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WESTERN EUROPE: Detente & Defense

6 minute read

Never had Europe’s beaches been so crowded with holidaymakers, or its roads so filled with cars, or its villagers, from Trondheim to Taranto, so well-dressed and well-fed. The vision of the U.S. President swapping toasts with the masters of Russia had given Europeans to believe what they long had wanted to believe: that ten years of cold war were over. High wages and full employment seemed evidence that prosperity had come to stay. All this—and the summer weather—begat a mood that the many sensed but few could rightly define. It was relaxation to the English, détente to the French, distensione to the Italians, and if everybody else didn’t feel that way, the West Europeans weren’t interested in listening to the complaint.

French Emergency. France was the only nation to have a full-scale military emergency on its hands. Half the French army was in action in North Africa, and so were the best divisions of the mobile security police, the nation’s last line of defense against Communist violence at home.

Trouble in North Africa costs the French treasury close to 800 million francs ($2,300,000) per day. Like Indo-China before, it has placed a strain on France’s inflated economy. Six months ago, France was enjoying something of a boom, and producing more cars, steel and textiles than ever before in its history. Production is going up, but last week, on their return from the beaches, French workers were out on strike in 17 provincial towns. Their demand was for higher wages to match higher prices.

Italian Flirtation. In Italy, distensione meant a continuing flirtation with the notion of an “opening to the left”—an alliance between Christian Democratic center parties and the fellow-traveling Nenni Socialists, who still refuse to break their “unity of action” pact with the Communists. The Reds, oozing good-fellowship, as much as implied that “the spirit of Geneva” required all parties to get together. Italy’s 2,000,000 unemployed are still the Communists’ best asset, but according to a series of tables euphemistically described as a “plan” by Budget Minister Ezio Vanoni, jobs could be found for them all by 1964. The only unanswered question was: where would the money come from to finance the projects that would provide the jobs? Vanoni obviously expected the U.S. to cough it up.

German Remedies. Germany was feeling what might be called the dislocation of prosperity. Burgeoning industry has sucked the labor market dry, forcing up wages and prices; Hamburg’s shipbuilding yards and North Hessian heavy industries are plagued by wildcat strikes. Sure to find jobs elsewhere, ten out of every 100 of West Germany’s coal miners have left their underground jobs in the past six months. Result: a sharp cutback in coal production. One group of German steel mills was again forced to buy expensive U.S. coal to keep its busy blast furnaces going.

To prevent the German boom from faltering, Economics Minister Ludwig Erhard proposed to 1) import foreign labor, probably from Italy, 2) reduce import restrictions, thereby permitting cheaper foreign goods to compete with German products, forcing prices down. Such remedies met strong resistance from the Socialists and trade unions.

British Inflation. In Britain, too the bloom was off the boom. British production is higher than it has ever been, but British wages are higher still. The result is a classic case of inflation: too many pounds are chasing too few goods. There was also chronic overemployment. There are 480,000 jobs going begging in British factories.. In such a situation, left-wing and Red-run unions have pressed reckless demands for more pay, threatening still further inflation.

Last week, at its annual conference in the seaside town of Southport, Britain’s giant Trades Union Congress (membership: 8,000,000) faced the issue of inflation head on. Its president, Charlie Geddes lashed out at Tory Chancellor of the Exchequer Rab Butler for slashing taxes before the last election (TIME, May 2), but devoted most of his speech to an eloquent plea for restraint. “If we exploit full employment,” he warned, “our children may be exploited by unemployment … If we are pricing ourselves out of the export market, we are pricing ourselves out of a job—and that is industrial suicide.”

Doing Too Much? To reduce demand —and hold down prices—Rab Butler has twice tightened up on British credit facilities (TIME, Aug. 29). So far all his maneuverings have met with little success. “We are trying to do too many things at once,” said Prime Minister Eden last week. “Better roads, modernized railroads, more houses, new power stations to develop nuclear power . . . maintaining our armed forces for service on many continents . . . equipping them with modern weapons—there is nothing to criticize in any of these aims, but they cannot all be met at once. Some must be restrained.”

From all sides came suggestions that the armed services should be “restrained” first, and much optimism about more punch for the pound (like Washington’s more bang for the buck”). Bevanite joined Tory in cries for an immediate reduction in the two-year draft.-The press was full of features about wasteful and frivolous practices in the armed services (the R.A.F. colonel who had his batmen dress up in Louis XIV servant rig for a costume ball).

“Defense expenditure,”said the conservative Financial Times, “is directly competitive with vital exports … It seems increasingly likely that [the H-bomb] has turned the cold war into a prolonged struggle for economic domination of the world. In that struggle … capacity of the British steel industry or the level of British exports may avail more in the end than current military strength.”

In each country’s case, the worrying seemed to be confined to the professionals; the rest, enjoying steady jobs, steady pay and continuing peace, could not care less.

The editor of Zurich’s solemn Swiss Review of World Affairs, returning from a trip to the U.S., assured his readers last week that the U.S. has just enjoyed “the happiest summer since 1928.” Britain alone in Western Europe has a two-year draft; the rest have anywhere from twelve to 21 months.

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