 1772). In other countries the call for protection of the farmer was loud and clear, and supported by millions of votes. In Great Britain, not. Cheap food came partly from the Commonwealth countries or the Argentine, but British agriculture was more efficient, because it was relatively mechanized, whereas elsewhere the peasant farm prevailed. However, now, in 1956, it was becoming clear to the British that a customs area was emerging in Europe, from which they were to be excluded: exporters would have to pay tariffs and face other obstacles to trade which could be just as effective in pricing them out. They responded, without any sense of urgency, with a counter-proposal: a free-trade area to include all of Europe, including such countries as Denmark and Austria which needed an outlet for cheaply produced agricultural exports, or which, as small and specialized economies, did not want to be cut off from world markets. Britain, and six such countries, now set up the European Free Trade Association, a version of ‘Uniscan’, which was run in a way quite unlike the EEC, without much regulation and with only seventy officials. Left to themselves, Germany and Benelux would probably have been happy enough with such an arrangement. However, the peculiarities of the Franco-German relationship meant that the six EEC countries took a different road. As matters turned out, it was a road to a prosperity that made Britain, a decade later, seem backward. But, in 1955, no-one in high places foresaw this.