Power in Europe?: II Great Britain, France, Germany and Italy and the Origins of the EEC, 1952-1957 [Reprint 2012 ed.] 9783110874365, 9783110121582

Citation preview

Power in Europe? II

Power in Europe II Great Britain, France, Germany and Italy and the Origins of the EEC, 1952 - 1 9 5 7

Edited by Ennio Di Nolfo

w DE

G Walter de Gruyter · Berlin · New York 1992

© Printed on acid-free paper which falls within the guidelines of the ANSI to ensure permanence and durability.

Library of Congress Cataloging-in-Publication

Data

Power in Europe? II : Great Britain, France, Germany, and Italy, and the origins of the EEC, 1952-1957 / edited by Ennio Di Nolfo. p. cm. Includes bibliographical references and index. ISBN 3-11-012158-1 (Germany). - ISBN 0-89925-816-6 (U.S.) 1. Europe - Politics and government - 1 9 4 5 . 2. European Economic Community. I. Di Nolfo, Ennio, 1930. II. Title: Power in Europe? 2. III. Title: Power in Europe? two. D1058.P68 1992 940.55'5 - dc20

Die Deutsche Bibliothek

— Cataloging-in-Publication

Data

Power in Europe?. - Berlin ; New York : de Gruyter. Literaturangaben 2. Great Britain, France, Germany, and Italy and the origins of the EEC : 1952-1957 / ed. by Ennio Di Nolfo. -

1992

ISBN 3-11-012158-1 NE: Di Nolfo, Ennio [Hrsg.]

© Copyright 1992 by Walter de Gruyter & Co., D-1000 Berlin 30 All rights reserved, including those of translation into foreign languages. N o part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher. Printed in Germany Typesetting and Printing: Arthur Collignon GmbH, Berlin Binding: Lüderitz & Bauer-GmbH, Berlin

Contents Introduction of the Editor

1

JOSEF BECKER

Power in Europe? Introductory Remarks

I. The Decision Makers in Foreign Affairs

7

17

ANTHONY ADAMTHWAITE

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

19

GEOFFREY W A R N E R

Aspects of the Suez Crisis

43

R E N É GIRAULT

Decision Makers, Decisions and French Power

66

MANFRED OVERESCH

The Alternative Prospect: The Plan of a Neutralized United Germany

84

BRUNELLO VIGEZZI

Italy and the Problems of "Power Politics" — From the EDC Failure to the Suez Crisis

101

H A N S - P E T E R SCHWARZ

Introductory Remarks for the Debate

II. The Economic Area

130

137

G E O R G E C . PEDEN

Economic Aspects of British Perceptions of Power

139

ROBERT FRANK

The French Alternative: Economic Power through the Empire or through Europe?

160

VI

Contents W E R N E R BÜHRER/HANS-JÜRGEN SCHRÖDER

Germany's Economic Revival in the 1950s. The Foreign Policy Perspective

174

VERA Z A M A G N I

The Italian "Economic Miracle" Revisited: New Markets and American Technology

197

G E O R G E C . PEDEN

Introductory Remarks for the Debate

III. The Military Problems

227

233

E D W A R D SPIERS

British Perceptions of Military Problems in the Fifties

235

JEAN DELMAS

Military Power in France 1954-1958

238

MANFRED MESSERSCHMIDT

Problems of West Germany Security Policy 1956 - 1 9 5 9

254

A N T O N I O VARSORI

Italy between Atlantic Alliance and EDC, 1948 - 1 9 5 5

260

JEAN D E L M A S

Introductory Remarks to the Debate

IV. The Political Parties

300

307

M A R T I N CEADEL

British Parties and the European Situation 1950 - 1 9 5 7

309

SERGE BERSTEIN

The Perception of French Power by the Political Forces

333

W I N F R I E D BECKER

Views of the Foreign Policy Situation Among the CDU Leadership, 1945 - 1 9 5 7

351

D I E T R I C H STARITZ

Western European and Atlantic Integration 1954 —1958 as seen by the German Communists

372

VII

Contents SIMONA C O L A R I Z I

The Italian Political Parties and Foreign Policy in the 1950s: DC, PSI, PCI, MSI

384

SEVERINO G A L A N T E

The International Policies of the Italian Christian Democratic and Communist Parties in the Fifties

407

HARTMUT ULLRICH

Introductory Remarks to the Debate

V. Public Opinion and the Cultural Sector PHILIP M .

435

443

TAYLOR

Power, Propaganda and Public Opinion: The British Information Services and the Cold War, 1945 - 1957

445

PIERRE M I L Z A

Public Opinion and Perception of Power in France at the End of the Fourth Republic (1954-1958)

462

KLAUS-JÜRGEN MÜLLER

Power and Awareness of Power in the Federal Republic of Germany 1953 - 1956/57: Perception of the Power Problem in Public Opinion ROMAIN H .

477

RAINERO

Italian Public Opinion and European Politics (1950 - 1 9 5 6 )

VI. Europe and the Origins of the EEC (from the Crisis of EDC to the Treaties of Rome through the Suez Crisis)

491

497

R O G E R BULLEN F

Britain and Europe, 1950 - 1 9 5 7

499

P I E R R E GUILLEN

Europe as a Cure of French Impotence? The Guy Mollet Government and the Negotiation of the Treaties of Rome

505

FRANZ KNIPPING

"Firm with the West!" Elements of the International Orientation of West Germany in the Mid-1950s

517

VIII

Contents ENNIO D I NOLFO

"Power Politics": The Italian Pattern (1951 -1957)

530

RAYMOND POIDEVIN

Introductory Remarks to the Debate

546

General Conclusion

551

RENÉ GIRAULT

On the Power of Old and New Europe

553

Abbreviations

563

The Authors

567

Other Publications

575

Index of Names

587

Introduction of the Editor This volume assembles 1 , in a revised and completed form, the 26 principal contributions to an international Colloquium held in Florence on 23 — 27 September 1987. These contributions are enriched by a general introduction to the Colloquium as well as a general conclusion. Each section (with one exception) of the six chapters into which the Colloquium was divided is followed by a general introduction to the debate. The aim of these introductions was to focus on the more sensitive points for the debate among participants so that each author could profit from it, in order to prepare the final version of his paper. In conclusion, the volume assembles 33 papers. More than a hundred British, French, German and Italian historians as well as scholars from related fields discussed the topic of "Europe and Power Politics ( 1 9 5 2 - 1 9 5 7 ) : at the origins of the European Economic Community". The focus of interest was on the changes brought about by the collapse of European power, following the end of World War II. Despite the many difficulties of the reconstruction process, in the years after 1952 and notwithstanding the crisis of traditional colonialism, the four European powers under consideration did present a completely different picture to the outside world. It was the picture of a continent that had lost its world role but had recovered enormous economic and political potential. The birth of European Institutions was one of the signs of this transformation, possibly the most important. It was felt that an era had come to an end: the era of traditional inter-European conflicts, and that in the Western part of the continent a new phase of history had begun. Such questions were considered in the larger context of a long-range European research project which began in 1980 at the initiative of René Girault of Paris I University. This project had brought together in an unusual experience, a large number of historians and political scientists from the four countries under consideration. The original title of this project is "Perceptions of Power in Western Europe between 1938 and 1958". This project will be widened in the forthcoming future to an analysis of the power relations between Western Europe, the United States and the Soviet Union. The project ' This introduction is closely connected with the introduction of the volume on the years 1 9 4 5 - 5 0 , edited by Josef Becker and Franz Knipping. The same structure, sometimes the same words have been repeated so as to render the homogeneity of both volumes and the continuity of the research.

2

Introduction of the Editor

aimed first of all of intensifying research on European international issues after 1945 and encouraging personal contacts within the European scholarly community. It is probably no exaggeration to say that this aim may have finally been achieved. Almost ten years of common or parallel research have strongly contributed to the birth of a real community of scholars who are now accustomed to working together and to adopting a comparative view towards their studies. In particular, the project aimed at highlighting the historical decline of Europe in the context of world power: by studying firstly the separate but parallel paths followed by Britain, France, Germany and Italy on the eve of the Second World War, when European power seemed at its apogee; secondly the period immediately after World War II, when the division between victors and vanquished barely concealed the reality of decline; and thirdly the Fifties, a turning point which marked the general acknowledgment of the decline of the four powers, notwithstanding the sensation of new strength given by the existence of a new European identity. How can a loss of power be measured? The research groups decided, as in the two previous phases of their activity, to analyze the growth of awareness, i. e. to ask how the contemporaries perceived and judged the international decline, and to what degree the changes in the political reality were recognized. The approach, hence, is to try to highlight "political mentalities" in the four countries, because these were the stable or changing elements of national selfassessment which continued to be present in European life even after reconstruction. Rather than dealing with the problem of power from a theoretical point of view, the contributors have investigated published and new sources which could offer the evidence of how the main figures of European life perceived their problems; how bureaucracies — whether diplomatic or administrative or political — were able to grasp the realities of the changes in the world scene. There has been, in fact, a conscious effort to connect this period of European history with the previous two. In fact the Florence Colloquium was the third meeting within the context of the project mentioned above. A first colloquium had been organized on 14 —17 April 1982 at the Chateau de Sèvres near Paris. Its objective had been to find a point of departure for the whole project by establishing a frame of reference from which to analyze "perceptions of power" on the eve of the Second World War, between 1938 and 1940. The contributions to this first colloquium have been published in various places. A second colloquium was held at the Haus St. Ulrich at Augsburg on 3 - 7 April 1984. It was dedicated, as already said, to the years from 1945 to 1950. The principal papers presented in this colloquium have been published in the volume Power in Europe? Great Britain, France, Italy and Germany in a Postwar World. 1945 — 1950, edited by the coordinators of the German research group, i. e. Josef Becker and Franz Knipping in the same series as the present volume. Other papers have been

Introduction of the Editor

3

published either in volumes collecting researches regarding only one nation or in various places 2 . The Florence gathering was therefore the third of a series, which is now being followed by a new phase of research, on Europe and the Superpowers from 1945 to the late Fifties. It should be emphasized, though, that all these colloquia are only the major highlights of the project. The essential research work was done during the intervening years. After the Florence meeting, research was carried out by groups of scholars in the four participating countries, along parallel lines and in close mutual contact. They approached the subject from six different perspectives: 1. The decision makers in foreign affairs. 2. The economic area. 3. The military sector. 4. The political parties. 5. Public opinion and the cultural sector. 6. Europe and the international scene (the creation of EEC). Under these headings, which are followed in the arrangement of the present volume, the project aims to consider the varying character of problems and questions in the four countries while also attempting to reach comparable evaluations of power consciousness, within both short and long term historical perspectives. Within the framework of this general orientation, the authors endeavour to present a picture of the specific aspects taken into consideration in their particular field of research, so as to increase our knowledge of European and international history in the mid-Fifties, a period that only recently has become an object of original research on primary sources and whose history still poses a great variety of unanswered questions. This volume represents a contribution in this direction. As the multiple research can scarcely be adequately summarized here, some brief general remarks, accompanied by the recommendation to read René Girault's conclusions at the end of the book 3 , must suffice. The general framework into which European events should be settled is the change in the relations between the Superpowers. The lessening of the Cold War tensions after the beginning of the Eisenhower Administration in USA and the death of Stalin gave more emphasis to national problems as well as to European integration. Since the focus of the conflict tended to move towards the Mediterranean, the problem of German rearmament was felt in different ways: much more now as a means to normalizing the position of the Federal Republic of Germany within Western Europe than as a means of improving defensive 2

See below Appendix # 3, Other Publications.

3

See below pp. 5 5 3 - 5 6 1 .

4

Introduction of the Editor

capabilities against the Soviet threat. This was to lead to a tendency to separate the positions of the four powers in front of America. All of them were now well aware of the world supremacy of the USA, but only West Germany and Italy were determined to follow a policy of loyal atlanticism to the extreme. The United Kingdom was still in the phase of readjusting its approach to foreign policy: the 'special relationship' with Washington and the possession of nuclear weapons gave substance to world wide interests. However, the sequence of crises and problems that the government of London had to face in the Middle East as well as in Africa brought into question the limits of British power. The Suez crisis marked a turning point in the re-shaping of British interests, but it was not immediately followed by a choice in favour of European integration. On the contrary, France looked towards a united Europe. Institutional crises, the war in Viet Nam, the North African war, the Suez enterprise, even if they strongly marked the weakness of the French political system, had a determining role in convincing the French government that European integration was the only means to avoid decay and to preserve a leading role in Western Europe. Britain and France therefore offered two markedly different examples of how the final crisis of decolonization could be managed. The FRG and Italy, on the contrary, no longer had problems of power politics, so that they could exercise their respective influences only in the diplomatic and economic fields, which the newly independent countries were much more ready to accept than mere neo-colonialism. The years taken into consideration in this volume were almost always marked by sustained economic growth in all four countries. The consequences of the war had been forgotten. A new affluent society was growing out of the "economic miracles" which, even in different ways, characterized this change. The most striking aspect from this point of view is the readiness of the continental powers to adapt to the notion that this growth could be sustained only by integration. The British links with the Commonwealth and the problems deriving from them delayed the advance of the same consciousness in Britain, posing a more difficult dilemma. These general aspects are clearly reflected in the nature of the single perspective from which this volume has been prepared. For example, the military sector was only a peripheral problem for Italy (even if it gave rise to an intense debate); it was a dominating problem for Germany, but only inasmuch as the approval of German rearmament posed the question of recreating a solely defensive German Army within the N A T O framework. On the contrary, the same problem raised profound debate in Britain and France, where the economic strain of colonial committments and of nuclear choices heavily conditioned national life. However the aim of this book is to reconstruct the perception of these problems; to study how deeply decision makers, politicians, political parties,

Introduction of the Editor

5

institutions were able to understand the changing nature of European power in the world. In most of the countries under consideration decision makers had not changed: France was still ruled by the same political élite that had been in power after the war, not to mention the diplomats; Britain had a new government, where the Conservative Party (Winston Churchill and Anthony Eden) had taken the place of the Labour. However, a large number of diplomatic decisions followed the usual patterns of British diplomatic tradition. The FRG was returning to full political life, led by a strong personality: Adenauer, the main figure of the first phase of reconstruction. Only in Italy, after the electoral defeat and death of De Gasperi, new men were in the government and new approaches began to emerge from the ashes of the past. The papers published in this volume certainly do not answer all the pertinent questions. The editor and his collaborators fully realize the limits of their efforts. There is much that has not been analyzed or specified. There are two major gaps. The first, no doubt, is the absence of a separate analysis of the influence of the evolution of the Cold War on European politics. This, however, is a field that has been investigated after the Florence Conference and there is good reason to think that the results of this further work will soon be available, either through a fourth colloquium or a new volume. The other gap is that no direct consideration has been specifically given to the process of decolonization that so deeply influenced the political life of at least two of the powers analyzed in this book. However, the problem of decolonization presents so many different facets that the original research group has not yet found the possibility to incorporate it in its programmes. There are probably other gaps. Despite all efforts to adopt the method of comparative research and debate, much could still be done in order to refine this method. Altogether, the reader will find a first analysis of the changes in the role of Power in European history during the Fifties, the result of a further endeavour to open up new perspectives in historical research. Historians, political scientists, and economists have again pooled their efforts and combined their methods in the hope of joint progress. The reader may judge the result. The editor of this volume decided to solve the thorny question of publishing papers which were presented in four different languages following the example of his predecessors (the editors of the first volume of this series), i. e. by attempting a publication in English. He thinks that the effort of a fourcountry comparison must not be unnecessarily complicated by linguistic divergiences. The preparation of this book in English in Italy, for publication in Germany, proved nevertheless difficult and adventurous. Without the goodwill of most of our British, French, German and Italian collaborators, this English publication might not have seen the light of day. The editor feels particularly indebted to prof. Josef Becker and prof. Franz Knipping, for their

6

Introduction of the Editor

assistance in the collaboration with the German publisher; to prof. Martin Ceadel and George C. Peden, for their help; to the staff of British translators and experts in the language of the historians and the political scientists, who have done the basic work of translation; to the group of Florentine collaborators who have been of enormous help in reassessing the quality of the volume, and especially: Dr. Bruna Bagnato, Dr. Elena Calandri, Dr. Maria Teresa Gallina, Dr. Massimiliano Guderzo, Dr. Leopoldo Nuti, Dr. Ilaria Poggiolini, Prof. Antonio Varsori. The editor addresses his heartfelt thanks to his colleagues, who have generously contributed with the promptness of their collaboration. He should also like to add that he accepts responsibility for any error in the translations. The editor is well aware, furthermore, that no translation from four different languages into only one can be exempt from mistakes and solecisms and he begs the reader's forgiveness for this. There are more thanks to render. The September 1987 Florence Colloquium took place thanks to research carried on in each of the four countries by groups which had received financial assistance from national organizations, Foundations, research endowments, University subsidies, ministerial financial help. The Florence Colloquium was financially supported by the Italian Ministry of Public Education, the National Council for Scientific Research, the European Economic Community, the University of Florence, the Municipal Administration of Florence, the Province of Florence and the Tuscan Region. The actual organization of the Colloquium and the publication of this volume were sponsored by the Accademia Europea di Studi Internazionali. The staff of the Section of History of International Relations of the University of Florence was particularly helpful in the preparation of the Colloquium. The heaviest burden of organization was taken, however, by Dr. Elisabetta Vezzosi, whose contribution proved of invaluable importance in the very special circumstances in which the Colloquium took place. It is to her skills and dedication that many unforeseen difficulties were bypassed. The editor wishes therefore to express his feeling of gratitude for her contribution and for the skillful direction of the staff, which during the final stages before the conference included Dr. Bruna Bagnato, Ms. Olivia Bruschettini, Dr. Isabella Di Nolfo, Dr. Laura Manetti, Dr. Ilaria Poggiolini. They formed an able and indispensable team in the various phases of the Florence Colloquium, and their presence much alleviated the burden of a very demanding scientific debate. Florence, June 1991

Ennio Di Nolfo

Power in Europe? Introductory Remarks by Josef Becker

The invitation to give the introductory paper at this third international conference on the perception of power in Western Europe before and after World War II has embarrassed me in three ways: first, I am not able to pay tribute to the genius loci by speaking to you in the language of Guicciardini and Machiavelli. I therefore apologize to our Italian hosts and audience. My second discomfort concerns our British colleagues: I do hope for their indulgence with my rather rusty English. And thirdly: since our first meeting five years ago, several volumes containing the proceedings of our symposia in Sèvres and Augsburg have appeared as well as numerous contributions to scientific periodicals in our various countries; 1 so it would prove a vain effort to summarize all these scholarly essays in the brief span of a thirty minute lecture. The solution seems to lie in concentrating upon some major results of our previous investigations and in sketching some perspectives for the debates to come. Inevitably, selection always means being subjective. But I shall do my best to avoid making too personal a choice and to avoid doing an injustice to any of the excellent papers resulting from our "Four Power project".

1

René Girault/Robert Frank (eds.): L a Puissance en Europe 1 9 3 8 - 1 9 4 0 , Paris 1984; Franz K n i p p i n g / K l a u s Jürgen Müller (eds.): Machtbewußtsein in Deutschland am Vorabend des Zweiten Weltkrieges, Paderborn 1984; Ennio Di N o l f o / R o m a i n H . Rainero/Brunello Vigezzi (eds.): L'Italia e la politica di potenza, 1 9 3 8 - 4 0 , Milan 1985; René Girault/Robert Frank (eds.): L a Crise de la Puissance française, 1 9 4 4 - 1 9 4 8 , Paris 1986; Josef Becker/Franz Knipping (eds.): Power in Europe? Great Britain, France, Italy and Germany in a Postwar World 1945 - 1 9 5 0 , Berlin - N e w York 1986. Italian and G e r m a n Volumes containing inter alia translations of a selection of the papers published in " P o w e r in E u r o p e ? " appeared in 1989. For a list of further contributions published in different French journals see "Power in E u r o p e ? " , pp. 5 7 0 - 5 7 1 .

8

Josef Becker

1. May I now invite you to look back to an early analysis by Richard Crossman on the state of international affairs in the aftermath of World War II? 2 It will provide us with a preliminary survey of the historical background of the problems which we intend to consider here in Florence and will illustrate how power was perceived by one of the leading left-wing Labour intellectuals. Crossman's article, "Britain and Western Europe", published early in 1946, starts with an assessment of the post-war "Balance of Power". The appraisal is trenchant and apodictic: the Second World War, Crossman writes, only completed a "process of transformation long under way", in the course of which the "real balance of world power" finally shifted away from Europe and a "new world balance of power" was created by the "forced emergence of Russia and the USA". There was, "strictly speaking, no European balance of power" at all, since the outcome of World War II did not leave any "European great power". The struggle for mastery in Europe, Crossman states, ended in the "total elimination of Germany" as an independent power factor. As for Italy, its "secondary ... potentialities" of the fascist era dissolved with Mussolini's Empire. And not even de Gaulle's France could resume its former Great Power position and try to create a new type of continental balance. According to Crossman, international politics in Europe were characterized by "something very different" from the traditional system of balance of power — by "a jockeying for position by the three great powers, none of them strictly European". However, as a consequence of the "technical evolution of the weapons of total warfare", only two of these three states could claim to stand the ultimate test of being a Great Power, as they were in a position to "contemplate a war with any hope of success". To quote Crossman verbatim: "Great Britain ended the Second World War, as France ended the first - a victor, but a victor who could never afford to fight again". At the end of the Second World War, Britain was, "strategically", no more than "a part of the European no-man's land between two continental blocks". If, in accordance with her traditional balance of power politics, Britain attempted to check world domination by either the United States or Soviet Russia, an ensuing world war would "inevitably destroy the remaining limited powers" of Great Britain. Crossman's analysis of the global bi-polar power constellation contains a rather unconventional assessment of Germany's post-war role. I quote again: " T h e power politics of Potsdam are wrong not because they are power politics, but because they are based on a false estimate of German power." Crossman 2

R. H. S. Crossman: Britain and Western Europe, in: The Political Quarterly 17 (1946) pp. 1 - 1 2 (for the following quotations see pp. 1 - 5 ) .

9

Power in Europe? Introductory Remarks

describes the Potsdam decisions as a "mere hangover" of an outdated perception of the political situation in Europe, because Germany, "though she can in the future be an occasion of war between the great powers, can never herself be a prime cause of war". T h e real importance of the shattered Reich and of a future solution to the German problem does not lie, according to Crossman, in the possibility that a "revival of German militarism" could "in itself threaten world peace", but in the fact that "the three great powers still think that it could".

2. Crossman's observations on the fundamental contradictions between the perception and the reality of power in the German policy of the United States, the United Kingdom, and the Soviet Union lead to the very centre of our interest: how did the political, military, economic and intellectual élite in the four Western European countries perceive what we might call the second and decisive stage of Europe's "self-deprivation of power"? Were they aware of the decay of their respective countries and were they at all aware of the decline of Europe as a whole when they started after 1945 to formulate their postwar policies and when they started thinking about a new European and world order? How realistic was their judgement with respect to the emergence of two super powers of continental dimensions? And to what extent did they realize that World War II would accelerate the anti-colonial independence movements and thus erode Europe's power base? Did the ruling classes in Italy and England, in France and Germany simply back "the same old nags from the same old stables" of traditional politics, thus neglecting the wisdom once uttered by Guicciardini: " E fallacissimo il giudicare per gli essempli, perché, se non sono simili in tutto e per tutto, non servono, conciosia che ogni minima varietà nel caso può essere causa di grandissima variazione nello effetto?" 3 Or did the decision makers and the leading social groups favour new ideas founded on realistic appraisals of the emerging bi-polar system of international relations? There seems to be two obvious answers to these questions. Firstly, there was in fact no static perception of the political, economic, and military potential of our four countries between 1945 and 1950. What we find is an evolutionary process showing both an early and realistic anticipation of the international situation and its probable development as well as nostalgic "hangovers" of conventional and traditional political thinking. Secondly, the 3

Ricordi

II, 117, in: Francesco

M i l a n - N a p l e s 1953, p. 121.

Guicciardini:

Opere. A cura di Vittorio

de Caprariis,

10

Josef Becker

decisive turning point came in 1947 when Great Britain, France, Italy, and Germany realistically assessed their remaining options. A decade earlier, Hitler's Reich was regarded as the most powerful of the four nations under consideration — thanks to its advanced military strength and industrial resources, to its organizational efficiency and apparent ideological unity. Great Britain, of course, was perceived as a world power, but as one which had to rely upon the Commonwealth and her Empire and which would probably also be dependent upon the assistance of the United States if she was to contain the rising power of the Reich and to withstand the combined pressure of Germany, Japan, and Italy. France was considered a Great Power in decline, if not a former Great Power, whose decadence was reflected in her low birth-rate and deeply rooted pacifism, in her acute social conflicts and in the instability of her governments, and finally in her industrial "backwardness" and her lack of natural resources. In spite of the fascist cult of power and Mussolini's imperial power politics, Italy was regarded as the least important of the four Great Powers. Her struggle for sovereign "freedom of action" did not prevent the Duce from slipping into the role of Hitler's junior partner. This was clear evidence of the limited options open to fascist foreign policy and of its continuous fluctuations up to the time when Mussolini's Italy was left with the "choices of weakness" (Ennio Di Nolfo). In retrospect and measured by contemporary standards of world power, the Nazi attempt to first establish European hegemony and then build on it a Germanic world empire, seems illusory, if not absurd. A rational interpretation of Hitler's political thought reveals two fundamental premises that guided his military action and strategy. First, there was the so-called "step-by-step program" ("Stufenprogramm") in which the various continental opponents were to be subjugated in a series of isolated "Blitzkriegen". This included the Soviet Union, which was viewed by the majority as a colossus with feet of clay. The "step-by-step program" would also allow Hitler to delay the final confrontation with the United States of America (and perhaps Great Britain) in the struggle for global domination. This would be won on the unassailable foundation of a Germanic Empire with a living space of continental dimensions, which would secure the economic self-sufficiency of the Reich. The second hypotheses was based on Hitler's demographic view of the Great Powers. According to his racist ideology, Greater Germany with her 80 million inhabitants of Germanic origin possessed military strength and technological and scientific resources that were far superior not only to France, but also to Britain, the Soviet Union and the United States. In Hitler's view there were no more than 56 million "genuine" Russians, and in the USA less than 60 million Anglo-Saxons. Instead of creating a Germanic world power, the second attempt at hegemony by the "Reich" resulted in the rise of two nations whose ascent to

Power in Europe? Introductory Remarks

11

dominating positions had been predicted a century before by Alexis de Tocqueville. Their decisive role in world politics now gave new meaning to the word "Great Power". Both the United States of America and the Soviet Union had a population of more than 100 million and both were endowed by geography and history with natural resources, economic power, and military strength to "choose [... their] fate in sovereign independence". 4

3. This rough definition of a new Great Power comes from early reflections by Raymond Aron on French foreign policy after Liberation. Aron sees a clear disparity of power between the United States and the USSR on the one hand and Great Britain and France on the other. What did this mean to the former European Great Powers? H o w did they perceive the inequality of power between first- and second-rate powers? And how did they evaluate their freedom to act or — in the case of the vanquished — their powerlessness in the post-war period? In our previous investigations we have concurred that Britain and France perceived the retention of their respective empires as being fundamental for their status in the post-war world. By retaining their colonies, both nations formally remained empires and World Powers. The colonies were thought indispensable to provide the economic resources for the post-war reconstruction of the mother countries. In spite of the national independence movements which had been present since World War I and in spite of distinct signs of disintegration and emancipation in Asia, in the Far East and in Northern Africa, the political decision-makers in Britain and France expected that, in the long run, their colonial possessions would survive unquestioned. 5 This was, no doubt, one of the most remarkable miscalculations of the political leaders of the time. It is therefore not surprising that in Italy too there was some hope of retaining at least a part of the former "Impero" in a peace treaty. The victors however did not even concede Italy a modest "vestige" of its former colonial possessions, thus leaving the country without even a symbolic claim to the status of a Great Power. The British and the French, however, were aware of the fact that postwar conditions still seemed to be in a state of flux, and that the future of 4

Raymond Aron: Reflections on the Foreign Policy of France, in: International Affairs 21 (1945) p. 443.

5

Still in 1954 Jean-Baptiste Duroselle: T h e Crisis in French Foreign Policy, in: Review of Politics 16 (1954) p. 437, spoke of "the overseas territories, which are the hope and the future of French power".

12

Josef Becker

their status as Great Powers did not depend only on the conservation of their colonial empires. The problem was how to resist the pull of the Super Powers and how to preserve or to regain as far as possible their autonomy and "liberty of action". One of the ingredients common to both Bevin's and Bidault's foreign policy was the consideration that the wartime cooperation with Stalin might also be possible in peacetime. From Paris' point of view the future role of France was to be that of a bridge between the Super Powers. With regard to France's German policy, and concerning her need for security guarantees against the "cauchemar allemand" this French concept implied a return to the Versailles system in an intensified form. Russia would have to play the role of the eastern guarantor — a role which it had been neither able nor willing to play in the 1920s and the 1930s. The question whether France would resolutely favour German dismemberment was not definitely settled. What dominated the French outlook was the resumption of the traditional post-World War I policy of security and predominance. Like Crossman, Raymond Aron warned against misjudging the German danger. He regarded it as "indefensible hypocrisy or an absurd fiction to speak of Germany as if she remained the centre of the world problem", or to behave as if "the German danger" still existed "in the form in which it has dominated Europe since 1871". 6 During the first two post-war years, British and French foreign policy had one object in common: to prevent unilateral dependence on the Super Powers. The British socialists believed that in spite of the looming antagonism between East and West, a socialist Europe led by Britain could play the part of a sort of "Third Power", based on a social system adopting a middle course between American capitalism and Stalinist communism. Similar hopes were held by Nenni's socialists, by the German social democrats under Kurt Schumacher and by the French socialists until these hopes were dashed by the developments of 1947/48. There were mainly two factors that brought about the insight that Western Europe's problems were not to be solved without the support of the United States and without the readiness to be a junior partner to Washington: the first was the escalation of the dispute between East and West into the Cold War, and the second the economic situation in Western Europe. It is not necessary to recount the phases of the establishment of Soviet domination in Central and Eastern Europe, a process that reached its climax in the "Defenestration" of Prague. Even if you concede that the actual Soviet military threat was overemphasized in Western European perception, there can scarcely be any doubt that Stalin would have tried to profit from political and social 6

R. Aron, op. cit., pp. 448 - 449.

Power in Europe? Introductory Remarks

13

déstabilisation of the parliamentary democracies, if this were possible without too great a risk to himself. The realisation that a Communist danger existed was closely related to the awareness of Western Europe's continuing economic weakness, its social costs, and its political consequences for the status and influence of the various European nations in the world. Again and again, our studies have led us to the conclusion that the awareness of the importance of economic power in international politics seems far more developed after 1945 than before 1939. In France, it was customary to measure national security primarily in terms of economic achievement against Germany. In 1947, the illusion of a "Western Union", conceived as a British or French led "Third Power" between the United States and the Soviet Union, collapsed. In the same year, the USA launched the Marshall Plan, creating the opportunity for lasting economic reconstruction, on the condition, however, that a European Union was established under American influence. So France, and similarly Great Britain, had to decide between either US-supported economic modernization and therefore, dependence on the United States, or independence and continuing decline. Acting in their national interests, Paris and London chose the first alternative, thereby accepting a temporary dependence on the United States in order to later regain their political independence. For Italy the proclamation of the Marshall Plan at the same time as the outbreak of the hot phase of the Cold War offered the chance of political reintegration, economic reconstruction, and industrial modernization. The hope that the "co-belligeranza" would be rewarded proved to be illusory. The "punitive peace" of 1947 was perceived as a symbol of Italian weakness. But her geographical position in the Mediterranean and the fact that she bordered on the communist bloc proved to be a trump card in the Cold War. It was mainly this geostrategic reality which brought about a turning point in US policy towards Italy. It led to the massive support of anti-communists before the 1948 elections. The Marshall Plan had created the opportunity to overcome the Italian economic crisis, to reduce the economic disparity between North and South, and, with industrial modernization and social stabilization, to create a platform for a constructive European policy, which is so closely associated with the name of De Gasperi. What we have said about Italy applies even more to Germany or — more precisely - to West Germany. It is true that even after 1945 there were groups in all German parties who still thought it was possible to profit from the central location ("Mittellage") of Germany by resuming the traditions of Bismarck and Weimar of steering a middle course between East and West. But by 1947, the idea of a "Third Way" with Germany as a constitutional and social bridge between the capitalist and socialist systems, between liberal parliamentarianism and communist one party rule, proved to be merely a

14

Josef Becker

dream. Adenauer's assessment of the post-war situation seems to have been most realistic. From the beginning, he was convinced that the border of the Soviet occupied zone of Germany would for the foreseeable future separate Europe into two spheres of influence. So for Adenauer the only way out of need and misery for the majority of Germans, and the way back into the international community, was to join the West and bring about reconciliation with France. The Marshall Plan and joining the West also seemed to offer a real opportunity of finding a solution to the German question. The conviction prevailed that parliamentary democracy and a free-enterprise economy sensitive to social needs ("soziale Marktwirtschaft") would be superior to the Eastern system. It was believed that political freedom and economic prosperity in the West German state would exert a magnetic attraction on the Soviet occupied zone. The so-called "magnettheory" was advocated by the Christian Democrats as well as by the Liberals and Social Democrats, thus indicating that the traditional underestimation of the internal stability and power of Soviet Russia had survived the break of 1945. The end of a transitional period in European post-war history with its ambivalent possibilities for development was marked in 1947/48 by economic depression, social instability and especially by the Soviet menace. Now, the old programs were replaced by new ones. Plans for European unification, especially the Schuman Plan, outlined constructive ways in which European civil wars could definitely be avoided and how interests could be harmonized — particularly those of France and Germany. The change in the French point of view was partly due to the insight that in future she would be dealing not with one, but with "deux Allemagnes". And in Germany the majority shared the view that national unity in liberty was only to be regained by cooperating closely with the Western powers, or that the re-unification might perhaps only be possible in a comprehensive European solution which would involve overcoming the division of the continent. As a rule, however, it was disregarded that the European solutions arranged in the Peace of Westphalia (1648) and in Vienna (1815) were based on maintaining a plurality of German states, precisely to preserve the balance of power in Europe.

4. European politics and the progress and setbacks of European unification in the 1950s will be the main focus of our discussions here in Florence. Let me just mention some of the major topics that are bound to crop up in the course of the next three days: Nato and the European Defense Community, the Schuman Plan and the Organization for European Economic Cooperation, the

Power in Europe? Introductory Remarks

15

Suez crisis and the decolonization process, de-Stalinization and the changing perception of the Soviet menace, functional and federal aspects of European integration, and "Atlanticism" and "Europeanism". These catchwords just reflect major aspects of European politics in the 50s — of course European politics seen as reaction and action in a world-wide system of international politics and economics. Allow me in conclusion to broach one matter which seems to me to be of particular importance for the European history of the 1950s as well as for our own research. 1 am thinking of the basic relationship between the traditional idea of the sovereign national state and the idea of a supranational European Union. We all know that the most important attempt to establish a nucleus of supranational institutions with the European Defence Community failed. Our investigation of the perception of power during the immediate post-war years has repeatedly made it quite clear just how important the "sacro egoismo" of national interests was when it came to making fundamental political decisions, even where the motives of the initiators were oriented to common supranational interests. M a x Kohnstamm, whose career as assistant to Jean Monnet has been so intimately linked with the idea of European unity and later on with the academic life of Florence, focused on the heart of the matter in a recent interview when he said: "The first law of politics is that structures are born only out of necessity. And the necessity itself must be perceived." 7 About 500 years ago, right here in Florence, the relation of perception to action was characterized as follows: "Gli assai uomini non si accordano mai ad una legge nuova che riguardi uno nuovo ordine nella città, se non è mostro loro, da una necessità, che bisogni farlo; e non potendo venire questa necessità senza pericolo, è facil cosa che quella república rovini, avanti che la si sia condotta a una perfezione d'ordine." 8 Machiavelli's pessimism about human nature and the chances to establish in time new political structures should not be the last word in my introductory remarks. M a x Kohnstamm ended his statement as follows: " T h e other decisive element" — besides necessity and its perception — "is hope. And I presume that Europe is still able to act according to the principle of hope." 9 I think it would be a rewarding result of our conference in one of the most distinguished cultural capitals of Europe if our research on power perception during a decisive decade of our common history not only promotes contemporary historiography but also sharpens our ability to perceive the real "necessità" lying beyond the scope of purely national interests. 7

"Die Zeit", No. 29, 10. July 1987, p. 13.

* Discorsi, Book I, Chapter 2, in: Opere di Niccolò Machiavelli, ed. by Sergio Bertelli, Vol. 1, Verona 1968, p. 99. 9

Like note 7.

I. The Decision Makers in Foreign Affairs

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy * by Anthony Adamthwaite

It is generally agreed that the 1945 — 51 Labour governments coped well with the retreat from power — the period was 'among the most successful in the history of British external policy'. 1 By contrast, the 1 9 5 1 - 5 5 Churchill government has won few accolades. Even discounting the retrospective blight cast by the 1956 Suez crisis, Britain's greatest postwar humiliation, the fact remains that the second Churchill cabinet's lasting achievement was small. T h e descent from power continued apace. Against foreign secretary Anthony Eden's negotiating triumphs in 1954 must be set the withdrawal from the Suez Canal zone, Britain's Middle East bastion. Within a year foreign secretary Harold Macmillan complained of 'Eden's chickens coming home to roost'. 2 Why, despite sharing the same objectives as Labour governments, did the second Churchill administration accomplish less? T h e explanation lies largely in the interaction of three elements: Britain's want of power to solve her problems; the uneasy Churchill-Eden partnership; the deficiencies of the government machine. T h e decline of Britain debate can all too easily distort assessments of the second Churchill government. Blanket assertions that postwar governments put grandeur before growth and encouraged debilitating myths are misleading in the context of the early 1950s. T h e literature often assumes that abandonment of world power claims would have enabled leaders to focus resources

* I should like to thank the British Academy for a grant which helped me to carry out the research for this essay. For valuable advice, I am indebted to Dr Roger Bullen. I acknowledge permission to quote from the following collections: Churchill College, Cambridge, for the Strang and Cadogan papers; Professor Geoffrey Warner and Lady Younger for the Younger Papers; Mr Piers Dixon for the Pierson Dixon papers; the Bodleian Library for the Woolton and Crookshank papers. Copyright material from the Public Record Office appears by 1 2

permission of HMSO. Paul Kennedy, The Realities Behind Diplomacy Diary, 24 October 1955, Woolton 3.

(Fontana, London, 1981), 362.

20

Anthony Adamthwaite

on internal growth and so escape rapid decline. However, this essay argues that the only realistic option at the time was the gradual reduction of overseas commitments while seeking a reduced world role. This was the strategy Prime Minister Clement Attlee and foreign secretary Ernest Bevin had successfully pursued. The same strategy might well have worked for conservative leaders but never received a fair trial. Prime Minister Winston Churchill opposed any withdrawals and quarrelled with Eden on a number of issues. Their bitchy and acrimonious partnership contrasted sadly with the solid and harmonious Attlee-Bevin relationship. Furthermore institutional weaknesses ensured that policy-making was badly fragmented and ill-defined.

Sources A full assessment of the Churchill government's foreign policy is hampered by the limitations of the sources. At first sight this may seem surprising. In one sense there is a formidable array of primary sources — public and private papers, Hansard, books, periodicals, newspapers, films and oral history. Nevertheless the foreign policy-making record has important lacunae. Despite the stacks of Public Record Office material many questions remain unanswered and may never be satisfactorily answered. The greatest obstacle lies in the inequality of available sources - a mountainous mass on some issues, extremely fragmentary or non-existent on others. Some gaps are decreed by Whitehall. Intelligence files and other papers deemed sensitive are locked away. 3 Exceptionally the weeders have left clues and a jigsaw puzzle can be pieced together but usually there are missing pieces. Other gaps in the record will never be filled. Changes in Foreign Office working methods make it difficult to discover the whys and wherefores of decisions. Before the Second World War consultation within the Office and with other government departments was mostly by correspondence; during the war much more was done orally, and this became the norm. The urgency of postwar issues ensured that they were handled in ad hoc or informal meetings which often went unminuted. The sheer volume of incoming papers (1913, 68,000; 1953, 586,000), the inevitable decline in the standards of filing, the mass of unrecorded telephone conversations, make it 'quite impossible for anybody to unravel with any accuracy from the archives the detailed history of events'. 4 3

For discussion of government policy and the Public Records see, Sir Duncan Wilson, 'Public Records: The Wilson Report and the White Paper', Historical Journal, 25,4 (1982), 985 - 994; Bernard Wasserstein, 'Whose History is it, anyway?', TLS, 25 July 1986.

4

Lord Greenhill of Harrow (former head of the FCO), The Times, 7 May 1977.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

21

Record-keeping procedures may conceal as much as they reveal. Cabinet minutes were designed not so much as a record of proceedings but as instructions for action to departments. The Secretary was 'under instructions to avoid ... recording the opinions expressed by particular ministers'. 5 In 1953 Macmillan, minister of housing and local government, complained that the minutes might mislead: 'historians reading this fifty or a hundred years hence will get a totally false picture. They will be filled with admiration and surprise to find that the Cabinet were so intellectually disciplined that they argued each issue methodically and logically through to a set of neat and precise conclusions. It isn't like that at all'. 6 In the words of the anonymous verse: Now that the Cabinet's gone to dinner The Secretary stays and gets thinner and thinner Racking his brains to record and report What he thinks what they think they ought to have thought.

Problems The multiplicity of problems crowding Eden's desk would have disheartened most foreign secretaries. The job, Eden remarked, 'had killed Bevin and destroyed Morrison and now he understood why'. 7 The Cold War was at its height dividing East and West by political and ideological conflict. Germany and Austria were dismembered and occupied with no sign of peace treaties. In Iran Prime Minister Mossadeq had nationalised the oil industry and thrown out the Anglo-Iranian oil company. The Egyptian government had denounced the 1936 Treaty with Britain which allowed the stationing of British forces in the Suez Canal zone until 1956. Early in 1952 the whole of the strategic reserve was sent to Egypt to deal with terrorism in the Canal zone. In Korea a fullscale war raged between North and South with Chinese Communists helping the North Koreans while the South was supported by United Nations forces made up largely of American units backed by British and Commonwealth forces. In Indo-China France fought Viet Minh nationalists aided by Communist China. Britain had her own colonial wars — from 1950 the Emergency in Malaya and in 1952 the Mau Mau rebellion in Kenya. Nearer home Italy and Yugoslavia clashed over their claims to the city of Trieste. For Eden and his advisors these challenges were dwarfed by the fundamental problem of how to sustain a world role with diminishing resources in a harsh and swiftly changing environment. Britain was a captive of circum5

Public Record Office, CAB 129/52, 13 May 1952, 'Questions of Procedure for Ministers'.

6

George Mallaby, From My Level (London, 1965), 16 — 17.

7

Robert Rhodes James, Anthony Eden (London, 1986), 353.

22

Anthony Adamthwaite

stance. The 1939 — 45 conflict confirmed that she was not a great power from her intrinsic strength. In 1945 a war weary and bankrupt country was eclipsed by two superpowers, the United States and the Soviet Union. After six years of peace rationing remained and in January 1952 the meat ration was even reduced. 'We are in a balance of payments crisis worse than 1949, and in many ways worse even than 1947', Rab Butler, Chancellor of the Exchequer, warned in October 1951. 8 A year later he repeated the warning: W e are all agreed when w e t o o k office that the defence p r o g r a m m e which w e inherited was beyond the nation's means. It w a s based on assumptions a b o u t American aid and the strength of our e c o n o m y which have since been proved false . . . W e are attempting to d o t o o much ... Anything m o r e than the current level of expenditure means moving t o w a r d s a w a r e c o n o m y with radical revision of o u r social and e c o n o m i c policies 9

Britain's predicament was pinpointed by John Colville, Churchill's private secretary, in June 1952: It is foolish to continue living with illusions ... the facts are stark. At the m o m e n t we are just paying our way. A trade recession in A m e r i c a will break us; the competition of G e r m a n metallurgical industries and the industrialisation of countries which were once the market for o u r industrial products will ruin our trade sooner o r later ... W h a t can we do? Increasing productivity is only a palliative in the face of foreign competition. W e c a n n o t till sufficient soil to feed 5 0 million people. W e c a n n o t emigrate fast enough to meet the danger, even if w e were willing to face the consequent abdication of our position as a great power. L o r d Cherwell sees hope in the union of the English Speaking World ... But n o w England, and E u r o p e , distrust, dislike and despise the United States. Some pin their faith on the development of the E m p i r e as a great e c o n o m i c unit ... W e have left it t o o late . . . 1 0

Britain patently lacked the military and economic strength to retain all her world interests. Since 1945 the United States and the Soviet Union had grown more powerful both in absolute terms and in relation to other major powers. In relative terms Britain's military strength continued to decline. The nuclear umbrella gained by the testing of an atom bomb in 1952 gave a brief illusion of strength. However she was clearly a poor third in the thermonuclear stakes. In 1952 the United States exploded a hydrogen bomb followed a year later by the Soviet Union. Britain did not catch up until 1957. The revolution in nuclear war represented by the hydrogen bomb underlined Britain's weakness. Limited resources, as Macmillan, minister of defence, recognised in 1954, meant that 'we really cannot fight any war except a nuclear war. It is quite 8 9 10

CAB 129/48, 31 October 1951, 'The Economic Position: Analysis and Remedies'. CAB 129/55, 3 October 1952 'Defence and Economic Policy'. The Fringes of Power: Downing Street Diaries 1939-1955 (London, 1985), 6 5 0 - 5 1 .

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

23

impossible to arm our forces with two sets of weapons — conventional and unconventional'. 1 1 The hydrogen bomb also hit at Britain's Middle East primacy. The Canal zone could be destroyed virtually at a blow. Sir Ivone Kirkpatrick, permanent under-secretary of state at the Foreign Office, minuted in 1954: I do not believe that in this atomic age we shall have either the wish or the ability to reactivate the base. We will be sufficiently occupied struggling for survival ... the power and numbers of these frightful weapons will be so great that the chances of our wanting to conduct a campaign in the Middle East will be less than it is today.12 The missile race proved beyond Britain's means and by 1958 her missile programme was running into serious financial difficulties. Britain's influence was also eroded by major changes in the Empire and Commonwealth. The grant of independence to India and Pakistan in 1947 was the crucial event in postwar overseas policy. In 1945 Britain's power had been perceived as resting not on the United Kingdom alone but on the Empire Commonwealth. India 'the jewel' had been the centrepiece of Britain's east of Suez domination. The Indian army enabled control to be exercised over the whole area on the trade route from Malta to the Far East and Australia. Although India and Pakistan joined the Commonwealth Britain lost military control of the sub-continent. Before 1939 Britain's relationship to the Commonwealth countries was still largely a maternal one. British ambassadors in foreign countries normally looked after the interests of the Dominions as well. Only Canada had a separate foreign service of any size. Commonwealth countries habitually looked first to Britain in all circumstances, irrespective of their geographical position. This was no longer true in the early 1950s. The 'old Dominions' — Canada, Australia, New Zealand, South Africa — became deeply involved in political and military relationships in their own parts of the world. The transformation was strikingly symbolised in the 1951 Anzus Pact by which the United States took over Britain's role in the defence of Australia and New Zealand and from which Britain, on Australian insistence, was excluded. There was no question of Commonwealth unity on foreign policy. Lord Strang, permanent under-secretary of state 1949 — 53, reflecting on his experience could not recall 'any instance' when 'there had been a united Commonwealth view on any difficult issue ... It was rare to find the Canadians and Australians of the same mind'. 1 3 11 12

13

Harold Macmillan, Tides of Fortune, 1945-1955 (London, 1969), 567. Minute of 26 July 1954, quoted in William Roger Louis, 'American anti-colonialism and the dissolution of the British Empire', International Affairs, 61,3 (1985), 413. Evidence to Plowden Committee, 28 January 1963, Strang Papers 2/II.

24

Anthony Adamthwaite

Diminishing power was only part of the problem. The world which Churchill and Eden found on taking office in October 1951 had undergone a metamorphosis even since the Second World War. As well as the obvious revolutionary changes — Cold War conflict, the rise of Afro-Asian nationalism, Communist control of China — the increase in the number of states agents and subjects of negotiation since 1945 constituted a sea change in international politics. 'Things have gotten ten or fifteen times more complicated', Churchill confessed to the American President, General Dwight Eisenhower, 'the problems I now face are much greater in number and complexity than they used to be'. 1 4 A global system had replaced a European based system in which the main decisions had been made in London, Paris, Berlin and Rome. The rise of multilateralism meant that by 1951 Britain was enmeshed in what Eden called 'the alarming growth of international committees and commissions of every sort and kind' — the United Nations and its specialist agencies, the North Atlantic Treaty Organisation (Nato), the Organisation for European Economic Co-operation (OEEC), the Council of Europe. The Cold War was a further constraint. Since 1941 the Anglo-American alliance was accepted as Britain's sheet anchor. Only American support, it was argued, enabled Britain to retain a world role. Paradoxically the American alliance accelerated decline. From 1947 the polarisation of power blocs around the United States and Soviet Union reduced the influence which second rank states like Britain could exercise. Britain's postwar rearmament, initiated in response to the outbreak of the Korean War in June 1950, overloaded an ailing economy, imposing a heavier defence spending per capita than on the American people. By 1953 British defence spending represented 28.5% of total government spending. 15 The difficulties of policy-making were compounded by the increased interest of the public in foreign affairs. Before the First World War foreign policy had been concerned almost exclusively with relations between governments. In 1914—18 the appeal to peoples as opposed to governments added a new dimension to diplomacy. Policy-makers had perforce to reckon with the impact of policies on domestic and international opinion. Some historians, relying on one or two polls over a period of twenty years, have seriously underestimated public interest in international affairs. However 1 9 5 1 - 5 5 polls reveal three features: consistently strong support for a summit; large fluctuations of interest in world affairs; firm views on individual issues. When asked in December 1951 what was 'the most urgent problem the government must solve in the next few months' the majority replied 'foreign affairs', instancing Korea and Egypt. 16 Five months on in May 1952 'the cost of living' came first, 14

16

Quoted in Anthony Seldon, Churchill's Indian Summer (London, 1981), 34. For example Kennedy, op. cit., 324. George H. Gallup (ed), The Gallup International Public Opinion Polls: 1937-1975, vol. I 1937-1964 (Random House, New York, 1977), 258.

Great

Britain

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

25

pushing international issues into fourth place. In June 1953 international problems again topped the list. On the hydrogen bomb, Egypt, Korea, German rearmament, the public held decided opinions. But strong views did not produce demonstrations or letters to MPs. Governments were still expected to play God. After 1945 opinion impinged on British policy in two ways. Firstly a growing body of international opinion, especially in the United States, condemned European colonialism; secondly wartime conferences generated expectations that great power summits would solve world problems and foster international understanding. For the Churchill government opinion was both spur and curb. By showing overwhelming support for a summit the polls fuelled Churchill's resolve to arrange a meeting. Sir William Strang, permanent under-secretary, argued 'the need to show the British public that we are not missing opportunities for peace'. 17 But public attitudes also acted as a restraint. To counter ebbing power, overseas publicity projected Britain's moral, democratic and technical leadership. In short the old lion might be past his prime but still had character and brains. This propaganda proved double-edged. Egypt exemplified the dilemma. Britain was expected to practise what she preached. After withdrawal from Palestine in 1948 Egyptian nationalism posed the most serious threat to Britain's Middle East paramounty. Egypt, anxious to eliminate the vestiges of British tutelage, demanded abandonment of the Suez Canal base. Already in 1946 Bevin's private secretary had acknowledged: 'the days are over when we could treat Egypt de haut en bas and act as a great Power ... This would not only have been out of tune with mid-twentieth century conceptions, but we should have been balled out at the Security Council'. 18 In 1953, while Britain and Egypt haggled over an agreement, Eden made the same point to Cabinet colleagues: to stay in the Canal base 'would almost certainly compel us to reoccupy Egypt ... We should be likely to have world opinion against us and would find it difficult to make a case if Egypt took us to the United Nations'. 1 9 Three years later Eden had evidently forgotten his own counsel. Assessing the significance of the 1956 Suez crisis Sir Charles Keightly, commander in chief of the Anglo-French forces, wrote: T h e overriding lesson of the Suez operation is that world opinion is n o w an absolute principle of w a r and must be treated as such. H o w e v e r successful the pure military operations m a y be, they will fail ... unless national, C o m m o n w e a l t h and Western world opinion is sufficiently on our side. 2 0 17 18

19 20

Evelyn Shuckburgh, Descent to Suez: Diaries 1951-56 (London, 1986), 84. Piers Dixon, Double Diploma: The Life of Sir Pierson Dixon; Don and Diplomat 1968), 232. CAB 129/59, 16 February 1953, 'Egypt: The Alternatives'. Quoted in Peter Hennessy and Mark Laity, 'Suez - What the Papers Say', Record,

I, April 1987, 8.

(London,

Contemporary

26

Anthony Adamthwaite

Solutions Eden analysed Britain's predicament in a Cabinet paper of 18 June 1952 on 'British Overseas Obligations'. 2 1 Not surprisingly, he recommended a gradual reduction of commitments. Postwar perceptions of British power need to be emphasised briefly, as background to Eden's review. British governments are sometimes said to have clung to a mirage of power until 1956. Scarce resources, it is contended, were squandered in maintaining vast overseas commitments and a huge defence budget. In fact as the Second World War ended, planners took stock of Britain's plight. 'The problems in front of us', wrote Sir Alexander Cadogan, permanent under-secretary in 1945, 'are manifold and awful'. 2 2 Arguably, the assessments of the time were not realistic enough but it is hardly fair to blame the planners for failing to foresee the precipitious decline of the 1960s and 1970s. Initial diagnoses concluded that enfeeblement was temporary and recovery a matter of time. Nevertheless contraction took place. Between 1945 and 1948 Britain withdrew from India, Palestine, Greece and Turkey. In 1946 Attlee had advocated withdrawal from much of the Middle East. 1949 brought a 'general realisation that there is no solution to our problems over which we ourselves exercise much freedom of choice'. 2 3 In 1950 Bevin reminded the Commons: 'the day when we, as Great Britain, can declare a policy independently of our allies, has gone'. 2 4 Thus by 1951 — 2 few disputed that Britain had to seek a reduced world role anchored in an American alliance. Eden's 1952 paper identified three fundamental factors governing British policy: 'world responsibilities inherited from several hundred years as a Great Power'; the United Kingdom was 'not a self-sufficient economic unit'; the lack of a 'world security system which meant that the United Kingdom ... is faced with an external threat'. 'Rigorous maintenance' of present commitments, warned Eden, placed 'a burden on the country's economy which is beyond the resources of the country ... A position has already been reached where there is no reserve and therefore no margin for unforeseen additional obligations'. The remedy was a gradual shedding of responsibilities while preserving 'the world position of the United Kingdom'. If 'after careful review' this proved too much for national resources the British people faced a difficult choice: 'they must either give up, for a time, some of the advantages which a

21 22

23 24

CAB 129/53. David Dilks (ed), The Diaries of Sir Alexander Cadogan, 1938-1945 (London, 1971), 15 August 1945, 782. Diary 7 July 1949, Younger Papers. Quoted in Christopher Mayhew, 'British Foreign Policy since 1945', International Affairs, 26,4 (1950), 478.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

27

high standard of living confers ... or, by relaxing their grip in the outside world, see their country sink to the level of a second class Power, with injury to their essential interests and way of life of which they can have little conception'. Drastic and unilateral withdrawal from commitments was rejected: 'the effects of a failure of will and relaxation of grip ... are incalculable. But once the prestige of a country has started to slide there is no knowing where it will stop'. Eden concluded that the only practical course was to slowly shed defence commitments in the Middle East and South East Asia by constructing international defence organisations and by persuading the United States to take the lead. Egypt was a practical application of the recommended policy. In February 1953 Eden restated his strategy, urging the Cabinet to accept the loss of the Suez Canal Zone: We could undoubtedly deal effectively with any immediate attempt by the Egyptians to eject us by force from the Canal Zone. But ... we cannot afford to keep 80,000 men indefinitely in the Canal Zone. Already our current overseas expenditure — mainly military — has risen from £ 160 million in 1950 to £ 222 million (provisional estimate) in 1952. This does not include the local cost of our troops in Germany ... With our limited resources, it is essential that we should concentrate on the points where our vital strategic needs of the necessities of our economic life are at stake and that we should utilise our strength in the most economical way. 25

What went wrong? Why did Eden's recipe fail? Arguably because the prescription was not radical enough. The government wanted to have its cake and eat it. But there was no half-way house between superpower and the second division. Only abdication as a great power would have released sufficient resources to arrest economic decline. Plausible as this argument sounds it is however open to several objections. At the time, the idea of wholesale withdrawal contradicted long-held, widely supported public policies and assumptions. Britain was the prisoner of her past. The 1945 victory seemed to have vindicated Britain's self-image as a leading world power. The retreats of the 1930s were dismissed as aberrations springing from political ineptitude. Both ministers and public were convinced that the country was and could remain a world power. To criticise this as an illusion is to oversimplify the quandary. Britain still mustered substantial military power — nuclear force, large conventional units plus a world-wide network of bases. Just thirteen years before in 1939 Britain had been an acknowledged world power pursuing an independent foreign policy. Building public support for abdication as a world power would have required long and careful preparation. Moreover, having power is being seen to have power. Eden and his advisors 25

CAB 129/59, 16 February 1952.

28

Anthony Adamthwaite

feared that a rapid run-down might be disastrous for prestige. This was a valid fear. Fast contraction risked destroying Britain's credibility. The power and influence needed for survival as a medium power might be lost. Also, the damage to home morale could have endangered the object of the exercise — economic recovery. In sum, rapid withdrawal from empire and commitments was not practical politics in the early 1950s. The government, with a majority of only 17, would not have carried its own supporters, let alone public opinion. The proof is that withdrawal from the Sudan and the Suez Canal brought a battle with the 30 — 40 strong Suez group of Conservative backbenchers. Alternatively, and more convincingly, it can be argued that Eden's policy failed for other reasons. First and foremost it was not properly conceived and followed through. It does not seem to have been discussed in Cabinet. No 'careful review' of resources and options took place. Furthermore the design was flawed. Eden suggested that in order to persuade the United States to shoulder more of the burden Britain had 'to demonstrate that we are making the maximum effort ourselves'. Distrust of Britain and her Empire was strong in the United States. This line of thought seemed to imply that Britain should continue to overstrain her economy so as to satisfy the Americans that we were still a powerful and worthwhile ally. This raised the further and deeper question which Eden and the planners dodged, namely, in what sense, if any, could Britain remain a great 'world power' while so demonstrably dependent on American support and goodwill? Key questions such as how much power and influence should Britain seek to retain and in what areas went unanswered. Nor was a timetable mentioned. How 'gradual' was gradual? Several considerations militated against an orderly and planned retreat. Churchill and Eden lacked the will to see it through. Eden, immersed in immediate problems, could 'see a little ahead' but was 'too keen on popularity to push far-seeing measures through'. 26 Churchill who only twelve years before had 'not become the King's First Minister in order to preside over the liquidation of the British Empire' opposed further withdrawals and contested Eden's policy on Egypt. Moreover, there was agreement that Britain was overstretched but no consensus on what should be done. The psychological dimension was crucial. The combination of rapid international change and growing awareness of national weakness had a traumatic effect. In the immediate aftermath of war the assumption that ills were temporary shielded opinion from a full perception of decline. By 1951 it was realised that Britain suffered from a continuing haemorrhage. In this mood withdrawals became much harder to stomach. Suspicions that the Americans were 'out to take our place' and 'to run the world' stymied the close partnership Eden's strategy 26

Shuckburgh, 152.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

29

required. 27 Rationally the British might acknowledge the need to shed part of the load but instinctively they took for granted that 'our future will be of one piece with our past and that we shall continue as a Great Power'. 2 8 Churchill recognised in 1952 that 'now that we no longer hold India the Canal means very little to us', yet fought tooth and nail to stay in Egypt. The discontinuity between the present and the immediate past was deeply disorientating and produced ambivalent responses. 29 With Churchill back at No. 10 his secretaries hoped that history could be arrested. They attacked Eden and the Foreign Office for their policy on Egypt: They thought we should sit on the gippies and have a 'whiff of grapeshot' ... If we go out of the Sudan and Egypt it will be another stage in the policy of scuttle which began in India and ended at Abadan. It will lead to the abandonment of our African colonies ... People said at Munich that Britain was finished and that history was against us, but Winston had proved it wrong ... 3 0

However, the Foreign Office believed that resistance risked humiliation. 'If we seek to hang on', Kirkpatrick wrote apropos the Sudan, 'we may end up being expelled and that would be humiliating'. 3 1 Finally, prolonged economy crisis, combined with international challenges, created an atmosphere of doom and gloom in which problems appeared insoluble. In December 1952 Sir Evelyn Shuckburgh, Eden's private secretary, recorded: Slept badly and became very depressed about the world in general. Our economic situation, German and Japanese competition, destruction of British influence in the Mediterranean and Middle East (after Persia and Egypt, the sheikdoms on the Persian Gulf are now being absorbed by Saudi Arabia). The Americans not backing us anywhere. In fact, having destroyed the Dutch empire, the United States are now engaged in undermining the French and British empires as hard as they can. 32

Prime Minister

and Foreign

Secretary

Tackling Britain's problems required a close and confident partnership between Prime Minister and foreign secretary. Unfortunately, policy-making suffered from 'two men acting as Foreign Secretary at the same time'. 3 3 Perhaps it was 27

28

29 30 31 32 33

Sir Roger Makins, British ambassador in Washington, 25 January 1954, quoted in Louis, op. cit., 396; Shuckburgh, 187. Sir Oliver Franks, British ambassador in Washington 1948 - 52, quoted in Philip Darby, British Defence Policy East of Suez 1947-1968 (London, 1973), 22. Quoted in David Carlton, Anthony Eden: A Biography (London, 1981), 305. Shuckburgh, 76. Minute, 14 June 1954, quoted in Louis, op. cit., 413. Shuckburgh, 63. Ibid., 126.

30

Anthony Adamthwaite

a symptom of the British disease that both transacted business from their beds. Eden's make-up — vain, irrascible, overstrung — did not help. The foreign secretaryship was the most demanding job in the Cabinet and after several weeks Eden admitted that he was 'hardly abreast of the daily telegrams'. 3 4 An arrogant belief in his own perceptions and skills made him unwilling to delegate. The resulting overload generated further stress. The treadmill of constant travelling, very long days and short nights created intense strains for Eden and his staff. The inevitable isolation of the job with scant leisure tended to accentuate overweening self-esteem and confidence in his own judgement. Churchill and Macmillan unwound with Trollope and Austen, Eden lived on his nerves, burned up by work and politics. He was dogged by almost constant ill-health (itself ill-treated) until the end of 1953. With the red boxes always went a black tin box of medecines. According to his private secretary, ill-health in the years 1951—53 'undoubtedly coloured his judgement'. 3 5 The April 1953 operation incapacitated him for six months and he was 'far from well' at the Bermuda conference in December 1953. 3 6 Ambition exacted a much heavier toll than illness. On coming to power Churchill intimated that he would hand over within a year. The year became two and then three. The old monarch's procrastination drove the heir apparently demented. Having waited so long for the premiership Eden was prey to every rumour and whisper. He saw the Chancellor of the Exchequer, Rab Butler, as chief rival and even tried to use the Foreign Office to conduct personal propaganda against Butler. Such tensions did not advance Britain's cause. In March 1953 both ministers sailed together for New York. They arrived without apparently understanding what each hoped to get out of the Americans. 37 Eden's main disability was intellectual. He had great flair but no genius. Unlike Bevin, he was a tactician, not a strategist, a rifleman setting his sights on 'definite, but limited problems', eschewing 'wide general discussion'. 38 As a negotiator he was first-class and scored major triumphs but the vision and ability to think ahead on a broad front were missing. Significantly he allowed the Permanent Under-Secretary's Committee, the Foreign Office planning staff set up by Bevin in 1949, to wither. 39 According to Sir Frank Roberts, deputy under-secretary 1951—54, Eden 'appeared less conscious' than Bevin of postwar decline and 'less ready to draw the consequences in terms of foreign policy, for example in his relations with Dulles and other American col34

Hansard: 494 H. C. Deb. 5. s., 19 November 1951, cols., 3 4 - 4 0 .

35

Shuckburgh, 14.

36

Robert Rhodes James, 374.

37

Lord Butler, Τ he Art of the Possible (London, 1971), 165.

38

Hansard, 494 H. C. Deb. 5. s., 19 November 1951, cols., 3 4 - 4 0 .

39

Carlton, op. cit., 298.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

31

leagues'. 40 Shuckburgh takes a slightly different view. Eden 'recognised the decline in the power and influence of Britain, b u t . . . could never quite reconcile himself to its inevitable consequence - growing American dominance. 4 1 O f Eden's annus mirabilis in 1954, Robert Rhodes James writes: 'more had been achieved in twelve months to resolve critical issues than in the entire postwar period'. 4 2 In fact 1954 was not as wonderful as it seemed. T h e Iranian settlement marked a decline of exclusive British influence since the oil stake had to be shared with American companies. T h e Egyptian agreement decisively weakened Britain's Middle East position since Cyprus was no substitute for the Suez Canal base. Indo-China was merely a respite and Eden had 'few illusions' about it. 4 3 Triumph and tragedy sums up Churchill's second premiership — personal triumph for a seventy-eight year old to stay in office and survive a serious stroke, tragedy for the country because recovery demanded leaders at their peak. T h e combined assaults of age and economic crisis left Churchill in June 1952 'depressed and bewildered'. 44 Increasingly deaf, his zest 'diminished', he rebuffed American promptings for swift action on European unity: 'It may be better to bear an agonising period of unsatisfactory time ... You may kill yourself in getting strong enough'. 4 5 Notwithstanding the occasional brilliant speech (except for the 'extraordinary flop' of 5 April 1954 hydrogen bomb debate) 46 the Prime Minister's growing incapacity after the 1953 stroke obstructed effective policy-making. 'Terribly drooling ... fast losing his grip', noted one colleague. 47 Even his secretary Jane Portal admitted he was 'getting senile ... cannot take in the papers'. 4 8 Propped up by the Cabinet Secretary, Sir Norman Brook, Churchill coped with day-to-day business but lacked the drive and energy to follow up ideas and to descry the whole field of policy. 'In the worst of the war', he said, Ί could always see how to do it. Today's problems are elusive and intangible'. 4 9 By the winter of 1 9 5 4 - 5 5 the fag-end ministry 'ceased to be a government'. 5 0 More damaging than the individual shortcomings of Prime Minister and foreign secretary was the tug-of-war between them. Maxwell Fyfe, home

40 41 42 43 44 45 46

'Bevin and Eden: Some Personal Impressions', unpublished paper in the author's possession. Shuckburgh, 19. Robert Rhodes James, 3 9 8 - 9 0 . Carlton, 359. Colville, 651. Ibid., 660. Diary 6 April 1954, Woolton

3.

47

Diary 26 February 1953, Crookshank

48

Shuckburgh, 141. Oliver Lyttelton, The Memoirs

49 50

Diary 11 March 1955, Woolton

Papers.

of Lord Chandos 3.

(London, 1962), 343.

32

Anthony Adamthwaite

secretary, thought Eden enjoyed more independence than any foreign secretary since Lord Rosebery in the 1890s. This was not so. Churchill's consciousness of failing powers made him the more determined to concentrate on his principal interests, defence and foreign policy. On Russia, Egypt and nuclear weapons he felt he had a mission. At least one colleague was sceptical. Lord Salisbury, Lord President of the Council, explained to Lord Woolton, Minister of Materials, that Churchill 'thought he was the only person who could bring peace to the world by dealing with Molotov'. Woolton: 'This interested me because I remember so well him telling me that he thought he could manage Stalin and that he would bring him to London. Roosevelt suffered under the same delusion'. 5 1 During the Second World War Churchill dominated foreign policy, controlling all major decisions; in 1 9 5 1 - 5 5 he wanted to be dominant but lacked the energy to do so effectively. Whenever Eden was away - even for his honeymoon in 1952 — Churchill assumed control of the Foreign Office and launched policy initiatives. Not surprisingly, their relations were frequently acrimonious. Churchill's vacillation over his retirement envenomed matters further. His hesitation derived from the hope that he might be able to make a deal with Russia over nuclear weapons. He was also doubtful whether Eden was really the right man. Procrastinating might allow Eden to prove himself; or allow someone who was adequate (Macmillan for example) to emerge as a better candidate. Procrastination forced Eden to swallow policies which he disliked. Thus he at first opposed Churchill's July 1954 approach to Molotov then gave way. Ί am afraid the P. M. has been ruthless and unscrupulous in all this', wrote Colville, 'because he must know that ... for both internal and international reasons, Eden cannot resign'. 52 Egypt and Russia provoked fierce battles. Churchill interfered constantly seeking to undermine Eden's policy of withdrawal from the Sudan and Egypt. And Eden himself seeing party opposition growing had second thoughts. The only fixed point in policy-making was the Foreign Office which consistently advocated withdrawal and opposed Churchill's initiatives for a summit. Eden, who in 1951 had stressed the EastWest divide as 'the cardinal issue in international affairs', 5 3 also opposed Churchill's 1 9 5 3 - 5 4 initiatives for a summit. His motives were mixed. He obviously did not like Churchill taking centre stage. In May 1954 during the Geneva conference Eden had a very friendly dinner with his co-chairman, Molotov. Shuckburgh noted: 'When it is a question of Winston wanting to throw his arms round Malenkov, it is one thing. But when we ourselves are involved, and playing the beau role, it is a very different matter. These politicians are two-thirds prima donna'. 5 4 51 52 53 54

Diary 1 October 1953, Woolton 3. Colville, 698. Hansard 494 H. C. Deb. 5. s., 19 November 1951, cols. 3 4 - 4 0 . Shuckburgh, 193.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

33

Although Churchill mistrusted the Foreign Office as 'too prone to appease' and 'riddled with Bevanism', 55 unlike Lloyd George he did not ignore it or attempt to create a separate organisation at No. 10. Foreign Office opinions on working with Churchill vary — perhaps reflecting the progress of his decline. In the autumn of 1951 Roderick Barclay, assistant undersecretary of state, found sessions with him 'not difficult ... there was always a sound reason for any drafting amendments which he made'. 5 6 But in August 1953 Shuckburgh complained of the difficulties of 'trying to conduct our foreign policy through the PM who is at Chartwell and always in the bath or asleep or too busy having dinner when we want urgent decisions'. 57 In 1954 Gladwyn Jebb before proceeding to the Paris embassy was briefed by a Prime Minister 'hardly at his best': W h a t I understood him t o say was that I must be very careful not t o underestimate the strength of the great French Army. M y main function, I gathered, was t o go out and, so far as possible, prevent the F r e n c h from being so tiresome. Detailed instructions on h o w t o do this would be sent t o me from time t o t i m e . 5 8

Churchill's enthusiasm was only roused by cloaks and daggers like the 1953 Operation Boot which, with CIA help, overthrew the Iranian Prime Minister Mossadeq.

The Foreign Office and Policy-making Britain's retreat was also hobbled by the deficiencies of the government machine. The performance of the Foreign Office, the main engine of overseas policy, fell far short of its potential. The foreign secretary and officials were permanently on the defensive, fighting battles on several fronts — Cabinet, Whitehall, Westminster, the press. In 1951 the chief preoccupation was implementing the most far-reaching restructuring in the Office's history, the 1943 Foreign Service Act, the 'Eden-Bevin reforms', liberalising recruitment and creating for the first time a single unified foreign service. Officials knew that parliament and the press were keeping close watch on the reforms. They felt vulnerable for another reason. The public associated them with pre-war appeasement. Strang and his successor Kirkpatrick had occupied senior posts in the late 1930s. The publication from 1949 of British diplomatic documents for the interwar years rekindled old controversies about the Office's role and responsibilities. 55

Diary 3 May 1953, Dixon Papers; Shuckburgh, 251.

56

Sir Roderick Barclay, Ernest Beviti and the Foreign Shuckburgh, 9 9 - 1 0 0 .

57 58

The Memoirs

of Lord Gladwyn

Office

(London, 1972), 269.

1932-1969

(London, 1975), 17.

34

Anthony Adamthwaite

Sorrows came not 'in single spies'. The defection to the Soviet Union of two senior diplomats, Guy Burgess and Donald Maclean, in May 1951 was 'a shattering blow'. 5 9 Demands for the cleansing of the Whitehall stables brought an internal purge resulting in the resignation and redeployment of several diplomats. The most important consequence was a new system of 'positive vetting' applicable to everyone, junior and senior. Strang volunteered to be vetted first. The new emphasis on security and security procedures subjected staff and families to greater personal strains. The damage to morale and prestige was the deeper because the Burgess-Maclean affair would not go away. There was no Commons or government statement until 7 November 1955. Year in year out Foreign Office spokesmen stonewalled repeated requests for information. The clumsy attempts at damage limitation only served to keep the hue and cry in full swing. The Office had long been the favourite whipping boy of politicians, journalists and Treasury watchdogs. It was accused of being overstaffed, extravagant and elitist. Wits claimed that like the fountains in Trafalgar Square the young men of the Foreign Office played from ten till four. At Westminster the scourge of the diplomats was Labour backbencher, Lt. Col. Sir Marcus Lipton. 'Would it not be in the public interest', he asked in December 1954, 'to have this lush underworld of duty free gin, Scotch and cigarettes independently explored?' 60 Calls for the Foreign Secretary to delegate his workload by creating four ministers of state with regional responsibilities were supported by Eden's predecessor, Herbert Morrison. The main parliamentary onslaught came in December 1954 when the Commons Select Committee on Estimates proposed an independent enquiry. Kirkpatrick advised acceptance since it would have 'a good effect on the Treasury' and he was confident that a 'carefully selected' committee 'would find ... there was very little wrong with our standards or organisation'. 61 Eden who detested the Treasury refused an enquiry. Parliamentary critics had an ally in Lord Beaverbrook whose Express group of newspapers waged a campaign against the diplomats, alleging that they wasted money and were effete and effeminate. In October 1952 the Sunday Express fired a broadside: 'How is it that when the Government changes the blunders go on just the same? Largely because the senior officials ... continue to make policy'. 62 Strang, permanent under-secretary, was said to personify an Office 'repeatedly overtaken by events'. His reputation, continued the Express, was tarnished by Munich 1938 and the failure of the 1939 Anglo-

59 60 61 62

Barclay, op. cit., 100. Hansard, 535 H. C. Deb. 5. s., 16 December 1954, cols. 1972 - 73. Public Record Office, FO 366/3110. Strang, 2/6.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

35

Soviet negotiations. Eden's public defence of Strang drew another attack: 'If he cannot or will not admit that the Foreign Office requires a thorough shakeup' then the Office needed 'a new political chief'. The principal Whitehall antagonist was the Treasury. Since the 1920s the Office had fought off periodic Treasury bids to assimilate it to the Home Civil Service. Officials of the Treasury and other H o m e Departments', declared one diplomat, 'are (a) jealous of the Foreign Service, and (b) ignorant of the problems of living in foreign countries'. 6 3 In 1 9 5 1 - 5 2 Treasury economy drives reduced staff from 4,300 (1948) to 3,843 (1952). 64 Early in 1953 the Financial Secretary to the Treasury recommended an enquiry into staffing conditions. Eden, who accused his officials of 'selling out' to the Treasury, opposed any enquiry. 65 As a compromise a Treasury proposal for the inspection of two or three overseas posts was accepted. But the Treasury continued to harry what it considered an elitist enclave. A 1955 report censured the diplomats for leisurely habits of work, too rigid divisions between departments and a negative attitude to Treasury criticisms. 66 Within the Office attempts to see the world as a whole were thwarted by a number of obstacles. As British power dwindled, staff and paper multiplied. London staff in 1914 (including doorkeepers and cleaners) numbered only 176, in 1952 3,842. Information services, economic recovery, conferences, the British zone of Germany, all spawned new departments. The volume and complexity of postwar diplomacy swamped officials in paperwork and committees. By 1950 incoming papers (630,768) had more than doubled since 1939. Much of the increase was in telegrams requiring urgent-action, thus reinforcing a natural bias to react to events. Organisation and staffing were in constant flux. The physical separation of staff, scattered over several buildings, added to the Office's fragmented and amorphous character. The elegant facade of Giles Gilbert Scott's palazzo concealed a Dickensian interior. 'Some staff work in cramped and draughty attics', the Office complained, 'others in gloomy dungeons. Many never see daylight during working hours'. 6 7 Such conditions impaired efficiency but the main pressure was the proliferation of paper. In vain Churchill and Eden appealed for brevity. The urgent drove out the important. 'The increase in staffs and the volume of paper', Kirkpatrick admitted, gave 'little time to think, to look ahead and to make wise long-term plans'. 6 8

63 64 65 66 67 68

FO 366/3110. FO 366/2981. Shuckburgh, 152. FO 366/3108. FO 366/3066. The Inner Circle: The Memoirs

of Ivone Kirkpatrick

(London, 1959), 267.

36

Anthony Adamthwaite

The downgrading of economics was a substantial handicap. Diplomats could not compete with the expertise of the main Whitehall economic departments. In December 1951 Treasury demands for economies forced the closure of the 23 strong Economic Intelligence Department. Duties had included the co-ordination of secret economic reports, questions of wartime organisation, economic warfare planning and the special study of economic reports on the Soviet Union, Rumania and Germany. Reporting on the Soviet Union and Rumania was done in London because previous cutbacks had closed the Commercial sections of the Moscow and Bucharest embassies. The work of the Economic Intelligence Department was transferred to the Research Department, but the officer responsible for reporting on the Soviet Union and Rumania had 'no specialised economic training'. 6 9 The Research Department reviewed the situation and spotlighted weaknesses. Although the list of departments involved in economic policy was impressive: none of these Departments keeps its own files of background material or tries to build up consistently and over a long period of time a 'total' picture of the economy, and the economic trends within any country or area. It is the lack of the constant study of the phases of economic development in foreign countries, and of the interaction between them ... that seems ... the most serious feature of the present situation both in the Foreign Office and in Whitehall generally ... In view of the complexity of the Soviet economic system and the difficulty of interpreting its development accurately the present position does not seem ... satisfactory

In 1953 Roger Makins, who had specialised in economic work, left his deputy under-secretaryship for the Washington embassy. His successor was an assistant under-secretary, that is, one grade below. With its strong sense of hierarchy Whitehall understood this to mean that economics had been demoted. The Foreign Office, although not the effete and extravagant creature critics alleged, had serious shortcomings. Despite the deluge of paper some officials may not have worked as long hours as State Department counterparts. Certainly there was scope for much greater co-ordination, particularly between the six departments responsible for east of Suez interests. More serious was the lack of machinery for policy review. A formal planning unit was not established until 1957. Nor was there even a daily conference of senior officials until 1964. It was symbolic of the Office's priorities that the library and research department were tucked away in a dingy block south of the Thames. The very qualities prized in diplomats - loyalty, reliability, caution, discretion, avoidance of extremes — discouraged unorthodox ideas. Training and pressure of work focussed attention on the execution of day-to-day decisions. It was also a closed society isolated from the world beyond Whitehall. Outsiders 69

FO 366/2983.

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

37

tended to be treated as hostile snoopers. Perhaps regretting the publication of interwar documents the Office clammed up - even withholding the work of its official historian, Sir Llewellyn Woodward. 70 The permanent under-secretaries in this period, Strang and Kirkpatrick, lacked the daring and imagination to promote new initiatives. Reserved, tactful, cautious to a fault Strang was 'not a policy-maker such as one might expect from a Permanent Under Secretary'. 71 He ran the Office, no more. Apart from a common training in German affairs he and Kirkpatrick were quite different personalities. Kirkpatrick was brisk, combattive and outgoing. But at a time when reflection and reappraisal were desperately needed 'he had little use for research or analysis or for prolonged discussion'. 72 Nor was his management style calculated to restore shaken morale. 73 The driving force in policy formulation came from below — from deputy and assistant undersecretaries, notably Frank Roberts, Roger Makins, Pierson Dixon, Evelyn Shuckburgh. Yet they were reluctant to push their views. For example following Stalin's death in March 1953 both Eden and Churchill favoured a meeting with Molotov. Senior officials disliked the idea but Shuckburgh alone (then Eden's private secretary) took the lead in dissuading Eden 'from whoring after the Russians'. 74 By far the biggest handicaps in formulating a coherent overseas policy were divided control and the complexity of post-war diplomacy. External relations were carved up between separate departmental fiefdoms. The Foreign Office shared responsibility with the Commonwealth Relations Office and the Colonial Office. Eden had to argue and agree a policy with the Commonwealth Secretary, Lord Swinton, and the Colonial Secretary, Oliver Lyttelton. There was a further complication. The multilateral character of post-1945 diplomacy cut across all departmental boundaries. The urgency of economic, financial and strategic issues meant incessant consultation and bargaining with Whitehall competitors - Cabinet Office, Treasury, Board of Trade, Ministry of Defence, Service departments. The machinery for this process was the system of interdepartmental committees on which the Foreign Office provided only one voice. The harmonizing of different and often conflicting viewpoints swallowed up energies and lengthened the lead times of policies. Whitehall battles were but the start of a Sisyphean task. Before the Second World War traditional bilateral relations between states were the staple of

70

Dixon Papers, 14 November 1950, minute to Strang. Dixon advised against publication of

71

Diary 29 October 1951, Younger Papers.

72

Dictionary of National Biography,

73

Barclay, 20.

74

Shuckburgh, 84.

Woodward's British Foreign Policy in the Second World War. 1961-1970

(Oxford 1981).

38

Anthony Adamthwaite

British diplomacy. Apart from occasional visits to the League of Nations at Geneva a foreign secretary stayed at home. By 1951 the foreign secretary, junior ministers and aides were a travelling circus. The Council of Ministers of the Council of Europe brought together foreign ministers. The Consultative Assembly of the Council provided an open forum for the debate of the same issues by parliamentarians from both government and opposition parties. In addition foreign ministers of the three western occupying powers met regularly for discussion of German and European questions. Nato Assembly meetings gathered fourteen foreign ministers, defence ministers and advisors. In addition permanent delegations were maintained at the United Nations, Nato, OEEC, Council of Europe and the European Coal and Steel Community. The many overlapping levels of the new diplomacy plus the fact that everything had to be translated lengthened negotiating times, making it harder to keep overall objectives in sight. The British papers reflect the exasperation and frustration caused by a complex institutional structure 'in which the same issues were discussed by the same people on different occasions and in different places'. 75 Such complexities demanded a forum in which ideas, issues and strategies could be reviewed. At the top of the Whitehall pyramid there was no effective machinery for overview and co-ordination. Downing Street had no Think Tank. In theory the Cabinet provided an arena; in practice, as the Labour minister Kenneth Younger discovered, it was 'a body with no common basis to its thinking ... quite unequal to big decisions'. 76 Pressure of business left little time for argument and most ministers were too engrossed in their own work to keep up with international affairs. Churchill's professed liking for free-ranging debate usually meant Churchillian monologues with ministers slipping away as lunchtime approached. Moreover Churchill did not hesitate to present the Cabinet with a fait accompli. Witness his 11 May 1953 speech calling for a summit. Another ploy was to forestall Cabinet discussion by sending for Eden and talking him out of circulating papers. Affection and loyalty for the elder statesman also inhibited discussion. Shuckburgh records Lord Salisbury, lord president of the Council and acting foreign secretary during Eden's 1953 illness, saying: 'he disapproves of the PM's policy of trying to get a top-level meeting with the Russians. He says it is one thing to be a member of the Cabinet and to refrain from opposing such policies but quite another to be the responsible Minister'. Shuckburgh noted: 'Now I see why A. E. gets so little active support in Cabinet when he is fighting the PM's bright ideas'. 77 But affection and loyalty had limits. In July 1954 Salisbury

75

76 77

Roger Bullen and M. E. Pelly, Documents HMSO, 1986), χ. Diary 3 October 1951, Younger Papers. Shuckburgh, 100.

on British Policy Overseas Series II, vol. I (London,

Overstretched and Overstrung: Eden, the Foreign Office and the Making of Policy

39

and Harry Crookshank, leader of the House of Commons, threatened resignation because Churchill approached Molotov without consulting and obtaining Cabinet approval. As for Eden, he regularly briefed colleagues but few offered comment. The only serious challenge came in 1951 — 52 from the proEuropeans, Macmillan and Maxwell Fyfe, supported by some junior ministers. Having failed to persuade Eden in a personal memorandum, Macmillan sought a Cabinet confrontation in March 1952. Maxwell Fyfe gave only minimal support and Macmillan was defeated. Backed by Churchill, Salisbury and other senior ministers, Eden was impregnable. 78 Nor did Cabinet committees supply the necessary machinery. Churchill did not revive the pre-war foreign affairs committee. The standing Defence Committee did not meet frequently and concerned itself mostly 'with relatively minor problems of current operations and military administration'. 79 Some ministers expressed anxiety about the weaknesses of the Whitehall machine. Lord Woolton, minister of materials, urged an overhaul. 'The civil service', he wrote, 'gives us loyal, devoted and competent service; but the chief officers ... like the Ministers, are so encumbered with a host of problems that very few have time or energy left to sit back and think'. 8 0 As minister of defence in 1954 Macmillan believed that Britain was not really winning the Cold War and looked for 'some way of getting everyone to co-operate and pull together - the Cabinet, the Foreign Office, the service chiefs, the information people'. 81 But Eden considered 'it was no use asking the PM to undertake any administrative reforms — he simply would not take it in'. 8 2 Indeed, on external policy the government was more a collection of warring baronies than a single force. The evidence is the handling of overseas information services. Successive cuts in expenditure brought parliamentary pressure for an independent enquiry. The Drogheda Committee set to work in July 1952 and reported a year later, recommending a 3 - 5 year expansion of services. The Foreign Office, Colonial Office and Commonwealth Relations Office jointly urged the Cabinet to accept a five year programme. But the Chancellor, Rab Butler, blocked any increase in expenditure and the Cabinet appointed a Ministerial Review Committee under the Home Secretary, Maxwell Fyfe. In December 1953 this committee vetoed expansion for 1 9 5 4 - 5 5 while reserving the question of future expansion. In Cabinet Eden defended 78

See John W.Young, 'Churchill's 'No' to Europe: The 'Rejection' of European Union by Churchill's post-war Government, 1 9 5 1 - 5 2 ' , The Historical Journal 28,4 (1985), 9 2 3 - 9 3 7 .

79

Colin Seymour-Ure, 'British 'War Cabinets' in Limited Wars: Korea, Suez and the Falklands', Public Administration,

80

62 (1984), 198.

'The Machinery of Government', 25 January 1954, Woolton 3.

81

C. M.Woodhouse, Something

82

Shuckburgh, 156.

Ventured (London, 1982), 132; Macmillan, 5 7 2 - 3 .

40

Anthony Adarathwaite

'a valuable report which for the first time provided a definite plan for the effective use of overseas information services'. 83 He continued: T h e s e services f o r m e d part of our cold-war strategy ... the Chiefs of Staff ... had expressed the view that the e x p a n s i o n of the services w a s necessary to o f f s e t the curtailment in the strength of the a r m e d forces. If the Cabinet were willing to leave cold w a r p r o p a g a n d a entirely to the United States, that at any rate w o u l d be a w o r k a b l e policy. If however we were to continue our e f f o r t s we should d o so to the best of our ability

However, Churchill, backed by Butler and Monckton, 'did not see how an expansion ... could be defended ... when most damaging sacrifices had to be demanded from the Armed Forces'. In a trenchant memorandum the Prime Minister expressed deep distrust of the information services: Every effort should be m a d e to reduce or to resist the natural tendency to grow. ... W h a t is wanted is not so much m o r e officials everywhere collecting information to p r o v e h o w necessary they are but a much smaller n u m b e r of agents ... w h o stay in the s a m e places long enough to learn s o m e t h i n g a b o u t the facts ... I hope all the reductions will be enforced a n d no increases granted except out of additional savings suggested by the Service itself ... As for information that we send a b r o a d , surely that task is accomplished by the n e w s p a p e r s at their o w n expense. We might help them circulate, but it m u s t be remembered that they say a lot of nasty things a b o u t us at the s a m e time. 8 4

Nearly another year passed in interdepartmental squabbles. The government withheld the Drogheda Report received in July 1953, releasing a summary in April 1954. Meanwhile Eden had to run the gauntlet of two Cabinet committees — Lord Swinton's Committee on Civil Expenditure and Maxwell Fyfe's Ministerial Review Committee. By May 1954 an armistice seemed in the making. Eden offered a compromise — expansion over seven years instead of the three to five proposed by Drogheda. The foreign secretary knew it was too little: Ί am more than ever sure that we will have to do more - but this cannot be decided in present regime'. 85 Then Swinton put his oar in. As chairman of the Civil Expenditure Committee the Commonwealth Secretary demanded cuts and insisted that no decisions be taken during a lengthy absence overseas. Eden noted: 'Lord Swinton has consistently criticised Drogheda and opposed me. N o need for C R O to get a penny'. 86 On 9 July 1954 Eden returned to the attack, telling the Cabinet that the information services 'were ... essential to the prosecution of the Cold War and to the maintenance of our international influence'. 87 Before the summer 83 84 85

86 87

CAB 128/53, 29 December 1953. Public Record Office, PREM 11/691. Memorandum of 29 December 1954 to Maxwell Fyfe. Frances Donaldson, The British Council, The First 50 Years (London, 1984), 191. Ibid., 192. CAB 128/27.

Overstretched and Overstrung: Eden, the Foreign Office and the M a k i n g of Policy

41

recess Churchill conceded that the services should be exempt from Swinton's proposed cuts. Unfortunately the concession was not minuted and the incident illuminated the central role of the Cabinet Secretary, Sir Norman Brook. On 27 October Eden reminded colleagues that a decision on Drogheda was long overdue and that Churchill had promised exemption. Privately Brook explained to Butler that he had deliberately refrained from recording that Churchill 'had virtually promised that the overseas information services should not suffer the full cut ... lest it stiffen other Civil Departments in their resistance'. 88 Rab surrendered with good grace. In the Commons Eden on 8 November announced the government's acceptance of Drogheda. But it was a Phyrric victory. At a time when Britain's case needed vigorous and effective presentation ministers and mandarins had wasted eighteen months arguing about sums of money 'comparable, in the case of the annual additions recommended for the Foreign Office Information Service, to one day's subsidy to the Egg Marketing Board, and as far as the total bill for the Information Services was concerned, to rather less than the cost of two bombers'. 8 9

Conclusion Ί feel like an aeroplane at the end of its flight, in the dusk, with the petrol running out, in search of a safe landing', Churchill confided in March 1954. 9 0 In fact the fuel had run out long before. 'The giant in decay', in Rab Butler's phrase, was a key element in the failure to cope with the problems of rapid decline. Nearly two years of manoeuvrings for the succession made the Churchill administration a broken-backed government incapable of forceful and imaginative management of external policy. Of three possible options in 1951 — keeping the status quo, drastic contraction of commitments, finding a reduced role in world politics, only the third was realistic. Far from blindly pursuing a mirage of power Foreign Office officials recognised that preserving existing interests was out of the question. Pessimism, not optimism, prevailed. Yet abdication as a great power went against the grain of general opinion and might well have proved counter-productive. Carefully planned and executed a gradual retreat offered at least the possibility of playing a major world role. But the essential components of successful management were missing. Eden and Churchill were at odds. Eden wanted a reduced role but did not will the means; Churchill preferred to do nothing. Much better co-ordination of foreign and defence policies was only part of the answer. Policy-makers were slow to 88

Donaldson, 192.

89

Foreign Office minute of 23 December 1954, quoted in Donaldson, 193.

90

Butler, 173.

42

Anthony Adamthwaite

grasp that an era of total war had been succeeded by that of total diplomacy. T h e Second World War had required and secured the total mobilisation of all resources, financial, economic, political, to ensure survival and victory; only a similar mobilisation might have restored national fortunes. T h e will to maximise and concentrate all energies was lacking. 'It's a pity we are governed by crocks', wrote one recently retired permanent secretary. 91 New machinery and new approaches were needed but Churchill had no appetite for re-structuring Whitehall. Government and civil service had not yet caught up with the scale and complexity of the midtwentieth century world. 9 2 Preoccupied with protecting its patch the Foreign Office lacked the muscle to push through a controversial policy. To modify attitudes and assumptions on Britain's world role required new initiatives. However, a 'nanny knows best' mentality ruled. Livingstone Merchant, assistant secretary of state in the State Department, described to Shuckburgh how he had 'to appear before Congressional Committees to explain State Department policy, and even to be "quizzed" by Senators on the T V for hours on end'. Shuckburgh was horror-struck. Merchant replied that 'Foreign Policy could no longer be a matter handled by experts in secret, but must be the subject of continuous scrutiny by the masses. Even the English would have to give up the "old-fashioned" idea of entrusting vital secrets to experts'. Shuckburgh 'feared that democracy could not survive if issues, as opposed to personalities, were to be put before the public. This was the fascist referendum idea. You can fool the public about issues, but not ... about the character and quality of leaders'. 93 T h e nearest Britain got to more open government was in 1954 when an astonished taxi driver driving down Whitehall heard a cabinet meeting broadcast live over his cab radio.

91 92

Diary, 16 September 1953, Cadogan Papers, ACAD 1/24. See Nevil Johnson, 'Change in the Civil Service: Retrospect and Prospect', Public tration, 63 (1985), 4 1 5 - 3 3 .

93

Shuckburgh, 163.

Adminis-

Aspects of the Suez Crisis by Geoffrey Warner

An excellent summary of both the strengths and weaknesses of the British position in the Middle East at the beginning of the period covered by this conference is provided by Sir Evelyn Shuckburgh, the Foreign Office official in charge of relations with the region from May 1954 to June 1956, in the introduction to the relevant section of his recently published diaries. On the one hand, Shuckburgh writes, We were the dominant power throughout the area. We had a huge military base on the Suez Canal, a naval base at Aden, air squadrons stationed in Iraq, rear bases in Cyprus and Malta. We paid for and provided the commander of the Arab Legion in Jordan. We had Protectorates over the Persian Gulf sheikdoms, whose foreign relations we conducted through a Political Resident in Bahrein. We had enormous oil investments in Iran and a growing interest in Gulf oil.

On the other hand, however, as he also points out, All these positions and interests ... were under threat in one form or another. Mossadeq had nationalised our Iranian oil; the Canal Zone base was under growing harrassment by Egypt; the treaty with Iraq, under which our squadrons were operating there, was about to expire. Saudi Arabia was threatening our Gulf Protectorates; Jordan was weak, penniless and threatened by Israel; Communism was seeping into Syria; Arab nationalism was rising everywhere, stimulated largely by the common hatred and fear of Israel. The question was, how much of all this apparatus of British power and influence, relics of the Empire, could we expect to retain? H o w much did we need to retain?

There was, Shuckburgh concedes, no general consensus on the answer to these questions beyond acceptance of the fact that Britain's limited resources were indeed overstretched. The Foreign Office did, however, have a fairly clear policy, which was based on the view 'that our interests in the Middle East area and notably our growing need for Middle East oil would have to be protected in the future by agreements with the Arab states rather than by holding on to positions of strength'. A consequence of this was that 'unnecessary irritants' in Britain's relations with these states must be removed. One major irritant was the Suez Canal base, and so it was that in 1954 the British

44

Geoffrey Warner

and Egyptian governments reached agreement on the terms of its evacuation. A second irritant were the bilateral treaties between Britain and various Arab states, which carried with them imperialist connotations. These were to be replaced by multilateral defence arrangements, which, it was hoped, would not only remove such connotations, but also spread the burden more equally among the partners. T h e first step in this direction was taken in April 1955, when Britain joined the Baghdad Pact between Turkey and Iraq, partly as a substitute for its bilateral treaty with the latter. (Pakistan joined in September and Iran in October of the same year.) T h e most powerful irritant of all, however, was the existence of Israel, and here the Foreign Office plan was to work for a settlement between the Jews and the Arabs which gave peace and security to Israel and which could be guaranteed by the great powers. Since it was felt that Egypt was the only Arab country capable of giving a lead in this sensitive matter, this entailed establishing a working relationship with its ruler, Colonel Gamal Abdul Nasser. 1 Unfortunately, there were serious flaws in this strategy. In the first place, whatever the attitude of Egypt and the rest of the Arab world might have been to the prospect of an Arab-Israeli settlement which left the Jewish state intact, there was never any indication that the Israelis were ready to make the slightest concessions to their neighbours. Indeed, far from improving, ArabIsraeli relations deteriorated sharply during 1955, with the Gaza raid in February, the establishment of the fedayeert in April and the closure of the Straits of Tiran in September, marking important stages in their d o w n w a r d spiral. Secondly, instead of consolidating Britain's position in the Middle East, the Baghdad Pact threatened to undermine it still further. This was because Egypt took strong exception to it on the grounds that it was a cloak for British imperialism, that it divided the Arab world, and that it was a deliberate attempt to build up Iraq as a rival to Egypt for the leadership of the Arabs. T h e Egyptian propaganda machine, which was a powerful one, launched an all-out assault on the pact, and especially at the proposal, mooted at the end of 1955, that Jordan should become a member. Four members of the Jordanian government resigned and there were demonstrations in the streets of A m m a n . T h e proposal was shelved. "While the United States had cooperated closely with Britain in the proposal for an Arab-Israeli settlement — so much so, in fact, that it was really a joint Anglo-American plan — it was only too clear that the administration in Washington was lukewarm about the Baghdad Pact, repeatedly refusing for example Britain's requests to join it. There were a number of reasons for this: 1

Evelyn Shuckburgh, Descent 1986), pp. 207, 210.

to Suez: Diaries 1951-56

(London, Weidenfeld & Nicolson,

Aspects of the Suez Crisis

45

the traditional American suspicion of European imperialism; the need to take account of the views of the United States' own protégé in the Arab world, King Ibn Saud of Saudi Arabia, who was as hostile to the pact as Colonel Nasser; and the desire not to offend the powerful American Jewish lobby by joining a pact which included an Arab state. But whatever the cause, the American attitude not only exasperated the British, but made their position more difficult. As if these problems were not enough, it was announced at the end of September 1955 that Egypt, allegedly fearful of an Israeli attack and starved of up-to-date weapons by the western powers, had concluded a huge arms deal with Czechoslovakia. The British and American interpretations of this event were identical. The U.S. secretary of state, John Foster Dulles, told the American cabinet that 'for the first time the Russians were making a determined effort to move into the Middle East ...', while the British foreign secretary, Harold Macmillan, informed the British cabinet that 'in the Middle East the Russians had clearly embarked on a deliberate policy of opening up another front in the cold war.' 2 For both Britain and the United States a crucial factor in the Middle East equation was oil. The British prime minister, Anthony Eden, put the matter to the Russian leaders, Nikita Khrushchev and Nikolai Bulganin, with brutal frankness an 20 April 1956 during their visit to Britain. We were dependent in o u r industrial life [Eden said] W i t h o u t that oil we should have unemployment and death. O u r Russian friends would understand that we that to happen. F o r us the supply of oil, mainly from literally vital.

on outside supplies of oil. we would slowly starve t o were not prepared to allow the Persian Gulf area, was

When Khrushchev replied that he understood the British position and that the Soviet Union would try to avoid any conflict in the area, Eden said that he was glad, for 'he thought it must be absolutely evident that we would fight for it.' 3 Despite Nasser's anti-imperialist and pan-Arab ambitions, which were after all quite openly set out in his pamphlet Philosophy of the Revolution, and his apparent flirtation with the Communist bloc, the British government had not abandoned all hope of reaching a modus vivendi with him at the end of 1955. In the light of a conference of British representatives in the Middle East on 4 and 5 January 1956, it was resolved: 2

Sherman Adams, First-Hand Report: The Story of the Eisenhower Administration (New York, Harper, 1961), p. 245; C. M. (55) 36th Conclusions, Minute 1, CAB 128/29, Public Record

3

Record of 2nd Plenary Meeting, 20 April 1956, in 'Visit of Mr. N. A. Bulganin and Mr. N. S. Khrushchev to the United Kingdom', PREM 11/1625, PRO.

Office, London (hereafter PRO).

46

Geoffrey Warner

We are still anxious to reach some basis of understanding with Egyptians provided nothing should be done to suggest that we are weakening in our support for Baghdad Pact. Good relations with Egypt are of particular importance insofar as they help towards securing early Palestine settlement. Although Nasser's regime has shown little signs of being prepared to co-operate with United Kingdom since the conclusion of Canal Zone Agreement, we see no reason why we should not come to some kind of working arrangement which would take edge off Egyptian opposition to United Kingdom policies. The Nasser regime is in firm control of Egypt and its influence in the Arab world has not diminished during the last two years. Nasser is concerned about the possibility of Egypt being isolated and deprived of her leadership of the Arab world and for these reasons he has heretofore opposed the Baghdad Pact. It is possible however that his differences with us are of tactics rather than of ultimate aims and there is no indication that he is not a sincere opponent of Communism and anxious for a settlement over Palestine. He is concerned with the long term economic developments which face Egypt and the problem of maintaining the standard of living of the rapidly increasing population. To this extent he is anxious for peace and stability in the Middle East to enable him to proceed with his plans for the economic development of Egypt. Although Nasser would probably be willing to use Soviets to help him to meet any attempts on the part of the West to organise Arab world in order to isolate Egypt, providing we can convince him that this is not our aim, there remains a possibility of effective working arrangement with him. 4

A key element in this strategy was the high dam which Nasser proposed to build at Aswan. Eden had told the cabinet on 20 October 1955 that if the contract to build it could be secured by a European consortium, it would go a long way towards restoring the prestige of the west, and particularly of the older European powers, in the Arab world generally, while in the case of Egypt 'it would be a trump card.' The prime minister expanded upon these thoughts five days later. Securing the Aswan dam contract, he said, 'would provide the most effective counterpoise possible to Russian penetration in Egypt, for it would give us a controlling influence over the Nile waters. The contract would also place us in a strategic position to safeguard our interests in the future of the Sudan.'5 But it soon became clear that the resources required for the dam were beyond those that could be provided from Europe alone. American help was needed. Fearful of the possibility that the Russians might step in with an offer the Egyptians could not refuse, and thereby tighten their grip upon the country, the British government persuaded the U.S. government to act. In December 1955 it was announced that the World Bank would provide a loan of $ 20 million, which, together with a grant of $ 56 million from the United States and one of $ 14 million from Britain, would enable construction of the 4 5

C o m m o n w e a l t h Relations Office circular telegram, 23 January 1956, FO 115/4548, PRO. C. M . (55) 36th Conclusions, Minute 1; C. M . (55) 37th Conclusions, Minute 3, CAB 128/29, PRO.

Aspects of the Suez Crisis

47

dam to begin. However, the offer contained conditions designed to weaken Egypt's ties with the Soviet bloc and Colonel Nasser denounced this attempt to influence his government's foreign policy by financial means. Meanwhile, his attacks upon the Baghdad Pact and other British interests in the Middle East continued unabated. At the end of February 1956 the cabinet discussed the line which the new foreign secretary, Selwyn Lloyd, intended to take with Colonel Nasser when he met him in Cairo on his way to a meeting of the S.E.A.T.O. council in Karachi. Lloyd said that 'he proposed ... to take a firm line about the tone of Egyptian propaganda on British policy in the Middle East and to make plain the advantages to Egypt of friendlier relations with the United Kingdom.' When he suggested that support for the Aswan dam project might be reconsidered, however, it was pointed out that the decision to provide the money had been taken in order to prevent the Soviet Union from getting the contract and that the commitment could not be lightly abandoned, and certainly not without consultation with the United States. Lloyd hastily reassured his colleagues that he did not intend to issue any specific threat, but merely 'to emphasise the common advantages to both countries of a better understanding and friendlier relations'. A few days later he told the cabinet that he intended to make it clear that Britain had no colonialist aims in the Middle East and only wished to safeguard its oil supplies and prevent Soviet encroachment. In order to achieve these objectives, however, Britain was determined to uphold the Baghdad Pact. More friendly relations with Egypt were desired, 'but these could not be established unless the Egyptian Government discontinued their hostile propaganda and their attempts to undermine our position throughout the Middle East.' The Foreign Office even proposed that Colonel Nasser should be invited to come to Britain 'to widen his horizons [and] influence him in our direction', but the Cabinet would not agree to this. 6 The attempt to win over Nasser effectively came to an end on 1 March 1956, when the young King Hussein of Jordan summarily dismissed the British commander of his armed forces, General Sir John Glubb ('Glubb Pasha'). Eden saw the Egyptian dictator's hand in this, 7 and although he may have come round later to a more rational view, all the evidence suggests that the Glubb affair led him to conclude that there was no longer any point in trying to work with Nasser. He said as much in a telegram to President Eisenhower on 6 March.

6

C. M. (56) 16th Conclusions, Minute 5; C. M. (56) 17th Conclusions, Minute 4, CAB 128/30, Part 1, PRO; Shuckburgh, Descent to Suez, pp. 338 - 39. There is no mention of the invitation to Nasser in the cabinet minutes.

7

Anthony Nutting, No End of a Lesson: 29.

The Story of Suez (London, Constable, 1967), pp. 18,

48

Geoffrey Warner T h e r e is n o doubt [he wrote] that the Russians are resolved t o liquidate the Baghdad Pact. In this undertaking N a s s e r is supporting them and I suspect that his relations with the Soviet are much closer than he admits to us. Recent events in J o r d a n are part of this pattern . . . I myself feel that we can no longer safely wait on Nasser. Indeed if the United States n o w joined the Baghdad Pact this would impress him m o r e than all o u r attempts t o cajole him have yet done. Certainly w e should accept, I think, that a policy of appeasement will bring us nothing in Egypt. O u r best chance is to show that it pays t o be o u r friends.

Six days later Eden was even more blunt in a conversation with Evelyn Shuckburgh. 'He was quite emphatic that Nasser must be got rid of', the latter records. '"It's either him or us, don't forget that.'" 8 On 21 March 1956 the British cabinet was presented with the new policy. Selwyn Lloyd told his colleagues that his discussions with Colonel Nasser had convinced him that the Egyptian leader was unwilling either to work with the western powers or to cooperate in the task of securing peace in the Middle East. He was aiming instead at the leadership of the Arab world and was willing to accept Soviet help to secure it. It was n o w clear [he went on] that we could not establish a basis for friendly relations with Egypt. T h a t being so, w e ought t o realign our policy in the Middle East: instead of seeking t o conciliate o r support Colonel Nasser, w e should d o our utmost t o counter Egyptian policy and t o uphold our true friends in the Middle E a s t . 9

A full four months before the nationalisation of the Suez Canal, therefore, the British government had resolved to do all it could to thwart Nasser's Egypt. 10 The Aswan dam was inevitably a casualty of the new policy. Early in April 1956 the British and Americans agreed to let the negotiations 'languish', although without informing Nasser. In May Egypt recognised the People's Republic of China and on 1 June the American minister in London told the Foreign Office that there was now no hope of Congress putting up any money for the dam. However, in mid-July, the Egyptians suddenly indicated a willingness to accept the western terms. The British agreed with the Americans that the original offer must be withdrawn, but were concerned as to how the decision should be relayed to the Egyptians. In the event, Dulles simply told the Egyptian ambassador in Washington on 19 July 1956 that the U.S. gov-

8

Robert Rhodes James, Anthony Eden (London, Weidenfeld & Nicolson, 1986), p. 431; Eden telegram, 5 March 1956, PREM 11/1177, PRO; Shuckburgh, Descent to Suez, p. 346.

9

C. M. (56) 24th Conclusions, Minute 5, CAB 128/30, Part I, PRO. This involved various measures of covert action by the intelligence services. See Watson memorandum, 2 May 1956, FO 800/723. It has even been suggested in some quarters that the British planned to assassinate Colonel Nasser, although this may not have been until after the Suez Canal was nationalised. See Peter Wright, Spy Catcher: The Candid Autobiography of a Senior Intelligence Officer (New York, Viking, 1987), pp. 1 6 0 - 6 1 .

10

Aspects of the Suez Crisis

49

ernment was not prepared to proceed. Congress, he explained to the British ambassador, had left him with no alternative. The British government followed suit on the following day. 1 1 Selwyn Lloyd's private secretary, Donald Logan, has recorded that Thursday 26 July 1956 was 'an eventful day' for the British foreign secretary: T h e Italian liner A n d r e a D o r i a on which Selwyn had b o o k e d a holiday cruise sank. H i s d o g w a s ill. N a s s e r nationalised the Suez C a n a l . I spent m o s t of the day with the vet. 1 2

T h a t evening Lloyd was present at a hastily convened meeting of ministers, chiefs of staff, officials and French and American diplomats. William Clark, the prime minister's press secretary, who was among those present, summarised the discussion in his diary: T h i s w a s the meeting at which Eden m a d e it absolutely clear that military action w o u l d have to be taken, a n d that N a s s e r w o u l d have to go. N a s s e r could not be allowed, in E d e n ' s phrase, 'to have his hand on our windpipe'. It w a s also the meeting at which the Chiefs of S t a f f told Eden that although Britain could deal with C y p r u s or M a u M a u or with a t o m i c war, it could not deal with a little local episode in the eastern M e d i t e r r a n e a n . I felt a s h a m e d that our nakedness should be thus revealed to the French a n d American representatives present . . . 1 3

These military limitations upon Britain's freedom of action were spelled out in more detail at the meeting of the full cabinet on the following day. Ministers were told that it would require 'several weeks' to prepare and mount a successful military operation. Nevertheless the cabinet agreed that, in addition to the maximum political pressure, Britain must be prepared to threaten, and if necessary to use, force in order to restore effective international control over the Suez Canal. Moreover, since failure to hold the Canal 'would lead inevitably to the loss one by one of all our interests and assets in the Middle East', Britain should be ready to act alone if need be. It was Eden who " M. E. (0) (56) 35, 12 June 1956, CAB 134/1298, PRO; 'Memorandum on relations between the United Kingdom, the United States and France in the months following Egyptian nationalisation of the Suez Canal Company in 1956', FO 800/728, pp. 4 - 5 , PRO. This latter document bears the date of 21 October 1957 on the front and August 1957 on its last page. Its author, Guy Millard, who was one of Eden's private secretaries, told me in an interview on 30 December 1986, however, that it was written much earlier than that, by February 1957 at the latest. It was prepared on the instructions of the Cabinet Secretary, Sir Norman Brook, and was based on all the documentation available at No. 10 Downing Street. It is, therefore, a near contemporary source of great value, and is hereafter cited as Millard Report, followed by the page number(s). 12 Sir Donald Logan, 'Suez, Meetings at Sèvres 22 - 25 October 1956, Narrative', 24 October 1956, p. 2. A photocopy of this document, hereafter cited as Logan Narrative, was kindly made available to me by Mr. Peter Hennessy, with the approval of the author. 13 William Clark, From Three Worlds (London, Sidgwick & Jackson, 1986), p. 166. I have been unable to trace any official record of this meeting. It is quite likely that none exists.

50

Geoffrey Warner

prompted this declaration of willingness to resort to unilateral action, and it was clear (though not from the cabinet minutes) that he was concerned by more than a desire to restore international control of the Suez Canal. The first Sea Lord, Lord Louis Mountbatten, who was present at the meeting with the other chiefs of staff, wrote to his deputy later the same day: 'The Prime Minister states that his object was to get rid of Colonel Nasser personally and his regime whom he regarded as the principal enemies.' 14 It would be both otiose and wearisome to present even a summary chronological account of developments between the nationalisation of the Suez Canal on 26 July 1956 and the outbreak of hostilities between Britain and France and Egypt on 30 October. Instead I propose to focus upon four key questions which, between them, may help to elucidate the mainsprings of British policy. These are: the divisions within the British government; relations with France; relations with the United States; and the problem of 'collusion' with Israel.

1. Divisions

within the

government

If Britain could have mounted a military operation against Egypt immediately upon the nationalisation of the Suez Canal, many of the problems which subsequently faced the British government could no doubt have been avoided, or at any rate minimised. But as we have seen this was militarily impossible. Eden, wrote Mountbatten on 30 July, 'was extremely worried at the ... information that it would be at least six weeks before D-day ...' 1 S N o doubt he foresaw some of the implications of such a long delay, but one wonders whether he realised the extent to which it would give rise to unease and even opposition regarding the use of force, not only in the country at large, but also inside his own government. The first sign of trouble came on 22 August, when the Commonwealth secretary, Lord Home, wrote to Eden: Ί sense that Rab [R. A. Butler, the lord privy seal and number two in the government] is very unhappy.' He is not against the use of force [Home went on], but he fears that we have got ourselves into a position where we shall press the button before we have a moral basis for action which will carry conviction in this country, the free world and the Conservative party. He feels that there should be more flexibility so as to

14

C. M . (56) 54th Conclusions, Minute 1, CAB 128/30, Part I, P R O ; Mountbatten minute to Vice-Chief of N a v a l Staff, etc., 27 July 1956, A D M 205/117, P R O .

15

Mountbatten to Vice-Chief of N a v a l Staff, etc., 30 July 1956, A D M 205/117, P R O .

51

Aspects of the Suez Crisis

allow time for the fullest diplomatic action the extent of which cannot be foreseen. 16

Worse was to follow two days later when, at a meeting of the Egypt Committee (the small, inner cabinet set up to deal with the Suez crisis), there was what at least two fellow-members of the committee described as an 'outburst' from Sir Walter Monckton, the minister of defence. Although the intervention in question is not recorded in the minutes of the meeting, it is clear that it contained reservations about the use of force. The cabinet secretary, Sir Norman Brook, hastened to reassure the prime minister that Monckton's statement should not be taken too seriously, but then went on to suggest that more than half the cabinet might be opposed to the use of force 'until all else has been tried, or until Nasser provides us with a good occasion'. Since we know from William Clark's diary that Brook himself was uneasy about the use of force, this might have been a clever ploy on the cabinet secretary's part to restrain Eden. It must certainly have given him pause for thought. 1 7 Of course Eden was supported by some of his other colleagues. Ί remain firmly convinced', wrote Alan Lennox-Boyd, the colonial secretary, 'that if Nasser wins, or even appears to win, we might as well as a government (and indeed as a country) go out of business.' He added that he was 'horrified by the doubts expressed by the Minister of Defence. All these difficulties stood out miles when we first embarked on our policy.' Lord Salisbury, lord president of the council and one of Eden's closest political friends, assured him: Ί need not say that I am absolutely at one with you, and will support you in any way I can.' Lord Home wrote that, as far as he was concerned, if nothing came out of the United Nations, Britain had no option but to resort to force. Ί need not say more but I am convinced that we are finished if the Middle East goes and Russia and India and China rule from Africa to the Pacific.' 18 The issue was debated by the full cabinet on 28 August 1956. It was one of those rare occasions when the views of individual ministers are recorded in the minutes. The chancellor of the exchequer, Harold Macmillan, who was certainly one of the most hawkish members of the government, 1 9 pointed out that the British economy depended on supplies of oil from the Middle East 16

H o m e letter, 22 August 1956, PREM 11/1152, PRO.

17

Brook letter, 25 August 1956, PREM 11/1152, PRO; Clark, From

18

Lennox-Boyd minute, 24 August 1956; Salisbury letter, 24 August 1956; H o m e letter, 24 August

19

See his remarkable minute to Eden of 24 August 1956 in which he proposed taking advantage

Three

Worlds,

p. 172.

1956; all in PREM 11/1152, PRO. of the situation to reorganise the entire Middle East, 'Jordan might disappear. Syria and perhaps the Lebanon might be merged in Iraq. A final solution [sic] of the Israeli problem would be essential.' FO 371/121237/125/G, PRO. It w a s also Macmillan w h o , according to Brook, provoked M o n c k t o n into his 'outburst' at the Egypt Committee on 24 August. See Brook's letter cited in note 17 above.

52

Geoffrey Warner

and that Nasser's ambition threatened them, both directly and indirectly. Monckton agreed that the stakes were so high that, if all other methods failed, force would have to be used against Egypt. But he felt obliged to draw attention to the disadvantages. Our action would be condemned by a substantial body of opinion overseas, including some Commonwealth countries. Opinion would be divided inside Britain itself. Our interests in other parts of the Middle East could well be affected. In particular, there would almost certainly be sabotage attempts against oil installations in other Arab countries. Moreover, once British forces had been sent into Egypt, it would not be easy to withdraw them and the country might find itself saddled with an expensive commitment. He hoped, therefore, that the government would 'exhaust all other means of curbing Colonel Nasser's ambitions' before resorting to force. Lord Salisbury agreed that no course of action was free from serious risks. 'If, however, we were satisfied that the success of Colonel Nasser's policy would undermine our national economy and destroy our influence as a world Power, we should be resolved to take whatever action was necessary to defeat that policy.' He urged his colleagues to reflect on the experience of the 1930's, when it had been shown that failure to check Mussolini and Hitler in the early stages had led to a much greater conflagration in the end. While concurring in the view that force should be the last resort, the lord chancellor, Lord Kilmuir, said that Britain should nevertheless not shrink from using it if the need arose. Finally, Butler said that although the national interest was of course paramount, the government would need the greatest possible support in both parliament and the country at large in order to secure it. It was therefore important that it should be able to show that 'all practicable steps to secure a satisfactory settlement by peaceful means' had been taken before resorting to force. 2 0 An identical division of opinion in the cabinet took place a fortnight later, on 11 September 1956. 21 The importance of these debates is twofold. In the first place they clearly demonstrate those issues which the decision-makers felt to be at stake in the Suez crisis. Secondly, however, they also reveal that, whatever the attitude of the United States, world opinion, or the Labour party opposition in Britain, the advocates of a military solution inside the British government were virtually compelled to 'go slow' in order to carry the rest of their colleagues with them. Indeed, it could be argued, as Guy Millard did in his classified report on the crisis, that the government came close at the end of September and beginning of October to abandoning its twin objective of restoring international control over the Canal and toppling Colonel Nasser's regime when it gave serious consideration to an Indian proposal for agreed international supervision of 20 2

C. M . (56) 62nd Conclusions, Minute 2, CAB 128/30, Part II, PRO. ' C. M . (56) 64th Conclusions, Minute 4, CAB 128/30, Part II, PRO.

Aspects of the Suez Crisis

53

Egyptian management of the Canal under the auspices of the United Nations. What killed this plan, however, was the absence of effective sanctions in the event of Egypt's defaulting upon its obligations. 22

2. Relations with France Since the Suez Canal Company, which managed the Canal before its nationalisation, was registered in France, it was inevitable that the French government would have been concerned with the outcome of the crisis, even if it had not had other grounds for dispute with Colonel Nasser's regime: viz. the latter's support for the rebels in Algeria. The prospect of cooperation with France against Egypt was, however, seen as a mixed blessing by the British government. One concern — the customary anxiety about French security — was resolved when the French prime minister, Guy Mollet, assured the chairman of the British joint intelligence committee that, apart from the service personnel directly involved, only he and the French defence minister need know all the details of the military plans which were being prepared. 23 The other principal concern, which was political, proved rather more intractable. It was first raised by Eden at the fourth meeting of the cabinet's Egypt Committee on 30 July 1956. The French, he said, had offered a division and a parachute brigade for participation in any military operations against Egypt. 'The participation of French forces would help to establish the European aspect of the operations,' Eden conceded, 'but on the other hand such action would be likely to lead to difficulties with the Arab states.' 24 The nature of these 'difficulties' was spelled out in a Foreign Office memorandum of 3 August: Principally as a result of the situation in Algeria, F r a n c e is at present the most unpopular Western country in the A r a b world. At a m o m e n t when we are ourselves proposing t o risk great unpopularity with the A r a b s by an attack on Nasser, we must try t o minimise the additional burden of F r e n c h unpopularity to the greatest possible extent.

But, as the memorandum also made clear, there was more to it than that. France had been critical of the Baghdad Pact. It must at least be asked to stop attacking it. France was also suspicious of the so-called 'Fertile Crescent' scheme, by which Syria and perhaps Lebanon (both ex-French mandates) would be united with Iraq. The British, on the other hand, favoured the idea

23

Millard Report, p. 18. E. C. (56) 14th Meeting, Minute 2; E. C. (56) 16th Meeting, Minute 2; both in CAB 134/1216, PRO.

24

E. C. (56) 4th Meeting, Minute 3, CAB 134/1216, PRO.

22

54

Geoffrey Warner

and if, as might well be the case, military action against Egypt helped to bring it about, it was important to ensure that the French did not oppose it. 2 5 In other words, it was not just Arab opinion which concerned the British, but the fate of some of their own designs for the Middle East. A meeting of Macmillan, Lord Salisbury and various officials discussed and amended this memorandum for the benefit of the Egypt Committee. It was agreed that it would be advantageous if the French could achieve a settlement of the Algerian problem before any operations were undertaken against Egypt, but this suggestion could only be put 'very tactfully' and not as a pre-condition. With regard to the Baghdad Pact, the French must be persuaded that it had to continue and was not in any way aimed at their interests. As for the Fertile Crescent, they would have to be told at the outset that the consequences of any action against Nasser might be the fall of the pro-Egyptian regime in Syria and a movement towards closer relations between Syria and Iraq. The revised memorandum was approved by the Egypt Committee on 7 August and sent to the British ambassador in Paris, Sir Gladwyn Jebb (who had helped to draft it), as the basis for negotiations with the French. 2 6 These negotiations resulted in a written agreement concerning the implications of the Suez crisis. One of the major clauses — that dealing with Israel — will be dealt with later in this paper, 27 but as far as Arab policy in general was concerned, the French did agree that the Baghdad Pact should continue in its present form and declared their willingness to adopt 'an objective attitude' towards it. At the same time, they felt that 'very great prudence should be exercised in seeking to extend its membership', and in particular took the view that north Africa 'should remain within the Western Mediterranean orbit (doivent rester unis à l'ouest Méditerranée).' Similar caution was expressed with regard to possible developments in the eastern Mediterranean. While it was agreed that a new government in Syria which would be more friendly to the west and Iraq should be welcomed, the hope was also expressed that '[t]he Lebanon should be encouraged to preserve its equilibrium as a mixed Christian· Moslem community facing the Mediterranean as much as the Arab world' and the French voiced concern that 'care should be taken not to replace the Egyptian "Khalif" by any Iraqi pretender to that title.' Algeria was not mentioned in the agreement, although the French foreign minister, M . Pineau, seemed to accept the need for a major political initiative. Jebb, however, doubted whether Pineau would be able to overcome probable opposition

25

Unsigned memorandum, 'France and the Middle East', 3 August 1956, FO 371/118871/1/G, PRO.

26

E. C. (56) 9, 7 August 1956, CAB 134/1217, PRO.

27

See below, pp. 57 — 61.

Aspects of the Suez Crisis

55

inside the French cabinet in time for any gesture to be effective. The ambassador concluded that while much useful ground had been covered in the talks, they had not perhaps achieved as much as he had originally hoped. 28 Much more far-reaching than this modest alignment of British and French policy in the Middle East was the proposal, apparently sprung on the British by Guy Mollet in mid-September, for a revival of the scheme for a FrancoBritish union, originally put forward by Winston Churchill in the darkest hours of 1940. A specially constituted committee of ministers and officials, chaired by Butler, had no difficulty in concluding on 24 September that this idea, the response to an acute wartime crisis, was now hopelessly out of date. It would be unpopular, because of F r e n c h colonial policy, in the new C o m m o n wealth and it would not appeal to the old C o m m o n w e a l t h ; it would encourage C a n a d a t o lean even m o r e closely t o w a r d s the United States; it would arouse disquiet and opposition in G e r m a n y and the Scandinavian countries; finally, we could no longer expect t o maintain the close link which we had developed with the United States on defence and a t o m i c matters. These were very powerful deterrents.

If Britain were to enter into closer relations with western Europe, the committee felt, it should be with the area as a whole 'and not merely with one of the weakest members in isolation.' Indeed, it was suggested that, in view of his well-known support for European unity, it might be 'a welcome surprise' for M . Mollet if he were told of the latest British proposal in response to the Messina conference of the six Schuman Plan countries: viz. the so-called 'Plan G' for a western European free trade area. 2 9 The French prime minister, however, displayed little enthusiasm for Anglo-French cooperation within the framework of existing European institutions because, in his view, it did not go far enough. If a Franco-British union was out of the question, could France perhaps become a member of the British Commonwealth? Eden, who chaired the next meeting of the committee dealing with the matter on 1 October, showed much more interest in this proposal of Mollet's, although he thought that if France were to join the Commonwealth, Belgium and the Netherlands would have to do so at the same time. Neither this discussion nor its continuation on the following day was conclusive. It is clear, even from the bland official minutes, that the sheer audacity of the concept was both overwhelming and somewhat alarming. It was however agreed that Belgium, the Netherlands and Norway must be included along with France in any attempt to associate western European countries with the

28

Enclosure to Beeley letter, 31 August 1956, FO 371/118872/19/G, PRO; Jebb telegram, 13 August 1956, FO 371/118871/12/G, PRO.

29

GEN. 551/lst Meeting, CAB 130/120, PRO.

56

Geoffrey Warner

Commonwealth and that this must be compatible with the policies embodied in Plan G. A committee of officials was set up to examine the implications for Britain and the Commonwealth of this 'unique departure in our history'. 3 0

3. Relations with the United States The Suez crisis placed an enormous strain upon the so-called 'special relationship' between Britain and the United States. This was because the differing interests of the two countries led to increasingly divergent policies. Unlike Britain, wrote Guy Millard in the immediate aftermath of events, [t]he interest of the United States G o v e r n m e n t . . . was marginal and, so far as the Canal was concerned, mainly c o m m e r c i a l . Prestige did not enter into it. N o firm decision had been taken by the United States that Nasser must be o v e r t h r o w n . T o s o m e extent the A m e r i c a n s were concerned with P a n a m a , but this was not of the first importance. T h e i r attitude differed from that o f the British and French t o w a r d s Middle E a s t nationalism. T h e y regarded it less as a hostile force than as something with which an a c c o m o d a t i o n must be sought and reached. 3 1

It followed from this that the United States was very unhappy about the possible use of force. This was clear from President Eisenhower's very first message to Eden about the crisis on 31 July 1956 and he never wavered. 32 If Dulles' attitude was sometimes more ambiguous, the general trend of his thinking was clear enough. Moreover, the British ambassador in "Washington gave a clear warning in September that the United States would provide neither moral nor material support for military action, and without such support it could easily lead to disaster. 33 Harold Macmillan generously conceded in his memoirs that his judgement had been at fault as far as the Americans were concerned. Ί felt', he wrote regarding the use of force, 'that the American Government, while publicly deploring our action, would be privately sympathetic, and thus content themselves with formal protests. We had learnt from many of our American friends that they were anxious to see the end of Nasser.' This last point was no doubt true, but Macmillan had been told by Dulles on 25 September 1956 that it would be preferable, in Guy Millard's words, 'to face the prospect of a long haul.' The secretary of state had also implored the British government, through Macmillan, to do nothing before the American presidential election on 6 30 31

GEN. 551/2nd and 3rd Meetings, CAB 130/120, PRO. Millard Report, p. 2.

32

See his messages to Eden of 31 July, 2 and 8 September 1956, all of which are printed in full in Dwight D.Eisenhower, The White House Years, Volume II, Waging Peace, 1956—1961 (New York, Doubleday, 1965), pp. 664 - 71.

33

Millard Report, p. 16.

57

Aspects of the Suez Crisis

November. Finally, the chancellor of the exchequer was well aware of the potentially disastrous effects of military action upon sterling, particularly if the United States did not provide maximum support for the currency. 34 In these circumstances, Macmillan's optimism regarding the American attitude is almost incredible. At the same time, the British persistence in seeking American support for their actions is equally hard to understand. It may be, as Macmillan noted at the outset of the crisis, that We must keep the Americans really frightened. They must not be allowed any illusion. Then they will help us to get what we want, without the necessity of force. 35

But what when it became increasingly clear that the Americans were not only unlikely to help the British get what they wanted by peaceful means, but were also opposed to them using force? The French repeatedly made the point that the United States was simply stalling for time, but the British seemed only to have become convinced of this after the event. It is hard to avoid the conclusion that what may be called the inertia of the special relationship was in operation. The British continually sought to enlist American support because that was what they had always done.

4. 'Collusion'

with

Israel

'Collusion' is the skeleton in the cupboard of the Suez crisis as far as Britain is concerned. In retrospect it is hard to understand why. It never bothered the French and although it obviously had to be kept secret at the time for fear of embarrassing Britain's Arab allies, there was no reason why it could not have been admitted after a decent interval. Yet this has never happened. Eden went to his grave without conceding it. So did Macmillan, who died ironically on the day before the British press published the 'secrets of Suez' in their annual review of new documents released at the Public Record Office. Selwyn Lloyd went one step further. His posthumously published memoirs lay bare the story of 'collusion', but then seek, in an incredibly tortuous conclusion, to deny that it had ever taken place. 36 34

35 36

Harold Macmillan, Riding the Storm 1956-1959 (London, Macmillan, 1971), p. 149 (see also pp. 104, 157); Millard Report, pp. 1 6 - 1 7 ; Bridges minute, 7 September 1956; Rowan minute, 21 September 1956, Τ 236/4188, PRO. (Macmillan's own handwritten annotations on these last two documents reveal the extent of his awareness of the situation.) Macmillan, Riding the Storm, p. 106. Selwyn Lloyd, Suez 1956: A Personal Account (London, Cape, 1978), pp. 2 4 6 - 5 0 . It is interesting that even the Millard Report, a highly classified document, contains no reference to the issue of 'collusion'. Its author told me that he regarded it as too sensitive an issue to include although he was fully aware of what took place himself.

58

Geoffrey Warner

T h e question of possible Israeli involvement in military operations against Egypt was raised as early as 28 July 1956, when the Egypt Committee agreed that it would be to Britain's advantage if the Egyptian armoured division deployed astride the Suez Canal could be induced to move eastwards, and that this might be achieved by means of an Israeli demonstration. On the other hand, the committee recognised that such a move would tend to range the other Arab states on the side of Egypt and it was Britain's aim to isolate the latter. 3 7 It was for this reason, no doubt, that President Eisenhower's special representative, Robert Murphy, was told by Eden a day or so later that, even if the United States government felt it could not take action against Egypt, it was hoped they would restrain Israel as well as the Soviet Union. 3 8 Harold Macmillan, however, felt that further consideration should be given to the probable Israeli reaction to an Anglo-French operation against Egypt. He told the Egypt Committee on 2 August that while it was indeed important that other Arab states should not come to Egypt's aid, it would be helpful if the latter were faced with a war on two fronts. T h e Foreign Office, which was traditionally supposed to lean towards the Arabs rather than Israel, was totally opposed to any Israeli involvement. T h e memorandum prepared for the discussion of Anglo-French policy on 3 August pointed out that military action in the Canal Z o n e would probably be misrepresented as part of an imperialist plot hatched with Israel. It is, therefore, important [the m e m o r a n d u m went on] that we and the French (and the Americans) should agree t o use our influence to keep Israel right out of the dispute.

T h e authors went so far as to argue that if Israel took advantage of the situation to make an incursion into Egypt, it should be compelled to withdraw, by force if necessary. 3 9 At the meeting of ministers and officials which discussed the approach to France it was agreed that the disadvantages of Israeli participation outweighed the advantages. 'Israeli assistance', it was felt, 'should, if possible, stop short of active intervention. Israeli presence alone should tie down considerable Egyptian forces.' During the talks with the French, J e b b informed London that he was 'glad to report that French entirely agree that Israel must be, as far as possible, dissociated from the Suez dispute.' Indeed, the written agreement concluded at the end of the discussions stated quite unequivocally: (a) Israel should be discouraged by all possible means from taking the opportunity to launch an attack on any of her neighbours; 37 38 39

E. C. (56) 2nd Meeting, Minute 3, CAB 134/1216, PRO. E. C. (56) 4th Meeting, Minute 1, CAB 134/1216, PRO. E. C. (56) 9th Meeting, Minute 5, CAB 134/1216, PRO; Unsigned memorandum, 3 August 1956, FO 371/118871/1/G, PRO.

Aspects of the Suez Crisis

59

(b) A r m s supplies t o Israel and her neighbours should be regulated on the same principles as before the C a n a l crisis; (c) A lift of the blockade on Israeli ships passing through the C a n a l should be shown t o proceed from general principles and not appear as a m a r k of favour to Israel ...

T h e only difference between the British and French on this issue seemed to be that the latter felt it would be necessary to induce Israel to cooperate by promising early discussions to settle the Arab-Israeli dispute after the installation of a new Egyptian government, while the former was reluctant to saddle the new government with such a commitment straightaway. 4 0 There is then virtual silence about possible Israeli involvement in an attack upon Egypt until mid-October. T h e new cycle of discussions started on 14 October, when Pineau's deputy, Armand Gazier, and General Maurice Challe came to Britain to put the proposal for a coordinated Anglo-FrancoIsraeli operation to Eden in highly secret conversations at Chequers. It continued with the meeting between Eden, Lloyd, Mollet and Pineau in Paris on 16 October and culminated in the famous Sèvres conference between the British, the French and the Israelis on 22 — 24 October. 4 1 It is not my intention to go into the details of these discussions, but only to ask (a) why did the British come round to the idea of collaborating with the Israelis in October when they had rejected it in August, and (b) to what extent was the cabinet aware of what was taking place? As far as the first question is concerned, it must be realised that the French proposal for 'collusion' with Israel came at just the right psychological moment. In the first place, Eden had become totally disillusioned with the Americans. T h e key episode here was Dulles' denial, in a press conference on 2 October, that the plan for a Suez Canal Users' Association (of which he had been the originator) had any teeth in it. 4 2 Secondly, it was clear, as the cabinet was told on 24 October, that the military operations which had been planned could not be held in readiness for much longer. T h e r e was growing dis-satisfaction a m o n g the reservists w h o had been recalled for service, and it would be difficult t o retain them for much longer unless there

40

E. C. (56) 9, 7 August 1956, CAB 134/1217, PRO; Jebb telegram, 11 August 1956, FO 371/

41

There are no official British records of several of the key meetings of this phase of the discussions, notably of the Gazier-Challe-Eden meeting of 14 October 1956 and of the Sèvres conference itself. For an unofficial account of the first, see Nutting, No End of a Lesson,

118871/6/G, PRO; Enclosure to Beeley letter, 31 August 1956, FO 371/118872/19/G, PRO.

pp. 9 0 - 9 4 . For unofficial accounts of Sèvres, see Lloyd, Suez 1956, pp. 1 8 0 - 8 5 ; Logan Narrative, pp. 3 - 5 , 6. Logan was the only British representative present on both 23 and 24 October. 42

For a vivid account of Eden's reaction to this statement, see Nutting, No End of a Lesson, p. 70.

60

Geoffrey Warner was s o m e significant development in the Suez dispute by which they could be convinced that their services would soon be required. M o r e o v e r , the condition of the vehicles which had been loaded in merchant ships for many weeks was n o w deteriorating, and the time was fast approaching when they would have t o be unloaded and serviced.

For these reasons the chiefs-of-staff wanted to adopt a new plan after the end of October, which would involve the release of the reservists and the unloading of the vehicles. But this would inevitably convey the impression that military precautions were being relaxed and thereby weaken. Britain's bargaining position in any further negotiations with the Egyptians. 43 In other words, if force were to be used, it would have to be used very soon. Paradoxically, however, a negotiated settlement of the dispute now seemed much closer. This was as a result of the negotiations between Lloyd, Pineau, the United Nations secretary-general, Dag Hammarskjold, and the Egyptian foreign minister, Mahmoud Fawzi, in New York earlier in the month. The cabinet agreed on 18 October 'that the outcome of the proceedings in the Security Council was as favourable, from our point of view, as could have been hoped' and Lloyd told his colleagues on the 23rd 'that we would not exclude the possibility that we might be able to reach, by negotiation with the Egyptians, a settlement which would give us the substance of our demand for effective international supervision of the Canal.' However, he went on, there were three major objections to a negotiated settlement: First, it n o w seemed clear that the F r e n c h G o v e r n m e n t would not give their full c o - o p e r a t i o n in such a policy. Secondly, it was evident that s o m e relaxation of our military preparations would have t o be m a d e and t o that extent we should weaken o u r negotiating position. Thirdly, he saw no prospect of reaching such a settlement as would diminish Colonel Nasser's influence throughout the Middle East.

One cannot help thinking that the final objection was the most serious from the British point of view. They were still determined to get rid of Colonel Nasser altogether. Eden gave the game away when he told the cabinet on 24 October that 'we should never have a better pretext for intervention against him than we had now as a result of his seizure of the Suez Canal.' 4 4 With regard to the extent to which the cabinet was informed of the extent of 'collusion' with Israel, it is not easy to say. It seems clear that senior ministers — Eden, Lloyd, Macmillan, Home, Butler, Kilmuir and Head (who had taken over the defence ministry from Monckton on 18 October) — were

43 44

C. M . (56) 72nd Conclusions, Minute 6 (Confidential Annex), CAB 128/30, Part II, PRO. C. M . (56) 71st Conclusions, Minute 4, CAB 128/30, Part II, PRO; C. M . (56) 72nd Conclusions, Minute 6 (Confidential Annex), CAB 128/30, Part II, PRO; C. M . (56) 73rd Conclusions, Minute 7 (Confidential Annex), CAB 128/30, Part II, PRO.

Aspects of the Suez Crisis

61

in the know. As for the rest, they were given some fairly broad hints. Eden told them on 18 October that 'he had reason to believe' that the Israelis would be more likely to move against Egypt than Jordan and that he had relayed a message to them, through the French, that if this happened Britain would not come to Egypt's assistance under the Tripartite Declaration of 1950. On the 23rd he told them that '[f]rom secret conversations which had been held in Paris with representatives of the Israeli Gevernment, it now appeared that the Israelis would not alone launch a full-scale attack on Egypt' and on the 25th that '[i]t now appeared ... that the Israelis were, after all, advancing their military preparations with a view to making an attack on Egypt.'45 One would have had to have been pretty stupid not to have realised that some contacts were taking place. On the other hand, the details were never disclosed. In particular, the cabinet was not told that Lloyd had been to Sèvres and the socalled 'Sèvres protocol' was never presented to it. Indeed, Eden made the most strenuous efforts to destroy all copies of this compromising document. 46 Despite the continuing anxieties of some members of the cabinet, 47 Britain and France did of course launch their attack upon Egypt, in cooperation with 45

46

C. M. (56) 71st Conclusions, Minute 4, CAB 128/30, Part II, PRO; C. M . (56) 72nd Conclusions, Minute 6 (Confidential Annex), CAB 128/30, Part II, PRO; C. M . (56) 74th Conclusions, Minute 1, CAB 128/30, Part II, PRO. According to Logan, When the document was handed to him, Eden seemed taken aback. Though he was satisfied with its contents, he had not expected a written record and seemed to think we should have realised this. On the following day, 25 October, we were instructed by the Prime Minister to return to Paris to ask the French to destroy their copy of the document. At the Quai d'Orsay we presented the Prime Minister's request to Pineau who received it rather coldly and questioned the need and the advisability of such action. H e pointed out that the Israelis had returned to Israel with their copy the previous evening. H e would give us a full answer later ... Eventually at about 4 pm we were taken to see Pineau again. He said that the French Government would not accept the Prime Minister's proposal, partly because the Israelis had their copy with them and partly because the French saw no reason to destroy it. We returned to London ... Next day the Private Office at the Foreign Office were told by 10 Downing Street to send over all copies of the document and of the translation that they had made. This was done. (Logan Narrative, pp. 6 — 7)

47

Thus, it was pointed out by unnamed ministers on 23 October that an attack on Egypt might unite the Arab world in support of Egypt and would presumably involve risks to British lives and property in the area. On 25 October others (or the same ones) warned that such action would offend the U.S. government and might do lasting damage to Anglo-American relations, that our intervention to separate the combatants would not appear to be holding the balance evenly as between Egypt and Israel, would be contrary to our obligations under the Tripartite Declaration of 1950 and would have no mandate from the United Nations. See C. M . (56) 72nd Conclusions, Minute 6 (Confidential Annex), CAB 128/30, Part II, PRO; C. M . (56) 74th Conclusions, Minute 1, CAB 128/30, Part II, PRO.

62

Geoffrey Warner

Israel, on 31 October 1956. One week later the British government agreed to a cease-fire. According to Guy Millard, the cabinet had the following points in mind when it took that decision: the c h a o t i c situation in the United N a t i o n s and the threat of sanctions, the attitude of the United States, the menacing c o m m u n i c a t i o n from Soviet Russia, a widening split in the Conservative Party, and a new danger, that of the increasing drain on the gold and dollar reserves.

In his memoirs, Selwyn Lloyd writes off the fear of Soviet intervention, the position at the United Nations, and opposition within the Conservative party (or within public opinion generally). According to him, the two crucial factors were the fact that the ostensible reason for British intervention — to separate the Egyptians and Israelis and to secure the canal — was no longer valid because it had been achieved; and the financial situation. He claims that, with respect to the latter consideration, 'Macmillan strongly advocated accepting the cease-fire both to me privately beforehand and at the Cabinet meeting.' Macmillan, on the other hand, denies that the financial situation was decisive. He also dismisses the Soviet threat and plumps for the achievement of the basic objective. There is no reference to divisions within the Conservative party. 4 8 What is one to make of these conflicting accounts? T h e belief that Britain had achieved its objectives can surely be ruled out. As we have seen, Britain's principal objective had been to get rid of Colonel Nasser, and this had not happened. There seems little doubt, on the other hand, that financial considerations were important. Macmillan himself admits that the attempt to secure support from the International Monetary Fund was vetoed by the United States and that news of this arrived in the middle of the crucial cabinet meeting. His comment that the drain upon sterling 'amounted to only oneeighth of the total gold and dollar reserves' sounds disingenuous in the extreme, especially when one remembers the warnings he had been given in September. 4 9 Interestingly enough, the cabinet minutes give rather more emphasis to the Soviet threat. It will be recalled that on 5 November the Russian prime minister, Marshal Bulganin, had warned the British and French: 'We are fully determined to crush the aggressors and restore peace in the Middle East through the use of force.' There was even a hint that nuclear weapons might be employed. T h e United States immediately replied that this would bring about a full retaliatory response, but at the British cabinet meeting on 6 November the view was expressed that if Britain did not agree to a cease-fire, 'we must reckon with the possibility of a Soviet invasion of Syria or some 48

Millard Report, p. 25; Lloyd, Suez pp. 1 6 3 - 6 6 .

49

Macmillan, Riding the Storm, pp. 1 6 4 - 6 5 ; and see above, p. 16 and note 34.

1956,

pp. 2 1 0 - 1 1 ;

Macmillan, Riding

the

Storm,

63

Aspects of the Suez Crisis

other area in the Middle East, and possibly a direct Soviet attack on the Anglo-French forces in the Canal area.' For what it is worth, the importance of the Russian factor is stressed in Peter Wright's recent volume of memoirs, which the British government tried so hard to suppress. According to Wright, M I 5 had broken the Egyptian diplomatic cipher. He continues: T h e single most i m p o r t a n t intelligence which we derived from the cipher break was a continuous a c c o u n t of Egyptian/Soviet discussions in M o s c o w , details of which were relayed into the Egyptian Embassy in L o n d o n direct from the Egyptian A m b a s s a d o r in M o s c o w . T h e information from this channel convinced the Joint Intelligence C o m m i t t e e (JIC) that the Soviet Union were indeed serious in their threat t o become involved in the Suez Crisis on the Egyptian side. O n e message was particularly influential. It detailed a meeting between the Soviet Foreign Minister and the Egyptian A m b a s s a d o r in which the Russians outlined their intentions t o mobilize aircraft in preparation for a confrontation with Britain. T h e panic provoked by this cable, which was handed straight to the J I C , did as much as anything to p r o m p t Eden into w i t h d r a w a l . 5 0

Cabinet minutes traditionally do not report party political matters, so one would not expect to find any confirmation in them of the hypothesis that divisions in the Conservative party were an important factor in the government's decision to accept a cease-fire. It does seem clear, however, that support for the government's action among Conservative M.P.'s, which had been wellnigh solid until the outbreak of hostilities, began to ebb quite rapidly when it became clear how long it would take to get British and French troops ashore in Egypt. Moreover, as we have seen, there had been divisions inside the cabinet throughout the crisis. According to his most recent and official biographer, by 6 November 'Eden had been deserted by all his senior colleagues except Lloyd, Head and Stuart, and Macmillan's defection had been crucial. Butler and Salisbury now led the majority that in effect demanded acceptance of the [cease-fire].' T h e r e was also opposition within the ranks of the chiefsof-staff. Although not quite so consistent a dove as he later maintained, the first Sea Lord, Lord Louis Mountbatten, did send Eden a personal letter on 2 November 1956 urging him to accept the United Nations' resolution in favour of the cessation of military operations and to turn back the invasion force, which was then on its way from M a l t a to Egypt. S 1 Suez is widely held to have marked some sort of watershed in Britain's post-war foreign policy and perception of its role in world affairs. Even at the time, as acute an observer as Guy Millard thought he could detect this. 50

C. M. (56) 80th Conclusions, Minute 1, CAB 128/30, Part II, PRO; John Mackintosh, Strategy and Tactics of Soviet Foreign Policy (London, Oxford University Press, 1962), p. 188; Eisenhower, Waging Peace, pp. 89 - 90; Wright, Spy Catcher,

51

p. 85.

Rhodes James, Anthony Eden, pp. 553, 5 5 8 - 6 0 , 574 (the quotation is from p. 574); Philip Ziegler, Mountbatten (London, Fontana, 1986), pp. 544 - 45.

64

Geoffrey Warner F o r Britain [he wrote], Suez was a climacteric. It had severely shaken the basis of Anglo-American relations and exposed the limitations of our strength. This fact defined the conditions within which British foreign policy must henceforth operate. T h e United States could not, it had been shown, confine the Alliance to the West without weakening its cohesion. But we could never again resort t o military action, outside British territories, without at least A m e r i c a n acquiescence. O u r capacity t o act independently had been seen t o be closely circumscribed by e c o n o m i c weakness. T h e experience of Suez may have led to a re-assessment of British interests and of o u r relative position in the w o r l d . 5 2

Plausible though this analysis seemed to me when I first read it in the Public Record Office, I have now come to the conclusion that it is wrong on virtually every count. In the first place, the limitations of British strength and the degree of Britain's dependence upon the United States had been shown long before 1956. They were the lessons, if not of the second world war, then of the AngloAmerican loan negotiations of 1945. It was, after all, Averell Harriman, then U.S. ambassador to the Soviet Union, who told his staff early in 1946: 'England is so weak she must follow our leadership ... She will do anything that we insist [upon] and she won't go out on a limb alone.' 53 All that happened ten years later was that England did try to 'go out on a limb alone' and paid the penalty. There had been no change in the underlying situation. Nor did Suez lead to 'a re-assessment of British interests and of our relative position in the world.' Britain continued to play an active part in the Middle East. In 1957 it intervened in Jordan to prop up King Hussein's regime against radical, pro-Nasserist elements. In 1961 it intervened in Kuwait when that country's independence seemed threatened by the new Iraqi regime of General Qasim, which had overthrown that of Nuri es-Said (who undoubtedly was a casualty of Suez) in July 1958. It was not until the late 1960's that Britain more or less abandoned its role in the area. Even more indicative is the way in which Suez, far from breaking the 'special relationship' with the United States, led to its reinforcement. 'The most urgent, and at the same time the most delicate, task which confronted me on becoming Prime Minister [in January 1957]', Macmillan wrote later, 'was to repair and eventually to restore our old relationships with Washington.' 5 4 Indeed, both he and Butler had been trying to do this even earlier, while Eden was on sick leave in the West Indies following a breakdown in his health. Eden remained bitterly critical of the role of his successor right up

52

Millard Report, p. 29.

53

W. Averell Harriman and Elie Abel, Special Envoy to Churchill and Stalin (New York, Random House, 1975), p. 531.

54

Macmillan, Riding the Storm, p. 240.

65

Aspects of the Suez Crisis

until his death in 1977. M a c m i l l a n , he thought, 'had been excessively devoted to Anglo-American unity at all c o s t s ' . 5 5 As for the unfortunate French, they were immediately assigned to the scrap-heap. W h e n Gladwyn J e b b wrote a letter to Sir Ivone Kirkpatrick, the permanent head of the Foreign O f f i c e and, incidentally, one o f the strongest supporters of the Suez action, suggesting some possible new

approaches

towards British foreign policy in the Middle East which might be discussed with the French, a Foreign O f f i c e official minuted that the letter seemed to rest on a number o f erroneous assumptions, including 'the belief that we can have a hope o f retrieving our Middle Eastern position while remaining in close association with the French in the area; or while not soliciting all the help we can from the U.S.' T h e Americans, he wrote, were 'ultimately the only real barrier to Soviet penetration' and they were 'certainly going to have nothing to do with a M i d d l e Eastern policy o f which France is a part sponsor; it is going to be difficult enough to get them to pay any attention to what we regard as our interests in the M i d d l e East.' Kirkpatrick agreed. In his reply to J e b b he wrote that recent events have only confirmed the fact that, apart f r o m the Israelis, the French are the m o s t unpopular people in the area. T h e r e f o r e any open alignment with the French in Middle Eastern matters is going t o be a dead loss t o us. This does not m e a n that we envisage going round letting the F r e n c h d o w n in all directions, but it does mean that c o - o p e r a t i o n with them in respect of Middle Eastern matters is going to have t o be very discreet if it happens at all. 5 6

T h e French would no doubt argue that it did n o t happen and that the road to Sakiet and the ill-fated Anglo-American 'good offices' was wide open. W h e n I discussed his analysis with him, Sir Guy M i l l a r d said that, in retrospect, he could see that he had neglected the European factor. A united Europe could perhaps have displayed m o r e independence vis-à-vis the United States. T h e evidence suggests that the French drew the necessary conclusions. T h e British did not. It was not only Guy M i l l a r d w h o neglected the European f a c t o r in 1957, but virtually the entire British establishment, and for many years to c o m e .

55

Rhodes James, Anthony Eden, pp. 584 — 85.

56

Jebb letter, 3 November 1956; Riches minute, 21 November 1956; Kirkpatrick letter, 11 December 1956; all in FO 3 7 1 / 1 2 1 2 3 7 / 1 3 3 / G , PRO.

N. B. All quotations from official records in the Public Record Office are reproduced by kind permission of the Controller of Her Majesty's Stationery Office.

Decision Makers, Decisions and French Power by René Girault

Calling certain figures "decision makers" raises real problems for the historian at any time. It is in fact sometimes hard to determine where power, or powers, are located. In the case of France towards the end of the Fourth Republic, the choice is still more delicate, as it appears that the traditional powers of a parliamentary democracy (executive, legislative and judiciary) were then "supplemented" or "circumvented" by another, without recognized legitimacy but not without real effectiveness, namely the administrative power. There were also powers of influence, constituted by the press and the employers, but they drew their capacity to intervene in political life either from temporary episodes (scandals or violent crises) or from more or less solid personal relationships (a good example can be found in the part played by Marcel Boussac, a textile employer). They were less decisive than the administrative power. The importance of administrative power derives from the specific situation of France in the years 1 9 5 4 - 8 : whatever the field of action of the executive power, whatever the quality of the politician holding that power (Pierre Mendès France, Edgar Faure, Guy Mollet, were undisputed personalities1), the reality as experienced by contemporaries since the start of the Fourth Republic was that of a country of continual cabinet crises, of major dominant political parties delegating power to this or that leader, for a limited period. This constitutional weakness of the executive power was duplicated by a conjunctural weakness of legislative power: whichever the electoral system employed, how could a source of strong power be found in an Assembly in which the two extremes, the communists on the Left, the Gaullists or Poujadists on the Right (the former averaging 25%, the latter around 20%) were located [or located themselves] outside government? The various combinations employed in order to form governments did little to mask the basic impotence of the executive power.

' Those three men chaired the Council of Ministers between June 1954 and May 1957.

Decision Makers, Decisions and French Power

67

Likewise, those w h o f r o m their position ought to serve that power gradually turned to their own benefit the reality of decision-making powers. It is well k n o w n that administrations everywhere develop efficient "bureaucracies", permeated by persistent tendencies towards autonomy; however, these bureaucracies, faced with solidly installed politicians, have to execute rather than decide. T h u s , their by no means irrelevant capacity for action relates more to the manner, quick or slow, partial or total, of executing decisions than to the general guidance of choices decided by the political power. In France in the years 1954 — 8, things were different: high officials in the Treasury, the financial institutions, the Plan, the major nationalized enterprises or the Commissariat for Atomic Energy on the one hand, and governors of Overseas Territories, or military leaders, on the other, took initiatives of a political nature that political leaders had subsequently to ratify. T h e deviation of the plane carrying Ben Bella and FLN leaders in October 1956, under an order from the military leaders in Algeria subsequently covered by the government, is the most spectacular example of the take-over of decision-making power, but not the only one. In short, the re-establishment of the decisionmaking centres by the historian must cover some political figures, some figures f r o m the business world and some figures f r o m the administrative, civil and military sectors. From an analysis of decision-making circles at the time of the Munich crisis in 1938, it seems to me possible to portray the n a r r o w circle of French decision makers as amounting to some sixty people. 2 A comparative analysis of decision-making circles, taking the well-known Suez crisis as an example, might lead to an equally reduced figure for the real decision makers. According to subsequent testimony of those involved, it was a few n a r r o w groups that really led the action that brought about the armed intervention in Egypt: a few direct collaborators of the Prime Minister (Guy Mollet), the small group of technical advisers to the Minister of National Defence (Maurice BourgèsM a u n o u r y ) , the Secretary of State for Defence (Max Lejeune), the Minister for Foreign Affairs (Christian Pineau) - without the high officials of the Quai d'Orsay being able to win their confidence - the resident minister in Algeria (Robert Lacoste) and a few collaborators of the military leaders directly involved (Generals Ely, Challe, Beaufre, Massu). O n the other hand, according to their own testimony, the leaders of the Compagnie Universelle de Suez were kept out of the political decisions. 3 In total, perhaps some thirty people called the tune in France. In fact, while the plan for organizing the expedition was conceived by this small number of leaders, the decisive choice in favour of armed intervention, the recourse to "gunboat policy", was conceived by much 2 3

La Puissance en Europe, 1938-1940, Publications de la Sorbonne, 1984, p. 26. Cf. Hubert Bonin, Suez, du canal à la finance, 1858 — 1987, Economica, 1987, p. 152.

68

René Girault

wider circles. As from August 1956, the idea of armed intervention was running through political groups, whether in the Assemblée Nationale, the Council of Ministers (whose decisions quickly became known) or within the parties; 4 the "technicians" in charge of the preparations perhaps remained silent on certain aspects of collusion, such as the visits to Paris by Israeli emissaries, but how could a large-scale airborne operation be prepared in secret? How, finally, can one regard as for "restricted" distribution the action of a government which, in order to achieve its goals, did not hesitate to resort to "curious intermediaries": Guy Mollet, keen to convert British Conservatives to the idea of armed intervention, asked his friend Marcel Boussac to visit a Conservative MP, Julian Amery, in October, just before the Tory Party Congress, to pass him a confidential message. 5 In fact in this case, as in many others, the "technicians" were guiding policy, and the "politicians", confined to tacticism, counted little in the face of a strategy decided by a large number of leaders. At bottom, the most interesting point for the historian is more to understand why the Suez campaign corresponded to a background movement in France than to determine exactly the number and nature of the "decision makers". We are again faced with an exceptional case. In the majority of cases studied, according to what seems to be the norm, the "State decision-making apparatus" embraces three groups: 1. The ministers and their direct advisers, whether members of ministerial staffs or directors of major departments. The Council of Ministers, whose mechanism is well known (thanks particularly to the diary of the President of the Republic, Vincent Auriol), decided few questions, leaving each member of the cabinet an appreciable, and appreciated, room for manoeuvre. 6 2. The National Assembly and the Council of the Republic, through the specialized committees and through the intermediaries of the leaders of the parliamentary groups in power (or destined to return to power). Certainly the "rank and file" members were kept on one side, but the constant need for the incumbent prime minister to ensure a numerical margin of confidence votes obliged him to "cultivate" influential members, and therefore to associate them with decisions, albeit indirectly (sending them on missions abroad, for example, or letting them participate in delegations to international conferences). 3. The specialized bureaucracies, in charge not only of preparing the decision but also of carrying it out, thereby ensuring the "eternal role of the

4 5 6

P. O. Lapie, De Léon Blum à de Gaulle, le caractère et le pouvoir, Fayard, 1971, p. 672 f. M. F. Pochna, Bonjour Monster Boussac!, R. Laffont, 1980, p. 256. The subsequent testimonies of former ministers (E. Faure, F. Mitterand, Ρ. O. Lapie) concur on this point.

Decision Makers, Decisions and French Power

69

State". 7 These bureaucracies were either integrated with the constituted bodies of the State apparatus, or independent but in close relation to it, depending on the nature of the problems at issue. The former varied in weight in the burocratic structure: the "fortresses" in the financial administration (Treasury, taxes) or the areas reserved for some of the Grandes Écoles alumni (Polytechnique, Centrale, Mines) in ministries with an economic remit (Industry, Transport) clearly counted more than the "poor relation" sectors of the cultural or educational areas. Pupils of the École Nationale d'Administration (set up in 1945) already recognized this hierarchy, officially unavowed but in reality strict, through the choices made according to their grades on leaving an École. The latter bring together both the general staffs of major national enterprises, like Renault or EDF, and the executives of employers' associations or trade unions (excluding the CGT), not to forget the influential agricultural (beetroot, cereal, wine producers) or industrial (textile, steel) pressure groups. The recent opening of the archives enables us to prove that the weakened political power often sought to avoid traps through frequent "conversations" with the specialists, in order at least to avert their subsequent negative reactions. These bureaucracies were far from being homogeneous or unanimous in their convictions, so that if the political power had continuity, it could play on the contradictions or rivalries among pressure groups or administrations; since political power is short-lived, however, this deal-making capacity was left up to the administration (generally a long-term one). The example of the Rome Treaties' preparation, setting up Euratom and the Common Market (analysed in the paper by Pierre Guillen and in the proceedings of the recent international colloquium held in Rome by the liaison group of historians of the Communities) takes on particular importance here. When the Spaak Report was made public in April 1956, it immediately aroused hostile reactions from employers' groups (CNPF, Jeunes Patrons, industrial lobbies) as well as serious reservations from the ministries concerned, with rare exceptions (Finance, Overseas Territories). However, a small group of high officials, in favour of European unification and assured of the "political" approval of prime minister Guy Mollet, were to use meetings of experts' groups to render these sectoral oppositions "sterile" (Alexandre Verrei Commission, Marjolin Commission). 8 Undoubtedly, without Guy Mollet's authority, this "pro-European" nucleus would have had serious difficulty in cutting down the opponents, but without the continuity of work carried on under the

7

Allusion to a formulation by Robert Blot, a friend of Edgar Faure, Director of Taxes, who opposed the "eternal" role of the State to the agitation of Pierre Poujade "who is not eternal" (sic), when the latter sought to get rid of "polyvalent" inspectors. E. Faure, Mémoires, Si tel doit être moti destin ce soir, Pion, 1984, p. 131.

8

Mémoires, Robert Marjolin, Le travail d'une vie. R. Laffont, 1986.

vol. 2,

70

René Girault

influence of Jean Monnet, for months, not to say years, by those same men, who were able to reach their goals thanks to technical knowledge of the specific areas and of the people concerned, the final objective would certainly not have been achieved. Likewise, in the preparation for Euratom, the Atomic Energy Commission had a decisive weight through two of its leaders, Pierre Guillaumat and Bertrand Goldschmidt. 9 This decisive role of certain wellplaced administrators had been foreseen and indeed organized by Jean Monnet himself from the start of the Fourth Republic; in 1946, in connection with the administration of the modernization and infrastructure plan, Monnet had already developed the "technique of influence": "We shall be compelled to intervene, willy-nilly, in the affairs of government. You may believe me if I say that I took no pleasure in harassing ministers and high officials with notes and phone calls; they ought to accustom themselves to that occupational hazard. ... It is true that most of these men, and those who succeeded them, soon overcame their initial reaction of impatience and took the greatest account of our opinions. However, none of them ever found my working methods entirely natural, since it crossed hierarchies and shook up routines where necessary." 1 0 T h e subsequent creation of the Action Committee

for the United-

States of Europe was inspired by the same practice: intervention with government, the employers and the unions, to suggest, convey, impose on them the "technical" solution(s) of the moment. In the report submitted to the Augsburg Conference, I already stressed the role of administrators, their often common social and cultural backgrounds, and their esprit de corps.

T h e difference between 1 9 4 6 - 8

and

1956 — 8 has less to do with a change in their action in the State than with the continuance of that action: the continuing weakness of the political system made an extraordinary situation legitimate. It enabled non-politicians to act in politics. In the words of one of these technicians, F. Bloch-Lainé: "I lived through a time which ... was exceptionally favourable to initiatives by wellplaced non-politicians to act without great preparation or great support in favour of a great crisis. It was an opportunity we exploited, no doubt imperfectly, but which our successors may perhaps envy". 1 1 Quite rightly, Bloch-Lainé points out that in this period the separation between employers and top administration was gradually being obliterated, since in many private firms the direct heirs (sons or nephews) were yielding the decisive positions to technicians trained in the Grandes Écoles and in the practice of the State administration. Historians of firms, who fortunately are becoming more nu-

9 10 11

Cf. P. Guillen, "La France et la négociation du traité d'Euratom", Relations Internationales. Jean Monnet, Mémoires, Fayard, 1976, p. 307. F. Bloch-Lainé and J. Bouvier, La France restaurée 1944- 1954, Fayard, 1986, p. 2.

Decision Makers, Decisions and French Power

71

merous, provide good illustration of this phenomenon. 1 2 " T h e employer by divine right" was giving place to the employer "by technical right". "Featherbedding", in the classical form of a move by a top State official at the end of his career to some honorific, lucrative post, became a matter for young executives such as Roger Martin, a polytechnician, who had a "soft landing" at Pont à Mousson at the age of thirty-three. 1 3 T h i s was another reason why the politicians' decisions, entangled by the "technocracy", followed the movements dictated by the administrators; Edgar Faure, who in his

Mémoires

regards his actions in the financial sphere as very personal, seems indeed to have followed the advice of high officials of the ministry in the Rue de Rivoli. And what might one say of the role played by high officials in posts outside France? In an article published in M a r c h 1953 in the journal La Nef, Schuman wrote: " T h e fait accompli

Robert

is the great, constant temptation which

Residents General do well to resist, to the extent that they do not succumb to it". This minister was speaking as a past master, since on several occasions the Residents in situ in Tunisia or M o r o c c o acted without requesting his authorization. One particular administrative sector deserves more attention regarding decision-making power: the army. As one of the other papers deals with the military world we shall therefore confine ourselves here to stressing one essential fact for the years covered: the increasingly marked autonomy of military power vis-à-vis civil power, to the point that the legal subordination of the former to the latter was placed in doubt by many contemporaries. In fact, in the colonial territories where the army had (or still has) the responsibility of maintaining order, actual authority depended closely on the military administration. T h e State, moreover, did not hesitate to grant power to the military in charge: thus, under cover of the state of emergency in Algeria, the actual of authority was assigned to the generals. Edgar Faure, prime minister, recognizes that the distinction between state of siege and state of emergency is entirely formal; dealing with the creation of this new piece of law, he writes in his memoirs: "It was for Robert Schuman, in his capacity as Garde des Sceaux, to explain the difference existing between the state of emergency and the state of siege: the simple truth being that the term state of siege inevitably arouses the idea of war, and any allusion to war had to be carefully avoided in connection with Algerian matters. ... Since this theme could not be brought out, Robert Schuman imperturbably explained that in the state of siege exceptional powers were granted to the military authorities, which could delegate them to the civil authorities, whereas the state of emergency was exactly the converse, since the powers were granted to the civil authorities ... 12

As well as H. Bonin's book already cited, see the history of the CFAO, by Pont à Mousson.

13

Roger Martin, Patron de droit divin, Gallimard, 1984.

72

René Girault

which could of course delegate them to the military authorities!" 1 4 Censorship of the press or radio or the newly emergent television depended, to be sure, on the civil authorities, but the impulse often came from the military hierarchy. Is it not symptomatic to note the "political" role that went to generals in the choice of the Resident General in North Africa, such as Juin and Guillaume in Morocco, or Boyer de la Tour in Tunisia? To the extent that the Algerian war, especially after spring 1956, entailed a rapid increase in the number of troops " o n active service", with the movement of numerous recalled reservists to military life and now actual service beyond the legal duration of active service, the weight of the military sector in the nation became considerable. Did this mean a nation at war? It is hard to draw the distinction, since on the one hand, despite a number of "terrorist" actions in the mother country and a number of restrictions bound up with the Suez crisis, metropolitan France did not suffer the horrors of conflict, but on the other hand almost all men between 19 and 21 spent a long period under the draft, in Algeria for the overwhelming majority of cases, and were therefore separated from their families which in turn were anxious and tense. Outside times of "legal" war, it is rare for France in its contemporary history to have been so much "under arms". Accordingly, very seldom the professional military have been so much under pressure to assume broad political responsibilities. T h e decline of civil power became particularly accentuated at the end of 1957 and in early 1958. In February 1958 the general staff in Algiers decided to take advantage of the right of hot pursuit by bombarding the Tunisian village of Sakhiet Sidi Youssef without previously consulting the minister for national defence (J. Chaban-Delmas). 1 5 T h e prime minister (Félix Gaillard) covered the operation by arguing, in a debate in the Chamber, that "the army would not accept" a condemnation of this action! In April 1958, when René Pléven sought in vain to form a new government, he asked generals Salan and Jouhaud to submit a memorandum to him setting out the army's "political" line on Algeria, so as to use it in political debate; an extraordinary weakness on the part of the civil power! T h e fear of "dominant" military power in France was therefore not merely a reflex of frequently anti-militarist intellectuals. It shook many minds, and recourse to General de Gaulle in 1958 meant for many the idea that only this outstanding military figure could keep step with a military hierarchy that was exceptionally involved in political life (in June 1958, 83% of the French said they trusted the General to get the army to obey - the very fact of asking the question is in itself revealing). 1 6 14 15

16

E. Faure, Mémoires, op. cit., p. 197 (April 1955). The operation, which caused 78 dead, attacked a Red Cross lorry and sparked off a debate in the Security Council. France's international position was considerably set back. Jean Lacouture, De Gaulle, vol. 2, Le politique, Seuil, 1985, p. 448. Lacouture well shows how the General utilized this threat, even if de Gaulle himself considered that these generals were essentially "brawlers" (p. 445).

Decision Makers, Decisions and French Power

73

One might take up Jean Lacouture's conclusion in his biography of General de Gaulle: "the State apparatus, the ultimate backbone of the country, was scarcely responding any more to directives; there was a state of illdisguised dissidence". In short, the terms that would best reflect the special situation of France regarding the loci in terms of decision-making power would be those of sectoral self-determination within the bodies making up the State (or in the State's orbit) and capacities for occasional action by the top levels of the State. It was a complicated, dislocated machinery. H o w can this machinery be studied to assess its perception of French power? Let us admit without false modesty that the research done for this colloquium has been insufficient to supply here any more than sketches or working hypotheses. On the one hand, one would have to have broad access to the archives of the various administrations and ministries, to the personal documents of those involved; but the thirty-year rule for accessibility to archives, strictly observed especially for the files dealing with Algeria or Suez, prevents us at present from engaging in specific research. We are therefore left with isolated pieces of accessible documents (Paul Ramadier's archives, for instance). On the other hand, much subsequent testimony, published or collected in oral archives, is hard to use; where witnesses are writing (or speaking) thirty years later, they are, consciously or otherwise, inspired by their knowledge of the outcome of the violent upheavals that were then affecting French decolonization, change in political system, economic success, first stages of European construction, the new way of life in France. They tend to explain or justify their actions by subsequent developments; as for their state of mind at the time, it is all the harder to recreate it the faster events move. And events did move even faster during the pivotal years 1954 — 8, rapidly outdating modes of thought or intellectual references of the time. Thus, the "Munich complex" (which we shall discuss again later), which dominated French decision-makers in 1956, came to seem derisory or ridiculous from the early 1960s onwards; yet it had deeply marked French minds. In order to arrive at valid conclusions, one ought accordingly to sift writings, speeches and private letters of the times attentively, without attaching too much value to subsequent reconstructions. This is a construction that is still at its foundations. In September 1957, a British journalist, Alexander Werth, published a remarkable book, La France depuis la guerre 1944 —1957.17 This is a translation of a work published in English in May 1956, plus two long chapters dealing with the years 1955 — 7, written "hot" by someone who knew French political life well. An attentive witness — since he was living in France, having a second house in the Périgord — of the often unacknowledged reactions of 17

"L'air du temps" collection, Gallimard, preface by Pierre Lazareff.

74

René Girault

Frenchmen, Werth well identified the main moods and trends that then dominated France. O n e may take the main observations of this journalist to throw light on the reactions of decision-makers, since they often correspond to the prevailing collective mentality. Three basic notions, at the level of long term analysis, may be adopted in connection with the perception of French power by the French: 1) T h e French have "a sense of physical inferiority (which) goes along with a discreet but solidly grounded sense of intellectual superiority" (p. 11). 2) "After the 1940 débâcle, everyone began to think about France's place in the world. It is rare for Englishmen to meditate on the destinies of their country, but Frenchmen think about it a lot, in part because in 1940 France felt itself to be on the edge of annihilation" (p. 15). 3) " W h a t makes the history of France so exciting ... is that the country is, more than any other, in a constant intellectual ferment. Maurrassism, liberalism, communism, burnhamism, existentialism, neutralism, Mendesism and the many schools of Catholic thought were each centres of vigorous thought, though often disputable, and they all, under the shock of world events of the last fifteen years, produced a rich harvest of writings and of argument. Almost all the well-known French writers - f r o m Mauriac or M a l r a u x to Sartre and Camus, Aragon and Éluard — were committed, and exercised an active influence on the country's political life" (p. 22). These "structural" principles are, according to Werth, accompanied by "conjunctural" reactions, clearly perceptible in a short term perspective. Having been on the defensive, or even in permanent retreat, between 1944 and 1955 (in connection with Germany, in connection with "satellization" vis-àvis the US, and especially in connection with the ex-Empire) "a perhaps irrational feeling of national humiliation had gripped France in 1955". It led the French towards a new nationalism, "a renaissance that came about under a socialist government brought in under an electoral platform of an entirely different inspiration" (p. 570). Werth does not hesitate to write that this amounted to a "national-Molletism". H e explains this as follows: "NationalMolletism was not like German National Socialism or like Mussolini's Fascism. At the very least it involved premeditation. However, it did have something in c o m m o n with them. Just as the rise of Hitlerism had in part been determined by the humiliation inflicted on Germany with the Versailles Treaty, just as Fascism had at least in part been the consequence of the feeling that Italy had been 'steam-rollered' by the peace makers of the 1919, so national-Molletism was a reaction to the impression that France had been treated unworthily by the outside world. Since at least 1940, it had undergone numerous humiliations, and the period of defeats, setbacks and withdrawals was n o w being rejected" (p. 570). T h e failure of the Suez expedition added a further element: left in the lurch by Britain, threatened by the t w o superpowers, the French

Decision Makers, Decisions and French Power

75

arrived at the concept of a "France alone" (late 1956 - early 1957). Having become cynical, "realist", they no longer wished to take lessons in morality from states that were themselves bogged down, whether in Kenya or Cyprus, in Korea or China, in Poland or Budapest. There ensued a policy of force in Algeria, and the success of "tough" formulas, despite the opposition of a minority of "liberal" intellectuals. Indeed, some statements by Guy Mollet in the debate in the Chamber after the Suez expedition on 18 December 1956 corroborate Werth's analysis. The prime minister, who had become rather popular for having taken a risk, justified himself as follows: "What guided us, in a certain sense, was an antiMunich reflex. ... To those who make fun of the comparison between Nasser and Hitler, since according to them Egypt is too weak to endanger the country, I reply firstly that Hitler had to wait until 1939 for the understanding with the USSR that was to enable him to unleash the Second World War, while the Nasser - Shepilov entente took a lot less time". Despite the ironical comments of Paul Reynaud ("events have shown that we are no longer in the times of the Crimean War", or "to be applauded at public meetings, what you have to do at the moment is speak ill of the United States or the UN"), Guy Mollet readily recognized that France had acted without consulting the American ally, "and when the Americans asked me for the reasons for our attitude, I answered them frankly: since you would have stopped us from acting, since we no longer want to wait for you as we did from 1914 to 1917 or from 1939 to 1942" (vigorous applause). The prime minister was using "popular" historical references, for they were widely used both by the press and among ruling circles. Foreign minister Pineau, too, brought up the Munich complex, as did businessman M . Boussac. 1 8 Many opinion leaders and politicians accepted the familiar comparison between the dictator Nasser and the dictator Hitler. At bottom, the generation of leaders, deeply marked by the cowardice of the French attitude in 1939 which had led in June 1940 to the occupation and to their very minor role in the victory in 1945, was inspired by the desire to resist "in time". Even in 1948 the 1940 disaster was clouding leaders' minds, and de Gaulle's gesture of 18 June 1940 was a major reference. Ten years later, after so many overseas setbacks, after the military defeat of Dien Bien Phu in Indochina which, though distant, resounded of an admission of powerlessness, reactions were even faster, more based on a return to recent history. Even François Mauriac, a "liberal" intellectual hardly to be suspected of "nationalMolletism", sacrificed to the same altar when on 3 August 1956 he wrote in 18

In N o v e m b e r 1955, Boussac told minister C h a m a n t : "I have no interest in M o r o c c o , but I consider that for France it is as serious an abdication as was M u n i c h " . Cited by M . T. Pochna, op. cit., p. 252.

76

René Girault

his Notebook in L'Express: "I believed that diplomacy was a science based on history. What a dictator, however weak, can do to democracies, however strong, has been sufficiently drilled into us for us to know it and no longer forget it". A number of political leaders at the head of State had been members of the Resistance (Mollet, Pineau, Lacoste, among the Socialists, Gaillard, Bourgès-Maunoury and Mendès France among the Radicals, and Laniel on the Right or Chaban-Delmas and Koenig among the Gaullists, etc.). The image of a new occupation and a new abyss was present to their minds: it was necessary to act first in order not to have to pay later. It was even necessary to act fast and hard against the aggressor, the dictator Nasser, before, through his own acts and through his alliances, he could create the irreparable in the Middle East and in Algeria. There was no hesitation in declaring that it was the peace of the world that was at stake. "Saving peace means moving fast", said François Mitterrand, Garde des Sceaux, to the Council of the Republic, as another former Resistance member: "It is because we feel that the cup is running over and that the proof of it has been adequately offered and for long enough that while it is no doubt necessary, and France supports this, to have recourse to international bodies, it is no longer possible to abandon ourselves to the complications of procedure which, in the end, would lead us who knows where". 1 9 Here we may come to an initial conclusion, regarding the importance of contemporary history in shaping the mentality of French decision-makers. As far as this issue is concerned the re-reading of the speeches given by a number of politicians is quite enlightening. On the model of de Gaulle, who constantly talks of "La France" as a person, and about the history of France in depth, the decision-makers make constant references to the past. But not to all of the past. This past had its framework or its limits in the period of the Third Republic. Several reasons seem to contribute to this chronological reference. Firstly, the ongoing decolonization often led to references to a triumphant colonization, as in the fiery debate between J . Ferry and G. Clemenceau on the feat of feats of the "builders of the Empire", at the end of the 19th century and the beginning of the 20th. Thereafter the Fourth Republic, always in search of identity and strength, naturally took as its term of comparison its illustrious ancestor, the Third Republic, which had ended so badly after having lived and achieved so much. Last but not least, the "Belle Époque", the Third Republic between 1900 and 1914, often regarded as a myth, was seen as an example of the difference between a strong France, a great power, which was able to achieve the respect of the great powers, and a dominated France, forced to bow to the requests of the two great powers. J . Lacouture rightly " Cf. the essays by François Mitterrand collected in Politique,

Fayard, 1977, esp. p. 124.

Decision Makers, Decisions and French Power

77

mentions the feeling of Frenchmen towards the "international down-grading of France" and their understanding of Suez as "Fashoda to the tenth power". 2 0 The comparison could also be applied to France's place on the international chessboard. The France of 1914 had solid allies, Russia and Britain, to face the awesome Germany. The France of 1956 was alone, despite its membership in the Atlantic alliance and some supporters. There was a constant endeavour to rebuild the Entente Cordiale: even after the disillusionment of Suez, the visit of the British monarchs to Paris in April 1957 was an occasion for the government and the press to intone the "traditional" hymns to the recent past, those of previous visits such as 1939; the temptation to revive the times when the two powers of Western Europe could control the world was great. There was even an attempt to regain past glories by insisting on a "constancy" of the French genius, taste, arts and letters. However, no-one had any doubt about one thing: the French, whether leaders or public opinion, were fully convinced that they could never rely on full support from any other country in the event of an impending danger of war. 21 The hoped-for ally, Britain, was judged even by its warm supporters to be "decadent" or "subject". ("There is something reminiscent of crumbling Byzantium in this Britain in difficulties ... which has not recovered from the war and is seeking to gather its fading forces, to hang on to both America and Europe"), as P. O. Lapie 2 2 summed it up. Conversely, the friendship with the Americans was resented as a superficial one, given the umbalance of forces; the decision-makers often had the feeling of putting up with rather than wishing for cooperation with Washington. Some even suspected the Americans of evil designs, for instance of trying to take advantage of the difficulties France was meeting with in North Africa to supplant it. Thus, M a x Lejeune maintained before SFIO leaders that "the greats of the world are coming together over the head of France" and that "France will leave some spoils there, which have already been designated" (October 1955). It should be added that the incisive personality of Secretary of State John Foster Dulles, "the pawn" according to Edgar Faure, contributed strongly to the credibility of the idea of an unbearable American "protectorate"; all the decision-makers that had occasion to meet him had the same impression of facing an authoritarian "proconsul", rigid, suspicious of the French and an indisputable friend of the Germans. How hard it is to lose one's rank! The backward look encouraged pessimism. The military exaltation of Suez followed by a diplomatic failure became the major reference point of the French "decline". It was the occasion

20

L. Lacouture, op. cit., p. 448.

21

This is one of the important conclusions drawn from many opinion surveys carried out among the French. Cf. the journal Sondages, 1958, no. 1/2 p. 2. P. O. Lapie, op. cit., p. 715.

22

78

René Girault

for a new awareness excellently summed up by a cartoonist, Pol Ferjac, in a drawing published in Le Canard Enchaîné showing in the same cage the British lion saying to the Gallic cockerel, "Waterloo, those were good times!". Were French decision-makers all pessimistic and with no hope of renewal? In order to give some qualifications of the negative conception of French power, it is appropriate now to consider two other phenomena, economic renewal and European construction. On these two levels, there was ground for satisfaction, and the future seemed to open new possibilities for recovery. Drawing on the papers by G. Bossuat, P. Guillen, J . Marseille and R. Poidevin, it seems to me possible to pick up two positive assessments of French power among French decision-makers. On the one hand, particularly in 1955 when the economic position was good, but even when it declined in 1956 and 1957 because of the burden of the Algerian war, a large number of the political decision-makers, administrators and leading circles in the business world noted the undeniable capacities for recovery provided by the economic reconstruction that had started after the Liberation. The observation that national production statistics were well up led those groups to be optimistic for the future, on one pre-condition: there must be an end to the crushing burden of the costs of colonial wars. On the other hand this meant forgetting the "nationalist" prospect of France "alone", in favour of becoming part of a united Western Europe, particularly in certain economic sectors; and as long as France could seize the opportunity of being the best place to organize European construction on the Continent, the future could be looked at with confidence here too. But once again a decided (and decisive) choice had to be made: there was a need to "break with previous habits", "make the sacrifice of national pride" (Robert Schuman). In fact not all French decision-makers followed the same line of reasoning; not all were anxious to go in such a direction. From the (relative) distance given to the historian, one can today better perceive the opposition between the "modernists" and the "traditionalists" (using the terms of J . Marseille). The former seemed prepared, with caution, to build new political relationships with the former colonial territories, to organize trade flows differently, to face some international competition, to sacrifice the commercial defence-lines of custom barriers and discriminatory measures, to envisage common European rules. French power would then be something different: it would be founded on new international relations, on a different mentality. One might call this a "new geo-strategy". The second group held tenaciously to one essential concept: French power depended on the maintenance of imperial preference, that is, a system where, economically defended by protectionism, the mother country took the advantage of an economic sphere on the scale of the former Empire, and where, politically, France, linked with Africa, could occupy an

Decision M a k e r s , Decisions and French Power

79

outstanding position in international relations by constituting a great NorthSouth axis (Dunkirk to Brazzaville). Admittedly, in the view of this latter group, a few minor adaptations were admissible (autonomy for some African territories, incorporation of France in some security pacts), but fundamentally their geo-strategy remained the one that had been the foundation of French strength before the war. Under the pressure of day-to-day constraints, contemporaries often lacked the time to properly assess what was at stake, and to logically establish the ways and means of arriving at set goals. Even General de Gaulle, who had withdrawn from public life between 1955 and 1958, seemed more able to adapt to the circumstances than to guide the course of events. 23 It would therefore be dangerous for historians to make out as rational, organized or meditated certain choices of decision-makers taken "on the spot", under the pressure of events. However, the debates reported by J . Marseille in connection with "Cartierism", 2 4 like those reported by P. Guillen or G. Bossuat in connection with the advisability of creating Euratom or accepting a vast Common Market, show that decision-makers were then aware of the necessity of choosing. The decade that had just elapsed since the Liberation, which had allowed the restoration — or reconstitution or reconstruction — of France (these various words conceal a debate on the meaning to assign to the economic effort made during those years), 25 was a time long enough to draw a balance sheet, and once this balance sheet was drawn, was it not natural to make choices? Had Pierre Mendès France not made this word choose into an axiom of his policy, applied particularly during his period as prime minister? 26 But these choices were largely determined by the development of the world situation. "Once the Korean war had stopped, it was clear that the wind was blowing everywhere one set oneself to catching it ... the end of shortages, despite the persisting risk of international conflicts, marked the start of an unprecedented boom for the countries capable of taking part in it ... the new start, to which few influential people were hostile, called for structural progress in the economic apparatus ... seen from the administration, where the major initiatives were still being taken, rather than from Parliament, the whole world seemed to be moving in the same direction," as F. Bloch13

With sybilline or contradictory utterances, de Gaulle kept his interlocutors in doubt as to his intentions on the future of N o r t h Africa, then the vital question. Cf. J . L a c o u t u r e op. cit. One a c t o r in the economic sphere at the time, F. Bloch-Lainé, stresses in La France

restaurée

the limits of everyday action and the possibility of options. 24

Cartier, a journalist with Paris-Match,

felt it was t o o costly for the French to keep unprofitable

African territories. See p. 17. 25

On this see the book by F. Bloch-Lainé and J . Bouvier, op. cit.

26

Was Mendès France not t o o rational to succeed in government? F. Bédarida and J . P. R i o u x , Pierre Mendès

France

et le mendèsisme,

F a y a r d , 1986.

80

René Girault

Lainé testifies.27 One may in fact note that economic leaders, whether liberal or interventionist, whether still servants of the State (like Bloch-Lainé, placed at the head of a committee of regional development and therefore a dispenser of investments, or Ambroise Roux, director at the Ministry of Industry when J. M. Louvel was minister) or entirely over in the private sector (like Jacques Frances, who used the "runts" of the national coal companies to set up audacious, innovative enterprises in the manner of a "capitalist" entrepreneur), or again the future president of Paribas, Jacques de Fouchier, who shook up French banking,28 were setting in motion new experiments which would soon explain why France was able to draw the best from the twenty years of real growth that were to follow. There is still a lack of sufficient scientific work to move beyond the stage of hypothesis, but the years 1954 — 8 do seem to have been those of a qualitative take-off of French capitalism, remarkable not only for a rise in output, but particularly for changes in the know-how of heads of firms. During these years, one current issue seemed to dominate the debate: the process of decolonization. Ought one, in economic options, to favour the exEmpire, or turn elsewhere? The realists knew well that it was impossible to run with the hare and hunt with the hounds. Where, then, to invest in the broad sense of the term? J. Marseille rightly emphasizes a fact which is not a matter of interpretation: as from 1954 the fall in private investment in the exEmpire was "manifest"; "metropolitanism" gained the day, and the "abandonment lobby" (Thierry Maulnier) triumphed. "Cartierism" went well beyond the figure that gave it its name; it broadly affected industrial and financial circles. Only the case of Algeria can be regarded as more complex, since it involved a human factor that made the option to withdraw delicate, plus an oil factor which at that time of the sparkling take-off of oil seemed capable of assuring some independence for France. However, Raymond Aron showed in 1957 that "the independence of Algeria was made essential by demographic or economic factors just as much as by the demands of the guerilla that had been unleashed" (La Tragèdie Algérienne). But this was still an isolated voice. This attitude of "fall-back" did not resolve the problem of Algeria in political terms, in the relation between the civil power and the military power, but the orientation towards other shores, towards colonial disengagement, had great weight for the future among business circles. Did these retreats from Africa (albeit measured), debated and diverse as they were, push towards Europe? Things were not so simple. As G. Bossuat 27 28

La France restaurée, op. cit., p. 2 6 1 - 2 6 2 . See the analyses of H. Bonin, Suez, op. cit., p. 246 ff. How the Compagnie Universelle de Suez was able to adjust to its eviction from Egypt and to create a powerful company with a mastery of technical innovation says much about the qualitative renewal of French capitalism at the time.

Decision Makers, Decisions and French Power

81

and P. Guillen show and as the proceedings of the Rome colloquium (March 1987) confirmed, the conversion to Europeanism was partial, uncertain and dubious. While a number of politicians were convinced "Europeanist" (Schuman, Mollet, Pineau, Faure), strongly supported by resolute administrators (P. Marjolin, P. Uri, A. Verret, E. Noël, L. Armand, E. Hirsch), many political leaders hesitated, many business people dragged their feet or were more than reserved. Basically, two factors operate to explain this dominant hesitancy in France: since "making Europe", after the political failure of the EDC, meant first of all achieving economic union, there was a need to be sure that the French economy had sufficient strength to find a meaningful place in it. After having been sick for so long, did the "restored" France have the capacity to face its European rivals, its neighbours? Was the undeniable reconstruction only a show? One may, it would seem, put forward as a working hypothesis that the majority of decision-makers was persuaded that French power at the time lacked industrial or commercial foundations, as always, and that its former banking power (pre-1914), bled by a massive export of capital, had totally disappeared (was reconstruction not due to American credit?). What, then were the stable bases on which one could launch oneself into very competitive markets? Contemporaries became aware only laggingly of the radical change in the French landscape; it is very often true that the force of habit prevents perception of the new. A second fundamental factor was that making Europe meant the creation of new links with Germany. Since Britain was continuing to choose the large scale, the Commonwealth, the Atlantic, one thing was clear: European construction was in great risk of being crippled and useless without an agreement with Germany. But by 1955 — 6 the West German economic performance seamed striking to the Frenchmen. Better than France, its neighbours on the other side of the Rhine had remarkably restored their economy. French experts and the press wondered as to the causes of the "German miracle": massive support from the Americans, the manipulative genius of the liberal Erhardt, German capitalism's sense of organization, the absence of military expenditure, cooperation between unions and employers, etc. No-one doubted the persistence of the number one factor of traditional German power, its industrial and commercial power. H o w was this power at the heart of Europe to be controlled? While the 1945 military defeat had deprived Germany of its military strength and the division into two rival Germanies was reassuring, this situation was regarded as provisional. German rearmament was a fait accompli after signature of the Paris agreements at the end of 1954; was it even possible to prevent German access to atomic weapons, since some were thinking of not using German economic power to speed up French atomic power? Could reunification not come about at the cost of neutralization? Schuman felt that

82

René Girault

it was in any case, "whether desirable or not", inevitable. 29 All of a sudden, fear of this over-powerful neighbour became stronger. We do not have enough analyses of decision-makers' ideas about Germany around 1954 — 8 to present a proper balance sheet here. However, judging by the reactions of someone like Robert Schuman, who was a supporter of Franco-German conciliation and an admirer of the Rhinelander Adenauer's work, the anxious attention paid by French leaders to the new Germany can be assessed; it was something like the Great Unknown, too well known yesterday to be approached without prejudice today. Was the wish expressed by the Germans, to peacefully become part of a united Europe, sincere? Was it not a ruse aimed at gaining time? French politicians' wariness about Germany was real despite the multiplicity of bilateral meetings organized both abroad and in Paris: like public opinion, decision-makers still retained the memory of a fairly recent past, that of Nazism, which for three-quarters of people surveyed in July 1954 "could recur" in Germany. 30 Until 1956 the Saar question darkened Franco-German relations. While one may remark some sort of Anglophilia in Mendès France and Mollet, no French political leader can be classed as "Germanophile", especially not de Gaulle who, until his famous talks with Adenauer in September 1958, was regarded as very remote from Germany. Whether from reason or from interest (securing financial contributions or technological support) some were inclined to forget the past and were surprised by Adenauer's good will at the time of the decisive debates over the creation of the Common Market (late 1956 - early 1957). The relative German restraint at the time of Suez was welcomed; but undisputably, ten years after the end of the war, Germany's image was still largely negative. There was a wish to be sure that Germany had changed, and this conviction seemed to be lacking. Could Europe, then, be made? There were other political reasons to explain such hesitancy: did France have the capacity to safeguard its independence, that is, the capacity to mobilize psychological forces, since its economic forces were uncertain, and its military forces were bogged down in colonial conflicts, particularly in Algeria? Where were to be found new criteria for the management of power that could be reassuring, allowing the serene contemplation of becoming part of Europe with a pre-eminent position? None in France doubted the continuity of French cultural power. Could it make up for some shortcomings? The country of Mauriac (Nobel Prize for Literature, 1952), or Camus (Nobel Prize, 1957), of Malraux, of Sartre, of Aragon, acquired a universal reputation through these writers, especially since they were involved in public life. "We must be aware that we cannot escape 25

30

See the analyses by Raymond Poidevin, Robert merie Nationale, 1986, p. 394 ff. Cf. the analyses of the magazine Sondages,

Schuman,

homme

op. cit., p. 70 ff.

d'État 1886-1963,

Impri-

Decision Makers, Decisions and French Power

83

the common misery, and that our only justification, if there is one, is in speaking out, to the extent of our means, on behalf on those who cannot do so" (Camus, speech in Sweden, October 1957). French culture still counted in the world, as was shown by the choice of Paris as capital for Unesco. Consciously, through that organization, the French government sought immediately after the Suez failure to regain part of its influence, especially in the Third World. At the New Delhi conference in November 1956, P. O. Lapie made many gestures of goodwill and even engaged in "demagogy" in connection with the budget vote for the organization, and finally used the stillexisting influence of the French language to regain for France its traditional authority within Unesco. 3 1 Could this cultural authority help France in the ferocious game of Power? One may be allowed to doubt it. This " m o r a l " force ought at least to be underpinned by the appearance of a stable political regime. But from this point of view, contemporaries, whether foreigners or French, knew well that the Fourth Republic was discredited by an exhausted political system. Without necessarily following the views of General de Gaulle, who repeated ad infinitum that France would remain powerless unless there was a thorough change of regime, it is appropriate to stress the growing impression of political "impotence" among almost all leaders. T h e renewal brought by the Mendès France government, the apparent stability of the Mollet government (it lasted more than fifteen months) did no more than stave off awareness of the harmfulness of the political system. From President of the Republic René Coty to senior officials, everyone felt that a reform of the executive would be necessary in order for the potential for a new France, coming into being with the reconstruction, to burgeon forth day by day. T h e Algerian events of M a y 1958 were to lead to the overthrow of the regime; the political class had scarcely any illusions as to previous political impotence, even those who like Mendès France or Mitterrand subsequently refused to join de Gaulle. Perhaps it is here that we come to the essential point of contemporary perception of French power, especially among decision-making circles: political chaos was preventing France from occupying the position that it could have held. But what was that position? Ought one to conclude with Antoine Pinay, mentioning the behind-the-scenes struggles of Marcel Boussac, that: " T h e r e was a conviction that France could still be strong enough to fight alone. I myself believe that that is no longer possible. If I was a supporter of the Rome treaty or of Europe, that was because I am well aware that if we are caught between the two giants of the last war, we shall be crushed, while if we are united, we can talk as equals to equals". 3 2 The dictates of the two superpowers in November 1956 no doubt considerably helped Frenchmen to forget their nationalism. 31

P. O. Lapie, op. cit., p. 6 9 9 - 7 0 3 .

32

M . F. Pochna, op. cit., p. 239.

The Alternative Prospect: The Plan for a Neutralized United Germany by Manfred Overesch

"What will lie between the white snows of Russia and the white cliffs of Dover?" Churchill put this question about the political and territorial future of Europe and its States two months before the end of the Second World War. From the second half of the 1950s onwards his question was considered by those States that regarded the status quo reached by then for the affirmation of their existence as having been answered by history: a Europe divided into two camps lay between the white snows of Russia and the white cliffs of Dover, consolidated by the principles of coexistence. Germany, the geographical centre of this Europe, and the political centre too in the Middle Ages and once again between 1871 and 1945, had to repeat the division of Europe in exemplary fashion in its own split. When on 7 September 1950 West Germans for the first time celebrated a national anniversary — of the meeting of the first German Bundestag one year earlier — Federal President Heuss complained in his speech that the "historical melody of Germany had been broken off". 1 His resigned assessment of German continuity was contradicted at the time only apparently by a widespread nostalgia in circles of public and published opinion in the Federal Republic. To the question of the Allensbacher Institute for Demoscopy, "Which great German has in your view done the most for Germany?", in late February 1950, 41% answered with Bismarck (followed well behind by Frederick the Great at 8%). 2 But this opinion survey did not express more than an emotionally supported reminiscence of past political leading figures, at any rate not a political programme regarded even by the 41% as achievable by the Federal Govern1

2

Verhandlungen des Deutschen Bundestages. Stenographische Berichte. 1. Wahlperiode 1949 ff., p. 1210: Theodor Heuss vor dem DBT am 7.9.1950. Manfred Overesch, Die Deutschen und die Deutsche Frage, Hannover/Düsseldorf 1985, p. 133: Allensbacher Institute for Demoscopy: "Welcher große Deutsche hat Ihrer Ansicht nach am meisten für Deutschland geleistet?", 20 February 1950. Der größere Zusammenhang in: F. Noelle - E. P. Neumann. Jahrbuch der öffentlichen Meinung 1947 - 1 9 5 5 , Allensbach 1956.

The Alternative Prospect: The Plan for a Neutralized United Germany

85

ment. Even before a Federal German foreign policy was possible, its course was already fixed: participation in the Western community of values and destiny through political integration into the ambit of the Western democracies. Conceptions from the nebula of German 19th-century politics were regarded as unrealistic and inappropriate. The manifestation of political objectives of Germans in the G D R at the time was different. In Summer 1950 the RIAS held a competition on the theme: " T h e next step towards German unity in freedom". 19,764 entries reached the Berlin broadcasting station, mainly from the G D R . 3 Almost all advocated a dynamic policy oriented primarily towards reunification, even at the cost of neutrality. In the Bonn Federal Ministry for All-German Questions, where a representative sample of the entries was sifted, the officials noted with amazement the G D R population's crude and very specific conceptions of action: "running like a red thread through almost all the entries is the call for a move by the Federal Government and the Bundestag to Berlin." 4 This widespread wish among the population of the G D R was confirmed one year later when the third Evangelical Church Assembly was held in Berlin on 23 - 27 July 1951 under the motto "Yet are we all brothers", and attended mainly by inhabitants of the G D R . Official (West) German policy faced from the very beginning the problem of having both conceptually and operationally to operate on two tracks, that is to aim, in accordance with the political objectives of the preamble to the Bonn Basic Law, at reunification of Germany, and at the same time to guarantee the security of the West German State founded on a basis of freedom, democracy and the rule of law, through its integration in a Western European union. This process of integration into Western Europe had already been largely prepared immediately after the Second World War. Indeed, the efforts at a resumption of humanism and Christianity, the climb back up, from the Germanic abyss that had for twelve years been declared a model, to the heights of the Acropolis, the Capitol and Golgotha, the whole breadth of a cultural European Renaissance perhaps symbolically summarized in the seventh-centenary celebrations of Cologne Cathedral in August 1948, can be understood as a direct preliminary to the European union which was desired economically, and especially politically. 5

3

"Der nächste Schritt zu deutscher Einheit in Freiheit", Preisausschreiben des RIAS Ende Juli 1950, reprinted in: Overesch, p. 137.

4 5

Bundesarchiv Koblenz (BA) Β 137/1056: Aktennotiz Weninghausen 1 2 . 1 2 . 1 9 5 0 . From the first new publications on the German book market after the Second World War

-

Werner Schneider, Das Unzerstörbare, Freiburg, November 1945, and Bruno Snell, Die Entdeckung des Geistes. Studien zur Entstehung des europäischen Denkens bei den Griechen, Hamburg, February 1946 -

until Ernst Robert Curtius's epoch-making work, Europäische

Literatur und lateinisches Mittelalter, Berne, summer 1948, there stretches a whole range of literary figures (including, and perhaps especially, in the reviews, e. g. "Die Wandlung", "Abendland", "Horizont", "Das goldene Tor") advocating a Renaissance of the community

86

Manfred Overesch

The first banknote, for five deutschmarks, issued on its own authority in March 1950 by the bank of the German Länder, the later Deutsche Bundesbank, for the first time with its directors' signatures, had as its design the rape of Europa, the Phoenician king's daughter, by Zeus transformed into a bull. 6 This mythologically transformed transfer of culture from the Eastern Mediterranean to Crete, perhaps 3500 — 4000 years ago, counts as the birthdate of European history. Its pictorial resumption in 1950 was the expression of a political will. The Europe portrayed in these symbols of Greek mythology was clearly determined in its political shape by the canon of values of Western history. In the outcome of the Second World War, that meant that it could only be a Western Europe. Adenauer (30 October 1945) called for the integration of the West German State into this sort of Europe, and he constantly pursued this. 7 He certainly must have felt he had been understood properly when the former British commander for North-Rhine Westphalia, General Alexander Bishop, congratulated him on his election as Federal Chancellor on 19 September 1949 with the words: You have always m a d e a great impression on me by your wide-ranging experience, your statesmanlike wisdom, your h u m o u r and a b o v e all your unshakable a t t a c h ment to certain principles, which although they were first stated s o m e t w o thousand years ago, are still t o d a y the only guarantees through which the world may find peace, reason and happiness. 8 of Western peoples characterized by Christianity and humanism. On this cf. now: Handbuch der Geistesgeschichte in Deutschland nach Hitler 1945 bis 1950, so far published: Christoph Cobet (ed.), Einführung in Fragen an die Geschichtswissenschaft in Deutschland nach Hitler 1945 bis 1950, Frankfurt 1956. On the 700th centenary of Cologne Cathedral on 14/15 August 1948 see Hist. Archiv der Stadt Köln, Bestand 2 No. 1483: Nachrichtenamt der Stadt Köln 14/15 August 1948. Particularly noteworthy is the book "Gleichgewicht oder Hegemonie Betrachtungen über ein Grundproblem der neueren Staatengeschichte", published around this time by the historian Ludwig Dehio (Krefeld 1948). Dehio introduced it with a quotation from Tacitus, Agricola 3 (1), in which the Roman historian commented on the end of the period of terror with the death of Emperor Domitian: "Nunc demum redit animus". 6

The weekly "Die Zeit" published on 3 February 1949 a caricature of Europa significantly changed in line with the human priorities of the time: under the heading "Europa on the Bull 1949", the king's daughter could be seen mounted on an American corned-beef tin.

7

The basis for his foreign policy programme remains his memo to Burgomaster Weitz of Duisburg of 31 October 1945: " M y attitude to the foreign policy situation", containing the key sentence: "The part of Germany not occupied by Russia is an integral part of Western Europe", reprinted in Overesch, p. 65. Hans-Peter Schwarz calls this "a sort of theoretical basis for his future foreign policy", idem, Adenauer. Der Aufstieg: 1876 bis 1952, Stuttgart 1986, p. 465. A noteworthy early phrase of Adenauer's (March 1946) is one in a letter to Sollmann: "Asia is reaching to the Elbe", which he repeated in many variations, e. g. his formulation on 16 December 1958 that the Federal Republic of Germany had a watching post "on the extreme Eastern frontier". K. Adenauer, Teegespräche 1955 bis 1958, 1986, p. 319 (on this see G. Niedhart's article in this volume).

8

Quoted in Rudolf Morsey (ed.), Rhöndorfer Gespräche vol. 3: Konrad Adenauer und die Gründung der Bundesrepublik Deutschland, Bonn 1979, p. 18.

87

T h e Alternative Prospect: T h e Plan for a Neutralized United G e r m a n y

The conceptual and operational double track of German policy clearly takes second place in Adenauer's chancellorship to the priority for West European integration policy followed by him firmly and unconditionally. The Chancellor had many supporters in this, in his own ranks in the CDU, but also, for instance, early on, in Thomas Dehler. This combative liberal-democrat, later a fierce opponent of Adenauer, specifically on German policy, on the eve of adoption of the Basic Law by the Parliamentary Council, called on the West German population not to reject the decision in favour of the West now, because of the Soviet threat ("Ohne Dich?"), and dream of an "Idyll of German neutrality": Is t h e r e a n e s c a p e in t h i s s i t u a t i o n f o r G e r m a n s i n t o ' p o l i t i c s w i t h o u t m e ' ?

Can

they keep outside o f w o r l d tension? T h e B o n n constitution already provides the a n s w e r . It m e a n s t h a t a G e r m a n y f r e e f r o m R u s s i a n p r e s s u r e is r e o r g a n i z i n g itself nationally,

with

a bleeding

heart,

without

the

German

East,

and

integrating

politically and e c o n o m i c a l l y into the Western c o m m u n i t y . W e m u s t be a w a r e that this m e a n s t h a t t h e h o p e f o r t h e idyll o f G e r m a n n e u t r a l i t y h a s b e e n a b a n d o n e d . 9

It was just this tempting idea of German neutrality that then, in 1949, as in the years immediately preceding and following it, acted for Adenauer's German political opponents as the slogan for a different, deliberately all-German course. This course was advocated from within the Federal Government by ministers Jakob Kaiser and Gustav Heinemann, 1 0 and outside the cabinet by former diplomats (Rudolf Nadolny, Walter von Dirksen) who produced aides memoires, academics (Alfred Weber, Karl Geiler), who founded action committees, or famous journalists (Paul Sethe, Rudolf Augstein), who came out with press articles and other publications. They all reversed Adenauer's scale of priorities (freedom, security, sovereignty, reunification), placing Germany's reunification first. As the alternative to Western European integration of a West German State, advocated by the Federal Chancellor, they opted for an all-German State in guaranteed neutrality, outside the alliances. The spectrum of alternatives became very broad in programmatic detail in the late 40s and early 50s. In March 1951, when most of them could be briefly brought together in a "German congress", there were 35 individual organizations. 11 The best-known up to then, the "Nauheimer Kreis" founded ' Dehler, " O h n e Dich?", in "Freie Deutsche Presse" 7 . 5 . 1 9 4 9 , cit. in: Friedrich Klingl. " D a s ganze Deutschland soll es sein!" T h o m a s Dehler und die außenpolitischen Weichenstellungen der 50er Jahre, Munich 1987, p. 4 1 . 10

Werner Conze, J a k o b Kaiser. Politiker zwischen Ost und West 1945 - 1 9 4 9 , Stuttgart/Berlin/ C o l o g n e / M a i n z 1969; Diether Koch, Heinemann und die Deutschlandfrage. With a foreword by Eugen Kogon, Munich 2nd ed. 1972.

11

Rainer Dohse, Der dritte Weg. Neutralitätsbestrebungen in Westdeutschland zwischen 1945 und 1955, H a m b u r g 1974, p. 13 and 100 ff.; s u m m a r y table p. 15. See also Alexander Eisenreich, Die österreichische " i m m e r w ä h r e n d e " Neutralität im Urteil der Bundesrepublik Deutschland 1955, ms. Magisterarbeit H a m b u r g 1986.

88

Manfred Overesch

by Ulrich Noack, had already gone public on 5 December 1948 with a "call for Germany's salvation by neutralization". 1 2 What was common to the heterogeneous multiplicity of neutralists was a number of philosophical, moralpacifist and liberal-national themes. But they all also lacked the viable elements of an all-German neutrality achievable in security policy terms in view of the world-wide bipolar antagonism that was being established. With the powers striving towards a quite new "balance of power around the world" (Gustav Stolper 1947), the search for an "idyll of German neutrality" (Thomas Dehler 1949) had to look anachronistic. Nevertheless, the maintenance of German unity could also be understood and defended as a political objective sui generis. The Federal German public, still by no means free in 1950 from the vision of a Bismarckian Reich, was split in 1951: 36% were in favour of all-German neutrality, 30% for a Western alliance, and the remainder were undecided. 13 The alternative neutralists received a powerful motivating impetus from the Germany policy activities of the GDR in the early 1950s. After many propaganda campaigns by the SED, among them both the FDJ Whitsun meeting in Berlin (East) and the so-called first German National Congress convoked on 26 August that year, and after internal agreement by the Easternbloc States at the Prague Conference of foreign ministers on 20 — 21 October, the GDR proposed to Federal Chancellor Adenauer through Grotewohl in an official letter of 30 November 1950 the convocation of a balanced all-German constitutive council, which could also "prepare the conditions for holding allGerman elections to a national assembly". 14 This very convoluted offer, hedged about with conditions, for all-German elections, mentioned at the end of the letter, went at least some way towards taking account of the basic position of the Federal Government stated in Adenauer's government declaration of 22 March 1950 as the absolute precondition for any all-German move: the holding of free all-German elections to a national assembly. 15 It is interesting to note that after only ten months the SED, despite massive resistance in its own ranks, 1 6 made the now unconditional proposal 12

Ulrich Noack, Die Nauheimer Protokolle. Diskussionen über die Neutralisierung Deutschlands. Die ersten drei Tagungen des Nauheimer Kreises August, September, Dezember 1948, Würzburg 1950. Der "Aufruf zur Rettung durch Neutralisierung Deutschlands" ibid. p. 1 9 0 - 1 9 2 . " Dohse, p. 196, note 142. 14 Otto Grotewohl to Konrad Adenauer, 30 November 1950, reprinted in: Overesch, p. 142. 15 Federal Government Bulletin, 22 March 1950. The initiative had been taken by American High Commissioner McCloy in his press statement of 8 February 1950, in which he suggested all-German elections as the right way towards reunification. 16

Walter Ulbricht declared on his return from a trip to Moscow at an SED Politbüro meeting

The Alternative Prospect: T h e Plan for a Neutralized United Germany

89

on 15 September 1951 in a letter from People's Chamber President Dieckmann to Bundestag President Ehler that "elections to a German national assembly are urgently necessary and possible, that such elections must be carried out on the same terms for all Germany, with the freedom and equality of the person and equal freedom of action for all democratic parties and organizations being granted and guaranteed for all citizens". 17 This unexpected and farreaching proposal from the GDR failed in its result because of the differing conditions associated by East and West with the holding of such elections. While Bonn insisted on elections supervised by U N O , East Berlin insisted on supervision by the four victorious powers. 1 8 At the culminating point of the debate on this offer by the GDR, Joseph Wirth, often active in leading positions in the Reich government during the Weimar Republic, as finance minister ( 1 9 2 0 - 1 ) , minister for the interior (1930—1) and Chancellor (1922/22) also spoke, following an exploratory trip to the GDR made on his own account. His written summary of his "trip behind the Iron Curtain" (subtitle: "The common path for Germans to unity — or to war") 1 9 in no way corresponded with the reputation that this centrist politician had once possessed. His political assessment was unreflecting: "In the East of our fatherland I have found a clear, firm will for a German State and therefore for the nation. This was in the Eastern government, and in the people in the East" (p. 6), and his assessment of the SED as a reliable "coalition partner" (p. 11) for the West was blind. His advice: "The competition of goodwill and ability for the best of the tasks set is open to every individual party" (ibid.) was unrelated to the political reality east of the Elbe. It was not only his fellow countrymen from Baden that said of this Freiburg man that he had become as red as a Black Forest ham. His political memorandum remained unconsidered in the Federal Ministry for All-German Questions. The press of course paid much attention to Wirth in central Germany, but rather pooh-poohed him in the West. Someone to be taken more seriously at the time was Gustav Heinemann. His departure on 9 October 1950 from the Federal cabinet, to which he on 30 December 1950: "We must not only break West Germany out of the Western bloc, but, what is much more important for a single Germany, bring it over to amalgamation with us, with w h o m it is linked by language, history, economy and culture. The slogan for the coming months must be the unity of Germany. At all costs we must arrive at a joint negotiating body for all of Germany, though of course never at the cost of general, free and secret elections." Agent's report on Ulbricht's statements after a M o s c o w trip to the SED Politburo, 30 December 1950, in: Overesch, p. 146. 17

Johannes Dieckmann to Hermann Ehlers, 15 September 1951, ibid. p. 158 f.

18

O n this see the archives of the Federal Ministry for All-German Affairs, in: ΒΑ Β 137.

" Josef Wirth, Die Reise hinter den Eisernen Vorhang. Der gemeinsame Weg der Deutschen zur Einheit see ibid.

oder zum Krieg, February 1951, in: BA Β 137/1344. O n the press debate on Wirth

90

Manfred Overesch

belonged as minister for the interior, was only a gesture of opposition, justified personally by his increasing intolerance of Adenauer's authoritarian conduct of office, and objectively by his opposition to any West German re-militarization. The resignation was not yet a programmatically constructive move. Heinemann made this only later. His road from the foundation of the "Emergency Association for Peace" (21 November 1951) via the "All-German People's Party" (20 November 1952) to the "Move to Referendums", 2 0 constituted by the "All-German Campaign" of trade unions, Social Democrats and Church representatives on 29 January 1955 in St. Paul's Church, Frankfurt, largely prepared and led by him, marked in its three stages the increasing organizational and substantive fleshing-out of an alternative German policy that many could follow. Its objective was seen by Heinemann as the reunification of Germany introduced by secret elections, which should be protected by "participation on an equal footing ... in a collective security pact for Europe under the United Nations": Germany for others and others for Germany. 2 1 Enough has been written on Heinemann's alternative Germany-policy. The essential feature in it was rejection of simple all-German neutrality through the proposal for a collective security pact for Europe (similarly advocated by Fritz Erler, the SPD security policy spokesman). There had been fruitful effects on this re-accentuation of neutrality policy since 1952 by FDP Bundestag member Karl Georg Pfleiderer. In his Waibling constituency, Pfleiderer came before the public on 6 June with the political recognition that in solving the German question the Soviet Union could not be deprived of its prize as victor in the Second World War. 22 Consideration for its political, economic and particularly military strategic interests in central Europe required a bloc-free united Germany, on the western and eastern edges of which the Allies could no doubt for a while maintain bridgeheads, but which would otherwise have to be guaranteed by national forces of its own. The "Pfleiderer Plan" which developed out of this speech, presented on 2 September 1952, was the alternative to the official government line most discussed at the time by politicians and the public. Let us here note only marginally, for reasons of chronological consistency, a proposal that was perhaps not dissimilar in political objective but quite different in approach, namely the one made by Federal minister Kaiser two days after Pfleiderer's Waibling speech on 8 June 1952 at the Federal delegates' congress of the Association of Baltic Germans in Würzburg. Kaiser suggested

20

Koch, p. 446.

21

Letter from Gustav Heinemann, 1 2 . 1 1 . 1 9 5 4 , cited in: Koch, p. 442.

22

On the context see Hans-Peter Schwarz, Die Ära Adenauer 1949 bis 1957, Stuttgart 1981, p. 159, H a n s Buchheim, Deutschlandpolitik 1949 bis 1972. Der politisch-diplomatische Prozeß, Stuttgart 1984.

T h e Alternative Prospect: T h e Plan for a Neutralized United G e r m a n y

91

that diplomatic activities be supplemented by calling into being a "genuine people's movement", "to give living expression to the whole nation's wish for restoration of our unity and freedom". 2 3 This suggestion led on 14 June 1954 (significantly, two years later) to the foundation, then in Bad Neuenahr, of the "People's Movement for Reunification", which became, and remained, known only through its secondary title, "Kuratorium Unteilbares Deutschland". One should, however, consider here, instead of the history of this People's Movement which remained politically ineffective, a memorandum which firstly stands out both for its subtle analysis of the historically created political options for the Allies, consolidated by the course of the Second World War, and for the boldness of the political plans for Germany it derives therefrom, and secondly temphasizes, through its fate of remaining unnoticed and indeed without influence, the unconditional dominance of the German policy advocated by Adenauer, pushed through against all alternatives. Its author, Richard Meyer von Achenbach, a diplomat and eastern expert in Berlin's Wilhelmstraße, until his resignation, forced by Hitler on 19 December 1935, offered Walter Hallstein, since 1950 secretary of state in the office of the Federal Chancellor and since 1951 for foreign affairs, a memorandum on Germany policy during a conversation on 29 October 1952. Meyer von Achenbach was instructed to produce it and did so with the title "Ideas on a constructive German policy towards the East" the following year, and submitted it to Hallstein on 10 January 1954. 2 4 He soon received negative reactions, initially from subordinate ministerial officials (27 February 1954 from Bargen, 12 March from Bräutigam) until on 22 March 1954 von Brentano wrote to him on behalf of Hallstein that his memorandum was "in crass contradiction" with the Federal Government's policy. 25 Why? The diplomat Meyer von Achenbach raised two basic questions: 1. How can a free Germany be created? 2. How can security problems for East and West be solved? Unity and freedom for Germany and security for German's neighbours were the criteria also given priority in the Allied debate on Germany between 1952 and 1955. If both options are to be combined — and that must be done according to Meyer von Achenbach if German unity is one's priority - then the basic percpetion must be that: "Roles have not been assigned so as to give the West the decisive trump cards" (p. 30).

23

Kaiser's speech to the Deutsch-Baltische Landsmannschaft in Würzburg on 8 June 1952, in: BA N L Kaiser 230.

24

Richard Meyer von Achenbach, Gedanken über eine konstruktive deutsche Ostpolitik. Eine unterdrückte Denkschrift aus dem Jahr 1953, ed. by Julius H . Schoepe, Frankfurt 1986.

25

Ibid., p. 7 ff.

92

Manfred Overesch

The Soviets, as the happy possessors of important geo-strategic, political and economic positions in Central Europe and particularly in the GDR, could not be forced from their positions without a compensating gain. The offer would at least have to guarantee security against an Allied attack in Europe. For such an attack it was only infantry contingents made available by the Germans that could in Meyer von Achenbach's opinion be used; only these were taken into account by the Soviets. The British, the French, the Italians or the Benelux States were not, for various but ultimately equally objective reasons, a reliable military potential for the US in Europe. Even after the explosion of the first Soviet hydrogen bomb on 12 August 1953,26 for Meyer von Achenbach this calculus of military security continued to be a priority for the Soviet Union. Accordingly, any German policy seeking reunification had to take this initial position of Moscow's into account, that is, find means and objectives that could make a change in the status quo attractive to the Soviet Union by maintaining its advantage. Meyer von Achenbach saw the solution only in military neutralization of an all-German State: "The military neutralization of united Germany would seem to be a sine qua non for the Soviet Union in connection with restoration of German unity" (p. 34). But the military neutrality would have to be underpinned by political neutrality. The details of the German policy programme defined by this key element are as follows in Meyer von Achenbach's summary: 1. Free elections, 2. Formation of a free all-German government with fixing of its alliance-free status with regard to both West and East (renunciation of treaties), 3. Removal from the East zone and the West zones of all foreign military associations and offices and all foreign organizations and authorities, 4. Creation of a German national army on guidelines agreed among the four powers, 5. Regulation of the German eastern frontier subject to later change by treaty, 6. Conclusion of a guarantee treaty among the four great powers and united Germany on the integrity of the territory of the German Republic. 27

The diplomat no doubt rightly assessed the tug-of-war in the period from 1950 to 1953, particularly in the debate on the GDR initiative of 1950—1 and Stalin's notes of 1952, in noting as to the principle for potential progress in Germany-policy: "The Federal Republic's attitude is largely decisive" (p. 22). His hope, however, looks more of an over-estimate: "Germany might in many respects become a mediator between East and West" (p. 54). This was the old

26

27

Paul Sethe at the time immediately saw this explosion as the turning-point of Soviet policy to Germany, Europe and the US: idem, Zwischen Bonn und Moskau, Frankfurt 1956, p. 82. Schoepe, p. 73.

T h e Alternative Prospect: T h e Plan for a Neutralized United Germany

93

illusion pursued by, for instance, Rudolf Nadolny and J a k o b Kaiser immediately after the Second World War. 2 8 As mentioned, Meyer von Achenbach heard from von Brentano on 22 March 1954 that his "ideas on a constructive German policy towards the E a s t " were in "crass contradiction" with the Federal Government's official Germany policy. They therefore remained ignored and concealed. Yet they are a document of the time, a high point, and at the same time provisional endpoint, of an alternative Germany policy in the early 1950s, the correspondence of which with a surprising 1953 plan of Churchill's is quite fascinating. Following the changes in the figures on the international stage in the first months of 1953, British Prime Minister Winston Churchill unleashed diplomatic storms with his speech to the C o m m o n s on 11 M a y 1953, first of all among his own government, then in the American administration and finally and especially with Federal Chancellor Adenauer in Bonn. The content of Churchill's speech was a proposal for an international security pact with and against a reunited Germany, on the model of the 1925 Locarno Pact. Churchill's indubitable motive of restoring Britain to the rank of a third great power, through an autonomous role as guarantee power of this eastern Locarno Pact that would link the Soviet Union's security and Western Europe's freedom with each other, may be left out of account here. The recent research finding of Foschepoth, who has gone well into the sources, 2 9 has shown us how in M a y - J u n e 1953 Churchill, in talks with the rather reluctant officials of the Foreign Office, in diplomatic correspondence with Eisenhower and in memoranda of his own, pushed the plan so far forward that he finally regarded "the possibility of a reunited, neutralized G e r m a n y " as a political prospect. Even though a stroke on 26 June laid him low, Churchill was not to be deterred from pursuing this plan, and on 6 July, in a letter to Lord Salisbury, then acting British foreign minister (foreign minister Eden was ill) first set forth as the theme of his plan the unconditional desire of the German people for unity. 3 0 28

" G e r m a n y wishes to be neither a bridgehead against the East nor a bridgehead against the West. In social and economic relations too, it whishes again to be only what its natural position at the centre of E u r o p e ordains, namely the bridge between East and West, the middle country that balances the tension between the two sides as far as possible and thus once again becomes the guardian of European peace as it w a s once before the stupidities of Wilhelmine policy and the insanity of Hitler." N a d o l n y to M o l o t o v , 1 4 . 1 1 . 1 9 4 7 ; cf. also his letters of 7 . 2 . and 3 0 . 4 . 1 9 4 7 to M o l o t o v , in: Auswärtiges Amt Bonn, Politisches Archiv N L N a d o l n y II; in this context see Günter Wollstein, Rudolf N a d o l n y -

Außenminister ohne

Verwendung, in: V j Z G 28/1980, p. 4 7 - 9 3 . 29

Josef Foschepoth, Churchill, Adenauer und die Neutralisierung Deutschlands, in: Deutschland-

30

Churchill to L o r d Salisbury, 6 June 1953: " N o t h i n g can hold the German people back f r o m

Archiv 19/1986, p. 1286 ff. restoration of their unity. Even Adenauer, an upright supporter of the E D C , is being forced

94

Manfred Overesch

People in the Foreign Office already knew from Adenauer's first visit to London in early December 1951 that the Federal Chancellor was not seeking to turn this popular will into his Germany policy programme, and did not set any sort of all-German policy in the way of completion of West Germany's integration into Western Europe: "Dr. Adenauer made it quite clear that he did not want German unity to take place in a way which would prevent the successful integration of Germany with the West." 3 1 By his second visit to London on 15/16 May 1953, and therefore just when Churchill's ideas were taking shape but without direct awareness of them, Adenauer had confirmed this attitude, through the German Treaty and the EDC treaty, signed on 26 and 27 May 1952 but not yet ratified, even more emphatically in words and tone. The British Foreign Office officials shared this opinion: "The rearmament of the Federal Republic, its integration into Western Europe, the whole defence contribution and the European unification movement are essential components of a whole. If we reverse our German policy, we shall bring the whole system crashing down around our ears and bring the borders of the Soviet bloc forward to the Rhine". 3 2 The British regarded the Locarno vision of their own prime minister as too far fetched, and properly assessed the dilemma facing Germany — a predicament in which, in their opinion and not only in theirs, the country would however have to remain for the benefit of Western Europe. Minister of State Lloyd wrote to Churchill on 22 June 1953: A divided Europe means a divided Germany. Uniting Germany again as long as Europe is divided is, even were it feasible, dangerous to us all. T h a t is why everyone feels — Dr. Adenauer, the Russians, the Americans, the French and we ourselves — in the bottom of our hearts that a divided Germany is the safe solution at the moment. But no-one dare admit this openly, because of its effects on public opinion in Germany. Accordingly we all publicly support a united Germany, though each on the basis of their own conditions. 3 3

Adenauer immediately sought to counteract the plan for reunification of a neutralized Germany which had become known to him from across the Channel, and he succeeded as was soon to appear. Specifically, this meant in the first place at least postponing an Allied conference urged by Churchill. The German Bundestag confirmed on 10 June 1953 the sequence of steps to reunification always advocated by its majority, which specifically ought not to stress this more and more. All G e r m a n parties will decisively support reunification, however the elections may turn out. T h a t depends on us, and will concern us all the m o r e when the French turn their back on the E D C . T h e fact there will always be " a G e r m a n problem" and " a Prussian d a n g e r " is something we must not lose sight o f " , cited in ibid. p. 1292. 31

Quoted ibid. p. 1291, N o t e 2 6 .

32

Strang to Churchill, 3 0 M a y 1953, quoted ibid. p. 1293.

33

Quoted ibid. p. 1300. 3 4 . Bulletin der Bundesregierung, 10 June 1953.

The Alternative Prospect: The Plan for a Neutralized United Germany

95

to lead to a neutralized united Germany. The three Western foreign ministers laid down their position on this once more on 10 July 1953 in a conference in Washington. The 17th of June 1953 changed the board for all of them, and Churchill's stroke on 26 June reduced his political force and presence. The result of the elections to the Second German Bundestag on 7 September 1953 reinforced Adenauer's policy on its path through parliament, through the twothirds majority of the right. In the decisive phase Adenauer managed to bring about possible changes or even breaks in German policy both among the Western allies and in his own camp. What followed in 1954, on the Allied side the foreign ministers' conference in Berlin on the terms of the Western Allies' German note of 23 September 1952 and the resolution of the German Bundestag of 10 June 1953, and on the German side the foundation of the "Kuratorium Unteilbares Deutschland" on 14 June 1954, no longer had the necessary great idea of neutrality of an all-German State protected by Allied security guarantees as the decisive feature. And the trend to cultural restoration in Germany ensured increasing support by the population for Adenauer's policy. "Homeland films" (more than 300 were made in the 1950s) identified the mixture of people from West, Central and East German regions with the Federal Republic of Germany. 34 The need for private happiness reduced the urge for political proclamations and campaigns that were in any case difficult, indeed apparently doomed to failure. The needs of the majority went towards participation in a growing, if still modest, prosperity, which began to offer the modern comforts of civilization, "We are living in a motorized Biedermeier age", commented Erich Köstner accurately in 1956. 3 5 Over broad areas, there seems to apply to culture 34

The importance of Federal German Homeland films for the integration of the fleeing Central German and expelled East German population in West Germany ought to be further researched, for instance on the scenario for the second Federal German Homeland film, "How Green was my Heath", in which a former East German landowner is going to seed, integrates into West German society. Cf. the approaches in Hermann Glaser, Kulturgeschichte der Bundesrepublik Deutschland zwischen Grundgesetz und Großer Koalition 1949—1967, Munich/Vienna 1986, pp. 235 ff. Another point to consider would be the general cultural trend away from the refusal of classical contents in favour of new forms, and towards a restorative maintenance of idylls and sensuality. Cf. the essay "Der Geist der fünfziger Jahre" by HansPeter Schwarze in: idem, Die Ära Adenauer. Gründerjahre der Republik 1949 - 1 9 5 7 , Geschichte der Bundesrepublik Deutschland, vol. II, Stuttgart/Wiesbaden 1981, p. 375 ff. In a typical letter, for instance, the publisher Ernst Rowohlt complained to the chief editor of the journal "Ost und West" as early as 2 November 1949 that while after the Second World War there had been dramatic calls for young German writers, now that they were there and being published, no-one wanted to read them ("Ost und West" 30/1949, p. 66 f.).

35

Quoted in: Vaterland, Muttersprache. Deutsche Schriftsteller und ihr Staat von 1945 bis heute. Ed. Karl Wagenbach et al., Berlin 1979, p. 132. Cf. Dieter Bänsch (ed.), Die fünfziger Jahre. Beiträge zu Politik und Kultur, Tübingen 1985. Eckhard Siebmann (ed.), Bikini. Die Fünfziger Jahre. Kalter Krieg und Capri-Sonne, Hamburg 1983.

96

Manfred Overesch

in these years what columnist Wilhelm Oehlmann had written on 9 November 1952 on music in Berlin in that city's "Tagesspiegel": "The keyword regression hits the basic mood of the times". This basic mood certainly encouraged Adenauer's German policy. 36 The Federal Chancellor did not (and never did) seek the dangerous role of a mediator between Eastern and Western positions acting primarily in an allGerman interest, but instead unilaterally, early and consistently he sought that of a sovereign West German partner in a free democratic Western alliance. There was one alternative to the West German foreign policy pursued by him: an orientation above all other objectives towards German reunification. The two objectives were fighting for first place. The advocates of priority for united Germany had the drawback of a lack of political influence — their highest-ranking representative was now a minister, admittedly for all-German affairs, but even in that position subject to the guideline-setting powers of the Federal Chancellor — but they had the advantage of journalistically widespread public assent. In its Germany policy the Federal Government could appeal to many testimonies coming to it from the population of the GDR, which testified before and after 17 June 1953 to the call for a firm, westoriented all-German policy. "What will lie between the white snows of Russia and the white cliffs of Dover?" Summarizing, let us look once more at the question of what made the concept of neutral united Germany fail. In the international sphere, Churchill evidently brought this idea into play in order to bring Britain back out of its position as a junior partner to America and into the rank of third great power. This prospect was regarded by the officials of his own Foreign Office as no longer achievable. A stroke crippled the initiator, Churchill; and his possible interlocutor on the Soviet side, Malenkov, initially in a strong position in the struggle for succession after Stalin's death, was soon driven into the background by his Moscow opponents. The Americans and French were in any case not in favour of a neutral all-German State. In the national context, in the West of Germany the supporters of the neutrality idea were mostly representatives of the upper bourgeois circles that had taken part in shaping German foreign policy according to the principles of Gustav Stresemann, and still regarded it as possible after the Second World War. But the international conditions had radically changed after 1945 by comparison with the period of the Weimar Republic. The traditional German special road of being a mediator between East and West had become impossible. The overwhelming majority of the West German public, with Adenauer, initially supported the policy of containment, then of roll-back, with which 36

And vice versa.

The Alternative Prospect: The Plan for a Neutralized United Germany

97

the Republicans had won the US elections in November 1952 (Eisenhower and Dulles entered office in January 1953). When the 17th of June 1953 revealed this policy as wishful thinking with no power-policy content, the idea of neutrality did briefly revive in the Federal Republic, but then faded again because the majority of Federal Germans, people and government, did not wish to accept the abandonment of Western ideas, ideals and values that was bound up with the idea of German neutrality. Hopes were instead placed in Article 7 of the German Treaty, which promised help from the Western allies in efforts at German reunification. In this article, the Allies undertook, together with the Federal Republic, "to bring about through peaceful means their common goal: a reunited Germany, with a free democratic constitution like that of the Federal Republic, integrated into the European community". Disappointment at this decision was expressed, for instance, by an anonymous 18-year-old from the GDR in a letter to the West in 1952: "The people, that is, a certain stratum of the people, in the Federal Republic are already back living in peace and have already forgotten the great misery of the war. They can simply no longer understand us here, and no longer hear our calls for freedom. That is a very sad state of affairs". 37 One possible answer to this might be what Adenauer said in his major interview with Ernst Friedländer in the NWDR on 24 April 1952, namely that the price for "unity in freedom could not be freedom itself". 38 One should not overlook the fact that at that very time, on 18 May 1953, Federal President Heuss dedicated the Deutsches Eck near Koblenz as the monument of German unity. Long after it was blown up by American troops in March 1945, Kaiser Wilhelm I on his horse had continued to hang upside down from the plinth of the monument. Now an inscription was unveiled that was intended always to recall "The mandate of the Basic Law to the whole German people, to complete the unity and freedom of Germany in free self-determination". A basic position of Bonn's Germany policy was no doubt confirmed in the inscription on the monument, but not made into a dominant feature. It is even doubtful whether a majority of the West German population would have supported it. This scepticism is made still stronger by the events of 1954. The Berlin foreign ministers conference of the four Allies in January - February 1954 was not accompanied by any great hopes from the West German population. They no longer wanted to go back to the reunification euphoria, partly emotionally underpinned, which, for instance, the Zurich daily Die Tat, in an article much noticed internationally and entitled "A recipe for Germany's reunification", had seen on 13 March 1954 as the precondition for a successful 37 38

Letter to the West (Anonymus 18 year old), n. d. but 1952, in: ΒΑ Β 137/1043. Ernst Friedländer's interview with Chancellor Adenauer, 24 April 1952, Overesch p. 166 ff.

98

Manfred Overesch

Germany policy: the Germans ought first of all to activate the "elementary, volcanic will to unity, that flows over all obstacles"; that could, if not immediately attain national unity, at least bring about "recreation of the mental picture of the united nation" and thereby decouple the Germans from constantly having to follow Allied wishes and constraints towards division. Similar in content but rather more reticent in words, Jakob Kaiser, a few days before, had called through the RIAS to make "reunification of Germany the centre of the will of our people". 3 9 A few days after the Zurich newspaper article, Federal President Heuss encouraged the minister to set up an organization for it: "The entire people," he wrote to him on 26 March, "wants this". 4 0 On 14 June 1954 in Bad Neuenahr, the "People's Movement for Reunification" was founded: the familiar "Kuratorium Unteilbares Deutschland". Federal Chancellor Adenauer merely sent a brief address of greeting, 41 thereby making the event that in the 19th century had been depicted grandly as a major patriotic deed into something politically marginal. The European euphoria — only slightly and transitorily damped by the failure of the EDC treaties in the French National Assembly on 30 August 1954 — did much for many in the West to alleviate national resignation. Even such carefully thought-out words as those of Alfred Weber, who was well aware of political realities but sought from his suffering at the national division of the Germans to strain his imagination to the utmost, broke against the scale of priorities of Adenauer's German policy and remained ineffective against the onrush of the euphorically welcomed European substitute Fatherland. To a question by René Allemann of the Zurich weekly "Die Tat" of 8 June 1952 as to possible intermediate paths between the alternatives of reunification and rearmament, Weber had reflectively replied on 11 June: 4 2 It is a very resigned decision. Unless now, under the pressure of the preparation to i n c o r p o r a t e West G e r m a n y militarily, an agreement on Central and West G e r m a n y c o m e s about that can provide s o m e sort of intermediate position that guarantees the West and does not threaten the E a s t (ordinary neutrality is of 35 40 41 42

BA NL Kaiser 257: Rede über den RIAS 27 February 1954. BA NL Kaiser 236: Heuss to Kaiser 26 March 1954. Ibid. Adenauer to Kaiser 11 June 1954. On 3 June 1952 F. R. Allemann repeated a 1950 international survey by the Zurich "Die Tat", asking the following four questions of "leading representatives of German intellectual life": 1) Do you assign priority to the reunification of Germany or to rearmament? 2) What consequences would you see from a reunification that would sacrifice rearmament? 3) What consequences do you fear from rearmament of West Germany without reunification of the two halves of Germany? 4) What proposals could lead out of the dilemma of these questions? This was what Alfred Weber was replying too. See BA NL Weber 19: Allemann to Weber 8.6.1952, Weber to Allemann 11.6.1952. Weber was later also among the authors of the "German Manifesto" of 29 January 1955 in St. Paul's Church, Frankfurt.

T h e Alternative Prospect: T h e Plan for a Neutralized United Germany

99

course not in question), unless something so enormously difficult comes about now, then we shall have to put up not only with being as good as hermetically shut off from our brothers and sisters in Central Germany. Think of what happens at the zone boundary today. We would have to abandon the parts of the population there for the foreseeable future to as good as total sovietization, with all its sufferings, particularly in psychic terms.

Elsewhere in the interview appears: We are at a moment of world historical decision. If some sort of settlement is still possible now, then we can, if it leads to our reunification and freedom, derive enormous advantages. If that does not come about, then we cannot, I feel, withdraw from the organization of the free West, to which we spiritually belong, the organization for defence against the overwhelmingly powerful organization of the East. N o t even if we as a single people, let us say this quite calmly, are to be the victim for the foreseeable future.

This enormous difficult task of "still", as Weber said in the interview, finding "some sort of middle way", was turned down by West Germans in their majority. They made that clear to Adenauer at the Bundestag elections in 1953 and still more clearly in 1957. What should be stressed once more here is the fact that this decision went against the - slight - tradition of a German nation State and in favour of modern supra-national integration, partly because of the Federal German population's need, strongly underpinned by feelings of recovery, for private happiness and certainly also for the modern comforts of civilization. Let us also at least fleetingly remark the course of the international temptations. Let an example be a quotation from a speech by French Ambassador François-Poncet, who on 27 April 1954 in the Münster Friedenssaal announced to the Germans the end of French attempts at hegemony over Germany with the words: "At least we must and can advance beyond the peace of Westphalia, as we have advanced beyond much that followed that η

43

peace . The poster campaign begun on 25 November 1958 by the Kuratorium Unteilbares Deutschland, "Macht das Tor auf" [Open the Door] (in preparation since September 1957), as an answer to the "Confederation theory" brought into the debate by Ulbricht (see the "Süddeutsche Zeitung" for 30 December 1956), probably kept the awareness of German division alive — as did the simultaneous poster campaign "Dreigeteilt — niemals [Divided in Three — Never]" — but did not bring about any initiatives to action. The philosopher Karl Jaspers more or less drew a line under the debate of the 1950s with his book, which came out in 1960, "Freedom and Reunification: the tasks of German politics". 43

André François-Poncet, Rede im Friedenssaal in Münster, 2 7 . 4 . 1 9 5 4 , in: idem, Z u Deutschen gesprochen, München 1958, p. 17.

100

Manfred Overesch

Today in 1987, when the Mayflower generation of the Federal Republic of Germany, the founding fathers, is dead or has withdrawn from the scene, ideas of united German neutrality in a centre of Europe seen as capable of reconstruction are experiencing some political revival. But perhaps the interpretation of history that sees German history since the high Middle Ages as a long decline from the unity of the Reich remains more effective. That history seems to teach us that the centre of Europe, Germany, can be achieved only in a federative structure. For practical politics, that means aiming at a twofold Germany (or three-fold, counting Austria). It would also mean saying goodbye to Ernst Moritz Arndt and the 19th-century world of national ideas: "All of Germany must that be! God in heaven, see that too And give us loyal Germans heart To make us love it good and true! That is what must be! All-Germany must be!" (from "Des Deutschen Vaterland" by Ernst Moritz Arndt, 1813).

Only the right to self-determination can still allow Germans to entertain such dreams.

Italy and the Problems of "Power Politics" — From the EDC Failure to the Suez Crisis by Brunello Vigezzi

Between the end of 1954 and 1955, Italy obtained indubitable recognition, which sanctioned her full comeback in international politics. The agreement on Trieste gave her back freedom of action and settled one of the most serious problems still open after the signature of the peace treaty. The Atlantic Council of May 1955 recognized the "new Italy" as a "precious ally", "a free and equal member in the consortium of democratic and freedom-loving nations". Moreover at the end of that year Italy was finally admitted to U N O . Almost as giving a bonus to the Italians, during a visit to London of Scelba and Martino, Churchill stated: "Italy has recovered her rank of a 'great power' "; and in Rome Dulles too confirmed that "Italy is a great power". 1 Yet these recognitions marked the end of a period of postwar misfortunes, rather than the start of a new phase of "power politics" and even less the emergence of a "great power" attitude in the ways and forms suitable for the international life of the fifties. Of course Italy wanted to be a member of the "club of the great powers" (a club with a variable membership ...). At least Italy — as an ambassador wrote — maintained "the ambition ... to get near to the status of the Great Powers ...". 2 But politicians and diplomats were also aware that the political, military, economic and social reality of Italy allowed the exertion only of a relatively reduced influence on the trends of general politics. This gave rise, rather, to the inspiration and wavering typical of the Italian foreign policy in this period. ' Archivio Centrale dello Stato (ACS), Minutes of the Council of Ministers of 12 May 1955, report by Martino on the Atlantic Council and its final declaration. O n Churchill, see for example "Relazioni internazionali", 26 February 1955, and on Dulles, Annuario internazionale 2

di

politica

¡SPI (1955), Milan 1956, p. 862.

Archivio storico-diplomatico del Ministero degli affari esteri (ASMAE), Quaroni to Martino, 8 May 1956.

102

Brunello Vigezzi

Italy and the world of "great

powers"

Certainly Italy had grown stronger; she finally entered upon the road to accelerated development; she acquired a more incisive freedom of movement; but all this was not sufficient to achieve a status of equality in international relations. M u c h was still needed to get out of the economic and social backwardness of the past, as Italian diplomats in the major Western capitals remarked, prompted by their very profession to take into account the surrounding world. When the presentation of the Vanoni plan raised so many hopes (destined however to rather quickly disappear ...) for a coordinated and binding decennial economic policy, the Italian diplomats in Paris, London, Washington and Bonn were among the first to show a certain enthusiasm; but the circumstances also imposed rather unpleasant criteria and comparisons. " T h e plan to be launched ... needs international support", 3 stressed the instructions to Zoppi, new ambassador to London; and starting from this point Quaroni, fiery and impetuous as usual, ended by outlining a picture which reduced almost to nothing further expectations in the field of foreign policy. "We have an excellent pretext to wait and see. And this is the Vanoni Plan. Actually today the only serious and important aim of Italian foreign policy should be that of finding all possible support abroad in order to carry it out more easily and quickly. Therefore if, from whichever part, we were pushed to adopt a leading position, we could and should answer: 'At the moment we have too much to do here at home in the struggle against communism and unemployment to be able to take ambitious initiatives in foreign policy: this is our contribution to general politics!' And, among other things, everybody would consider these words wise and serious". 4 Quaroni was intentionally taking a paradoxical position; and after a while he himself tried to clarify and complete it with a rather bold and ingenious project, sketched with the Chief of Defence Staff General Mancinelli, through which he wished " t o link the Vanoni plan, the struggle against poverty ... and the strengthening of our military apparatus". 5 T h e Americans should "undertake great aids and investments, with the guarantee that a large part of the increase of the State budget would then be allotted to the military sector . . . " . Thus, Quaroni rectified his position, linked different

3

aspects,

A S M A E , meeting in Palazzo Chigi on the occasion of Zoppi's departure for L o n d o n , undated but end of 1954.

4

A S M A E , Quaroni to B. M o s c a , plenipotentiary minister, with request of forwarding t o the President of the Republic Einaudi, 4 January 1955.

5

A S M A E , Quaroni to Mancinelli, 12 January 1955.

Italy and the Problems of "Power Politics" — From the EDC Failure to the Suez Crisis

103

exhorted and built castles in the air; but his reports remained in any case (if not even more) indicative of an entangled situation and of the difficulties to come out of it. The "disadvantageous position in which Italy is placed ... demonstrates that the Italian problems must be dealt with in the context of international cooperation ...": in the spring of 1955, Scelba, President of the Council, speaking in New York at the Council of Foreign Relations, founded his entire speech on this leit-motiv. Under many aspects Italy was still strictly dependent on foreign countries and could not escape such a situation. Moreover Scelba theorized the giving up of "every type of nationalism", and supported moderation and prudence. "We are not lost in contemplation of the European past; we no longer envisage the greatness and the civilizing mission of single European nations". The Italians were moving away from the traditional teachings of power politics. Scelba also echoed this other theme, which was really diffuse in Italy at that time. 6 But this did not preclude Scelba, and many others with him, a moment later, from straining at the leash, feeling the desire to shoot ahead and the impulse to be present, to count more. In any case Italy was in a period of growth, of expansion and it was understandable, maybe necessary, that she wished to assert herself. Of course Italy could not forget her limits. After Fascism and the defeat in the second world war, Italy could certainly not think of having a say in the settlement of the "German problem"; but, having said this, it was Scelba, immediately after his return from America, during a meeting of the Council of Ministers, who stressed the criterion that "in international politics ... Italy ... wishes to be informed about everything in order to be ever present". On the other hand, Italy wanted peace, preached concord, hoped for European union, but even all this did not exclude Italy from keeping watch, to prevent anyone else from making their way at her expense and overtaking her in what remained, one would say, the old race among nations. This was valid first of all for the Federal Republic of Germany, whose policies Italian politicians often supported, not without concealing some suspicion and jealousy. As Scelba said, again during the Council of Ministers, "we would not tolerate Germany becoming another Great, remaining ourselves in an inferior position ,..". 7 Therefore in these years Italian foreign policy was based on such alternative if not contrasting themes; and the spurs appeared even stronger, if we consider that Italian politicians and diplomats had the impression that their foreign policy had in any case entered a phase of movement and was dealing with larger and larger sectors. The problems of the relations with the United States and the countries of Western Europe certainly remained at the top of 6 7

ASMAE, text of Scelba's speech 31 March 1955. ACS, Minutes of the Council of Ministers of 15 April 1955.

104

Brunello Vigezzi

the list; but this did not prevent politicians and diplomats f r o m paying growing attention to the Balkans, to the Mediterranean or to the Middle East; or from pointing out that the perspective in which they had to work was even larger: "Today Italy is called upon to partecipate a little more actively in the 'shaping' of world politics ...". 8 On the whole the sense of limit persisted. Among other things, Italy also had to try to recover her full credibility; as Q u a r o n i stressed, Italy had to demonstrate being again "a country which can be internationally trusted ,..". 9 But all this did not prevent a desire for a greater initiative to be taken by Italy. In his report to the Council of Ministers, M a r t i n o , back f r o m the United States, could even exaggerate: "For the first time, we noticed the American desire to emphasize Italy's contribution to international relations ...". 1 0 As a matter of fact American leaders were very often less inclined to avail themselves of Italy than M a r t i n o thought, but his report gives the idea of an orientation — maybe rather illusive - which was quite c o m m o n , and this actually acted as a trait d'union even when divergences became evident. In more than one instance M a r t i n o had different opinions f r o m his President of the Council, Sceiba or Segni, not to mention Gronchi, who, immediately after becoming President of the Republic, f r o m the middle of 1955, made his direct influence quite plain also in the field of foreign policy. O n the other hand, in this period Italian diplomats had prolonged and very heated discussions among themselves. But all this was also the result of the greater tendency among almost everybody to try to single out the new possibilities offered to the country. Actually the difficulty of conciliating so many trends is tangible; but it is another significant feature of Italian foreign policy in this period. Moreover, the difficulties and the uncertainties originated both within Italy and f r o m the general situation. In any case the Italian diplomats continued to perform their duty as observers and the awareness of their country's limits stimulated rather than dampened their attention and interest in the surrounding reality: the cold war and détente, the European and non-European realities, the policies of the superpowers and the third world. The same recurring formulae describing Italy's foreign policy or, if one prefers, her "power politics", acquired their value f r o m this background, and this explains h o w the different formulae followed each other, alternated, were perhaps intermingled: from the references to the "classical conception" of "power relations", more or less adaptable to the times, to the propensity towards clear "supernational" solutions, to the remarks on the diffusion of the criterion of "inter-

8 9 10

ASMAE, Quaroni to Magistrati, 23 January 1956. ASMAE, Quaroni to Magistrati, 27 January 1956. ACS, Minutes of the Council of Ministers of 15 April 1955.

Italy and the Problems of "Power Politics" - From the EDC Failure to the Suez Crisis

105

dependence". 11 The criterion of "interdependence" - of the various countries and problems — certainly appeared the most frequent and also the most suitable for Italy; which had, and so could perform, an effective role. The diplomats in particular did not cease stressing that only thanks to the attentive analysis of the issues and to the constant research of the links or of the "instruments" suitable for realizing a relatively coherent and incisive policy, Italy could play a role in international relations. 12 In these years Italy's "power politics" (if this expression may be still be used ...) appeared as one of the fruits, one of the possible results of "interdependence". But even so the analysis of the issues and the research of links and instruments appeared difficult, if not prohibitive, in a period so rich of new events, tensions and uncertainties, namely the crisis of the EDC and the other, even more serious, of Suez.

The WEU: an instrument without

future?

The failure of the European Defence Community aroused first of all great perturbation. Maybe the Italian leaders did not defend with all their might — as is sometimes said — the treaty's approval. From time to time they were even tempted to subordinate a prompt ratification of the EDC to the so longed-for solution for Trieste. Or they showed a good deal of concern for the great expenses required by a European army, or for the consequences which might affect the Italian arms industries which were not competitive enough. But, even so, the fall of the treaty in Paris left an empty space difficult to fill; and, during their meetings, the Italian ministers admitted with frankness the "critical situation" which had been created and the impending dangers. The United States and Britain might stress their tendency to proceed alone; the United States might indulge in bilateral agreements for the rearmament of Germany; while the French policy, by means of insisting on discrimination against Germany, could lead to the "perversion of the Atlantic Pact". In other words the resentment against Mendès France could merge with the suspicion towards Foster Dulles and increase and extend the uneasiness. 13

11

For some examples of the various formulae in the diplomatic correspondence, ASMAE, aidemémoire of the Ministry on disarmament in view of the Italo-French meeting, 20 April 1956; Betteloni to the Ministry (from Bonn), 24 September 1956; Quaroni to Martino, 10 December 1954; Magistrati's note on the conference on the Suez canal problem, 23 August 1956.

12

The leit-motiv of "instruments" in speeches, as can 12 October 1954; ACS, Minutes of

13

the relation between the foreign policy of the period and the search for new the sense here indicated recurred for instance in Martino's parliamentary be seen in G. Martino, Discorsi parlamentari, vol. II, Rome 1977, p. 426, p. 484, 25 November 1954; p. 523, 4 February 1955. the Council of Ministers of 21 September, 5 October 1954.

106

Brunello Vigezzi

This uncertainty however did not last long and the appearance of the Western European Union's new solution had the power to reassure and interest the leaders of Italian foreign policy. After all, the WEU guaranteed or could guarantee American support, British presence, German reintegration, control of armaments and a certain degree of European cooperation. Furthermore, the texts approved or under discussion implied criteria, solutions, drafts of solution and perspectives, sometimes rather vague, but not excluding promising results. "In the end the Paris Agreements are an important positive 'strong point' . . . " : the comprehensive judgement of the director of political affairs, Magistrati, was clear-cut and also pointed out that there was a starting point from which to proceed. T h e "associative" way, at least in that moment, seemed to prevail over the "intergrationist" one; but the "historical fact" of the agreement remained and if there were any backward steps, there were also novelties deserving careful examination. 1 4 Above all, we could say, it was Mendès France who drew attention on himself; and the Italian diplomats, after much diffidence, in their correspondence ended by even crediting the relatively unknown figure of a Mendès committed to a European policy, maybe too bold but certainly not unattractive. "Mendès France" — we must admit — has "the merit of having made a really remarkable effort to foster the formation, even if with different bases and new courses, of a certain Western European consciousness . . . " . 1 5 In particular, with the British presence once assured, Mendès envisaged the possibility of more circumscribed internal agreements which would allow going on in any case; and maybe his Agency of armaments would go far. The Agency - as the draft projects said - should take care of the production, standardization, distribution, control of armaments; and if Britain, at this level, was unwilling to participate, in the meantime France, Italy, Germany might act on their own, giving again a little impetus to cooperation, maybe vivifying the leading sectors where the risk of being excluded was by then great: from aeronautics, to computers, to nuclear energy. As a matter of fact, the Italian leaders also feared that, by so doing, the separation from Britain might become excessive; they feared that the Italians would be crushed between the French and the Germans; they feared that the national industries would not obtain the due guarantees, or that the south and the islands might be sacrified in favour of Northern Africa for the new strategically safe installations which were under discussion; but they also had the opportunity to discuss the situation frankly. In this case Italy partecipated or seemed to partecipate in full in the definition of a 14

15

ASMAE, Magistrates note on the Paris Conferences of 20 - 23 October, dated 25 October 1954. Ibid.

Italy and the Problems of " P o w e r Politics" -

F r o m the E D C Failure to the Suez Crisis

107

general policy and this also carried weight. Mendès supported the Italian candidature to the Agency's direction, reassured and tried to establish an effective collaboration with the Italians and the Germans. Certainly, Italy maintained her doubts and reservations; but, within her possibilities, also gave a hand. "On our part we have given, even if with the necessary reservations, considerable support to the French proposal...". 1 6 And if Quaroni, as usual, exaggerated, yet his reports reveal something about the expectation and the excitement of that moment: "We stated many times that the Paris Pact must not be a point of arrival but one of departure and also maintained that this is susceptible of important evolutions in the field of European integration. Now the possibilities of integrative development lie in the Agency of Armaments alone ... Therefore, if we really mean to continue to be Europeans, we have to accept the principle of the Agency of Armaments: if we reject it, we must recognize that we have stopped thinking in terms of Europe". 17 On the contrary, the results were rather poor. British and Dutch resistance was strong. Among the Germans, Erhard supported free trade, the necessity of close relations with Britain and the United States and the value of a worldwide perspective: all things that, in his opinion, risked being compromised. On the other hand French resistance was not diminishing and the fall of Mendès had the effect of magnifying it. The wide-ranging and rather amazing projects were bound to vanish and in a short time the agreement on armaments was reduced to a modest routine. The WEU remained a point of reference, even considering the real problems it permitted dealing with. The WEU remained also the symbol, even if undefined, of a European collaboration to which it periodically tried to give substance. The "re-launching" of the WEU was often heard in these years and from time to time caused struggles over its exploitation. 18 In particular, the Suez crisis would cause various efforts to resume the work; but, for the time being, at the beginning of 1955 the discussion on the WEU on the whole remained rather an indication of the great difficulties experienced when wanting to give shape and solidity to foreign policy, in Europe as elsewhere.

16

A S M A E , Magistrati to M a r t i n o , 2 N o v e m b e r 1954.

17

A S M A E , Quaroni to M a r t i n o , 6 January 1955.

18

On this problem see for example A S M A E , Quaroni to M a r t i n o , 3 0 August 1955; aide-mémoire of the Ministry for the Italo-German meeting, undated, but February 1956; aide-mémoire of the Ministry on W E U , 18 July 1956; Grazzi to the Ministry, 8 August 1956; Brosio to M a r t i n o , 27 September 1956.

108 Nato has its problems

Brunello Vigezzi

...

The favourite formula of various Italian leaders, of Martino and many of his collaborators — "the WEU and N A T O " — had therefore reduced meaning and importance. For the time being the references to the WEU expressed more than anything else the rather vague even if persistent hope that, in the context of the Atlantic Alliance, the Western European members might coordinate their policies, apart from being concerned that this should not bring hindrance or other negative consequences. The WEU States should not withdraw into themselves and the other members of NATO should not get the impression that there was a willingness to exclude them from the discussion of the continent's problems. In other words the WEU was certainly precious, but if there was confusion or superimposition it was logical that it should give way to the major organization. "The military content of the WEU is fixed by NATO itself". 19 Martino was determined; and, on the political level, the convergence of the WEU towards NATO seemed out of the question, at least at that moment. The WEU might provide the new password on the limitation and control of armaments, useful if not indispensable to face the negotiation with the USSR and the Eastern block. "It is a fact that for the first time in an Atlantic Council it was spoken at length of the possibility of the 'limitation of armaments' if not directly of disarmament". Of limitation, that is to say: "of a system of balanced, voluntary and agreed limitations, which is the foundation of the treaty establishing the W E U " , 2 0 Magistrati noticed with satisfaction in May. In a period of détente, the criterion could really appear opportune; but, also in this case, it ended by shifting the interest from the WEU to NATO, the Alliance which would be at the centre of possible negotiations. "The fundamental principle of our foreign policy is the loyalty to the Atlantic Pact , . . " . 2 1 This point therefore remained undisputed and was stressed in confidential instructions, in debates at the Council of ministers or in public statements. Martino, in his analyses, recalled the primary value of the alliance in guaranteeing the "security" of Italy and which then justified the larger and more varied "policy of international commitments". 22 Italian foreign policy derived its freedom of action and its chance of development from the mem-

19 20

Martino, Discorsi parlamentari cit., II, p. 513, 10 March 1955. ASMAE, Magistrati's note on the Atlantic Council and the WEU Council meetings, Paris 9 - 1 1 May, dated 13 May 1955.

21

ASMAE, from Martino's instructions to Quaroni in view of the Italo-French meeting in Rome, undated but 3 December 1954.

22

ACS, Minutes of the Council of Ministers of 26 May 1955.

Italy and the Problems of "Power Politics" -

From the EDC Failure to the Suez Crisis

109

bership of the Atlantic Pact - Martino plainly developed this remark many times. In the end, given the evidence we find and the formulae which followed one another, the same more or less limited "power politics" of Italy had the same origin. In the end Italy counted as "member of a great alliance". One can argue that she was and remained above all an "allied power". 2 3 The leaders of the Italian foreign policy of that period, politicians and diplomats, were therefore all but reluctant to recognize the significance or the importance of NATO; and perhaps for this reason alone the remarks, doubts and questions expressed on it strike us more. Indeed the alliance remained undisputed; but, looking around, it was also true that it was almost impossible to find a problem on which there were no uncertainties or discussions. Quaroni, who was one of the most ardent supporters of the priority of relations with the United States and of the Alliance's importance was for example the most discouraged; and summing up the situation at the beginning of 1955 he did not hesitate to talk about a deep crisis involving the entire Western world. The WEU had just come into being and was already in trouble; and the troubles certainly did not spare NATO. "We are members of two big institutions, the Atlantic Pact and the Western Union, which are in serious crisis, not only a temporary one, but a deep crisis of orientation , . . " . 2 4 In other words the Atlantic alliance remained undisputed, but, one would say, it followed with difficulty both its internal developments and the course of the general situation; and the same men, on the same occasions, ended by combining comments and remarks going in two different directions. According to the Italian observers, under some respects the crisis was certainly due to growth, but this was only partially reassuring. The polemics on the "directorate", on the fact that the "big three" — the United States, Britain and France — continued to wish to represent everybody, were increasing; the discussions on the extension of the alliance's aims, beginning from the famous article 2, intensified. But then these were only some of the problems. The search itself for a greater military security raised even bigger questions. For the time being the efforts to find a point of balance between nuclear and conventional weapons were of little avail; and from another point of view they ended by stressing the superiority of the United States which had no appreciable comparison. In other words, the United States were finding their orientation by themselves; they cared too little about the consequences of their choices for their allies; if not actually neglecting Europe, to privilege the extraEuropean problems, Washington aimed at a world wide strategy and policy. Therefore, when in May Magistrati prepared his confidential report for the Atlantic Council he repeated the leit-motiv: " T h e Atlantic unity" was still 23

24

Annuario

¡SPI cit., 1954, Milan 1955, p. 849 ( S c e W s communiqué of 20 May 1954) and

Annuario

... 1955, p. 864 (Atlantic Council's communiqué of 11 May 1955).

ASMAE, Quaroni to Magistrati, 8 February 1955.

110

Brunello Vigezzi

"the most effective and powerful means" of acting ... But his report immediately pointed out that time was pressing and introduced a whole series of serious questions awaiting a solution. "Unlike the previous councils" the meeting did not deal with "any technical problem", and its "main characteristic ... was that right from its beginning it took the aspect of a meeting whose only purpose was the political discussion of the very important problems now brought forward . . . " . And the list was impressive, because to pre-existing problems, which were dragging on, had been added those coming into existence as a result of the new era of "detente". New challenges were arising almost everywhere, were making the frontiers of the pact weaker than ever and were inducing many people to question themselves about the possible means of safeguarding the alliance in such circumstances. 25

The diplomacy of conferences Actually, the Geneva conferences of July and October 1955 were considered by the Italian politicians and diplomats rather as the symbol of the new international policy of "détente": a more or less appreciable and successful policy — this is another story, but one which in any case required great effort to determine a line of conduct satisfactory for the West and, in particular, for Italy. The policy of detente had its good reasons, or rather, its justifications; and beyond the polemics which immediately broke out from opposing positions, the Italian diplomats pointed out in their despatches the various reasons which could induce the USSR, the USA and others with them, to proceed in that direction. The wish to abandon the Stalin's heritage; the impetus of the new ruling group, a certain desire to reduce the burden of military expenses, agricultural needs, the general tensions in the communist world, the fears of an atomic conflict and the consideration of the stalemate reached: all these reasons summed up at intervals in the case of the USSR and, among many warnings, seemed to indicate that the new policy had some rather solid fundaments on which to rely. On the other hand, the United States had been surprised and had rightly remained reluctant, diffident and hesitant; but then they chose to try the new policy, with prudence but also with resolution and with the encouragement of an internal debate which ended by interesting and involving the most diverse forces of the country, in favour - to recall the words of the ambassador to Washington, Brosio - of an "honest endeavour" towards conciliation between West and East. 2 6 25 26

ASMAE, Note of Magistrati on the Atlantic Council meetings ..., dated 13 May 1955. ASMAE, Brosio to the Ministry, 28 July 1955.

Italy and the Problems of "Power Politics" — From the EDC Failure to the Suez Crisis

111

In fact the policy of detente immediately put the two superpowers in the forefront; in a certain sense it isolated them; but under a different respect the other States, great, medium and small powers, in both the West and the East, were soon involved; and the process, beyond Europe, soon interested the entire world, naturally without avoiding all the repercussions which came from such unprecedented widening of relations. In other words, détente took root and opened hitherto unknown perspectives. Or at least this is the picture we may draw from the Italian observers who followed the events and tried to evaluate the situations. They could not, however, even disguise a growing invincible perplexity over the fact that the policy of "détente", one would say, could not easily find shape, or rather, it found shape similar to "conference diplomacy". This maybe reduced the existing tension, fostered the dialogue, and spread the "spirit of Geneva", but it then left unchanged the basic contrasts, if it didn't actually worsen them by creating new opportunities for confrontation, while nourishing in the "public opinions" of the various countries a series of expectations which were then left completely unsatisfied. 27 The first Geneva conference — of the two superpowers and of the two other "greats", France and Britain — set an example; after singling out with difficulty a procedure and some big problems: German reunification, security, disarmament, the exchanges between East and West, after repeated stageeffects, its only result was a postponement to the new conference of the foreign ministers, but it produced a chain of events which seemed difficult to avoid. Magistrati, who followed the conference from the Italian point of view, in his "very confidential note" tried of course to grasp the substance of the various political questions, but — rather significantly — in his report ended up by giving considerable space also to other aspects: the role of the press ("well beyond 1,500 journalists from every country: a figure superior to that of any previous international meeting ..."), the diffused hopes, the relation between policy and propaganda and, in the end, he pointed out also in this field the growing prominence of the two superpowers and the new weight of the appeals addressed to the outside. "The representatives of the United States and of the Soviet Union — real big actors in the conversation — cared to give to their statements ... an extremely large character and such to address mainly, if not uniquely, the public opinions .,.". 2 8 Magistrati insisted, and was convinced, on pointing out phenomena bearing an influence on the whole for-

27

28

ASMAE, Magistrati's note on the Conference of the four powers in Geneva, 1 8 - 2 3 July, dated 26 July 1955. Ibid.

112

Brunello Vigezzi

mulation of the problems. T h e diplomacy of conferences — or, as it was also immediately labelled, "the diplomacy of television" 2 9 — was asserting itself; and, still burdened as it was by all the cold war contrasts, produced a peculiar impact on foreign policy. In their analyses, Brosio, Q u a r o n i , Zoppi, Grazzi, the other ambassadors, were more and more induced to linger on the attitudes of "public opinions", or as they said in their peculiar language, on the great "psychological tendencies" active in the various countries. 3 0 They designed pictures where they located governments and diplomacies in a large perspective, more than ever flowing and rather insidious, which risked altering the same conditions in which international politics were led and, in particular, putting the West in a bad light. In truth, at times the auspices remained good. In July at Geneva Eisenhower had thought he could lead the policy of détente, sensationally recovering the initiative, formulating the proposal of the "open skies", of the general controls; the result was not negligible. "Eisenhower has recovered the political 'leadership' in the world, which had slipped from America, dealing a decisive blow, with his well-known proposal on disarmament, to Soviet propaganda, which had enhanced in the eyes of the world the cliché of a warmonger and imperialist America . . . " . Brosio noticed the general comments and shared them; but he also pointed out the doubts which overflowed and which grew increasingly numerous. Eisenhower's proposal after all was still on soil where it was difficult to make a move, where diplomacy soon got mixed with propaganda, where foreign policy was subject to relatively incontrollable thrusts. "Geneva could reveal herself as a labyrinth where the American Theseus entered without Ariadne's thread , . . " . 3 1 On her part the USSR turned a deaf ear and placed her peace offensive on a different level. Of course she too might have had her difficulties, but seemed to master them better, while all the Western States laboured more than ever to coordinate previous trends with new tendencies. In other words, with the first, great Geneva conference over foreign policy, power politics were paying their toll to the policy of détente. This situation could have been temporary and even beneficial; but, in the meantime, particularly for the West, it was not easy to see ahead and regain an effective link. At least Italian observers struck this note; and, putting aside his tone, his impetuousness or even his somehow polemic nostalgia for classical diplomacy, what Q u a r o n i wrote was a common question. "What will happen in this situation over the rearmament of Germany and N A T O and WEU themselves? If we could make a Cabinet foreign policy, as we imagine it was possible a century ago, we would not need to worry. 29

A S M A E , Q u a r o n i to M a r t i n o , 29 August 1955.

30

See for example A S M A E , Q u a r o n i to M a r t i n o , 30 December 1954.

31

A S M A E , Brosio to the Ministry, 28 July 1955.

Italy and the Problems of " P o w e r Politics" -

F r o m the E D C Failure to the Suez Crisis

113

Today we may think that we no longer have to fear rash American acts and that there are many and serious internal political considerations inducing the Russians to be very prudent. The Atlantic group should just continue to organize itself politically and militarily: and with energy, calm and patience make the Russians understand that, if they really want to gain peace, they must make concessions beyond those in the 'television' field. But today which country is able to make a foreign policy based on the traditional concept of negotiation? From the experience we ourselves have had of a dictatorship, I doubt very much that the Russians could do it: perhaps they too are slaves and victims of their own propaganda more than we might believe. But certainly no Western State can afford to do that". 3 2 In short, according to Quaroni, detente was putting to a test the international policy of the West and, certainly, the foreign policy of Italy. We have seen that between the end of 1954 and the first half of 1955 Italian foreign policy was already going through a rather hazardous period of elaboration; and the loyalty to the European or Atlantic ideals certainly did not prevent the leaders from measuring all the difficulties of defining a solid and coherent line relative to WEU and NATO itself. But, at that point, on such ground, "detente" really risked enlarging the perturbation excessively, weakening or quite cancelling the usual points of reference. The same minutes of the Council of Ministers were full in these months of rather unusual indications on the repercussions of the policy of détente and on the reach which might be assumed by the attitudes of "public opinion" or, as was also often said in Italy, by the new "conditions" and "psychological reasons", the new climate which emerged in Geneva. 33 As far as diplomatic correspondence was concerned, it was still aimed at Italy. The remarks on the USA, the USSR and on world politics corresponded precisely to the considerations on national events; most of the capitals diplomats unreluctantly stressed the quite disturbing effect that détente could have on a country like Italy and on the conduct of her foreign policy. \ "In a climate of détente we must ... think ... of the possibility of having to defrost the present state of our relations with the East, yet avoiding being 'burnt' by such a thaw . . . " . 3 4 The postwar Italian diplomats were indeed already accustomed to linking the conduct of foreign policy and public opinion and also to noting the problematic aspects of their relations; but what was happening, in their

32 33

A S M A E , Quaroni to M a r t i n o , 2 9 August 1955. ACS, Minutes of the Council of Ministers, considering for example in this light the meetings of 17 January, 2 2 M a r c h , 15 April, 2 6 M a y , 2 August, 2 2 and 2 5 O c t o b e r 1955.

34

A S M A E , Zoppi to M a r t i n o , 15 August 1955.

114

Brunello Vigezzi

opinion, surpassed every precedent, and threatened to damage the actual structure of relations between foreign policy and internal policy. The foreign policy of a "democratic power" must be based on a sufficient and motivated internal consensus; and in Italy this had happened after all, excluding on one side the nationalist right and on the other the communists and their allies. 35 But suddenly, and with little advantage, the new situation put such fundamental orientations to a hard test. Soon conference diplomacy set new problems of "partecipation", repeatedly stressed by the rightwing parties, who ended by wishing or professing a rather sterile policy of "prestige". In more than one instance the power politics of Italy seemed inclined to take obsolete forms, while the government wavered and, if not exactly towed, laboured to contain a constant and growing thrust. But the main danger then turned out to be that of badly changing relations with the communists, without having a clear strategy. At least, complying with the existing criteria, reestablishing good relations with Moscow while continuing to be hostile to the Italian communists was rather problematic. In other words if attention were 36 not paid, détente, as Zoppi wrote, might leave everybody 'burnt' Diplomats repeated this by exhortation and warnings; and, pushed by the politicians, before and after Geneva, started a very close debate on détente, which certainly sometimes takes a rather lenient trend but also allows a better understanding of the re-examination which was certainly going on. Maybe the immediate instinct was that of concern and defence. In more than one case the remedies proposed were really common and clearly provisional. On the other hand the invitations to close the ranks, to react as before towards nationalists and communists were recurrent. But the analyses and the considerations went a little further; and once more maybe, it was again Quaroni who gave an immediate idea of the importance of the discussion, directly linking it to a good deal of the postwar developments. "... I seem to hear the echo of the famous sentence of Metternich: Ί could foresee everything but a liberal Pope!' We are suffering the consequences of De Gasperi's disastrous lines when, before the elections, he told the communists: 'On the level of internal — or social — policy we might even have agreed: where we cannot come to terms is on foreign policy!'. 35

In this sense, for a larger re-examination, I refer directly to my essay on the subject in the previous colloquium, Italy: the End of a 'Great Power' in Power

36

in Europe?

1945-1950,

and the Birth of a 'Democratic

Power',

B e r l i n - N e w York 1986, pp. 6 7 - 8 8 .

For the various terms and orientations here mentioned see a m o n g others ASMAE, Zoppi to Martino, 15 August; Rossi Longhi to Quaroni, 26 August (with reference to the discussions with Brosio and Di Stefano); Quaroni to Martino, 30 August; and see also ACS, Minutes of the Council of Ministers, 2 August 1955.

Italy and the Problems of "Power Politics" - From the E D C Failure to the Suez Crisis

115

At that time I immediately wrote to him to point out, in my usual style, the mess in which he would have found himself the fatal day when Americans began to flirt with the Russians ... As a matter of fact we should have said exactly the opposite. N o w I am convinced, like you, that we must fight, but fight at home with all possible means to move the incompatibility with the communists onto its real ground, that is to say that of internal politics. I agree it is difficult, but what is easy in our country?". 3 7 As usual Q u a r o n i exaggerated and, in other occasion, he was the first to hesitate in drawing the logical consequences of his reasoning. But in any case his lively debate with Secretary General Rossi Longhi and with the other ambassadors, gives an effective picture both of the bewilderment and of the commitment to come out of it. The means indicated by Q u a r o n i were too drastic and even foolhardy. But this does not exclude the fact that the Italian leaders and their collaborators, faced by the news of détente, were really trying to reshape the general lines of Italian foreign policy and its possible links with internal policy.

"Détente

is a disaster

..."

The trouble was rather that in the meantime also the international situation did not offer much really good news either. The months between the first and the second Geneva conference, between July and October, marked the clear decline of hope, seen indistinctly and rather confusedly in the meeting of the big four. Détente did not bring any constructive result, even if, on the other hand, it continued to exercise its influence, and to produce effects ... On the contrary, the greatest risks — one can argue — came just from that p a r a d o x , that Italian observers developed almost from every possible point of view. Perhaps Russia had her problems too, but, in the end, at least for the time being, she looked much more at ease than the Western States. Russia made continuous professions of peace, wanted security, and supported the reorganization of Europe but, at the same time, she took up a defensive position and continued to reject effective armament control proposals. In short, she switched to supporting the separation of the two Germanies, setting impossible conditions for re-unification. Russia wanted détente, but not making any real concession it aimed, as usual, at dividing the West and was attacking in the most diverse sectors, in the Balkans, in Algeria, in the Middle East and in the third world. So that in evidence of the facts it could even be

37

A S M A E , Q u a r o n i to Rossi Longhi, 1 September 1955.

116

Brunello Vigezzi

said that "the new communist leaders are not more Russian and less communist than Stalin, but, on the contrary, less Russian and more communist than Stalin ,..". 3 8 Thus Fenoaltea's long summarizing report from Ottawa, which circulated among embassies and legations to collect opinions on détente, introduced this subject. In comparison, the West continually risked losing ground, if not actually "disintegrating". Or at least this was the diagnosis which surfaced with a certain insistence. 39 The United States, Great Britain, France, and the States of NATO did not succeed in making use of their best cards in favour of German unity. The visit of Adenauer to Moscow in September and the "brutality" displayed by the Soviet leaders damped the enthusiasms over the remaining illusions. "The reunification of Germany will not take place ...". 4 0 But neither did the other problems allow for better results, at least for the time being. "Détente helped and is helping only the Soviets ...": Martino itself, Rossi Longhi, Brosio, Quaroni, Zoppi, Grazzi, Fenoaltea, in other words almost everybody, remarked with uneasiness upon this basic datum, 41 but also added that the West was unable — and in the end did not even have to — evade the obligations, the attractions and the perspectives of the new policy. In the end, the "balance" remained "discouraging". 4 2 Maybe détente implied a new "equilibrium"; but even this, under close examination, showed more disadvantages than advantages. Certainly the nightmare of a general war became even more unlikely; but the new equilibrium seemed to stress more than ever the role of the two superpowers, creating major disadvantages for an alliance like NATO, which was based on the real consensus of its members and the frequent internal discussion of roles. On the other hand, détente implied a growing enlargement of world politics, but the West remained more vulnerable to sudden blows in various areas, without being able to prepare the instruments suitable for coordinating its moves. Moreover, détente continued to grip Western "public opinion", which was baffled, agitated, then quivered and withdrew, wavering between expectations and fears. The Italian ambassadors stressed remarks of this kind, even if, on the whole, they agreed on indicating that the new phase, between ups and downs, thrusts forward and sharp setbacks, would last in any case for years if not decades, 43 with all the ensuing tensions and preoccupations. 38

A S M A E , Fenoaltea to M a r t i n o , 30 September 1955, circulated by Rossi Longhi on 14 October

39

A S M A E , Q u a r o n i to M a r t i n o , 11 N o v e m b e r 1955, with other references to the discussion

to all the principal embassies and legations with request of comments. started by Fenoaltea. 40

A S M A E , Q u a r o n i to Martino, 20 September 1955.

41

See, for this quotation, A S M A E , Brosio to M a r t i n o , 6 October 1955.

42

Ibid.

43

See for e x a m p l e for this orientation and the various terms, A S M A E , Q u a r o n i to M a r t i n o , 29 August 1955.

Italy and the Problems of "Power Politics" - From the EDC Failure to the Suez Crisis

117

The Atlantic Council of the end of October, right on the eve of the second Geneva conference, thus became rather the document of existing conditions; and Magistrati, in his report, recorded with diligence the atmosphere, the changes, the embarrassment, and the impending problems, old and new. In the meantime the conference diplomacy continued to show some of its defects; it kept the superpowers apart and in some ways it also separated France and Great Britain from the others: "a situation which, if pushed to the extreme consequences, could really bring a discrimination within the group of Atlantic countries, with very damaging repercussions on the alliance's cohesion". But this was only, so to speak, the external aspect. The difficulty lay rather in finding a common line, also because the agreement between the European allies and the United States soon looked problematic and the United States showed some reluctance over the obligations of a "complete plan of security ...". Because, in the end, the "Washington government... c a n n o t . . . neglect the untiringly recurring difficulties in Congress when it is necessary to make the North-American Confederation undertake new engagements with the European countries, considered turbulent and 'dangerous', for the purpose of the preservation of order and peace". The addition of Foster Dulles, backed up by Macmillan, seemed designed to intentionally cause the greatest disconcertment, given "the hint of the impossibility of their countries being involved in a conflict 'caused for example by a Balkan war' ...". Was the United States' guarantee being diminished? On his part Martino pointed out the disadvantages and stressed the new tasks facing the Atlantic diplomacy to reconcile security and the German question, but the tension was noticeable also in the rather expected pessimism over the USSR's rejection of Western proposals, or also for the tendency to avoid thorny questions on the fringes of the alliance, from Algeria to Cyprus, to the Baghdad Pact. At the least the Atlantic diplomacy was laborious and full of uncertainties. 44 And a few days later the new Geneva conference offered confirmation of the worst expectations. In conclusion "detente" was a "disaster". 4 5 Or, at least, detente risked undermining the foundations of the system by then created by the West and reducing rather drastically its power. These opinions were recurring and neither was the 20th congress, a little later, sufficient to make the judgements change. According to the Italian observers, the USSR continued to keep the initiative; in fact the USSR continued to nurture her deep confidence in being in "a phase of ascension and progress". 4 6 In these conditions, precisely, "detente

44

45 46

ASMAE, Quaroni to Magistrati, 28 October 1955, with Magistrati's attached note on the meetings of the Atlantic Council and of the Council of Ministers of WEU of 24 - 25 October. ASMAE, Quaroni to Martino, 11 November 1955. Brosio to the Ministry, 19 April 1956.

118

Brunello Vigezzi

... is a disaster", or at least risked becoming a disaster ... The doubt remained; and if we want to analyse and evaluate the Italian foreign policy of this period, to underestimate this fear, would be a mistake. At all events, the background was this, and in the final analysis, it is within such a context that we may better understand the reactions of both the Italian ambassadors and leaders when they tried, as they did, to find their way again and to single out the right criteria for overcoming the widespread bewilderment.

Neo-Atlanticism and the "hierarchy of powers" In the end, Atlantic diplomacy was in dire straits; but this certainly did not mean that anyone — Italy in particular — wished to leave the alliance. Within their possibilities the Italian diplomats and politicians endeavoured to find the remedies; and, after all, "neo-Atlanticism" remains the aptest and most comprehensive term to indicate the effort of readjustment then going on. In truth, in stressing the role of "neo-Atlanticism" in Italian foreign policy, historiography tends on the whole to move its beginning to a later time and to define the phenomenon otherwise. Neo-Atlanticism should be that of Pella in 1957, after the Suez crisis, or, from a different point of view, that of Gronchi, Fanfani, and maybe of Mattei and La Pira, all united by the ambition to increase Italy's influence in international life, clinging - as before - on the Atlantic alliance, but also favouring detente, and claiming at the same time a greater independence for Italy, a more effective link with the United States and more intense relations with various countries of the third world. But, save for the peculiar accentuations of Gronchi or Pella, of La Pira or Mattei, neo-Atlanticism was really already in incubation; and, on the whole, it is perhaps more correct to see its origin in what had been experienced since the end of 1954 and in the discussions then initiated, which accustomed almost everybody, politicians and diplomats, to consider limits and merits of the alliance, to think about its future and even to question its fate. This, in the wake of detente, had induced almost everybody to re-examine the relations between foreign and internal policy, between economic and political problems, between European and extra-European problems, until the questions on the "possibility" and even the "eventuality of an Italian foreign policy" became part of the political debate. 47 In this context President Gronchi could have had a leading position. But his election caused great bewilderment and among our allies many seemed to fear his initiatives: the mixture of internal and foreign policy, "the opening to

47

ASMAE, Quaroni to Martino, 29 August 1955.

Italy and the Problems of "Power Politics" -

From the E D C Failure to the Suez Crisis

119

the left" to the socialists, "neutralism" and maybe a restless and unscrupulous quest to increase Italy's power. But the alarm died down or at least faded away rather soon. Mrs. Luce, American ambassador in Rome, very much concerned in the beginning, on preparing Gronchi's visit to the USA, according to some witnesses, already noticed "that, after all, the devil was perhaps not so black ... as he was painted"; 4 8 and in any case the visit, in February 1956, took place with success, resuming moderately various themes elaborated in the two previous years, as may be demonstrated by the diplomatic reports, where, from time to time, the convergence in the general lines is certainly evident. 49 In other words, Gronchi's proposals to animate Italian foreign policy and to go beyond the sterile "balance of power" which seemed to paralyze the world 5 0 , found many common accents with the neo-Atlanticism that the Italian politicians and diplomats were sketching. Sometimes Gronchi's initiatives could even disconcert, suddenly re-awakening a feeling of diffidence toward Italy. Examples similar to this are easy to find. When, at the beginning of 1956, in an audience Gronchi hinted at the possibility of coming out of the deadlock of the German unification agreeing to first discuss security and disarmament, according to the thesis favoured by the Russians, the emotion was so strong that the German ambassador did not hesitate to show his concern through a confidential step. Gronchi was too unconstrained in looking for a "compromise solution" to so crucial and tricky a problem! But, two months later, German government circles expressed all their satisfaction regarding how Gronchi had dealt with the problem during the Italo-French meetings in Paris, supporting "the urgency of German unification". In spite of everything, it seemed that Gronchi was firm on the key points ...; 51 and, vice versa, following Italo-German relations in these years, at diplomatic and government level, it was not uncommon to find criteria and perspectives inspired by the atlanticism's new inclinations. This happened when Italy observers reported the acute impatience of Adenauer and his collaborators over the alliance's difficulties and uncertainties; when they noticed the convergence to carry out some innovating line; when they recorded the criticism of the mistakes of "Americans, British and French" in the Middle East. Prompted by their enthusiasm, they came to outline, as ambassador 48

On the entire problem, which would deserve a larger examination, see at least the information, the interviews and the documents published by L. Wollemborg, Stelle, Trent'anni

di vicende

politiche

fra Roma

e Washington,

strisce

e

tricolore.

Milan 1983, in particular p. 34.

49

ASMAE, Brosio to the Ministry, 16 February and then Brosio to Rossi Longhi, 4 March,

50

See Gronchi's speech at the National Press Club in Washington, in G. Gronchi,

Brosio to Martino, 22 March 1956. d'America, 51

Discorsi

Milan 1956, in particular p. 34.

ASMAE, see the note of the ambassador in Germany, undated, the subsequent aide-mémoire of 22 February 1956 and the communication from Bonn of 28 April 1956.

120

Brunello Vigezzi

Grazzi did, the foundations of a real common action within N A T O : "We would find ... no ally more powerful than Germany to use to advantage the Atlantic Pact and to make it a living and working entity: we are both young nations, partly oppressed, but at the same time rich in energy and in moral and economic potential and we are destined to form a vanguard as regards reactionaries and conservatives . . . " . 5 2 Differences remained. Gronchi's policy maintained its features and its characteristic fluctuations. The same could be said for Mattel's boldness and its repercussions, or for Fanfani's statements on the Atlantic policy and the Arab countries. A little later, these differences, owing to the Suez crisis, would actually provoke breaks, sharp polemics. But we should not forget that the divisions and contrasts were often born on ground which almost everybody had helped to prepare. Martino had a different line from that of Fanfani and was much more concerned — as was seen shortly afterwards — about remaining in step with France and Great Britain. But, on the eve of the Suez crisis, it was Martino himself who wrote to Dulles calling his attention to the possible serious consequences of the refusal to finance the Aswuan dam. "Italy, placed at the centre of the Mediterranean, closed between the two fixed passages of Suez and Gibraltar, is naturally particularly worried about all that in this area might form even an only conjectural danger . . . " . And what was true for Italy could also be true for the whole alliance, given the common interest "to neglect nothing, to avoid the estrangement of such important areas and such numerous populations from Western civilisation , . . " . 5 3 Italy and the West, could not lightly lose Egypt and maybe the whole Middle East. On the other hand the ministry's aide-mémoire in the light of Gronchi's visit to America had already pointed out the doubts about the Baghdad Pact or the reservations about the tripartite declaration, 5 4 which could have arisen as soon as the perspective was enlarged. The criteria, the themes linked to neo-Atlanticism in different ways continuously surfaced among various distinctions or dissimilar statements. But from such a point of view the most significative case was perhaps that of the Secretary General Rossi Longhi who, a little afterwards, would play the role of intransigent defender of the West and ardent opponent of neo-Atlanticism and who certainly, in the meantime, was one of the most critical of the effects of détente. "Only on the other side of the iron curtain may they be satisfied and rightly

52

See, for the quotations, A S M A E , report of Alessandrini to the Ministry, 6 February, and

53

A S M A E , M a r t i n o to Dulles, 25 July 1956.

54

A S M A E , Aide-mémoire undated, but J a n u a r y — February 1956.

Grazzi to the Ministry, 3 M a y 1956.

Italy and the Problems of "Power Politics" — From the EDC Failure to the Suez Crisis

121

so ,..". 55 On this basis Rossi Longhi did not tire of preaching caution and diffidence. Still on this basis, he was among the most convinced in wishing for the revision and reform of the alliance; in criticizing the excessive pretensions of the "directorate"; in auguring frank political discussions on the most thorny points. And, in this line, he was also ready to understand the weakening of traditional limits and to insist on the key point of the passage to new world politics, after détente, after Bandung, after all the changes going on. As he noticed at least during those travels of Martino in the Far East, which too represented a kind of prudent opening to the new times: "We had to observe that in New Delhi the Atlantic language is liked little, nay, very little. On the contrary all what tastes of the United Nations meets large favour, which seem to satisfy those ideals of universal pacifism and international equality entertained by the Indian leaders". And concluding his report, prepared in fact for the Atlantic delegation, Rossi Longhi went even further, pointing out the consequences which were foreseen and had to be considered. "To conclude, the three countries of the Indian subcontinent — Pakistan, India and Ceylon — represent as many well-characterized positions in the present world settlement. Only one element unites them: their anti-colonialism. And this is an element which, in its various forms, by now characterizes the entire Asiatic scene (not to mention Africa) and which is successfully exploited by Soviet propaganda. This is a fact that the Western countries cannot but hold in the highest consideration ,..". 56 Italy's foreign policy and her very power politics found shape in this context, which was being built in the most various ways and which involved Italy and most Western countries. Changes were felt everywhere, they were more and more evident; on the other hand, sometimes even the term "new Atlanticism" was beginning to be used by Washington itself - as after all it was rather obvious. 57 The perception of the new situation, the difficulties of détente and the concerns for the uncertainties lying ahead were rather mixed and did not make things easier; so that, in middle 1956, we could say that more than a solid and coherent line there existed at least two or more tendencies, which were deeply affected by changes, but which laboured to find a way out. Once the illusions of Geneva had disappeared, the most logical way of facing the "very important evolutions" seemed to be, in short, that of recov-

55 56

57

ASMAE, Zoppi to Martino, 5 March 1956, note in the margin in Rossi Longhi's handwriting. ASMAE, Rossi Longhi to Quaroni, 26 August 1955 and Rossi Longhi to Alessandrini, 16 January 1956. ASMAE, Ortona to Martino, 29 August 1956, with reference, among other things, to the meetings among Eisenhower, Dulles and Fanfani, but having in mind the transformations of American foreign policy since the end of the war.

122

Brunello Vigezzi

ering the "unity" and "cohesion" of the alliance, with all the "adaptations" required by the times. In effect, many did their utmost to achieve this; the recurring analyses of conventional and nuclear weapons, the new discussions on NATO's tasks, the nomination of the committee of the "three wise men", the laborious research of rules for a preventive consultation among the allies, the same efforts to examine also extra-European problems, were all signs of an orientation of this kind, as happened quite clearly in the last Atlantic Council before the Suez crisis.S8 But, in those same months, Italian observers remarked with accuracy upon yet another and different tendency which was gaining ground and which, from the point of view of "power politics", seemed sometimes to require specific attention. By then détente had given way to "competitive coexistence", 59 but such a process could also accentuate new competition for power, whose characteristics and outcomes were more uncertain than ever. The two superpowers, the United States and Russia, seemed more than ever to act on their own. Maybe it was right to question the nature, the real solidity of their supremacy. But in any case did not their supremacy throw doubt upon the role of the other "powers"? What was the real weight of the Club of Greats which had apparently dominated the Geneva conference? Did France really remain a "great power", or, as was also said, was she "a great power by courtesy", of which the superpowers would rid themselves as soon as possible?60 As far as Great Britain was concerned, maybe it was true, as Eden said, that "she is either a great power or she is nothing", but this too proud an alternative simply risked consigning her to the past; 61 while new forces were emerging: maybe in Europe Germany itself; or India or China among the third world countries. Or suddenly it seemed that the tendency to pursue was still that of an agreement among the western European powers, with the, to a certain extent concealed, aspiration of being able in the future to contrast the two superpowers ... The remarks, comments and discussions which accompanied the "conference diplomacy" sometimes took this turn, and the design of a real "hierarchy of powers", which was being formed and in which Italy too was called upon to partecipate, could be foreseen. 62 Maybe Italy remained rather apart, feeling the disproportion of forces and inclined to conciliate, if not to mediate, the various tendencies, but in the end she worked in that context, and among those perspectives and uncertainties she prepared to face the Suez crisis. 58

59 60 61 62

ASMAE, Note of Magistrati on the meeting of the Atlantic Council of 4 - 5 May, dated 11 May 1956. ASMAE, Brosio to the Ministry, 19 April 1956. ASMAE, Quaroni to Martino, 10 December 1954; Quaroni to the Ministry, 10 February 1956. ASMAE, Zoppi to the Ministry, 29 May 1956. ASMAE, Quaroni to Martino, 30 August 1955.

Italy and the Problems of "Power Politics" -

From the EDC Failure to the Suez Crisis

123

From Suez to world politics Actually, the Suez crisis had its own autonomous relevance, with its development made of different phases, contrasts, dramatic and well-known episodes. But the crisis — particularly considering things from the point of view of Italian foreign policy and with the criteria used so far — had also the character of a punctual and extraordinary verification of the "Atlantic policy" of recent times, or, if we wish, of a showdown which led to the fixing of better lines of conduct and possibilities. And if we then consider that in the end the events in Egypt mixed with those in Hungary, the months of October and November 1956 also acquired a wider meaning, almost a sort of general conclusion of the troubled period which had opened with the failure of the EDC and the foreshadowings of detente. When France and Great Britain took a stand against Nasser and the nationalization of the canal, Quaroni was actually quite scandalized. What Mollet, Pineau, and also Eden or Selwyn Lloyd were proposing for the Atlantic alliance was really too simple! "I wish to be quite clear ... that we are firmly decided on carrying on to the end and if a socialist and pacifist like me is saying this, you may be sure that there is no other alternative . . . " . Pineau certainly disliked the nuances and presented his programme of action too: France and Great Britain would be able to act on their own very well, while the United States would be able to hold the Soviet Union at bay . . . . 6 3 Quaroni reported and on his part did not exclude that maybe "a certain deflation of Nasser" would be desirable but, "even admitting this", he immediately added: "I confess that I cannot be undismayed by the superficiality shown on this occasion by the French government and perhaps also by the British government". 64 In comparison, the Italian government and diplomacy preferred a different course; they distinguished among "nationalization", the particular interests of the Canal Company and the more general problem of the "freedom of navigation"; 65 they tried to evaluate the repercussions in the Arab world and were inclined to prudence. On the other hand the news coming from Washington indicated that the American government also supported France and Great Britain only partially. It was one thing to stop the financing for Aswan, and another to start "irreparable military actions", risking general conflict. 66 In other words, Pineau's programme showed its limits and, in the meantime,

63

ASMAE, Quaroni to the Ministry, 6 August 1956.

64

ASMAE, Quaroni to Martino, 7 August 1956.

65

ACS, Minutes of the Council of Ministers, 31 July 1956; and see also in the same days in ASMAE the letter of the secretary general Rossi Longhi himself to Fornari, 8 August 1956.

66

ASMAE, Ortona to the Ministry, 13 August 1956.

124

Brunello Vigezzi

the Suez problem grew, if not spread. The London conference, convened to examine what had to be done, rapidly became an example of new world politics and soon seemed to reveal the aspirations, the tensions and the contradictions of the period. The conference was seen as "the most thorny and burdensome of these last years" 6 7 and in that context the choices and the oppositions assumed quite a different meaning. On their part, Italian government and diplomacy certainly tried to favour conciliatory tendencies; or sketched some efforts of mediation which bore little fruit. But, at this point, contrasts appeared in any case even among the Italians and — what was perhaps more important — the controversies involved the whole political line followed so far. From this point of view the Suez question became the occasion for a global re-examination, which did not quickly end. "All the events taking place since 26th July, day of the nationalization of the Suez Canal Company, are a clear demonstration of what, in the end, had been smouldering in the major European countries in the field of political strategies and of collaboration among States ...". A little more than two months later, Magistrati thus opened his heart and pointed out the pressures for going further, up to a "revision", to a "focalization" of the entire "international policy" of Italy. 68 After all neo-Atlanticism remained the starting point, but it was subjected to a very hard trial and ended by suggesting contrasting and rather binding evaluations; as shown in the reports, the comments of these months, dense, if not more frantic than ever, were dedicated by the Italian diplomats to the meetings of Martino with Dulles in London; to those of Fanfani with Eisenhower or Dulles at the end of August in Washington; to the WEU meetings in mid-September; to the consultations inside N A T O ; to the second London conference, or to the Bruxelles meetings themselves for the Common Market and the Euratom. In the end, were the French and the British defending their own specific interests and the last privileges of the old colonial empires, or, with the passing of time, did it become clearer that, even among many inaccuracies and mistakes, they were trying to guard some basic rights of the old Europe? Of course the United States remained and at least for a long period would remain an irreplaceable ally but, in the meantime, she risked making irreparable mistakes, sacrificing the conventional armaments necessary to defence, maybe aiming at a two-party agreement with the USSR and badly pursuing the third world countries. With a Europe certainly protected but still at someone else's

67

68

ASMAE, Note of Magistrati on the conference on the Suez canal problem, 16 - 23 August, dated 23 August 1956. ASMAE, Magistrati to Grazzi, 6 October 1956; and see also ACS, Minutes of the Council of Ministers of 12, 19 September, 1 October 1956.

Italy and the Problems of "Power Politics" - F r o m the E D C Failure to the Suez Crisis

125

discretion. Adenauer himself, whose Atlantic loyalty was well-known, remarked all that, and — as the Italian diplomats observed with a certain emotion, at the beginning of October, picking up the thread of many contrasts after Suez — threw out the password of the "Great European power": without super-national utopias, based rather on a simple confederate structure, able to "preserve for all European nations their importance and their value in the world", open to France as well as to Great Britain, to Italy as well Germany, able also to influence the United States more. 69 The line to be followed was this, or similar, as Rossi Longhi first of all maintained, as Grazzi or Magistrati pointed out, even if with some doubts; or was it not rather the other one, which, in spite of everything, Brosio and Ortona tried to single out in Washington? The United States had not forgotten Europe; their interest in the Atlantic alliance had not "absolutely weakened"; but their policy took into account the changes in progress and, without yielding to the USSR, without deceiving itself on Nasser's Egypt, accepted by then much larger responsibilities, thus guarding equilibrium and peace. With regard to these problems, the choices of France and Great Britain were and remained too restricted and dangerous. 7 0 Of course, the most acute moment of dissent came at the end of October when the governments of Israel, France and Great Britain, without consulting the United States, dashed into the military expedition against Egypt. The mistakes continued. Moreover, just when the "revolt" in Hungary ignited, the new Suez crisis showed the discord of the West and left to the USSR unexpected chances to manoeuvre! "The shock for the alliance is of unimaginable proportions ...". 7 1 This was Brosio's first reaction; but from that starting point, with a series of analyses, retracing again and again his steps, comparing his opinion with those of his other Italian colleagues, he looked for a positive solution, which little by little induced him to point out the new possible developments of atlanticism. In short, the success of the United States seemed to him out of the question and quite reasonable. France and Great Britain, in evidence of the facts, had failed: the rather rash statements on the "Great European powers" were retracted and after all the repression of Hungary reduced the USSR's 69

A S M A E , Grazzi to M a r t i n o , 2 October 1956.

70

A S M A E , O r t o n a to M a r t i n o , 29 August, and Brosio to M a r t i n o , 27 September 1956.

71

A S M A E , Brosio to the Ministry, 30 October 1956; and for the first Italian reactions see also M a r t i n o ' s report to the Council of Ministers. There the p a s s a g e : " T h e Italian position cannot but be similar to the American one: that is to say of complaining about the resort to force, as well as not having been consulted. But w e must try to see that the alliance a m o n g Italy, France and Great Britain is not cracked . . . " (ACS, Minutes of the Council of Ministers of 31 October, the only meeting however in which, in this period of acute crisis, foreign policy w a s discussed).

126

Brunello Vigezzi

standing. "America ... was able to appear to the world as the only great power with clean hands, an advantage ... she would not miss". 72 But Brosio, diligent as he was in probing the characters and the importance of the new American "realism", 7 3 did not moralize in his judgement. The United States had minded their own business in a rapidly changing world; they had acted accordingly and their best guarantees for the future derived from that. "The crisis which we are going through and which could be described as a crisis of readjustement, shook America in her d e p t h . . . . The unpleasant surprise of having to apparently side against her own friends ... being, even briefly, by the side of her abhorred enemy, thus having to lead a mass of countries, many of them unreasonable, treacherous and half-primitive, to condemn her allies of half a century; these did not occur without leaving their mark. Being able, at least for the moment, to face the crisis without being overwhelmed and preserving the world from a catastrophe was in itself a fact to be proud of and led many to say: America must act on her own, follow her impulses and remain faithful to her tradition. These are, I would say, the emotional and negative aspects. But there was no dearth of positive, rational aspects: the ascertainment of the intrinsic Soviet weakness; the mirage of being able to recover some large Asiatic countries; the tonic effects of fear on the Europeans in a proN A T O and pro-Europeanism direction; the confirmed subordination of Europe to America with its by-product: the greater hearing which the Europeans must give to the United States' voice ...". 7 4 In stressing these issues Brosio certainly neglected many others. Rossi Longhi, Quaroni, Grazzi, Zoppi and the other usual interlocutors, in their reports and in their answers, remarked on other aspects, to moderate the picture and to contest various criteria, particularly regarding Italy and her future conduct. Brosio was the first, with all his rather ostentatious coarseness, to recognize that he quite often saw things from "the American point of view ...". 7 5 Brosio left too little room for the European powers, underestimated their reactions and diminished their initiative. Rossi Longhi, in particular, reproached him for desiring "a sort of Rome-Washington axis", as a great antidote for dealing with difficult situations and major problems. "If I am not mistaken, this is Fanfani's position ..,". 7 6 At this point the discussion on neoAtlanticism was indeed more open than ever ... But perhaps Brosio, better than others, was able to resume the experience of this period and to point out

72 73 74 75 76

ASMAE, ASMAE, ASMAE, ASMAE, ASMAE,

Brosio to the Ministry, 15 November 1956. Brosio to Martino, 6 December 1956. Brosio to the Ministry, 29 November 1956. Brosio to Martino, 6 December 1956. Rossi Longhi's note in the margin of Brosio's report of 6 December 1956.

Italy and the Problems of "Power Politics" -

From the E D C Failure to the Suez Crisis

127

all the importance of the transition from the years of postwar and cold war to the new world politics which was emerging. By then Italian foreign policy had greater possibilities; but, while it could still be based on the Atlantic alliance and was certainly willing to do so, it had also acquired, we could say, the consciousness, or at least the feeling, not exactly reassuring, of having to operate and assert itself in a world which had much wider and much less precise frontiers than before.

In search of Europe Maybe the Italy of the fifties would really have managed to overcome the uncertainties of world politics and to find in any case an adequate ubi consistant: by means of European integration or at least, association. On the other hand government and diplomacy had this clearly in mind; in fact we could say that during all this period Italy never ceased to pursue such an aim, as in the cases of the Messina projects, the Common Market, Euratom or even of the larger perspectives of reducing national sovereignties or of political community. The idea of integration remained for Italy a "key idea": Magistrati repeated it in his notes on the various international meetings; Quaroni found that the "European vocation" was a natural vocation for Italy, and, at the beginning of 1956, the Ministry's recapitulatory aide-mémoire on the Italian foreign policy, in view of the meeting with the German representatives, confirmed that "the willingness to pursue the aim of European integration" was "a permanent feature of Italian policy ...". 7 7 The line was fixed; in this field the Italian government and diplomacy often carried out a really conciliating, discreet and continual action; and after all in March 1957, owing perhaps to the shock of the Suez crisis, the Common Market and Euratom Treaties were actually signed. In these years then, Italy certainly relied on her European policy, laying also the foundations for a great future work; but, if this is indubitable, it is indispensable to beware of a mistake of historical perspective, which historiography has often made or, at least, is inclined to make. The evaluation of the importance of the European policy, of its role, even as an expression of a power politics adapted to the times, partially hits the mark; but then the European policy of Italy, and even more so the essential policy of her partners, is really comprehensible and valuable only within the general development of this period. The polemics, the agreements, the stand77

ASMAE, Magistrati's note on the meetings of the Atlantic Council and of the Council of WEU of 14 - 1 6 December, dated 19 December 1955; Quaroni to the Ministry, 10 February 1956.

128

Brunello Vigezzi

stills and the progress towards the Common Market and Euratom, the close discussions on sectorial or horizontal integration or on the pacific use of atomic energy, the remarks and reflections on the relations among politics, economy or strategy, touch many aspects of great relevance, but "European policy", in its entirety, with the great resistance it met or the success sometimes gained, suffered actively and sometimes even obsessively the various phases of international politics: the perspectives of détente, of the Geneva conferences, of the Suez crisis or crises. Or at least this was the interpretation of the Italian politicians and diplomats themselves, who were in any case among the most favourable, when they tried — as it was necessary - to single out the way or the moment to link together the foreign policies of Italy, of the continental allies, of Great Britain, of the United States and European perspectives: be it a question of WEU, of Messina, of institutional aspects or military problems, of federation or confederation, or, in a word, of the various forms which between 1954 and 1957 European policy could assume. European policy remained, if we wish, a "constant", but, in more than one case, an extremely, if not elusive and "evanescent" one. 78 Quaroni, more than others, was compelled to ascertain this in Paris; and, impulsive and inclined to paradox as he was, ended by collecting a series of judgements and images which seemed to consign any relevant result to the world of dreams. In the end, even if he did not share minister Martino's faith in going beyond national sovereignties, Quaroni sincerely appreciated the European vocation of Italian foreign policy; the obstacles he met in supporting it however, were so great and so many as to lead him to despair. "We may want Europe, unfortunately we do not suffice to make it". 7 9 In particular, the French parliament wanted to have nothing to do with a common market; but then the news coming from the other ambassadors was not much more encouraging. Great Britain resisted; Germany, in the best possible case, was divided and wavered ... Therefore the strongest political impulse came right at the moment of the Suez crisis, but it was full of allusions. At this point — Quaroni reported - various French milieux too, given the stakes, would be prepared to tolerate the European treaties, if only to arrive at a common front against Nasser and against the United States themselves. "Europe is to be claimed in order to throw America and the Americans out ...". 8 0 The trend also took these extreme aspects, or maybe recovered some links with the strategy, much more solid and moderate, of a "great European power", able to assert itself with greater 78 79 80

ASMAE, Zoppi to Quaroni, 3 March 1955. ASMAE, Quaroni to Martino, 5 April 1955. ASMAE, Quaroni to Martino, 3 November 1956.

Italy and the Problems of "Power Politics" - From the EDC Failure to the Suez Crisis

129

autonomy: a strategy which, by then, received some support also from Adenauer. 81 The final Suez crisis and the events in Hungary very much moderated these perspectives. Or, at least, given the weaknesses shown, and the risks undergone, they led to the warning of not underestimating in the future the various possibilities of a European agreement, yet establishing in the meantime very solid links with the United States. Within certain limits the Suez crisis, it could be repeated, made a "European" revival easier. But, at that point, we may also understand why Grazzi, who in Bonn had closely followed the most recent events and had devoted the greatest attention to Adenauer's intentions, commented on this matter in terms more cautious than ever. "Today we count for what we are; and in a divided Europe, and therefore neglected by America, we would count even less, not to say nothing at all ,..". 82 Perhaps Grazzi was a little too pessimistic and unilateral. The initiative for the EEC and for the Euratom still maintained its autonomous value and was being accomplished. For the rest, just a few days earlier, Adenauer and Gronchi, without neglecting the lesson of Suez, had reviewed many of the themes of the new Atlanticism and discovered that, perhaps owing to the "Italo-German impulse", there were plenty of reasons for confidence: to "give new strength" to NATO, to strengthen the relations with the United States, to vigorously oppose the advance of the USSR, to "awake the sleeping beauty of the WEU", to complete the European treaties, to be present in the extraEuropean areas, starting with Egypt, Aswan and the Middle East. 83 Perhaps Grazzi was rather too unilateral; but on one point he was certainly right; because in any case at the end of 1956, after Suez and on the eve of Rome treaties, the search for European solidarity, in spite of everything, had not acquired or, if one prefers, had not yet acquired the strength to inspire and to orient Italian foreign policy,84 which was coming to grips with the new uncertainties of world politics.

81 82 83 84

See above p. 125 and No. 69. ASMAE, Grazzi to the Ministry, 20 December 1956. ASMAE, Gronchi — Adenauer conversation in Bonn on 6 December 1956. See in this sense also ACS, Minutes of the Council of Ministers of WEU, 26 March 1957, and, there, Martino's report on the international situation, with scant reference to the European treaties.

Introductory Remarks for the Debate by Hans-Peter Schwarz

Professor Girault has reminded us in his lucid paper that the historian can often profitably draw on the analyses of contemporary journalists. As well as Alexander Werth's famous book "La France depuis la guerre 1944 - 1 9 5 7 " , there is another study which at the time strongly influenced the German image of France. The author was the Swiss journalist Herbert Liithy, and the title was: "France's Clocks are Different". All I am concerned with here is the title, since it recalls a basic fact that should be a starting point for our discussions. It is as banal as it is basic, and it states: though all States of Europe live in the same time, their clocks are different. This applies to internal and external policy decision-making processes, and also to the motives and concepts of the decisive personalities. But it is not just that the clocks ran differently in the period from 1952 to 1957 in Rome, Paris, London and Bonn. Each one of the colleagues who presented their valuable studies to us this morning was, irrespective of any coordination, plainly resolved to take his own clock apart in a quite different fashion. This is entirely legitimate: it is unavoidable, but it does not make the first discussant's task any easier. Yet as modern historians we are all, more or less consciously, pupils at the same time of Ranke and of M a x Weber. So that we know there are two truths. The first truth is that everything is unique: nothing is really comparable with anything else. The second truth is that real knowledge begins where we start to compare the allegedly incomparable. It is in this sense that I now turn to the papers of Mr. Adamthwaite and Mr. Girault, following with Mr. Warner, and finishing with the studies on Italy and Germany. First let me give a general description of the approaches. All take the view that the countries they studied were in a period of great movement and profound changes, and were also aware of this, according to the testimony of decisive personalities. A picture of a Western bloc rigidified in the cold war would certainly be quite false.

Introductory R e m a r k s for the Debate

131

Secondly, the governments of all countries knew more or less skillfully how to bring both traditional and a few newer tools to bear in order to regulate power relationships. Mr. Girault and Mr. Adamthwaite have directed our attention primarily to the decision-making systems of their countries. The result of their studies is to some extent paradoxical. As we know, political scientists regard British prime ministerial government as a paradigm of hierarchical order, rational coordination through cabinet committees and long-term stability, thanks to the two-party system and majority voting. But what did this system, according to Professor Adamthwaite, actually produce in the years from 1952 to 1957? Stagnation, no clearly defined priorities, wastage of resources, no re-definition of Britain's role in the world, and finally the chaotic mess of the Suez intervention. The causes are, in Mr. Adamthwaite's opinion, the very structures generally praised as so particularly successful. Political hierarchy may be useful for innovative foreign policy, but how could one expect from Prime Minister Churchill an innovative policy on Egypt, given the fact that 55 years before he had fought in Kitchener's army at Omdurman? And on top of that, all the failings of age! Let me recall a remark in correspondence by Adenauer (born in 1876), who met Winston Churchill in M a y 1948 at the congress of the European Movement in The Hague, and summarized his impressions as follows: "Very impressive, but after all, very old!" Everyone knows, too, that contrasts between prime minister and foreign minister are in the British governmental system a guaranteed means of bringing about a standstill. But when a foreign minister is unmovable because he is already regarded in his party as a potential successor to Churchill, then the position becomes really difficult. The same applies to the drawbacks of highly differentiated coordination. Where the top does not provide any strong impetus, the bureaucracy too concentrates on prolonging the status quo. One may then ask with all prudence whether consistent long-term planning in the Foreign Office would really have provided the solution, since not even Eden himself - far less Churchill foresaw fundamental change. Yet Mr. Adamthwaite has pointed out that the reduced role for Britain, against which Churchill fought, would have been readily accepted by Anthony Eden. This thesis is both general and specific: general in that innovation in foreign policy depends ultimately on the man at the top; specific in that Eden, if no reformer, was at least an enlightened reductionist. Continuing this course of thought, the question arises whether Britain might have arrived at the redefinition of its world policy role already in the

132

Hans-Peter Schwarz

mid-1950s, if British policy had been guided by Macmillan rather than by Eden. Two points arise here: firstly, in the last years of Churchill's premiership it was not yet on the cards that Macmillan would become prime minister; secondly, as Mr Bullen reminds us, in summer 1956 Macmillan was one of the keenest hawks on Suez. But anyone reading Mr. Warner's equally richly documented paper dealing with Eden's Suez policy in 1956 knows that there are contradictions on this specific point. However, let us leave this cause célèbre of British great-power policy aside for the moment, and look at Mr. Girault's study. He too puts the decision-making system at the centre of his study. Throughout the fifties, the governmental system of the Fourth Republic was feared, deplored or mocked in Europe as a paradigmatic example of ineffective and irrational "gouvernement d'assemblée". It was not 30 or so decision-makers that "ont mené le jeu en France" but over 500, who pursued an entirely incalculable policy. For three whole years the world could not know exactly whether a couple of dozen of these "decision-makers" would arrive at acceptance or rejection of the EDC. Against all expectation, Mendès France then succeeded in 1954, in a couple of months, not only in finding majorities for the partial liquidation of the untenable position of the French Empire — Indochina, Tunisia, Morocco — but even in getting the National Assembly to accept the worst possible thing - the national German defence contribution in the NATO context, after it had, as the paradox of all paradoxes, rejected the solution of a European Army. One might go on. It was not that there was stagnation in the face of the task of redefining a geo-political will, but rather incalculability. Professor Girault does not seek to· conceal this. On the contrary. But he points out that where the forces in parliament are blocked, power shifts elsewhere — to particular ministries, specialized bureaucracies. It is a system much closer to the hard-to-calculate governmental system of the US, which has been reducing Europe to despair since the First World War, than the British one or that of the Federal Republic. This "machinerie compliquée et disloquée", however, managed in those very years from 1954 to 1958 to take some decisions that still today remain fundamental to France's power position and to the distribution of power in Europe: — the reluctant, but, as it proved, definitive acceptance of the German defence contribution in a NATO context; — the decision, taken not openly but huis clos, in favour of the independent creation of the "force de frappe", the fruits of which were to be harvested only by de Gaulle, and which the whole of Western Europe has now learnt to see as a great relief;

Introductory Remarks for the Debate

133

— the decision in favour of the EEC and Euratom; — the foundations of France's economic modernization. In the policy on Tunisia and Morocco, one may also discern the lineaments of the "nouvelle géostratégie" toward which de Gaulle was then to impel France's Africa policy. Was, then, the so disordered decision-making system of the Fourth Republic superior to the so orderly British one? A system that was not hierarchical and not well coordinated, but for that very reason more capable of innovation? Professor Girault - and we know his sceptical nature - would no doubt refrain from formulating any such overweening thesis. He warns us to attach the appropriate importance to the irrationality that derives from events and situations. He also reminds us of the reservations still being held against the EEC and the new Germany policy in 1957. He emphasizes how an all too understandable clinging to the three Algerian Départements ultimately blocked all new approaches. Raymond Aron, in his famous polemic "La tragédie algérienne" prophesied as long ago as 1957 that it would not be until some years later that de Gaulle would draw the consequences. Accordingly, the French balance sheet is ambivalent. This ambivalence of France, one may argue, also follows from a certain weakness. It wished to dare the venture of intensifying European policy also because it had been deceived at Suez by America and Britain. It even sought to draw advantage from nuclear cooperation with Germany. It still cooperated loyally in NATO, but withdrew from it a large part of its troops, which it needed in Algeria. But at the same time it got itself bogged down in the Algerian war, which very severely threatened its great-power position. This is neither an "either-or", nor the basic pattern of today, but a tortured "both-and". This is the point at which to turn back to Britain. For long British memorialists and historians have had one great delight: disclosure of the "Secrets de l'Expédition d'Egypte", as the Bromberg brothers called it. This delight is almost as great as what Germans feel in looking back speculatively, nostalgically or however to the alleged lost opportunities of the years 1952 and 1953. Professor Warner gives us his version, based on much new material. It will no doubt be vigorously debated hereafter by British colleagues who know about these things. What concerns me is his summing-up. Professor Warner's thesis is that Suez does not mark a break. On the one hand, Britain ought to have recognized the limits to its great-power policy earlier, and on the other, Suez did not lead to a "reassessment" of its role as a world power. Indeed, for years thereafter the British establishment was not prepared to draw the consequences from the changed power relationships — specifically in connection with European cooperation.

134

Hans-Peter Schwarz

Accordingly, it was not primarily a poorly working decision-making system, or backward-looking views of a prime minister, but pervasive lack of will in leading political circles of a tough, proud people, unwilling to abandon its position as a world power. Personally, I largely agree with this interpretation of British great-power policy, but I have my doubts whether the thesis with which Warner concludes, namely that France had drawn the necessary conclusions much earlier, really fits. France too seems to me to be more ambivalent, far into de Gaulle's times; considering its relationship to NATO, one even has to add, until today. Tough resistance, then, in the case of Britain, and ambivalence in the case of France: that is the summary. Let us now consider the last two of these four graces brought before us today: Italy and Germany, as the Federal Republic of Germany still tended to call itself then, quite naturally and consciously. At bottom, Rome and Bonn were pursuing very similar foreign policies in the period from 1952 to 1957. This emerges from the analytical outline by Professor Vigezzi, which I find very stimulating, and from the well-founded papers of my revered German colleagues Overesch and Niedhart. Owing to lack of time, I cannot deal with these studies at the length they deserve. Let me just pick out a few key ideas. What is the style of the foreign policy of these two countries? It is a foreign policy of "interdependence", or of "integration", to use the words of the time. This foreign policy in no way misses the reality of power relationships, and even to a certain extent itself pursues power politics, but it is highly appropriate to States emerging from a situation of powerlessness. Britain's and France's claims to great-power positions are understandable and — looked at with the hindsight of the 1980s — brought Western Europe on the whole many benefits. Consider where we might be today without the independent British and French nuclear forces! But the power-policy of the Italians and Germans is, if I may put it this way, more modern, more in touch with the inter-dependence of the Western world, and has brought the countries and States of the Western European world just as much good. What does this foreign policy of interdependence mean, then? Here, too, I can do no more than pick out keywords: — consistent multi-lateralization in the context of the various Western organizations; — partial renunciation of autonomy and spectacular go-it-alone moves in favour of skilful cultivation of relationships with all the great Western powers (which of course does not rule out a certain equilibrium policy within the West, but does prohibit confrontational alliance policy in the style of the inter-war years);

Introductory Remarks for the Debate

135

— cautious policy of dialogue with the Soviet Union, underpinned by the Alliance; - primacy of economic benefit in the context of the world trading system and the European systems. The Federal Republic of Germany in particular secured the greatest successes with this idea between 1952 and 1957. In 1952 it was still a sort of protectorate of the Western Allies, without a single soldier of its own. The economic miracle was starting to gem in that year, and was now bringing big tax yields to public funds, without which the subsequent years' domestic and foreign policy oriented towards stabilization would have been impossible. By 1957 the Federal Republic was already by far the strongest and most dynamic West European economy. The build-up of military power was delayed for many more years, and in 1957 the Bundeswehr was only a "force in being". But many were predicting that by the early 1960s Germany would have the strongest conventional military force of Western Europe and probably, in some way or other, have solved the problem of nuclear participation. Even if it were not a mature nuclear power like Britain and France, it would still be something similar. Adenauer and his collaborators, as M r Niedhart very rightly shows in his accurate analysis, in which I largely share, saw the Federal Republic as a sort of European great power. Washington saw it the same way. But neither saw this as remotely contradicting integration policy. N o r was there any notion of the Federal Republic being an economic giant but a political dwarf, as Willy Brandt saw fit to maintain in the second half of the 1960s! This power was burdened by the well known shackles: division, geostrategical exposure, the psychological burden of the recent past. But for that very reason it pursued the same moderate, though anything but powerless, foreign policy as we see with Italy too. Looked at from the perspective of the 1980s, Bonn and Rome were already, with full awareness, developing the concepts of modern European policy to which France and Britain were converted only later. The reason is clear. Britain and France were still, in the period under consideration, European great powers of world stature, but also had to cope with the "management of decline". Italy and Germany, by contrast, had the catastrophe behind them, and could devote themselves, in favourable circumstances, to "managing the comeback". The absence of an overseas Empire proved an advantage in the cases of both Italy and Germany. There were no differences in this respect with the US, none of the much-hailed "overstretching" of British and French overseas policies. Such were the blessings of poverty. The same blessings were to be shared by Japan in the Far East. Does that mean that the Federal Republic of Germany, we might ask in conclusion, had abandoned its national interests? Would reunification with simultaneous neutralization have been a realistic answer?

136

Hans-Peter Schwarz

It would seem appropriate at this point to take another look at this central issue of Germany policy of those times, which is, after all, still a central issue today: deprivation of the right of self-determination; division. Professor Overesch's in-depth study has gone into this with great knowledge. But his thoroughly researched study has shown that in 1952 — 3 there were only slight minorities in the political establishment that saw some reasonableness in the concept of reunification in a framework of neutralization. It is only political no-accounts that are brought before us: the Minister for All-German Affairs, Jakob Kaiser, pushed by Adenauer, following his failure as CDU chairman in Berlin and the Eastern Zone, into the dead-end of "allGerman Jakob"; the congenial diplomat Pfleiderer, then a loner in the FDP parliamentary group, later Adenauer's ambassador in Belgrade, but never at the centre of power; Gustav Heinemann, who left the CDU and went to the electoral debacle of 1953 at the head of a mini-party; or the rather too enthusiastic drinker, former Reich Chancellor Josef Wirth, plus a couple of journalists. Not a very impressive list. On the side of the Western Allies there was Churchill, already very old, with Eden at the Foreign Office, and Washington and Paris making a common front against his reveries. Why did the path chosen by Adenauer, and the broad majority supporting him, seem in fact to almost all concerned to have no alternative? Adenauer's own calculations are presented very accurately in Mr Niedhart's study. He regarded an autonomous power-policy by European States as a structural danger to his country, and took the view that Germany (or more exactly the Federal Republic) and Western Europe needed to modernize their power-policy if it could at all be called that. This meant concerted foreign policy, particularly vis-à-vis the Soviet Union, but also the building up of a European alternative to American hegemony. This was no old-style great-power policy, but, as Adenauer and his colleagues believed, a policy that would bring a certain equality of rank with Britain and France, and at the same time be acceptable to all the smaller Western European States. Of course, with the German answer at the time to the questions of modern power-policy, as with the Italian one, the memory of the very recent handling of power was not unimportant since it had hardly been for the best for either country. Professor Girault has reminded us how nice it is to end with a quote. I shall follow his example, especially since I can cite a German poet rewarded with honorary citizenship by revolutionary France. Friedrich Schiller alluded, in one of his very readable maxims, to the difference between the useful modern and the less acceptable old-fashioned style of power perceptions and power behaviour, as a race between strength and cleverness. The last lines of these verses, with which I wish to conclude, are: "Pride runs ahead and crashes in his fall; cleverness overtakes them all."

II. The Economic Area

Economic Aspects of British Perceptions of Power 1 by George C. Peden

In the years 1952 to 1957 economic difficulties led Britain to reassess her rôle in world affairs. The presence of inflationary pressures at home, and the weakness of her balance of payments with the rest of the world, were signs that the British economy was in trouble. By the mid-1950s it was clear that there was a danger that Britain might lose her share of world export markets, and by the later 1950s there was a growing awareness that the British economy was not expanding as rapidly as those of her European neighbours. However, Britain's economic and political interests as the centre of the Commonwealth and of the Sterling Area, combined with her determination to maintain her sovereignity, were impediments to her participation in European integration. Britain was therefore unable to exercise any positive influence on the creation of the European Economic Community. Britain's economic difficulties did, however, help to bring about changes in defence policy, notably in 1957, when it was decided to reduce Britain's disproportionately large contribution to Western defence. Even so, Britain still saw herself as a power with worldwide interests and responsibilities, which had to be maintained. She was not yet ready to abandon her claims to a rôle of leadership in world affairs. What had changed between 1952 and 1957 was the perception of where the most pressing challenge to British power lay: by 1957 it had been recognised that this lay in the economic rather than in the military sphere. The maintenance of armed forces, and the production of armaments, could no longer be allowed to harm the health of Britain's internal economy or the success of her export trade. 1

This paper has drawn upon the following unpublished work: Sir Alec Cairncross, University of Oxford, draft chapters of a forthcoming book on 'The Economic Section, 1 9 3 9 - 6 1 ' and Victoria Syme, University of Bristol, draft chapters for a thesis on 'Economic Constraints on British Rearmament 1950 - 1955'. The author has also benefited from listening to the following seminar papers (all given at All Souls College, O x f o r d , in 1987): Sir Alec Cairncross, 'The Threefold Crisis of 1955'; Lord Franks, 'Anglo-American Relations, 1 9 4 5 - 5 2 ' ; Lord Plowden, 'Anglo-French Relations, 1 9 4 9 - 5 0 ' . Research for this paper was funded by the British Academy. T h e author is grateful to Sir Alec Cairncross for comments on a first draft of the paper but responsibility for remaining errors is the author's alone.

140

George C. Peden

1.

Responsibility for adjusting policies to economic realities between 1952 and 1957 lay with the Conservative governments of Winston Churchill ( 1 9 5 1 - 5 ) , Sir Anthony Eden ( 1 9 5 5 - 7 ) and Harold Macmillan (1957-63). By the 1950s international relations involved a wide range of government departments dealing with different aspects of economic policy. Domestic politics and foreign policy were intimately related. For example, an offical working party considering the Schuman Plan in 1950 included representatives of the Treasury, the Board of Trade, the Ministry of Fuel and Power, the Ministry of Labour and the Ministry of Supply, under a chairman from the Central Economic Planning Staff. Naturally the Foreign Office was also involved, while on other matters the Bank of England, the Ministry of Agriculture, the Colonial Office and the Commonwealth Relations Office would also be consulted. The Chancellor of the Exchequer was also in regular communication with the finance ministers of the major Commonwealth countries. The key ministerial committee for co-ordinating British economic policy, both external and internal, was the Cabinet's Economic Policy Committee, 2 chaired by successive Chancellors of the Exchequer. In this period these were R. A. Butler ( 1 9 5 1 - 5 ) ; Harold Macmillan (1955 - 7) and Peter Thorneycroft ( 1 9 5 7 - 8 ) . Other leading members of the committee in the early 1950s were Churchill's closest adviser, Lord Cherwell, the Paymaster-General from 1951 to 1953, and Viscount Swinton, an elder statesman, who was successively Minister of Materials (1951—2) and Secretary of State for Commonwealth Relations ( 1 9 5 2 - 5 ) . None of these ministers was in any sense an economist but Cherwell's academic training — he was a professor of physics at Oxford — gave him the confidence to subject economic advice to rigorous criticism. The leading Treasury officials, Sir Edward Bridges, the Permanent Secretary and head of the Civil Service, 1945 — 56, his deputy, Sir Bernard Gilbert, and Sir Leslie Rowan, who was in charge of the Overseas Finance Division, 1951—58, all similarly lacked formal economic training, although not experience of economic affairs. The leading economist in Whitehall throughout the period was Sir Robert Hall, Director of the Economic Section since 1947. The Economic Section was a team of economists, originally set up in the Cabinet Office during the Second World War, but formally transferred to the Treasury in 1953. Hall's advice reached the Cabinet via the chancellor, and the only important source of professional economic advice outside the Treasury, but within Whitehall, was Donald Mac-

2

The minutes and memoranda of the Economic Policy Committee are to be found in the Public Record Office (PRO), London, in Cabinet Office Papers, series 134, vols. 841 to 55 (CAB 134/ 841-55).

141

Economic Aspects of British Perceptions of Power

Dougall, Chief Adviser in the Prime Minister's Statistical Branch from 1951 to 1953, who briefed Cherwell. 3 The Treasury's responsibility for managing the economy through fiscal and (in consultation with the Bank of England) monetary policy was firmly established by this time, but Bridges encouraged teamwork within Whitehall through interdepartmental committees. Of the high intellectual powers of most leading officials and economic advisers in Whitehall there can be little doubt. However, one criticism which is often levelled is that officials and economic advisers were so busy dealing with problems of the moment that there was insufficient time for thought about the long-term future of Britain and its economy. Even under the Labour Government of 1 9 4 5 - 5 1 , which had been committed to the idea of a planned economy, long-term planning had been upset by events, notably the convertibility crisis of 1947, the devaluation crisis of 1949 and the outbreak of the Korean war in 1950. 4 After the Conservatives came to power, the Central Economic Planning Staff, which had been set up under Sir Edwin Plowden in 1947, had less and less work to do, and Plowden himself left Whitehall at the end of 1953. 5 On the other hand, while there was nothing remotely like French indicative planning until the 1960s, Conservative ministers and their advisers did undertake major policy reviews between 1952 and 1957. The most important of these, for the purposes of this paper, was a review in 1956 of the future of the United Kingdom in world affairs. This was an attempt to relate policy commitments to economic resources, but it also revealed a good deal about what policy-makers in Whitehall thought were Britain's economic strengths and weaknesses. Outside Whitehall, the chancellor's principal source of advice was the Bank of England. The Governor of the Bank, Lord Cobbold, met the chancellor each week, so that the Treasury was always fully aware of financial opinion. 6 3

Of the ministers mentioned, three produced memoirs which cover the 1950s: Sir Anthony Eden, Memoirs:

Full Circle, London 1960, R. A. Butler, The Art of the Possible, London 1971,

and Harold Macmillan, Tides of Fortune 1956-1959, Government

1945-1955,

London 1971. Anthony Seldon, Churchill's 1951—55,

London 1969, and Riding the Storm Indian Summer:

The

Conservative

London 1981, draws upon interviews with many politicians and

officials, and is a particularly useful source for personalities and relationships within Whitehall. Anthony Howard, RAB: The Life of Lord Butler, London 1987, is another useful source for economic policy-making. For Cherwell and economic policy see Earl of Birkenhead, The Prof in Two Worlds, London 1961, pp. 280 —94. For economists and their advice, see Donald MacDougall, Don and Mandarin: Cairncross, The Economic 4

Memoirs

of an Economist,

London, 1987, and Sir Alec

Section 1939 — 61 (forthcoming).

See Sir Alec Cairncross, Years of Recovery:

British Economic

Policy 1945 - 51, London 1985,

esp. pp. 326 — 9. 5

Seldon, Churchill's

6

For the work of the Bank of England in this period see 'Committee on the Working of the

Indian Summer,

p. 163.

Monetary System: Report', Cmnd. 827, British Parliamentary Papers (BPP), 1 9 5 8 - 5 9 , vol. 17, esp. ch. 5.

142

George C. Peden

The links between Whitehall and industry were less intimate, but employers had no difficulty in communicating their views to a Conservative government, either through the British Employers' Confederation and the Federation of British Industries, or through particular trade organisations. More surprisingly, perhaps, relations between the government and the Trades Union Congress seemed to be good during Churchill's last period in office. Churchill instructed his Minister of Labour, Walter Monckton, to pursue a conciliatory policy in dealing with the unions, and the government consulted the T U C as frequently as the Labour government had done before 1951. Attitudes hardened on both sides, however, once the Eden government attempted, unsuccessfully, to negotiate an agreement on wage restraint with the T U C in 1956. 7

2. The Conservatives came to power in 1951 determined on a markedly less interventionist economic policy than that of their Labour predecessors. Variations in interest rates were preferred to Labour's system of building licenses and the allocation of coal and steel as means of controlling investment. Likewise tax changes and the price mechanism of the free market were preferred to import controls, price controls and rationing as means of controlling consumer expenditure. 8 The annual Economic Survey, which, under Labour, had published forecasts and targets, and represented a limited form of indicative planning, was from 1952 largely confined to a factual report on the economic situation. Even so, the chief ends, if not the means, of economic policy remained the same. These were: firstly, the building up and maintenance of a strong balance of payments. Britain needed to earn enough overseas income, especially dollars, to pay for essential imports, and also to pay for the level of government expenditure abroad necessary if she was to continue her rôle in world affairs. Secondly, there was the domestic political imperative of maintaining full employment. 9 Thirdly, there was the connected problem of checking inflationary pressures, which were bound to be present when there was a seller's market for labour, and when there were large arrears of private and public investment to be made up after the Second World War. All three goals could most easily be achieved if Britain could increase her output of goods and services per unit of labour, and also her income from exports. Increased output and exports depended upon a satisfactory flow of

7

Ross Martin, TUC: The Growth of a Pressure Group 1868-1976,

8

For the reduction in direct controls under the Conservatives see J. C. R. Dow, The ment of the British Economy

5

See J. Tomlinson, pp. 1 4 2 - 3 .

Oxford 1980, pp. 2 9 8 - 3 0 1 . Manage-

1945 — 60, Cambridge 1964, chs. 3 and 6.

Employment

Policy:

The

Crucial

Years

1939-1955,

Oxford

1987,

Economic Aspects of British Perceptions of Power

143

investment, so that Britain could maintain, and if possible increase, her efficiency relative to that of her commercial rivals. However, the idea that the government should seek directly to influence the structure and efficiency of the economy, as was being done in France, did not enter the British scheme of things after 1951. Butler did in 1954 speak of doubling the standard of living over the next 25 years, but his chosen method of achieving this fourth goal of economic policy, which implied growth in output, was to rely on the free market to guide new investment. 10 Reliance upon fiscal measures (that is changes in taxation and in the balance between government revenue and expenditure) and monetary measures (changes in interest rates) to regulate the economy was not without its problems. The idea was to raise aggregate demand for labour (through increased private consumer expenditure, investment, or government expenditure) if unemployment rose, and to reduce aggregate demand if inflation rose. However, there were inevitable lags in the collection of data and there was uncertainty as to future trends, so that it was difficult to know when to reflate or when to deflate. Unemployment averaged less than 2 per cent in the 1950s, and at that level it did not take much of an increase in demand to outstrip domestic productive capacity, and thus to raise prices and threaten the balance of payments. However, the decline in import controls, which affected about 60 per cent of all imports in 1952 to about 20 per cent in 1954, meant that there had to be greater reliance on domestic deflation to avoid balance of payments problems. As a result a weakness in the balance of payments, or speculative pressure against sterling, could force the Treasury and the Bank of England to take fiscal and monetary measures which would discourage the very investment which was necessary to make British goods competitive. The Cabinet showed an awareness of this dilemma when it discussed the problem in July 1955, but in practice it was unwilling to reduce public investment programmes on social infrastructure so as to leave more capacity in the construction and capital goods industries for private investment in manufacturing. 11 This reluctance arose from the fact that governments had a wider range of policy objectives apart from the immediate concerns of economic policy. In particular, the Conservatives had been helped to electoral victory by a commitment to build 300,000 houses a year, compared with an annual average 217,000 under Labour in 1948 — 51. The fulfilment of this commitment involved increased imports of materials, especially timber, and the diversion of steel away from manufacturing industry (and therefore exports). Even so, in 1952 and later, ministers were more willing to cut defence programmes than the 10 11

Butler, Art of the Possible, pp. 1 6 0 - 1 , 175. PRO, CAB 128/29, Cabinet minutes, 1955, 22nd conclusions (CM (55) 22).

144

George C. Peden

housing programme. 1 2 It proved to be very difficult to contain the political pressure for increased social expenditure, and this could force the chancellor to seek economies where he would rather not have done. In particular, in 1956, when the Cabinet refused to reduce food subsidies by as much as the Treasury wished at a time of inflationary pressure, the chancellor proposed, and the Cabinet agreed, that, as an alternative, taxation allowances for industrial investment should be suspended. Yet these allowances had been introduced only two years earlier in an effort to encourage British firms to modernise their plant and equipment with a view to making British exports more competitive. 13 As we shall see below, defence expenditure was one area where the Cabinet was willing to make cuts, a development made possible by the abatement of international tension after 1952. The principal shortages facing British industry in 1952 were coal and steel, but by early 1953 the immediate shortage was over with regard to the latter. The coal shortage, however, persisted until the mid-1950s. As late as 1955 the Cabinet was gloomily considering the prospect that Britain, having once been a major exporter of coal, might become a net importer. In the light of this, ministers accepted the view that there was a need to press on with the substitution of imported oil for coal in power stations, as there were technical problems in accelerating the nuclear programme. 1 4 In the event, coal imports, which were always less than coal exports, fell rapidly after 1955 to negligible amounts by 1958. 15 Even so, the prospect of increased dependence on imported oil may have been a factor in British policy in the Middle East in 1956. British manufacturing industry itself still seemed to hold a strong position in world markets in the early 1950s. For example, Britain's share of world merchant shipbuilding in 1950 was over one third, and, although this was bound to decline as competitors such as Germany and Japan recovered, it is hard to explain the failure of British shipyards to modernise in anticipation of this competition. The spectacular decline of British shipbuilding since the 1950s, to a level less than that of Denmark by the 1980s, was not anticipated. Moreover, British industry was well represented in growth sectors and seemed well placed to compete. For example, in 1955 British labour productivity in the motor-car industry was still ahead of its European competitors and the Japanese industry was still in its infancy. 16 The Cabinet's Economic Policy Committee was assured in 1952 by the Ministry of Supply that Britain had a remarkable technical lead over its 12

See minutes and memoranda of meetings of ministers in PRO, CAB 130/77. " PRO, CAB 128/30 (part 1), CM (56) 14. 14 PRO, CAB 128/29, CM (55) 17. 15 William Ashworth, The History of the British Coal Industry, vol.5, 1946-1982: The Nationalised Industry, Oxford, 1986, pp. 6 7 2 - 3 . 16 C. H. Lee, The British Economy since 1700: a Macroeconomic Perspective, Cambridge 1986, p. 209; Sidney Pollard, The Wasting of the British Economy, London 1982, p. 11.

145

Economic Aspects of British Perceptions of Power

competitors in aircraft manufacture and that there was enormous potential for the industry. 17 It was true that British industry could not match the economies of scale achieved by the volume of production characteristic of American industry, but skilled labour was cheaper in Britain than in America. From the perspective of the 1950s, de-industrialisation, such as has occurred in Britain since the 1970s, was neither inevitable nor anticipated. The need to maintain and develop export markets was recognised in Whitehall. As an official working party on external economic policy noted in 1952, 1 8 the United Kingdom imported half of its food and nearly all of its materials (except coal). The ability to pay for these essential imports depended upon the British people's industrial, commercial and financial skill, relative to that of other nations, especially as Britain's income from abroad, and the ratio of her gold and dollar reserves to liabilities, had been greatly reduced as a result of the Second World War. 1 9 The working party therefore urged that Britain should seek to increase her share of world exports, both through having an adaptable economy and by co-operating with other countries to liberalise world trade. These objectives were adopted not only by the United Kingdom but also by the Commonwealth at the end of 1952 as a basis of future economic policy. 20 Unfortunately, far from increasing her share of world exports, Britain's share actually fell. Between 1950 and 1955 the total volume of world trade in manufactures rose by over 40 per cent, but Britain's share fell from over 25 per cent to about 20 per cent, while West Germany's share rose from about 7 per cent to about double that figure. 21 The greater part of this fall in Britain's share of world trade in manufactures, from over 25 per cent to about 22 per cent, came between 1950 and 1952, at a time when key sectors in British industry were diverted by a rearmament programme, which the Labour Government had started at the time of the Korean War. Between 1950 and 1952 the volume of British exports actually fell by 5 per cent, while Germany's increased by over 50 per cent. As we shall see, the Conservative government scaled down the rearmament programme in 1952. Nevertheless, the Chancellor of the Exchequer, Butler, warned his Cabinet colleagues in 1953 that there

17

PRO, CAB 134/842, 17th meeting, 29 May 1952.

18

The working party's papers are to be found in PRO, CAB 130/78.

19

See G. C. Peden, 'Economic Aspects of British Perceptions of Power on the Eve of the Cold War', in Josef Becker/Franz Knipping (eds), Power in Europe? and Germany in a Postwar World, 1945-1950,

20

Great Britain, France,

Italy

Berlin 1986, pp. 240 - 3.

PRO, CAB 130/78, 'The Economic Background', 11 July 1952 and 'The Problems of External Economic Policy', 22 July 1952; CAB 134/848, 'Future Economic Policy', memorandum by the Chancellor of the Exchequer, 15 May 1953.

21

'The Economic Implications of Full Employment', Cmd. 9725, BPP, 1955 - 56, vol. 36, para. 21.

146

George C. Peden

would need to be 'a major concentration of effort on increasing exports.' 22 British exports did in fact reach a record level in 1954, but, even so, her share in world trade in manufactures fell slightly and by mid-1955 the Cabinet was being warned that there were signs that Britain might be falling behind in her power to compete in world markets. 23 There was a limit to what the government could do to secure greater exports. Fiscal and monetary policy could be used to reduce domestic demand, but the government had to rely on exhortation to ensure that the industrial capacity thus released was used to produce exports. As Robert Hall, when discussing the 1953 budget, observed, the dynamic had to come from business itself — hence the importance of reducing, as far as possible, the disincentive effects of taxation. 2 4 Much, of course, depended upon British firms' ability to deliver promptly goods of the right price, quality and design, and to provide an efficient after-sales service, but Whitehall officials could only agree with the journal Engineering that many British exporters did not 'do enough towards adapting their product and selling effort to overseas requirements'. 25 Competitiveness also depended upon the creation of new plant and products. At Hall's suggestion, Butler's budget of 1954 included new 'investment allowances' for industry, whereby 20 per cent of the cost of all new investment in plant and machinery should be deducted from a firm's taxable income. There was in fact a great investment boom in 1954 — 56, but the Government was unable to reduce public expenditure sufficiently to accommodate the increase in private investment without inflationary pressure. As a result the Government found itself trying to restrain private investment through a tightening of monetary policy and by withdrawing the investment allowances. It will be recalled that in 1956 the Cabinet preferred to withdraw the investment allowances rather than cut food subsidies. The Prime Minister, Eden, was unwilling to support the Treasury on cuts in food subsidies because he believed that much of the purchasing power removed by increasing the price of bread would at once be replaced by increased wages. 26 He was anxious to maintain good relations with the Trade Unions at a time when the Government was seeking agreement on restraint in wage increases. It was a part

22

PRO, CAB 134/848, 'Future Economic Policy', memorandum by the Chancellor of the Exchequer, 15 May 1953, para. 10, and 'Measures to Combat a Recession in the United States and to Strengthen the Economy', note by officials, 1st Oct. 1953, para. 50.

23

PRO, CAB 134/854, Economic Policy Committee minutes, 17 Feb. 1955; CAB 129/176, CP

24

PRO, Treasury Papers, series 171, file 413 (T 171/413), 'The Economic and Budgetary Problem

25

PRO, CAB 134/851, 'The Trend of UK Exports During 1953', EA (54) 10, and

(55) 68, Committee on Balance of Payments Prospects, Report, June 1955. in 1953', 9 Feb. 1953. 1st Jan. 1954. 26

PRO, CAB 1 2 8 / 3 0 (Part 1), C M (13) 56.

Engineering,

147

E c o n o m i c Aspects of British Perceptions of P o w e r

of an attempt to educate trade union opinion that the Government issued in March 1956 a White Paper on The Economic Implications of Full Employment.27 This warned that although full employment had been maintained since the war, price stability had not, and that continuing rising wages, by raising costs, must inevitably weaken the whole basis of Britain's export trade. Eden had hopes that he could use his negotiating skills to secure agreement on a halt to wage increases, so as to break the wage-price spiral, but the T U C General Council would do no more than issue a warning against a free-forall in wage increases — a warning which the rank and file showed no disposition to take to heart. 28 Yet, as one Treasury official observed: 'our trouble at bottom always is the persistent tendency of incomes to outrun production'. 29 Wages were increasing in all industrial countries in the postwar period, but whereas West German average wages rose by 335 per cent between 1950 and 1962, production there also rose by 187 per cent, so that unit labour costs rose by only 48 per cent. In Britain, on the other hand, average money wages rose by much less over the same period — by 137 per cent — yet, since production rose by only 41 per cent, unit labour costs rose by much more than in Germany - by 70 per cent. 30 Low growth in output doubtless reflected indifferent management, poor industrial relations and the persistence of archaic restrictive practices in a wide range of industries, as well as lack of investment in the early 1950s. Butler, while Chancellor of the Exchequer, had been willing to acquiesce in some increase in wages and prices, if this would contribute to the creation of a more flexible, and therefore more competitive, economy, 31 but of this there was little sign. By 1956 the Cabinet was being warned by the Treasury that currently two-thirds of any increase in national product went to increase consumption. Officials recommended that 'a major objective of policy should be to reduce substantially' this proportion, if there was to be an adequate level of home investment. 32 There were, however, political problems about implementing such a policy, at a time when many people were enjoying consumer goods, such as cars and televisions, for the first time. In July 1957 Macmillan made his famous 'you've never had it so good' speech, not because he was complacent, but because he feared that the nation was living beyond its means. 33

27

C m d . 9 7 2 5 , BPP, 1 9 5 5 - 5 6 , vol. 36.

28

Russell Jones, Wages and Employment

29

P R O , Τ 1 7 2 / 2 0 6 1 , 'Some Points for the Chancellor to think over prior to Meeting with T U C ' ,

30

Pollard, Wasting

31

P R O , CAB 1 3 4 / 8 4 6 , E c o n o m i c Policy Committee minutes, 1st Apr. 1953.

Policy 1936-1985,

London 1987, pp. 5 3 - 4 .

1st N o v e m b e r 1955.

32

of the British Economy,

p. 5 3 .

' T h e Future of the United Kingdom in World Affairs', June 1956, paras. 14 - 1 9 . This Cabinet Office paper has not yet been released to researchers at the P R O , but, when it is, it will be found in CAB 1 3 4 / 1 3 1 5 . However, the Treasury very kindly made available to me a draft of its contribution to the paper.

33

C. J. Bartlett, A History

of Postwar

Britain

1945 - 74, London 1977, pp. 1 4 2 - 3 .

148

George C. Peden

3. Britain's difficulties in maintaining her competitive position in world export markets conditioned her approach to international trade and finance. In the 1930s, when her share of world exports of manufactures had been 20 per cent, Britain had already had both high unemployment and balance — of — payments problems. After 1945 Britain looked to co-operation with other countries, especially the United States, to expand world trade, so that, even without increasing her share, Britain could expand the volume of her exports. She would then, despite the loss of overseas income since 1939, be able to pay for the imports of raw materials, oil and capital goods, which were essential if she were to employ her labour force fully. 34 The need to liberalise world trade was a recurrent theme in ministerial discussions in the 1950s. Nor was this liberalisation to be confined to the non-Communist world. In 1953 Butler believed that one of Germany's main markets lay in Eastern Europe, while Japan's main market must be China. If Germany and Japan were restricted in these natural markets, as proved to be the case, then there would be extra competition from German and Japanese goods in Britain's traditional markets. 3 5 By 1955 the increase in Japanese exports to British colonies was being remarked upon in the Economic Policy Committee. 3 6 External commercial policy was also guided by the General Agreement on Tariffs and Trade (GATT), which was a product of what was described in Whitehall as the 'theological fervour' with which the American government was attached to the idea of non-discriminatory world trade. Under G A T T Britain's existing imperial preferences (discriminatory tariffs) in favour of trade with Commonwealth countries were safeguarded, but no increase in imperial preferences was allowed. There was also provision for import quotas to be used, if necessary, to safeguard the balance of payments, but quotas which discriminated against a particular country (in practice the United States) were subject to annual review from 1952. The main issue facing British policy-makers in 1952 was: would the pattern of world trade move towards an equilibrium in which Britain and other non-dollar countries could finance their purchases of North American goods? If not, dollars would continue to be in short supply and the expansion of world trade on a non-discriminatory basis, as envisaged by the authors of GATT, could not be achieved. In 1952, when the United States still had a large trade surplus and had not gone far to reduce her own tariff barriers, the Board of Trade could detect few signs of an early return to a stable equilibrium between 34

Peden, 'Economic Aspects', in Becker/Knipping (eds), Power in Europe?,

35

PRO, CAB 134/848, 'Future Economic Policy', 15 May 1953, para. l i e .

36

PRO, CAB 134/854: minutes, 17 Feb. 1955.

p. 245.

Economic Aspects of British Perceptions of Power

149

the United States and the rest of the world. 3 7 After a review of future external economic policy in 1952 — 53, however, the Economic Policy Committee took the view that present policy should be maintained, since the American government was inclined to be helpful, by providing aid and by trying to persuade Congress to lower tariff barriers. 38 Even had Britain sought to modify or renounce GATT, she no longer had the option, as she had had in the 1930s, of increasing intra-Commonwealth trade by increasing imperial preferences. (Following the Ottawa Agreements of 1932, which greatly increased such preferences, the proportion of British exports going to the Commonwealth had risen from 43.5 per cent to 48 per cent. 39 ) By 1952, however, imperial preferences were no longer an effective instrument of policy. The Commonwealth Economic Conference of that year made abundantly clear that there would be no support in the Commonwealth as a whole for a policy of attempting to build up intra-Commonwealth trade behind discriminatory tariffs. While Commonwealth countries valued their trade links with the United Kingdom, they were not willing to risk their good relations elsewhere, given that the British market could not absorb the whole of the Commonwealth's output of primary products. Moreover, Commonwealth countries were particularly anxious to maintain American goodwill, since they hoped to obtain American capital for development. 40 Britain herself had since 1947 particularly favoured development which increased the capacity of her colonies to earn dollars — for example, Malayan rubber and tin — for such earnings were added to the dollar 'pool' of the Sterling Area, and thus helped to sustain the value of sterling. 41 The characteristics of sterling and the Sterling Area are worth noting. Sterling was the national currency of the United Kingdom alone. However, it was also the currency in which the countries of the Sterling Area held their foreign exchange reserves. The Sterling Area itself was largely co-terminous with the Commonwealth, except Canada, plus some non-Commenwealth countries, notably the Irish Republic, Iraq and Burma. Naturally the Sterling Area countries wished to preserve the value of their foreign exchange reserves, and for this reason, any devaluation by Britain, unless absolutely necessary, was likely to weaken what was perceived as an important Commonwealth link. Finally, ster37

38 39 40

41

PRO, CAB 134/843, 'Future External Commercial Policy', memorandum by the President of the Board of Trade, 19 March 1952. For origins of dollar shortage see Peden, 'Economic Aspects', in Becker/Knipping (eds), Power in Europe?, pp. 240 - 8. PRO, CAB 134/846, Economic Policy Committee minutes, 20 May 1953. See lan Drummond, Imperial Economic Policy, 1917—1939, London 1974. PRO, CAB 134/848, 'Future Economic Policy', memorandum by the Chancellor of the Exchequer, 15 May 1953; CAB 130/78, 'External Economic Policy: Appreciation of the Attitude of Commonwealth Governments', memorandum by a group of officials, 22 July 1952. See Peden, 'Economic Aspects', in Becker/Knipping (eds), Power in Europe?, pp. 256 — 8.

150

George C . Peden

ling was second in importance only to the United States dollar as an international currency. In the 1950s 40 to 50 per cent of all world trade and finance was conducted in sterling. In the Treasury's view, any collapse in the value of sterling would produce confusion in international payments and bring to an end the steady expansion of world trade. Ministers were warned in 1956 that such a development 'would be a major victory for the Communist view that the capitalist system contains the seeds of its own destruction.' 42 Under the Bretton Woods agreements of 1944, and as a member of the International Monetary Fund (IMF), Britain was committed to a policy of making sterling convertible for current transactions, at an exchange rate which must remain fixed within narrow margins, unless there was 'fundamental disequilibrium' in the balance of payments. An attempt to make sterling convertible in 1947 had failed, owing to the imbalance in world trade, which led to a greater conversion of sterling into dollars than Britain's meagre gold and dollar reserves could sustain. 43 Britain stood to gain by making sterling convertible, partly by making international trade easier, and partly by reviving the profitable business of the City of London (insurance and banking services). Progress towards freer movement of funds in Europe resulted from the European Payments Union of 1950, which provided Europeans with a 'clearing house' for settling mutual financial claims arising out of their current trade. On the other hand, even after sterling had been devalued from $ 4.03 to $ 2.80 in 1949, there were those who doubted whether Britain's gold and dollar reserves would enable her to maintain both full convertibility and a fixed exchange rate, given the world dollar shortage. Britain's balance of payments problems in 1951—52, when the United States failed to provide as much dollar aid as the Labour government had expected when embarking on its rearmament programme, provoked a furious debate in Whitehall over the relative advantages of fixed and floating exchange rates. This was resolved in favour of the advocates of a fixed rate, represented in the Cabinet by Cherwell, against the plan of the Treasury and the Bank of England for a floating rate. 4 4 Thereafter there was a steady liberalization of exchange controls, with de facto convertibility coming in February 1955, and de jure convertibility three years later. This policy was not an unalloyed success, however. Certainly the earnings of foreign exchange by City of London financial services rose rapidly

42

' T h e Future of the United Kingdom in World Affairs', June 1956, paras. 8 - 1 0 (see note 32). See also Sir Leslie R o w a n , Arms and Economics:

The Changing

Challenge

(Cambridge, 1960),

pp. 2 4 — 7. R o w a n was almost certainly the author of the relevant paragraphs of the Cabinet Office paper. 43

See Peden, ' E c o n o m i c Aspects', in Becker/Knipping (eds), Power

44

This represented a triumph for Cherwell, w h o persuaded ministers not to accept the ' R o b o t '

in Europef,

pp. 2 4 1 — 4 .

plan of the Treasury and Bank of England for immediate convertibility with a floating rate -

see Cairncross, Years of Recovery,

ch. 9.

Economic Aspects of British Perceptions of Power

151

after convertibility. On the other hand, the continued preference of financial markets for dollars rather than sterling forced British governments to defend sterling by raising interest rates - to the detriment of industrial investment. 45 In fact at no time in the post-war period was Britain for long freed from balance-of-payments difficulties. One reason for this was the paucity of her gold and dollar reserves. Even in 1956 these amounted to only about £ 800 millions, compared with short-term liabilities of £ 3,742 millions. Such reserves were quite inadequate to defeat a major run on sterling, and therefore financial policy could not risk a loss of confidence on the part of international financiers. Moreover, the reserves were actually lower in relation to British trade in goods in 1955 than in 1951, when rising import prices and the diversion of British industrial capacity to the rearmament programme had brought about a major balance-of-payments crisis. Another problem was Britain's external commitments. These included £ 80 millions a year in interest and capital repayments in respect of loans made by the United States and Canada at the end of the war; an average of £ 150 millions a year of defence expenditure outside the United Kingdom in the years 1952 to 1955, and an average of £ 30 millions a year on colonial grants over the same period. Net investment abroad, mainly private and to the Commonwealth, varied between £ 100 millions and £ 200 millions a year. Altogether external payments, including other miscellaneous items, averaged £ 420 million in the years 1952 —1955, with the prospect of a further £ 80 millions a year if in future Britain had to bear the full cost of her troops stationed in Germany. It is hardly surprising that, when the Cabinet came to consider Britain's future rôle in world affairs in 1956, the Treasury urged that Britain should aim at a balance-of-payments surplus of £ 300 millions a year, compared with a deficit of about £ 100 millions in 1955, so as to build up the gold and dollar reserves to about twice the current level. This could only be done if a higher proportion of the national product went to industrial investment at home and to exports, and if overseas commitments could be reduced. As things were, Britain had been able to carry out her existing policies only with the help of a total of over £ 3000 millions in aid, chiefly from the United States, over the first ten post-war years, and by 1956 the period when Britain could continue to rely on such aid was over. 46 It was in the light of such considerations that the defence review of 1957, discussed below, was carried out. The balance of payments had been a major preoccupation of the Conservative government from the time it took office, and indeed that was why the Conservatives had slowed down the rearmament programme in 1952. In 45

46

See Susan Strange, Sterling and British Policy: A Political Study of an International in Decline, Oxford 1971. 'The Future of the United Kingdom in World Affairs', June 1956 (see note 32).

Currency

152

George C. Peden

1953 the position had eased, as the terms of trade, that is the price of exports relative to the price of imports, moved in Britain's favour, allowing her to import more goods for the same volume of exports. 4 7 By 1954, however, the Economic Policy Committee was being warned that there was a tendency for imports to increase, while exports remained stable, and that the long-term outlook for the balance of payments was not encouraging. For ministers the worst aspect was probably the warning that the current balance-of-payments surplus was inadequate to maintain Britain's overseas commitments, of which the largest was military expenditure, and that there was a possibility that unpalatable decisions would have to be made. 48 In 1955 even the modest balance-of-payments surplus of the previous year disappeared, and by November the Chancellor of the Exchequer, Butler, was warning his Cabinet colleagues that the strain on sterling was a danger to Britain's status as a major power. 49 By 1956 the Cabinet was ready to review Britain's rôle in world affairs, and the level of defence expenditure which she could maintain. If there were any doubts about the importance of sterling in that rôle, that doubt was removed by the Suez crisis. At the height of the fighting in November a run on the pound developed, taking with it about 15 per cent of the country's gold and dollar reserves. When the Chancellor of the Exchequer, Macmillan, asked Washington for help, he was told that the United States would only support sterling if a cease-fire were arranged with the Egyptians. While there were other factors pointing to an abandonment of the Suez operation, Eden was convinced that the run on sterling was one of major importance, 5 0 amply justifying Butler's warning of a year earlier. In the last resort Britain was unwilling to take action which would damage the Sterling Area, and thereby, so it was believed, the Commonwealth and international trade.

4. Defence expenditure had fallen in the post-war period from 16.2 per cent of national income (GDP) in the financial year 1946/7 to 5.8 per cent in 1949/ 50. On the outbreak of the Korean War in 1950, however, the Labour

47

Butler, Art of the Possible, pp. 157, 1 6 1 - 2 .

48

PRO, CAB 134/850, Economic Policy Committee minutes, 20 May and 29 July 1954; CAB

49

PRO, CAB 129/78, Cabinet papers, 1955, number 184 (CP (55) 184), Overseas Expenditure'.

134/852, Report by the Economic Steering Committee, 21 July 1954. 50

Eden, Full Circle, James, Anthony

pp. 5 5 6 - 7 ; Macmillan, Riding

Eden,

the Storm,

pp. 1 6 3 - 5 ; Robert Rhodes

London 1986, p. 573. For earlier Treasury warnings of the need to

have American support if sterling was to stand the strain of hostilities, see Τ 236/4188.

153

Economic Aspects of British Perceptions of Power

government had embarked on a rearmament programme which, at its most ambitious, in January 1951, had aimed at doubling defence expenditure between 1950/1 and 1952/3. It had been hoped that aid from the United States would offset the balance-of-payments effects of increased inputs and the diversion of industrial capacity to arms production. American aid, however, proved to be much less than expected, and the Conservatives slowed down the programme at the end of 1951, in the face of a balance-of-payments crisis. Even so, defence expenditure rose to 8.7 per cent of national income in 1952/3 and remained at between 7 to 8 per cent until 1956/7. Britain was thus left with a much heavier defence burden than her European neighbours, except France, and also a precarious balance of payments. Moreover, the post-war rise in investment and exports had been checked at a critical stage in the postwar competition for world markets.51 Table 1: Defence Expenditure of Major Powers in 195552

United States USSR United Kingdom France West G e r m a n y Canada Italy Japan

As percentage of national income (GNP)

Equivalent in U.S. dollars (billions)

10 13 8 7 4 7 4 2

41 19-31 5-7 2-4 2-3 2-3 1-3 0-1

N o t e : It is difficult to give precise equivalents of expenditure in dollars owing to differences in costs in different countries and, in the case of the USSR, the lack of a realistic rate of e x c h a n g e between the dollar and the rouble.

British defence expenditure continued to be higher than that of any major power except the United States and the USSR (see Table 1). Nevertheless this level was insufficient to provide the forces recommended by the Chiefs of Staff. In 1952 it was estimated that defence expenditure in 1954/5 and 1955/6 would need to be 27 per cent higher than in 1952/3 if their recommendations were to be carried out. The Chancellor of the Exchequer, Butler, warned that this would necessitate a steep rise in taxation — equivalent to 2/ — in the

51

Cairncross, Years of Recovery, Ch. 8. Figures in this paper for defence expenditure as a percentage of GDP are from Leo Pliatzky, Getting and Spending: Public Expenditure, Employment and Inflation, Oxford 1982, p. 15.

52

From Charles J. Hitch/Roland N. McKean, The Economics Cambridge, Mass., 1960, p. 95.

of Defense in the Nuclear

Age,

154

George C. Peden

pound at a time when the standard rate stood at 9/6 d in the pound. For his part, the President of the Board of Trade, Peter Thorneycroft, stated that an increase in defence expenditure must be at the expense of exports by the engineering industry. 53 In the face of these facts, it was agreed that the rise in defence expenditure must be halted. Rather than carry out a major review of defence policy, the Churchill government instituted a 'super-priority' programme, whereby delivery of key items of defence equipment was to be accelerated. The intention was to maximise the use of scarce resources, and the implication was that less important items would be dropped. However, the defence services seem never to have fully accepted the original concept of a 'super-priority' scheme limited to a small number of selected items. The aircraft industry in particular was expected to carry out a multiplicity of projects. For example, the Royal Air Force continued the development of three different types of nuclear bomber, all of which entered service in the later 1950s. 54 As Britain's balance-of-payments position worsened in the mid-1950s, it became clear that there were too many demands on the labour available (unemployment was about 1 per cent) and, in particular, that too much of Britain's engineering and electrical production was directed to defence rather than to export markets. As in the 1930s and 1940s, there was a need to strike a balance between armed strength and economic strength, if Britain was to retain her position as a major power. 5 5 In 1955 the Secretary of State for Foreign Affairs, Macmillan, took the initiative of suggesting a complete review of types of weapons, with a view to abandoning those which were obsolete. 56 This was the genesis of the 1957 White Paper on defence. By 1956 Macmillan was Chancellor of the Exchequer, and during the Cabinet's review of the future of the United Kingdom in world affairs, the Treasury urged successfully that the main cuts in expenditure should fall on defence. 57 The White Paper itself noted how the immediate danger of war had receded since the termination of hostilities in Korea. Britain's influence in the world, it was stated, depended 'first and foremost' on the health of her internal economy

53 54

PRO, CAB 130/77, ministerial meeting on Economic and Defence Procedure, 21 July 1952. My comments on the 'super-priority' programme are based on the research of Miss Syme (see note 1). For the demands on the aircraft industry in this period see Sir Roy Fedden, Britain's Air Survival: An Appraisement and A Strategy For Success, London 1957.

55

For the earlier periods see G. C. Peden, 'Perceptions britanniques de la puissance économique à la fin des années 1930' in René Girault/Robert Frank (eds), La Puissance en Europe 1938 — 40, Paris 1984, pp. 187 — 202, and 'Economic Aspects' in Becker/Knipping (eds), Power in Europe?, esp. pp. 2 4 8 - 5 0 .

56

PRO, CAB 129/77, CP (55) 111: 'The Economic Situation', memorandum by the Secretary of State for Foreign Affairs. PRO, Τ 273/312, T. L. Rowan to Chancellor of the Exchequer, 5 June 1956.

57

Economic Aspects of British Perceptions of Power

155

and on the success of her exports. Without these, military power could not be supported in the long run. 5 8 In order to release industrial capacity and scientific and technical resources for civil use, it had been decided that Britain must cease to make a disproportionately large contribution to western defence and that her military programme must be limited to those projects which were essential. 59 Within defence policy, more reliance was to be placed upon Britain's independent nuclear deterrent. 6 0 There was also, however, recognition that soaring research and development costs of all kinds of military technology would make it difficult in future for Britain to carry out the whole range of projects on her own. The White Paper revealed that the Government had been considering the possibility of closer co-operation on research and development with France and other N A T O allies. 61 The White Paper represented a recognition of what the Treasury had argued in the Cabinet's review of the future of the United Kingdom in world affairs. This was that Britain had ceased to be a first-class power in material terms. The United States and the USSR were vastly superior in population and resources, while increasing competition in world markets from West Germany, Japan and the United States threatened Britain's existing wealth, based as it was on trade. 6 2 This did not mean, however, that even Treasury officials believed that Britain should abandon her rôle of leadership in world affairs. Britain was still the centre of the Commonwealth and the Sterling Area, and she was a leading member of other international organisations, the IMF, GATT and the Organisation for European Economic Co-operation (OEEC), through which she could hope to influence the world economic order. 6 3 Finally, while the 1957 White Paper represented a major adjustment in defence policy, one should not exaggerate the degree of change. Defence expenditure as a percentage of GDP did fall from 7.2 in 1956/7 to 6.1 in 1959/ 60, but this was still well above German or Japanese levels. Moreover, Britain was still in 1957 the only power other than the United States and the USSR to have nuclear weapons. Compared with her European neighbours, Britain still seemed to be a major world power, and this was bound to influence British attitudes to European integration.

58 59 60

61 62 63

'Defence: Outline of Future Policy', Cmnd. 124, BPP, 1 9 5 6 - 5 7 , vol. 23, paras. 2 and 6. Ibid., paras. 11, 21, 58 and 72. See Colin Gordon, 'Duncan Sandys and the independent nuclear deterrent', in Ian Beckett/ John Gooch (eds), Politicians and Defence, Manchester 1981. Cmnd. 124, BPP, 1 9 5 6 - 5 7 , vol. 23, para. 64. ' T h e Future of the United Kingdom in World Affairs' (see note 32). Rowan, Arms and Economics, esp. pp. 19 and 2 6 - 4 1 .

156

George C. Peden

5. Nevertheless, it may still be asked: if Britain was in difficulty in maintaining her economic and military power, why did she not seek closer economic cooperation with her European neighbours? The answers to this question do not lie mainly in the economic sphere. The British were reluctant to surrender any element of sovereignity, and only a major benefit - such as American participation in NATO - would induce them to do so. Moreover, the British still had the psychology of a power which had been victorious in war — unlike France, Germany or Italy. What follows is concerned with economic matters, but it is not claimed here that these were decisive in shaping policy in the 1950s. What does seem to have happened is that from 1950 to 1955, that is in the years between the Schuman Plan and the Messina conference, Britain's economic position relative to that of her European neighbours still seemed sufficiently strong to make it possible for her to stand apart from European integration. The Commonwealth still took a higher proportion of British exports in the 1950s than the future EEC countries did — in 1951 the respective proportions were 50 per cent compared with 25 per cent, although by 1957 the Commonwealth share had fallen to 43 per cent. 6 4 By 1956 Macmillan, at least, was beginning to question the value of Commonwealth links, and by the later 1950s there was growing public criticism of Britain's relatively poor economic performance compared with her European neighbours. However, these shifts in British perceptions seem to have come too late to make Britain willing to accede to the Treaty of Rome in 1957. It is difficult, from the standpoint of the 1980s, to realise how superior Britain's economic position seemed relative to that of the future EEC countries in the early 1950s. For example, when in 1952 the Ministry of Supply and the Ministry of Fuel and Power were considering the implications for Britain of the European Coal and Steel Community (ECSC), it was observed that Britain's coal output was broadly the same as that of the whole of the ECSC, while Britain's steel output was about half that of the ECSC. 6 5 It is hardly surprising that the British thought that they could negotiate with the ECSC from a position of strength. More generally, in marked contrast to the 1980s, Britain still enjoyed a higher standard of living in the 1950s than that of any of the countries which signed the Treaty of Rome. Even so, it was realised in the later 1950s that economic growth was distinctly higher in continental Europe than in Britain, as figures published in 1958 show (see Table 2). 64 65

Joseph Frankel, British Foreign Policy 1945-1973, Oxford 1975, pp. 224 and 240. PRO, CAB 134/843, EA (52) 36, 'Economic Policy Committee: Schuman Plan', 21 March 1952, para. 2.

Economic Aspects of British Perceptions of Power

157

Table 2: Total Growth in Output 1952 - 6 (per cent) 66 West G e r m a n y Netherlands Italy France Britain Belgium and L u x e m b u r g

38 27 26 20 15 13

By the later 1950s Britain's sense of economic superiority over her European neighbours was weaker than it had been earlier in the decade, although it had by no means entirely dissipated. Likewise the Commonwealth was less of an economic counter-attraction to Europe by the later 1950s than it had been earlier. Even so, the system of preferences for intra-Commonwealth trade was still a stumbling-block to entry to the EEC, and was seen as such. The Commonwealth, with its nine (in 1957 eleven) sovereign states and some 50 colonies, and a total population of 600 million, had political as well as economic significance. The fact that Malaya and the Gold Coast intended to remain within the Commonwealth and Sterling Area on achieving independence in 1957 was seen as a source of strength, since both were major dollar earners. 67 On the other hand, as already noted, the Commonwealth preference system was no longer an effective instrument of economic policy. By 1956 Macmillan thought that it was an open question how far it was to Britain's advantage to preserve her advantage in Commonwealth markets by giving preference to Commonwealth products, even when these were not the cheapest available, a policy which must tend to increase Britain's cost of living and, therefore, her manufacturing costs. 68 By then Macmillan thought that the problem was how to reconcile Britain's position as head of the Commonwealth and Sterling Area with her place in Europe, 69 but, as we shall see, this was not regarded in Whitehall as an insoluble problem. Perhaps a more fundamental problem was Britain's conception of European co-operation and unity. The British valued intergovernmental co-operation through the OEEC, but they were suspicious of supra-national institutions which impinged on national sovereignity. In 1955 the House of Commons did agree to British association with the ECSC, but the motive was the maintenance of good commercial relations. When, after the Messina conference, Britain was invited to take part in drawing up plans for a common market, the

66 67

Andrew Shonfield, British Economic Policy Since the War, Harmondswoth 1958, p. 14. 'The Future of the United Kingdom in World Affairs', para. 14 (see note 32).

68

PRO, CAB 128/30 (Part 2), CM (56) 51, 20 July 1956.

69

Macmillan, Riding the Storm, p. 74.

158

George C. Peden

Chancellor of the Exchequer, Butler, circulated a Cabinet paper objecting to British participation, on the grounds that a discriminatory bloc was bound to affect the obligations which Britain (and the Messina Six) had to the OEEC and GATT. 70 In fact Britain was represented at the post-Messina discussions, but the commercial rather than political nature of Britain's interest was indicated by the fact that the representative was an official from the Board of Trade, not the Foreign Office. During 1955 and 1956, however, important members of the Eden government came to recognise the economic advantages of association with Europe. Macmillan saw that the trouble with the British economy was that it was not as competitive as it ought to be, and that British industry would not invest in the most modern technical developments unless there were a unified market of sufficient size. Association with Europe would provide this. On the other hand, there was no question of Britain joining a common market, as envisaged by the Messina Six, with a supra-national apparatus. It was still believed that Britain's obligations to the Commonwealth, and her extra-European interests, made that impossible. Accordingly in September 1956 the President of the Board of Trade, Thorneycroft, and Macmillan put forward a plan, known as Plan G, for British entry into a partial free trade area with the Messina Six. The latter were to be regarded as a single unit, and all other OEEC countries which wished to would be able to join. 71 Plan G did not meet with universal approval within the Cabinet and Conservative party, but it did become the basis of British policy which was to lead to the European Free Trade Area, and represents the extent to which Britain felt her interests to be bound up with Europe by 1956. The drafting of Plan G involved seven departments in Whitehall — the Foreign Office, the Treasury, the Customs and Excise, the Board of Trade, the Ministry of Agriculture, the Commonwealth Relations Office and the Colonial Office — as well as the Bank of England, and therefore represented a broad range of interests. It is significant that in the plan foodstuffs were to be excluded from the proposed free trade area. This was to protect the interests of Commonwealth producers and Britain's own subsidised farmers. It was expected that the free trade area would not include either the Commonwealth or other countries' dependent territories, but Commonwealth goods would continue to have free entry to the British market. The emphasis was on the abolition of tariffs, over a period, on manufactures, for the benefit of British industry. Britain's extraEuropean interests were to be protected by the retention by all participants 70 71

PRO, CAB 129/76, CP (55) 55, 'European Integration', note by the Chancellor of the Exchequer. PRO, CAB 129/83, CP (56) 208, 11 Sept. 1956. For Macmillan's account of this plan see Riding the Storm, pp. TI - 88. The Cabinet's discussions are to be found in PRO, CAB 128/ 30 (Part 2), C M (56) 65 and C M (56) 66.

E c o n o m i c Aspects of British Perceptions of Power

159

of existing freedom of action as to tariffs from the rest of the world, subject to commitments under GATT. The free trade area's supra-national apparatus was to be kept to a minimum, its management being conducted in the OEEC by a Managing Board, at ministerial and official levels. All this was a far cry from what the proponents of the EEC hoped to achieve, so that it is scarcely surprising that the British conception of European economic co-operation failed to win the assent of the Messina Six.

6. The immediate source of Britain's decline as a major power in the 1950s was her failure to increase her industrial production as rapidly as other countries were doing. Among the major powers only the United States performed worse in this respect, but her relative decline was from a far superior level to Britain's. The reasons for Britain's failure are many and various, and are not limited to the policy issues dealt with in this paper. Poor industrial relations, low labour mobility as between trades and location, inadequately trained managers, faulty marketing strategies and many other factors have been blamed, often with good reason. The government's own policies to correct balance-of-payments problems and to protect sterling tended to restrict industrial investment. The British people themselves were in no mood to forgo current consumption in the interests of industrial investment or exports. Yet the steady erosion of Britain's position in world markets represented a threat not only to the balance of payments but also, ultimately, to full employment itself. This latter threat was not fully apparent, however, so long as world trade continued to expand. In the short run, British governments had to adjust policies to changing economic realities. Defence commitments were reduced, and there was a serious attempt at co-operation with European states to create a wider market for British products. However, Britain still perceived herself as a major leader of the world economic order — through the Commonwealth, the Sterling Area, the IMF, GATT and the OEEC — and she was not yet ready to abdicate her distinctive rôle in world affairs in favour of merging her destiny with the EEC.

The French Alternative: Economic Power through the Empire or through Europe? by Robert Frank

There is one point in common between the period 1945 — 8, studied at the Augsburg colloquium, 1 and 1954—8: a manifest continuity in perception of French strengths and weaknesses. The economy was at the centre of all assessments, taking up a much greater place than during the 1935 - 8 period studied at the Sèvres colloquium. 2 It was the defeat in 1940 that brought awareness that it was the principal criterion of power. Henceforth the needs for modernization were to be at the heart of thinking on ways of putting France back on its feet. However, during the 1950s, while "reconstruction" as such had been accomplished and modernization was starting to make its effects felt, the French very much felt that their country had not thereby regained its position as a great power. Still worse, it risked seeing its influence in the world decline still further. This was the age of expansion and impotence. 3 Three new questions were therefore posed as from 1954: how despite everything was the expansion and economic potential to be continued in order to avoid decadence? How was one to get out of the financial dependence on the United States that had lasted since the war? And above all, in which direction was France's economic influence to be oriented: the French Union, or Europe? This report is based essentially on the following papers: — Gérard Bossuat: "L'Europe et la crise des finances extérieures; les voies incertaines de la puissance française au temps de Guy Mollet"; — Jacques Marseille: "Les milieux d'affaires français ont-ils été cartiéristes?" 1

Josef Becker, Franz Knipping (eds.), Power in Europei in a Postwar

World

1945-1950,

Great Britain, France,

Italy and

Germany

B e r l i n - N e w York, de Gruyter, 1986, pp. 2 6 4 - 2 8 1 ; Robert

Frank, " T h e French Dilemma: Modernization with Dependence or Independence and Decline". 2

René Girault and Robert Frank (eds.), La puissance

en Europe,

1938 —1940, Paris, Publications

de la Sorbonne, 1984. 3

T h e term is taken from the title of the work by Jean-Pierre R i o u x : La France République,

vol. 2, L'expansion

et l'impuissance

1952 — 1958,

de la

¡Verne

Paris, Editions de Seuil, 1983.

161

The French Alternative: Economic Power through the Empire or through Europe?

— Philippe Mioche: "La perception de la puissance française par le patronat française vers 1958"; - René Mouriaux: "La perception de la puissance: la vision des syndicats de salariés (1955-1958)".

1. Expansion and Power As in the 1930s or 1940s, the word power did not seem to be much used. But in the economic sphere, there were many terms referring to the notion. Among politicians, Pierre Mendès France was one of the most sensitive to this vocabulary. In his first inaugural speech to the National Assembly on 3 June 1953 — when he was to fail to secure a majority — he put it thus: "The collapse of our economic potential entails that of our military potential. ... It is in our power to achieve the restoration the whole world is expecting, and restore to France its prosperity, its rank and the means to accomplish its mission". A year later, in his speech on 18 June 1954 when he did take up office, he was concerned above all with the Indochinese affair, but nevertheless concluded that: "Our aim is to make France into a strong, prosperous nation again". With the help of the "mission" of Gruson, director of the Economic and Financial Research Service — SEEF, set up two years earlier — he drew up an economic programme which he defended before the National Assembly on 10 August when he called for full economic and financial powers. Once again he spoke in terms of recovery: "We must reawaken France! ... You will see the force, the energy, concealed within a nation that some of our enemies have dared to call the 'sick man'!" At the basis of this reawakening was "expansion", which became the key concept of the times — today we would call it growth. For Mendès France, this growth was to be secured, from a combination of private initiative and State intervention, the latter to serve as a stimulus and above all as a guide, in selecting financing. This selective planning was to begin by reducing military burdens, the weight of which in these years of the Indochina war, 1953 — 4, had attained a record unequalled except for the two world wars: 10% of national income, as against 4% in 1913 and 8% in 1938. 4 Here we come to the core of Mendès France's thinking, which was decidedly in terms of French power. His perception was at the same time pessimistic and optimistic. France could not do everything, and to regain its rank it had to make choices. He had already said that in his June 4

See the article: "Les comptes de la nation" in L'Express

for 6 June 1953. L'Express

had just

been set up by Jean-Jacques Servan-Schreiber to support Mendès France. See also: Robert Delorme and Christine André, L'Etat et l'économie, dépenses publiques

en France, Paris, Seuil, 1983.

un essai d'explication

de l'évolution

des

162

Robert Frank

1953 speech. It was on that occasion, in the context of this issue of power, that he had uttered one of his most famous phrases: governer c'est choisir: "... The fundamental cause of the evils afflicting our country is the multiplicity and weight of the tasks it is seeking to take on all at once. But it is not possible to do everything at once. Governing means choosing. Choosing means setting priority levels. Since we only have limited resources available, we should look to allocating them to the essentials. In all fields, we shall have to shift effort from the unproductive to the productive, from the less useful to the more useful. That will be the golden rule for our recovery". For Mendès France, France's recovery would not come from the ricefields of Asia, but from the productivity of its economy. "France would not be France if the people who built the cathedrals were not capable when the time came of also building the fastest trains in the world". 5 In his retinue were the men who had created the national accounting system — he himself in 1952 had been first chairman of the commission for audits and economic budgets. The language of Claude Gruson, Simon Nora and Jean Serisé was indeed that of expansion. They broke with the traditions of financial orthodoxy incarnated by Jacques Rueff, and took inspiration from Keynes, while going beydnd the "intervention-liberalism" debate: the State had to intervene, not in order to protect or subsidize ailing branches of the economy, but to revive private initiative and encourage the dynamic sectors. "Dynamism" was another key word of those 1950s; in the last analysis it merely translated the Greek etymology, power. It was significant that the French architects of the national accounting system, Gruson in particular, had not at all the same conception as their British counterparts, Stone and Meade. The former said they were accounting and reasoning in terms of expansion and of economic structures to be renovated; they reproached the latter with taking a simple perspective of full employment and short-term adjustment of the economy. These new French technocrats intended to stiffen up Keynes with a good dose of Saint-Simonism.6 Moreover, they perceived modernization not as a passing need of the post-war period, but as a continuous process which should if necessary be imposed on a sometimes reluctant country. The 1957 report on the nation's accounts insists on this point: "... The essential condition, the one that dominates all the others, is for the nation's renascent dynamism to be safeguarded at all costs. ... Despite a high level of investment,

5

Cited by R. Kuisel, "Pierre Mendès France et l'économie: une volonté de modernité", in François Bédarida and Jean-Pierre Rioux (eds.), Pierre Mendès France et le tnendèsisme, Paris, Fayard, 1985, p. 376.

6

For the history of the national accounting system, a work that must be read, with its sugnificant title, is Les comptes de la puissance, Paris, Encres-Recherches, 1980, produced using a set of testimonies by François Fourquet.

The French Alternative: Economic Power through the Empire or through Europe?

163

research and technical innovation, this should be the major concern of all long-term policy". Planning must not only be quantitative but qualitative. Science was thus brought into the service of the economy, and hence of power. It was in this spirit that Mendès France had already given his agreement in 1955 to the organization of the "Etats Généraux de la Recherche", a colloquium to be held under the Guy Mollet government in November 1956 in Caen. 7 This mystique of investment and production proved contagious. The best demonstration of its long-term influence can be found in the wording of the December 1958 Rueff Report. When, after General de Gaulle's return to power, the Rueff Committee was set up, the modernists were anxious over the return of this fervent supporter of financial order, who had polemicized with Keynes in 1925 and still at the Liberation regarded him "as a cipher" in the courses he taught as the Ecole des Sciences Politiques. 8 However the 1958 report, though it advocated drastic economies to choke off inflation, though it referred back to the "Poincaré miracle" of 1926 — 8, in many respects shared in the philosophy expressed in the SEEF reports on the nation's accounts. Hailing France's demographic recovery and its "unprecedented economic expansion", the authors of the report advocated "immense investments" for the years to come, firstly to assure an increased population of the present level of infrastructures, and secondly to ensure their growth. The austerity called for should first and foremost hit "subsidies to the unproductive", and "financial recovery will not sacrifice investments to the currency". 9 At bottom, at the end of the 1950s, this quarrel between Ancients and Moderns was petering out. 1 0 Jacques Rueff accepted the principle of the budgetary "impasse" even though he criticized its abuses and called for it to be reduced. This concept, invented in France in 1952, designates the surplus of the State's total expenditure, including investment expenditure, over budget revenue: incorporating the "deficit" (the excess of expenditure in the general budget over the same revenue), the impasse is theoretically calculated in terms of public borrowing capacities, so that financing it should not generate 7

8

9

10

Jean-Louis Crémieux-Brilhac, "Pierre Mendès France, l'enseignement et la recherche", in E Bédarida and J. P. Rioux, op. cit., pp. 4 3 5 - 4 5 1 . Testimony of Jean Sant-Geours, in F. Fourquet, op. cit., p. 71 and 123. For Jacques Rueff's attitude during the 1930s, see Michel Margairaz Direction et directeur du Trésor: de l'orthodoxie à la réforme (1930—1960)", in Patrick Fridenson and André Straus (eds.), Le capitalisme français 19è — 20è siècle, blocages et dynamismes d'une croissance, Paris, Fayard, 1987, pp. 4 7 - 6 5 . Rapport sur la situation financière présenté à Monsieur le Ministre des Finances et des Affaires Economiques en exécution de sa décision du 30 septembre 1958, Paris, Imprimerie nationale, 8 December 1958. This Rueff Report of December 1958 should not be confused with the Rueff —Armand Report (Rapport sur les obstacles à l'expansion économique), drawn up after November 1959 and published in July 1960. It had already been petering out since around 1948: see J. Becker, F. Knipping, op. cit. p. 269.

164

Robert Frank

inflation. This theory, institutionalizing the end of the neutrality of public finance, puts forward the "general balance of the economic and social life" of the country, at the expense of systematic budgetary imbalance. 11 As for the men of SEEF or the Plan, they did not wait for the Rueff Report to denounce the evils of inflation, which justified protectionism, kept archaic enterprises going, strengthened blockages and hindered economic fluidity. 12 If owing to the contagious effect of productivism the cleavages were no longer evident in words, they persisted in practice. Etienne Hirsch, General Commissioner for the Plan, had to approach Pinay, finance minister, to make the cut in the impasse called for by Rueff less draconian and stop investment being sacrificed to financial recovery. 13 It should not be thought that this dominant Saint-Simonism of public servants was opposed, as sometimes they like to claim, by Malthusianism on the part of private employers. It is true that at the launching of the Second Plan (1953 — 7), old de Wendel did not understand why he was being asked for an effort at modernization, since he had already made one just after the war. Hirsch was obliged to explain to him that "modernity is not a definitive condition!" and that "this effort can never be made once and for all". 14 But this example has not been equalled. In fact, employers did little talking about expansion or power. They did better, they invested. Productive investment, which had fallen between 1949 and 1953, went through a sharp upswing between 1954 and 1957, during the periods of the miraculous "expansion in stability", to use Edgar Faure's expression, that is, expansion without inflation. Philippe Mioche shows in his paper how at the end of the Fourth Republic employers were showing through their actions their confidence in the French economy. This confidence was not always perceived by high officials; hence the lack of fit between their pessimism as to France's industrial and commercial capacities and the statistical reality. 15 The unions likewise scarcely spoke of "power", of France's power at least. As René Mouriaux's paper shows, they preferred to use the term either to designate the two big countries dominating the world, or to describe the strength of the "big monopolies or trusts". However, trade unionists referred to the concept implicitly in saying what in their eyes would be good for the country. The three main trade-union federations were not agreed on much. " "La politique budgétaire de 1952 à 1957", Ministry of Finance publication, Notes et Etudes documentaires, 1959, no. 2576 (La Documentation française). 12 See the three articles by Simon Nora in Le Monde in June 1953, the title of which, "Economie française: prospérité ou décadence" alludes to Jean Monnet's famous slogan "Modernization or decadence". 13 F. Fourquet, op. cit., p. 220. 14 Ibid., pp. 2 3 8 - 2 3 9 . 15 François Bloch-Lainé and Jean Bouvier, La France restaurée, Paris, Fayard, 1986, pp. 249 ff.

The French Alternative: Economic Power through the Empire or through Europe?

165

The General Confederation of Labour — the CGT, whose leaders are members of the Communist Party - equated the national interest with the interest of the workers; against the capitalists, it intended to defend the nation, whose strength lay in their eyes in the conquest of social progress. For FO — Force Ouvrière — it was instead conciliation between workers and employers that could ensure the health of the country. As for the C F T C , the French Confederation of Christian Workers, it was democratic planning, the collective advancement of workers and the self-realization of every human being that would make the "true greatness of the nation". Over and above these differences, René Moriaux shows how the trade unions were agreed on locating the power of a country not in the soldier's cap or in militarism, but on the side of the strength of the masses or of popular support. The irruption of social aspects into the definition of power was one of the characteristics of the time. To avoid decadence, there had to be a minimum of harmony in French society, a cohesion to be secured through well-being, through increasing the standard of living, but also through public investment. In particular, as stressed by the Rueff Report, the housing crisis had urgently to be settled, since it was a "cancer ... undermining the social structure . . . " and was making "large classes of the population" ... "into irreconcilable adversaries of the social order". This evolution was reflected in a change of priorities and a shift in concepts. When Pierre Massé became general commissioner for the Plan in 1959, he put the stress less on modernization of the productive apparatus or on expansion than on economic and social development: this was to be the title of the Fourth Plan (1962 — 5) which, under the influence of Jacques Delors, active member of the C F T C , assigned the lion's share to collective infrastructures. 16 Be that as it may, if economic growth had become the necessary and major condition for power, it was far from being a sufficient condition. In 1956, for instance, it in no way prevented setbacks and humiliations.

2. Independence

and Finance

One of the main obstacles to a power policy by France during the 1950s was its financial dependence on the United States. There was already occasion at the Sèvres colloquium to say that the issue of dependency or independence was not put in such sharp terms before the war. 1 7 The words were little used. Even if in 1938 there was a certain inequality in relations between the two allies, France and Britain, both countries were "great" powers and had built 16

F. Fourquet, op. cit., pp. 275 - 276.

17

R. Girault and R. Frank, op. cit., p. 182.

166

Robert Frank

up a network of relative, reciprocal dependencies. After the Second World War, things were no longer the same. French dependency on the American "super-power" was absolute and unilateral, 18 as shown in economic terms by the loans in 1945, the Blum-Byrnes agreement in 1946, the 1947 interim plan and Marshall aid in 1948 — 52, continued in military aid to Indochina until 1954 and through off-shore orders under NATO until 1955. All these dollars fed the needs of the French balance of payments. A return to equilibrium thus seemed in the mind of those in charge to be a condition for a return to power, or more exactly for independence. Politically, the latter was no longer something impossible: the thaw in Soviet-American relations was relaxing US pressure on its allies: the emergence of the Third World and the end of absolute bi-polarism in international relations were offering more room for manoeuvre in external policy by medium powers. The baggage train had to follow. From this point of view the years 1 9 5 4 - 5 seem rather like a high point, since to the great pride of Edgar Faure, finance minister to Laniel and Mendès France and later himself prime minister, the equilibrium of the balance of payments was restored, without devaluation — the last dating from 1949, though Edgar Faure had had to employ all his eloquence in summer 1954 to dissuade Mendès France from it. 1 9 With the years 1 9 5 6 - 7 the scene changed. Gérard Bossuat's paper shows how the crisis of external finance that broke under the Guy Mollet government threw France's international position into question again, almost as much as the political defeat of Suez. The causes are well known: the sharp winter of 1956, the social reforms and above all the cost of the Algerian war set inflation going again; imports underwent a considerable rise, and the balance of payments showed a deficit in 1956 of 890 million dollars, 145 million paid off by an EPU loan and 745 million taken from the foreign currency reserves. These reserves were melting like snow in the sun. In this payments crisis, Gérard Bossuat stresses a new factor that played an essential part: 1956 marked the end of special American military aid. At a time when, for the first time since the Second World War, French financial independence could be established, dollar hunger made itself felt. On two occasions the Guy Mollet government sought in vain to secure American credit. The financial attaché, La Pérouse, expressed the feelings of many experts and observers when he said that this appeal, however realistic it might be, went "against what we have sought to achieve by making ourselves independent20 of American eco-

18 19

20

J. Becker, F. Knipping, op. cit., pp. 264 — 281. Edgar Faure, Mémoires, I, Avoir toujours raison ... c'est un grand tort, Paris, Pion, 1982, p. 543, pp. 6 1 5 - 6 1 9 . Our emphasis.

T h e French Alternative: Economic Power through the Empire or through Europe?

167

nomic aid credits". 21 This "flight of all our exchange reserves" was troublesome not only to liberals like Pinay, but also to such people as Hirsch, 2 2 who tended to favour economic aspects over financial ones. The picture emerging was that of a Left that was impotent and a poor administrator. On 17 March 1957, Pierre Mendès France, who had resigned from the government ten months before — because of his disagreement on Algeria — criticized to the National Assembly the policy of expansion if carried out through external deficits and the budget impasse, since the consequences were clear: "economic dependency23 risks one day assuming the form of political dependency". Guy Mollet refused to devalue, despite some opinions in favour at the Quai d'Orsay and in the retinue of finance minister Paul Ramadier. 2 4 In the name of Europe, the prime minister declared his intention to respect the commitments made to the OEEC on liberation of exchange rates (to arrive at the stage of 90% liberation). Ultimately, Guy Mollet was governing without choosing, seeking to attain simultaneously, despite the cost, expansion, social well-being, a military break-through in Algeria and Egypt and the construction of Europe. In fact, France, unable to afford this policy of power in every direction, gave glaring proof of its powerlessness. Regarding European affairs, the Guy Mollet government took decisive initiatives that led to the signing of the Treaties of Rome. But here too choices were not made, since accession to the Common Market presupposed internal economic reforms and a devaluation, likely to bring the standard of living into question again at any moment. The decisions were taken by Félix Gaillard in the two ensuing governments — though some of the last measures envisaged by Paul Ramadier foreshadowed them in part. 2 5 It was specifically in the name of Europe, in order to prepare France for the forthcoming deadlines, that in summer 1957 the 20% predevaluation was decided, with suspension, as in 1952, of the liberation of exchanges. After de Gaulle's return to power, it was again in order to cope with Common Market entry that at the end of December 1958 a devaluation of 17.5% was planned, as recommended by the Rueff Plan. This plan was adopted at the same time, along with its sets of budget savings, cuts in subsidies and external economic policy recommendations: return to liberation of exchanges, in accordance with the commitments made to the OEEC, reduction of customs duties by 10% pursuant to the Rome Treaty and monetary convertibility. The objective was to shut off the "inflation tap",

21 22 23 24

25

G. Bossuat, communication cited on page 160, in the text of this paper. F. Fourquet, op. cit., p. 218. Our emphasis. Robert Bothereau, FO leader, likewise felt that the franc was overvalued R. Mouriaux cited, p. 10). G. Bossuat, pp. 23 - 24.

(paper by

168

Robert Frank

since it led inevitably to the "lack of means of external payment" and to the dramatic choice "between stopping imports, a generator of unemployment, and the humiliating search for new foreign assistance". 26 "Without this effort and these sacrifices," de Gaulle declared on television on 28 December, a week after his election to the Presidency of the Republic, "we would remain a country being dragged along, swinging continually between drama and mediocrity. But if we succeed, what a stage it will be on the road that leads us to the summits!". 27 It was also decided to make the franc "heavy" (one new franc = 100 old francs), to give public opinion, as Rueff writes, "the feeling that monetary equilibrium was lastingly established on its new foundation". 2 8 For de Gaulle this was probably also a purely prestige measure, marking symbolically through the currency his wish to give France back its rank. There can be no doubt that the strength of the currency was, already at the time when the Fifth Republic was founded, one of the essential bases of the Gaullist independence policy. However, there is a tendency to forget that the Fourth Republic already had this ambition before the interruption of the external finance crisis of 1956 — 8, and that it was on the point of achieving it. It remains the merit of the Guy Mollet government to have pushed forward the European option, the foundation for a new definition of French power.

3. The Empire or Europe? It was not so much men — political or economic leaders — as events that chose between the French Union and European construction. In particular, decolonization was more undergone than controlled. However, a change of heart is perceptible as from 1955 in business, union and government circles. During and immediately after the Second World War, all was lost for the French, save the Empire. The latter, transformed into the French Union in 1946, seemed to constitute the last resort for France's power. This myth then began to act as a "compensatory myth", to use Charles-Robert Ageron's term. Ten years later, the issue began to be turned on its head. The colonies were presented as a source of weakness. For instance, the famous articles by Raymond Cartier in Paris-Match in August and September 1956 forcibly put the question whether the Overseas Territories were not costing more than they were bringing in. Were they not a burden on the mother country's 26

Rapport

27

Cited by Jean Lacouture, De Gaulle,

28

Letter from Jacques Rueff to Antoine Pinay, minister of finance and economic affairs,

sur la situation

financière

..., op. cit. (Rueff Report), p. 7. le politique

15 December 1958, annexed to Rapport

(1944-1959),

sur la situation

Paris, Seuil, 1985, p. 677.

financière

..., op. cit., p. 57.

The French Alternative: Economic Power through the Empire or through Europe?

169

economy? He went on to cite the richest countries of Europe, Switzerland and Sweden, with no imperial past, or Holland, which had managed to profit by loss of its possessions: "It might not perhaps be in the same position if instead of draining the Zuyderzee and modernizing the factories it had had to build railways in Java, cover Sumatra with dams, subsidise Molucca cloves and pay family allowances to Borneo polygamists". 2 9 Jacques Marseille shows in his paper that Raymond Cartier was not necessarily the inventor of "Cartierism". This was born in certain business circles, before the well-known journalist's articles. On 1 November 1955, the magazine Entreprise published a survey which was already putting forward the Dutch example: "A prosperous economy without colonies: the Netherlands", with a significant subtitle: "Ultimately, has the loss of Indonesia not been a factor favourable to growth?". In 1956 Pierre Moussa, director for economic affairs and the Plan at the French Ministry for Overseas Territories, spoke specifically of this "Dutch complex" which had caught up "the most intelligent of Frenchmen". In late July the same year, Paul Legatte in Le Monde queried the commercial usefulness of the French colonies. 30 It is hard to measure the effects of Cartierism on business circles. Georges Villiers, CNPF chairman, was in April 1956 still talking about "the decisive importance for the French economy of the market of the French Union". 3 1 But the space the Confederation's journal was devoting to overseas was shrinking like Balzac's ass's skin, as Jacques Marseille wrote, and after 1957, articles stressed less the advantages than the drawbacks. In this area, movements of capital preceded those of business opinion: investments in the French Union and the assetvolume of colonial companies quoted on the stock exchange fell as from 1954, at a time when investments in the mother country were experiencing a leap forward. On the question of the Empire, trade unionists took more of a moral and political position. They did not speak with a single voice. FO advocated conciliation between colonizers and colonized. Conversely, the C G T presented itself as anti-colonialist, declaring in favour of Algerian independence as from its 1955 congress. The C F T C , which favoured peaceful decolonization, very soon proved attentive to the emergence of the under-developed countries, and by contrast with Cartierism stressed the role that France could play towards them. 3 2 29

30

31 32

Raymond Cartier, Paris-Match, 1 September 1956, cited by J. Marseille, paper cited. Read also, Jacques Marseille, Empire colonial et capitalisme français. Histoire d'un divorce, Paris, Albin Michel, 1984. J. Marseille, pp. 7 - 8 . The series of articles by Legatte, entitled "The Empire, the source of our prosperity?", began to appear on 26 July 1956. "Communauté française", CNPF, no. 146, April 1956, cited by J. Marseille. See R. Mouriaux's paper. See also, René Mouriaux: La CGT, Paris, Seuil, 1982.

170

Robert Frank

In general terms, public opinion was less concerned in 1956 with the "safety of the French Union" (17% of the French), or the prestige of France (8%), than with problems caused by growth (32% took as the country's priority objective improving the standard of living and extending social justice). 33 As for the political class, it was well aware, as Gérard Bossuat shows, that the overseas political presence could no longer be maintained without immense economic investments, themselves a threat to the standard of living in the mother country. Some people in 1956 cherished the hope of having the cost shared by European partners, in return for abandoning the monopoly of colonial markets in their favour. Jean Masson, secretary of State for economic affairs in the Guy Mollet government, asserted that the Overseas Territories were the instrument of French power in the future Europe. He was supported by Georges Villiers, the boss of bosses, who called for France to enter the Common Market together with its possessions. Gaston Defferre, minister for France Overseas, dreamed of a Euro-African Common Market. Europe was, then, regarded by many as the saviour of French colonial power. The latter was no longer what it had been, and the European mystique was such that no-one showed support for a falling back by France on its imperial territories. 34 There remains the specific question of Algeria, which has more to do with the issue of national identity than of power. In their set of arguments, the defenders of French Algeria invoked history and the fate of the large European population rather than economics. Not that economics was entirely absent from discussion. Raymond Aron thought in 1957 that the independence of Algeria would not weaken France; quite the contrary, since the price to pay in investments to make the Algerians fully into Frenchmen would be heavy. 35 The exploitation of Saharan oil, which started flowing to France in early 1958, seemed to set discussion going again. Vie française on 17 January felt that this black gold could allow France to "regain that front rank among the great powers that our incompetence has made us lose." However, in the same publication on 7 March, René Lemoine exclaimed provocatively: "the Algerian war is threatening our investments" and bewailed the sacrificed infrastructures or delayed programmes — motorways, hydro-electric dams, the Ranee tidal power station. 36 Opinions were divided. Nonetheless, Saharan oil did play a 33

Survey cited by Charles-Robert Ageron, "L'opinion publique face a u x problèmes de l'Union française", Les chemins

de la décolonisation

de l'empire

français,

1936 — 1956,

Paris, C N R S

publication, 1986. p. 45. 34

G. Bossuat, p. 10.

35

R a y m o n d Aron, La tragédie rienne", Commentaires,

36

J . Marseille, p. 12.

algérienne,

February 1985.

Paris, 1 9 5 7 ; see Michel W i n o c k , " L a tragédie algé-

The French Alternative: Economic Power through the Empire or through Europe?

171

considerable part in the mythology of French power at the time. In the December 1958 Rueff Report, where the authors, as we have seen, enumerated the "immense investments" France would have to make in coming years, Sahara infrastructure headed the list, immediately before the need to "raise the standard of living of the populations who have just renewed their attachment to and trust in [France]", 3 7 and well before specifically metropolitan ambitions, such as "the modernization and development of the productive apparatus" (in fifth place) or scientific research (sixth). 3 8 Finally, Jacques Marseille distinguishes among three attitudes amongst those who thought about the question of the losses and profits of the Algerian conflict: those who were ready to sacrifice everything financially in order to keep Algeria French, those who had the illusion of believing that "France could manage everything at once, Algeria, Europe and growth", and those who rejected a waste of resources " a t a time when the country has to keep up with other commitments". 3 9 While the majority of governments did not have the strength to choose, so that their attitude can be classed in the second category above, their option in favour of Europe was resolute. Following the failure of the E D C in 1954, economics took back the lead over politics in the European relaunching of 1955 — the Messina Conference and the Spaak Report. At the Venice Conference of M a y 1956, France regained the initiative she had lost, thanks to the determination of Guy Mollet and his ministers Christian Pineau and Maurice Faure. It was an option for power, no longer in arrogant independence, but in a framework of European interdependence. T h e C o m m o n M a r k e t was also a "bold wager", a leap forward: the French economy was condemned to ... modernization in perpetuity. It would be wrong to believe that employers were afraid of this situation. T o be sure, steelmakers' opposition to the setting up of the E C S C in the early 1950s led Jean M o n n e t to make definitive judgements about the protectionism and Malthusianism of French employers. But as Philippe M i o c h e forcibly shows, the reality was much more complex. In fact, the C N P F approved the Schuman Plan in 1950, and in 1951 disassociated itself from the steel employers' association. Employers were "in favour earlier and more massively than is believed". 4 0 If Georges Villiers, at the C N P F general assembly on 15 January 1957, criticized entry into the Common Market, it was not the principle that he was querying but the economic policy of the Guy Mollet government which, in his eyes, was not preparing the country properly for the test of international

37

An allusion to the September 1958 referendum.

38

Rapport sur la situation J. Marseille, p. 12. P. Mioche, p. 13.

39 40

financière,

op. cit., p. 6.

172

Robert Frank

competition. 41 On 1 July 1957, no correction had no difficulty in putting together a majority in favour of the opening to Europe. It was according to him a safeguard against all governmental dirigisme and a guarantee of new outlets. Only a minority, headed by the textile industry led by Boussac, and "more timidly" the metal-working industry, protested against the Rome Treaties. Even the steelmakers rallied to it. Experience with the ECSC had reassured them; they were not displeased to see their problems diluted in a broader European organization. Above all, their geo-economic and geo-political perception had evolved as a result of the new geography of their exports: less steel sold in Latin America and Africa, more and more to the five partners. For a French employer in 1956 - 8, being "European" did not mean displaying one's modernism, but quite simply being realistic. 42 Philippe Mioche is right to say that the link between modernity and European mindedness cannot be erected into an axiom. What he notes in connection with business circles is just as valid for the political class. Guy Mollet, the man of the Rome Treaties, was not necessarily more modern than Pierre Mendès France, who in the National Assembly on 7 July 1957 opposed ratification of the Common Market. The divergences had to do with differences of assessment of the state of the French economy. Made pessimistic by the external financing crisis, Mendès France doubted that France could bear the competition; he also regretted Britain's absence, since he had always regarded it as an essential piece on the European chessboard. Finally, he denounced the Treaty's too liberal procedures, which might interfere with the regulatory mechanisms of the French economy and compromise national independence. Pierre Uri, the inspirer of the Treaty, was cut to the quick. In a letter reported to us by Gérard Bossuat, 4 3 he disputes the liberal nature of the Common Market and has no difficulty in bringing out the contradiction in his friend: hoping for British membership would come down to accepting the liberalism that the London government was advocating in its free trade area, the very liberalism that both were agreed on rejecting. At the time when General de Gaulle came to power, European construction had become more or less irreversible, and was evidently in line with certain economic views of French high officials since the Second World War: rejection of the blind automatism of the market, a desire to reconcile private initiative and guidance of the economy, the option in favour of opening frontiers as a measure of expansion and modernization, independence vis-àvis the United States. Europe was the new horizon for France's international

41

G. Bossuat, p. 29.

42

P. Mioche, p. 15.

43

G. Bossuat, pp. 3 3 - 3 4 .

The French Alternative: Economic Power through the Empire or through Europe?

173

influence. If at one time it was regarded as the saviour of French colonial power, it became increasingly to appear as its substitute. In 1938 the French had doubts about their economy, but not really about their power. Around 1948, this was no longer the case; after the lessons of the defeat, the occupation, and Liberation, the economy was now asserting its primacy over all other factors of assessment, and dependency on the United States was accepted in order to pay for modernization, a condition regarded as necessary in order for the country to regain its rank some day. In the mid1950s, the mystique of investment and expansion was advancing still further. It was no longer limited to circles at the top of the administration and politics, but was gaining the majority of the employers, who were now displaying their confidence in the French economy. Accordingly, independence was the order of the day. It was the Suez failure, the 1956 — 8 external financing crisis and the Algerian trap that were to put paid to many illusions. Economic growth does not by itself create power. At bottom, politics and finance were taking their first revenge on economics since the Second World War; that was what General de Gaulle had perfectly understood in 1958. Expansion nevertheless remained a need, both to satisfy growing social demand and to establish the country's influence. But the background was changing: Europe was taking the place of the Empire, and that was what General de Gaulle had finally to admit.

Germany's Economic Revival in the 1950s. The Foreign Policy Perspective by Werner Biihrer and Hans-Jürgen Schröder

In the course of the 20th century economic factors have acquired increasing significance in international relations. Economic potential, the development of market conditions and assertion on the world market have become increasingly important criteria in securing the foreign-policy interests of individual states. This is particularly true for the Federal Republic of Germany. Given the military defeat and territorial fragmentation, it was primarily advances in the economic sphere that offered the possibility of a return to the international concert of nations. Internal and external economic factors complemented one another: there was, in view of the wartime destruction, no alternative to economic reconstruction; and this reconstruction was not conceivable without Germany's re-entry into the world economy, simply because of the West German economic structure. These connections were also clearly seen by the West German leading elites in politics and the economy. T h e elites consistently exploited the reconstruction of the West German economy for foreign economic policy and foreign policy in general, though the so-called "economic miracle" of the 1950s was by no means predictable in the early post-war years.

1. T h e headlong upsurge in the West German economy in the 50s is undoubtedly among the most remarkable phenomena of European post-war history. In the spring of 1948, West Germany had still been threatened by economic decay, poverty and starvation, and because of a serious balance-of-payments crisis in 1950 — 1 it was subjected to painful investigations and recommendations of foreign experts. In the 1950s this nation suddenly began a rise towards becoming the leading economic power in Western Europe. This rise — soon hailed by its Western neighbours, with a mixture of fear and admiration, as an "economic miracle" — caused concern, not least because of its markedly

Germany's Economic Revival in the 1950s

175

aggressive approach. Sensitive politicians and experts, or those with international experience, sought to take account of these apprehensions and - like Frankfurt banker Hermann J. Abs - warned against German arrogance and overconfidence. Others, joined occasionally also by Federal Minister of Economics Erhard, showed little understanding for such counsel. For Erhard, economic expansion had "nothing aggressive" about it. It was thus only consistent that, during the CDU Federal Party Congress in May 1954, he should argue explicitly to maintain under all circumstances this economic policy (conceived in part by him), "which is dynamic and expansively forwardmoving." 1 The minister was even able to adduce economic reasons for this position: it was undisputed among economic experts that following the territorial losses in the East the country was more strongly dependent on exports in order to pay for the additional imports associated with the losses. Probably, too, it was less the export orientation itself, felt to be disruptive particularly in Britain and France, than the verve and speed of the Federal German external economic offensive that caused the worry. Between 1952 and 1958 (in the consolidation phase of the economy after the breakthrough to self-sustaining growth) the value of exports more than doubled from 16.9 to around 37 billion D M . Imports too almost doubled (from 16.2 to 31.3 billion DM). Exports to France rose from 1076.9 million D M in 1952 to 2162.3 million D M in 1958, and those to Britain from 955.2 million D M to 1460.1 million D M . In the same period, imports from these two countries grew from 606.2 to 1595.1 and from 525.2 to 1360.7 million respectively. Thus, although the growth in imports was clearly above that of exports, in both cases the Federal Republic secured considerable surpluses in its balance of trade. 2 This was, moreover, true for trade with almost all OEEC Member

' 5. Bundesparteitag CDU, Köln, 2 8 . - 3 0 . 5. 1954, p. 106, Abs speech ibid., pp. 9 2 - 9 8 . We follow the periodization suggested by Gustav Stolper, Karl Häuser, Knut Borchardt, Deutsche Wirtschaft seit 1870, Tübingen 1964, esp. pp. 258 - 259. The following summary of West German economic development during the 1950s is based on Harald Winkel, Die Wirtschaft im geteilten Deutschland 1945 - 1 9 7 0 , Wiesbaden 1974; Klaus Hinrich Hennings, West Germany, in: Andrea Boltho (ed.), The European Economy. Growth and Crisis, Oxford 1982, pp. 472 — 501; Werner Abelshauser, Wirtschaftsgeschichte der Bundesrepublik Deutschland (1945-1980), Frankfurt/Main 1983; Werner Abelshauser, Die langen Fünfziger Jahre. Wirtschaft und Gesellschaft der Bundesrepublik Deutschland 1 9 4 9 - 1 9 6 6 , Düsseldorf 1987; Herman van der Wee, Der gebremste Wohlstand. Wiederaufbau, Wachstum, Strukturwandel 1 9 4 5 - 1 9 8 0 , München 1984; Gerold Ambrosius, Europäische Integration und wirtschaftliche Entwicklung der Bundesrepublik Deutschland in den fünfziger Jahren, in: Helmut Berding (ed.), Wirtschaftliche Integration und politische Integration in Europa im 19. und 20. Jahrhundert, Göttingen 1984, pp. 2 7 1 - 2 9 4 ; Friedrich Wilhelm Henning, Deutschland von 1914 bis zur Gegenwart, in: Wolfram Fischer (ed.), Europäische Wirtschafts- und Sozialgeschichte vom Ersten Weltkrieg bis zur Gegenwart, Stuttgart 1987, esp. pp. 449 — 469.

2

176

Werner Biihrer and Hans-Jürgen Schröder

States, and was expressed in a corresponding development in commodity structure. As before the war, the share of finished goods — particularly machinery, vehicles and electrical goods — rose, while export of raw materials and semi-finished goods fell. With average annual growth rates of around 20% on export and around 18% on import, foreign trade was the motor for growth in the 50s. The gross social product rose between 1952 and 1958 from 133.5 to 197.7 billion D M , 3 with annual rates of increase of 7.8% on average. In the period from 1950 to 1960 the Federal Republic was at the head of the Western European countries. Industrial production grew by 148%, with the investment goods industry, important for exports, significantly higher at 223% ; only mining lagged behind, with a growth of 3 2 % . This general trend is emphatically confirmed by the following examples: output of iron rose from 9.47 to 25.7 million tons, manufacture of cogs and gears from 26,725 to 108,388 tons, of private cars from 216,000 to 1,674,298 units. The Federal Republic asserted a leading position in labour productivity too. While there were and continue to be differing theoretical attempts at explaining this dynamic process of internal and external economic growth, 4 the following important conditions and factors in the "economic miracle" can nevertheless be established: 1. The Federal Republic owed its extraordinary growth above all to its favourable industrial structure, suited to the specific needs of the world market. The dominant industries were the ones whose products were in increasing demand on the West European markets and in the US; machinery, cars, electrical goods and chemicals. Furthermore, during the Korean War, the Western countries were forcing arms production at the expense of the civil sector. German industry, which was initially excluded from direct arms production, was therefore able to concentrate on meeting demand in the civil sector and thus regain lost ground. In doing so, it was able to benefit from cost and price advantages, while at the same time the terms of trade were changing in its favour. The objective of price stability was therefore at the top of the economic policy priority scale and was, thanks to combined efforts by the relevant ministries and the Bank Deutscher Länder, largely achieved. Positive impetus came too from the undervaluation of the D M and from a package of export-promoting measures by the Federal government, though these government measures ought not to be overestimated: firstly, they were not confined to West Germany, and secondly they had in part to be abandoned 3

Statistical data from Statistisches Jahrbuch für die Bundesrepublik Deutschland 1953 und

4

See for further references Knut Borchardt, Die Bundesrepublik in den säkularen Trends der

1959, S t u t t g a r t - M a i n z 1953, 1959. wirtschaftlichen Entwicklung, in: Werner Conze, M. Rainer Lepsius (eds.), Sozialgeschichte der

Bundesrepublik

pp. 20 - 45.

Deutschland.

Beiträge

zum

Kontinuitätsproblem,

Stuttgart

1983,

Germany's Economic Revival in the 1950s

177

because of OEEC pressure. Taken as a whole the successful foreign trade offensive contributed decisively to the prosperity of the 50s; negative aspects of the intensive integration into the world economy were to emerge only in the 60s and 70s. 2. A further important precondition for the economic upsurge was restoration of German credit-worthiness. That this involved not only economic questions, but also political and ethical ones, was soon made clear by the Allies, in making relaxation of the Occupation Statute dependent on recognition of German foreign debts. 5 In the July 1952 London Agreement on Debts the Federal government accepted an overall debt amounting to around 14.5 billion D M , made up in almost equal parts of pre-war and post-war debts; the annual instalments amounted until 1958 to 567 million D M , and thereafter to 765 million D M . The London arrangement not only eased the transition to Mark convertibility but also led to a rise by leaps and bounds in foreign investments in 1954, since there now existed the possibility of transferring the yields on foreign capital investments. While economic rehabilitation of the Germans was the main priority in London, moral rehabilitation was the focus of the simultaneously proceeding reparations negotiations with Israel. 6 The fact that the "solution" to this problem was likewise attempted in financial terms, while costly from a German viewpoint, was ultimately extremely convenient. The Agreement signed in Luxembourg on 10 September 1952 provided for the provision of goods and capital amounting to 3.45 billion D M . For the German supplier firms, the goods deliveries agreed on were an advantage, since in this way they even came to benefit from "assistance paid from tax funds". 7 But it was more decisive that both agreements increased trust in German credit-worthiness and thus smoothed the way to the urgently needed foreign credit. 3. The existence of an adequately qualified and flexible labour force is generally regarded as the decisive factor for economic growth. These conditions were particularly well met in the Federal Republic: 8 owing primarily to the massive influx of almost 12 million expellees and refugees up to 1960. From the G D R alone, 3.6 million Germans came to the Federal Republic between

5

See Christoph Buchheim, Das Londoner Schuldenabkommen, in: Ludolf Herbst (ed.), Westdeutschland 1 9 4 5 - 1 9 5 5 . Unterwerfung, Kontrolle, Integration, München 1986, pp. 2 1 9 - 2 2 9 ; Hans-Peter Schwarz (ed.), Die Wiederherstellung des deutschen Kredits. Das Londoner Schuldenabkommen, Stuttgart — Zürich 1982.

6

Vgl. dazu Hans-Peter Schwarz, Die Ära Adenauer 1 9 4 9 - 1 9 5 7 , Stuttgart 1981, pp. 1 8 1 - 1 8 7 ; Nana Sagi, Wiedergutmachung für Israel. Die deutschen Zahlungen und Leistungen, Stuttgart 1981.

7 8

Schwarz, Ära, p. 186. Vgl. van der Wee, Wohlstand, pp. 1 6 7 - 2 1 2 ; pp. 2 8 - 4 2 , 8 0 - 8 1 .

Abelshauser, Die Langen Fünfziger Jahre,

178

Werner Biihrer and Hans-Jürgen Schroder

1950 and 1962. They were mainly young or middle-aged, well-educated and highly motivated. The refugees and expellees were still disproportionately affected by unemployment until the second half of the 50s, yet this high unemployment was an additional reserve for the firms aiming at expansion. It took until 1955 for the number of unemployed to fall below the million barrier; and it was not until 1960 that the number of jobs available clearly exceeded that of the registered unemployed. Additionally, the unmistakable will to rise, particularly manifest in the groups mentioned, made its effects felt positively. 4. Though prosperity and social peace increasingly reinforced each other, the decisive point initially was that this nascent upsurge was not endangered by labour conflicts. The fact that this was achieved was not at all a matter of course, whether for the traditional sphere of relationships between labour and capital or for the new social policy tasks involved in economically and socially integrating the expellees and refugees. The importance of the social peace is therefore to be rated all the higher, though it was bought at the cost of far-reaching abandonment by the unions of structural changes in the economic system. With the legislative embodiment of co-determination on a parity basis in May 1951, the unions had admittedly gained a partial success in the fight for a new structure for the economy, 9 but for the moment it was to be their last. The Employee Representation Act (Betriebsverfassungsgesetz) adopted in October 1952 fell far short of expectations and guaranteed workers merely "rights of representation in personal matters and co-determination in social ones". 10 In view of the political relationships of power and in recognition of parliamentary majority decisions, the unions concentrated on wage and work-time demands. This strategy was thoroughly successful: real wages rose between 1950 and 1960 by 73%, and in 1956 IG Metall (the Metalworkers' Union) achieved the decisive breakthrough to a 45-hour week. Against this background, it should hardly be surprising that the number of strikes was relatively low in comparison with other countries. Despite occasional conflicts on basic issues of social and wage policy, on the whole what prevailed was a cooperative style, consciously balancing interests, in the relationship between employer associations and trade unions. 11 9

See Horst T h u m , Mitbestimmung in der Montanindustrie. Der Mythos vom Sieg der Gewerkschaften, Stuttgart 1981; Montanmitbestimmung. Das Gesetz über die Mitbestimmung der Arbeitnehmer in den Aufsichtsräten und Vorständen der Unternehmen des Bergbaus und der Eisen und Stahl erzeugenden Industrie vom 21. Mai 1951, ed. by Gabriele Müller-List, Düsseldorf 1984. 10 Abelshauser, Die Langen Fünfziger Jahre, p. 45. " See ibid., pp. S. 4 7 - 4 8 .

Germany's Economic Revival in the 1950s

179

The fact that the expellees and refugees did not, as widely feared, turn into a potential for protest may in part have been due to their mainly conservative, work-oriented attitude; in this case too, moreover, what was more important was the improvement in the material situation. Apart from the increasing integration into the labour process, this was due above all to two measures: the equalization of war burdens and the construction of council housing. Admittedly, the Act on Equalization of War Burdens of August 1952 did not have the initially intended effect of redistributing assets, yet it was possible to pay out billions in compensation and resettlement assistance from the specially created fund. 1 2 The governmentally backed housing construction made it possible to build cheap council housing for low-income tenants. The figure for publicly supported new buildings was highest for 1952. Thereafter the emphasis in support shifted to construction of private houses and condominiums. Altogether, between 1950 and 1961 over 6 million new dwellings — around half of them council housing - were built, after 1953 at a rate of more than 500 thousand per year. The undesired economic policy effects of this building boom were tolerated because of the acute housing need and the socially integrative effect of the home-owning ideology. 13 5. A last important factor in the "economic miracle" was the remarkable personal and conceptual continuity in national economic policy (clear particularly in comparison with other West European countries). 14 In the 50s a large number of people and authorities, namely the Minister of Economics, the Minister for the Marshall Plan and Economic Cooperation, the Minister of Agriculture, the Minister of Finance and the Minister of Housing, the Foreign Office and not least the Federal Chancellor with his authority to decide government policy, had the capability to shape and intervene in economic policy, but it was still primarily Ludwig Erhard who laid down the main lines. He was in office much longer than most of his colleagues (from 1949 to 1963) and the decisive reason for his long term of office was his successful economic policy. In most disputes, and particularly where Adenauer was on the other side, Erhard came out on top. This had, for instance, been the case in the early 50s when chiefly American critics first promoted a job-creating programme and later — in the wake of the Korea crisis — government control and guidance measures for the purpose of support of Western armaments efforts; on both occasions the Chancellor was prepared to yield to American 12

See ibid., pp. 3 1 - 3 7 ; Stolper, Wirtschaft, pp. 3 1 3 - 3 1 5 .

13

Winkel, Wirtschaft, pp. 1 6 0 - 1 6 4 .

14

O n Erhard see Volkhard Laitenberger, Ludwig Erhard. Der N a t i o n a l ö k o n o m als Politiker, Göttingen — Zürich 1986; Daniel Koerfer, Kampf ums Kanzleramt. Erhard und Adenauer, Stuttgart 1987.

180

Werner Biihrer and Hans-Jürgen Schröder

pressure for a "significant modification of the free market economy". 1 S Also in the dispute over the need for measures to restrain the economy in 1955 — 6, Adenauer had, in the end, to give in. Erhard emerged from these disputes strengthened, and his economic policy authority and competence were publicly recognized. He embodied, and not only in a metaphorical sense, the German "economic miracle", which in his viewpoint was admittedly not any sort of "miracle", but due to consistent application of his neo-liberal economic philosophy, in the form of the "social market economy". Even if theory and practice did not always correspond, and such important areas as the coal and steel industry and agriculture came under different rules, prosperity and the social market economy were inseparably coupled in the public mind until the mid-60s. The economic reconstruction and social stability of West Germany sketched out here opened up many prospects for the foreign policy of the young Republic. These are, however, grasped inadequately by a diplomatic history concentrating on interpreting traditional power factors such as military and alliance policies. The foreign-policy possibilities resulting from the German economic position were clearly diagnosed by the leading elites in politics and the economy: the German economic potential was generally employed as an instrument for foreign policy. This will be exemplified below for both government policy and the industrial interest groups.

2. Even in the first post-war years, West German politicians saw economic reconstruction in a wider political context. In numerous pleas for economic reconstruction, the fate of the German economy and particularly the industry of the Ruhr was bound up with the future development of the Western democracies. Under the impression of the winter crisis of 1946 — 7, the June 1947 Munich Conference of Minister Presidents assessed the state of the German economy in brutally blunt terms: "The German economy is in a profound, paralytic crisis." At the same time the connection between German economic development and Western European reconstruction was brought down to a dramatic formula with the following question: "What is Germany? Germany is today nothing more than a historical geographical expression, nothing but a single ghastly expanse of ruins, with nothing in common any 15

The American High Commissioner for Germany, McCloy, in March 1951, as quoted by Werner Abelshauser, Ansätze "korporativer Marktwirtschaft" in der Korea-Krise der frühen fünfziger Jahre. Ein Briefwechsel zwischen dem Hohen Kommissar John McCloy und dem Bundeskanzler Konrad Adenauer, in: Vierteljahrshefte für Zeitgeschichte 30 (1982), p. 736.

Germany's Economic Revival in the 1950s

181

more but need. But this expanse of ruins is the heart of Europe, as it always was, and this Europe was once a living organism, bound indissolubly, for better or worse, by a thousand threads of history, culture and economy. What we ask is how Europe is to heal with its heart still gravely ill, if it is not treated, and if it is not given the injections it needs to start beating strongly again? The times when Europe set the order for the world are past. Yet the new powers that today determine the course of history cannot guarantee world order unless they keep order in Europe. But keeping Europe in order means keeping Germany alive!" This German argument carried such force at the time because at bottom it was in line with American interests. 16 Historical research has convincingly shown that by early 1946 at the latest Washington was pursuing a pragmatic policy of stabilization in West Germany, even though this was not at first apparent in official pronouncements from the Americans. From 1947 on, this policy of stabilization was increasingly set in an all-European or West European context. When Secretary of State Marshall announced a European recovery programme in his Harvard speech in early June 1947, the inclusion of West Germany was understandably not particularly stressed, since, after all, barely two years had passed since the German capitulation. Internal thinking, particularly in the State Department, allows no doubt, though, that West Germany was in the beginning included as an integral element in planning for the European Recovery Programme. In an August 1948 State Department policy statement, Germany's central value for the operation of the European economy was clearly emphasized: "Germany is potentially one of the most important European suppliers of such acutely needed commodities as coal, mining machinery, and industrial equipment. At the same time she is potentially an important market for European goods. German economic recovery is therefore vital to general European economic recovery. On the other hand, German economic recovery is largely dependent on the economic recovery of other European countries since they are the chief markets for her goods. It is US policy that the fullest possible recognition be given this interdependence in order to achieve the greatest over-all benefits for the European Recovery Programme." 17 In a correct assessment of the American Marshall Plan policy, Hermann Piinder, Chairman of the Administrative Council of Bizonia, saw the work of the OEEC (Organization for European Economic Cooperation) as "very welcome beginnings to genuine all-European thinking by all participating countries." It was a particular merit of this organization from a German viewpoint

16

Conference minutes, June 6, 1947, in: Akten zur Vorgeschichte der Bundesrepublik Deutschland

17

Department of State Policy Statement, Germany, August 16, 1948, in: Foreign Relations of

1945 - 1 9 4 9 , vol. 2, München 1979, p. 540. the United States (quoted FRUS) 1948 II, Washington, D. C. 1973, p. 1310.

182

Werner Bührer and Hans-Jürgen Schröder

that it had shown "increasing understanding for our position too, and for West Germany's possibility of contributing to the economic recovery of Europe". The economic integration launched with the European Recovery Programme had, argued Piinder, far-reaching political significance as well. 18 The Adenauer government had from the outset taken this assessment of the Marshall Plan as its own, and successfully exploited the political dimensions of the European Recovery Programme to extend the young Republic's room for foreign policy manoeuvre. In pursuing political interests by economic means, German commercial policy had a key place. Thus, one member of the Frankfurt Economic Council was stressing as early as August 1949 that "German commercial policy must in future, to a greater extent than has been possible so far, be a resource for the whole of German policy — including foreign policy in particular. We must throw our commercial policy weight into the balance in foreign policy terms too, and this will be all the more possible because our weight as goods purchasers in the world economy of the consumer market, between 2 and 3 billion dollars, is very considerable". 19 These dimensions of commercial policy, foreign policy in the broadest sense, are confirmed in manifold respects in the German document. This is true both for the political assessment of individual trade treaties and for the debates on the claim to leadership in commercial policy that kept flaring up within the Federal government. Thus, the Ministry for the Economy was not prepared to grant the Foreign Office "primacy in guiding commercial policy", since "a unitary, purposeful economic policy" was "inconceivable without inclusion of foreign trade policy". It was at any rate admitted by the Ministry of Economics itself that "realistic foreign policy could not do without the instrument of foreign economic policy". 20 For this very reason, the Foreign Office was not prepared to cede powers in matters of commercial policy to the Ministry of Economics. Thus, Foreign Minister von Brentano said in July 1955 on the Hessian Broadcasting Corporation that "commercial policy too is only a part of our overall political, particularly foreign policy, activity. After all, commercial policy is not an end in itself, but must be set in the context of overall policy. ... Germany's economic links with the rest of the world are ... part of foreign relations". 2 1 The fact that the Foreign Office so decisively " Wörtliche Berichte und Drucksachen des Wirtschaftsrates des Vereinigten Wirtschaftsgebietes 1 9 4 7 - 1 9 4 9 , ed., by Institut für Zeitgeschichte and Deutschen Bundestag, Wissenschaftliche Dienste, vol. 3, München 1977, p. 1525. 19 Minute Elmenau, August 31, 1949, in: Bundesarchiv Koblenz (quoted BA), Nachlaß Pünder/ 718. 20 M e m o r a n d u m Ministry of Economics, June 28, 1955, (Zur Frage der Zusammenarbeit zwischen dem Bundesministerium für Wirtschaft und dem Auswärtigen Amt), in: BA, Β 136/ 1261. 21 Die Außenhandelspolitik nach der Souveränitätserklärung, in: Bulletin des Presse- und Informationsamtes der Bundesregierung, July 31, 1955, p. 1064.

Germany's Economic Revival in the 1950s

183

defended its guiding role in commercial policy is further testimony to the enhanced importance of economic questions in the area of foreign policy. This foreign-policy component of commercial policy can also be shown in a number of trade treaties. This is particularly true of the German-American trade treaty of 1954. In view of the Adenauer government's close dependency on the USA, a trade treaty between the two States obviously had a general political importance beyond the economic sphere. This foreign-policy dimension was expressed notably in the fact that the trade treaty negotiations were announced during the Federal Chancellor's first visit to the US in spring 1953, and that the agreement was signed during his second visit. 22 For the members of the Federal government, the great importance of the German-American trade treaty of 1954, with its additional foreign policy implications, was stressed in an internal cabinet document: "For the United States, it is the most important agreement of this nature. For the Federal Republic, it is the first and likewise the most important classical trade treaty after the war. Undoubtedly it will form the basis for a German trade treaty system that will establish and promote the Federal Republic's economic relationships with other countries. The old agreement of 1923 had at its time too a political significance from its mere existence. The new agreement with the Western world's leading nation will have no lesser effects". 23 Further confirmations of the foreign policy importance of the West German economic rise is the perception of the power-policy gain in the estimation of other countries. Here, every change in the German economic position was recorded, as it were, seismographically. In Western Europe, French diplomacy in particular interpreted any rise in the level of West German industry as a threat to its own security. But Paris had to bow to the Anglo-Saxon, particularly American, desires for economic stabilization of West Germany. And while understanding for French security efforts towards Germany was expressed verbally by the Americans, in practice American policy nevertheless made no departures from its stabilization efforts in West Germany. For instance, Secretary Marshall, at the Franco-BritishAmerican talks in 1948 on the Ruhr, expressed understanding for French fears of a recovery of German economic potential. He admitted that West Germany's economic reconstruction raised problems for neighbouring States. At the same time, the Secretary of State left no doubt that Washington was in no way prepared to depart from the policy of stabilization in West Germany. Marshall sought to allay the reservations of his French counterpart Robert Schuman by

22 23

See FRUS 1 9 5 2 - 1954, VII/1, pp. 424 ff., 592 ff. Foreign Ministry memorandum, October 15, 1954, in: Politisches Archiv des Auswärtigen Amtes, Bonn, Länderabt. III, Verhandlungen und Abschluß von Handelsverträgen mit den USA, vol. 4.

184

Werner Bührer and Hans-Jürgen Schröder

pointing out "that the United States Government would not knowingly be involved in any procedure which would re-establish German power to a dangerous degree." 24 The French security efforts had to take second place, particularly because Washington had not seen any alternative to the stabilization policy in West Germany. It should be recalled in this context that this policy had significant political motivations as well: it was to give West Germany a twofold immunization against the Communist threat, namely against subversion within and against pressure from without. The recognition by French diplomacy that the German economic rise could not be halted contributed decisively to the inauguration of the Schuman Plan. German economic potential should — if it could not be controlled unilaterally by France — at least be channelled through cooperation with the Federal Republic into an economic and political direction acceptable to France. 25 This was precisely the way the Schuman Plan was interpreted by British diplomacy: "The Schuman Plan appears as the latest attempt by the French to retain some control over German heavy industry. Their aim is now to replace some of their evaporating powers by obtaining influence indirectly in a manner politically acceptable to the Germans". 2 6 And the New York Council on Foreign Relations commented: "In any event, what is the alternative? It is surely better and more profitable to enlist Germany's dynamism as a partner than to face it with enmity". 2 7 From this same angle, the American government initially assessed the Schuman Plan positively. The discrepancy between the French need for security and the economic and political implications of the rise of West Germany seemed to be balanced out, as far as Franco-German relations were concerned, by the Schuman Plan. 28 For the American government too, the possibilities and limitations of Germany's inclusion in the West European system of States became increasingly relevant with the advancing recovery of the West German economy. Here was one essential stimulus, going beyond the narrower economic sphere, to the debate that intensified in the US in 1949 — 50 on the need for Western European

24 25

26 27

28

Minutes of Meeting of Foreign Ministers, November 19, 1948, in: FRUS 1948 II, p. 520. See Constantin Goschler, Christoph Buchheim, Werner Bührer, Der Schumanplan als Instrument französischer Stahlpolitik. Zur historischen Wirkung eines falschen Kalküls, in: Vierteljahrshefte für Zeitgeschichte 37 (1989), pp. 1 7 1 - 2 0 6 . Cabinet Paper, June 26, 1951, in: Public Record Office, London, CAB 134/230. Germany's Position in Western Europe. A Report Submitted by the Council on Foreign Relations to the Conference at Bruges, April 21 - 26, 1955, New York 1955, Not for Publication, mimeographed copy in: NA, RG 59, 762 A . 0 0 / 4 - 1 3 5 5 . On the U. S. position see Klaus Schwabe, "Ein Akt konstruktiver Staatskunst" — die USA und die Anfänge des Schuman-Plans, in: Klaus Schwabe (ed.), Die Anfänge des SchumanPlans. The Beginnings of the Schuman-Plan, Baden-Baden 1988, pp. 2 1 1 - 2 3 9 .

Germany's E c o n o m i c Revival in the 1950s

185

integration. In a State Department memorandum, "Germany in the European Context", the solution to the German question was even defined as the most important theme of American integration policy: " . . . if there is no other reason for unifying Europe it would be necessary to do so in order to solve the German problem. The vitality of the Western European countries has been greatly sapped by two wars. Despite great losses of German manpower in the wars, the Germans are probably still the most vital and energetic people on the Continent. ... As German political life continues to develop, two main forces will increasingly assert themselves. One of these is the desire for the unification of Germany and the recovery of Eastern territories. The other is the desire for more positive steps directed towards the amelioration of the German economic position. These are natural tendencies, and if they find some possibility for solution in the policies of the Western Powers, we may be able to maintain a position of influence in Germany." Since on the reunification question it was ultimately only the Soviets that could make territorial offers, it was necessary for the Western Allies to pay particular attention to West German economic ambitions. The trend perceptible in London and Paris to see in Germany "mainly a dangerous source of economic competition" did not do justice to the situation and furthermore concealed the danger of eroding a common Germany policy by the Western Allies. For economic inclusion of the Federal Republic into the West, however, political consensus and political measures would be necessary. 29 This argument by the Bureau of German Affairs displays a close overlap of economic and political factors. Not least for political reasons, legitimate German economic interests were to be met. The problems of the growing independence of West German policy arising out of West German economic dynamism ought then to be controlled by political means too; that is, measures towards political integration appeared necessary because economic integration alone would not in the longer term be enough. However, in early 1950 even the most optimistic estimates could not foresee the extent of German economic dynamics. The so-called "economic miracle" of the Federal Republic then liberated forces that inevitably influenced the international system even further than already assumed at the turn of the decade from 1949 to 1950. Significantly, the American High Commission rated the resurgence of German productivity and vitality as an important factor in Western European development, "as one of, if not the, most significant factors." West German dynamism was important above all because it would lead to a great power shift between France and Germany. 30

29

Germany in the European C o n t e x t , in: F R U S 1950, IV, p. 5 0 8 .

30

M c C l o y to State Department, April 25, 1950, ibid., pp. 6 3 3 ff.

186

Werner Bührer and Hans-Jürgen Schröder

This assessment was unreservedly shared by the Policy Planning Staff: "Germany's revival — particularly since 1948 — has confronted Germany's neighbours and western powers with the implacable, if not necessarily sinister, fact that the Federal Republic is now the strongest power in Europe outside the USSR, and likely to grow stronger year by year with the full implementation of current allied positions." 3 1 This appraisal runs like a red thread through American analyses of the question of Germany. When the US embassy in early 1959 summed up the decade's history of the Federal Republic, it referred among other things to increased German selfconfidence. An important basis, it was stressed, was in particular the impressive performance of the West German economy: "German self-confidence and reliance of its allies on the Federal Republic are justified by the strength of its political structure, the health of its economy ..., its slow but steady progress in building defence forces, and the identification of its foreign policy with ours." 3 2 The power-policy gains going hand in hand with the West German economic upsurge were seen in highly differentiated fashion on the American side, outside the government too. This emerges from, for instance, the previously cited Council on Foreign Relations analysis of spring 1955, "Germany's Position in Western Europe", which also summarizes the political implications of West German economic power. The economic development of the Federal Republic and particularly Germany's return to the world market, ran the argument, had contributed to international integration of the Federal Republic, to which political importance was also attached because entirely cooperative elements were being manifested in it. The Federal Republic's enhanced dependency on foreign trade would also open up for other States possibilities of influencing West German conduct in the international system. 33 Acceptance of the Federal Republic's economically based power-policy position was undoubtedly eased for the Western democracies because Bonn supported Western European economic and political integration, and became foremost advocate in Europe of a liberal foreign economic policy. The adoption of American conceptions of system were on the one hand to stress the close dependency on the US. Morevoer, German's liberal trade policy could dispel reservations that Germany might return to the bilateralism of the 1930s. The existence of such fears is emphatically confirmed, particularly in British documents. Taken as a whole, the Federal Republic's strong integration into the

31

M e m o r a n d u m Fuller, September 4, 1952, in: F R U S 1952/1, pp. 356 - 361; M e m o r a n d u m Nitze,

32

American E m b a s s y Bonn to State Department, February 2, 1959, in: N A , R G 59, 7 6 2 A . 0 0 /

33

G e r m a n y ' s Position in Western Europe (see footn. 27).

September 26, 1952, ibid., pp. 361—368. 2-259.

Germany's Economic Revival in the 1950s

187

world economy and increasingly into the West had great significance. The initially primarily economically and politically accented integration into the West of the Federal Republic, extending ultimately into the military area too, seemed to offer a guarantee against Germany's going it alone.

3. The importance of the West German economic potential for reconstruction in Western Europe inevitably meant that the ideas and objectives of those who sat at the controls of economic power also acquired great political weight. The most important spokesman for employers on political questions became, after its foundation in October 1949, the Federal Association of German Industry (BDI), which will therefore be at the centre of attention below. The association from the outset supported Adenauer's foreign policy. Fritz Berg, first president of the BDI, a small businessman with a marked self-awareness, was even prepared to acknowledge the Chancellor's claim to leadership. The reason was that the Federal Chancellor's course largely corresponded with his own foreign-policy convictions and those of most of his colleagues. 34 Where else but in the West was industry in the 50s to find credit, know-how and markets? Admittedly, a number of preconditions were necessary: "The mistrust of Germany on the basis of mistrust of the political objectives of the German economy had under all circumstances to be eliminated". 35 This simultaneously set the guiding line of foreign policy that the association leadership wished to follow, at any rate in its "Westpolitik". But getting rid of the fears and reservations of other countries was no easy task. Particularly in France, industry on the other side of the Rhine continued to be regarded as a fear-inspiring, over-powerful competitor, to be restrained by every means. Adenauer therefore endeavoured to dispel the concerns of neighbours in the West and, particularly in France, he pressed for trust in the "new Germany". Influential circles in industry supported this course — after initial hesitations. In particular, Klöckner boss Günter Henle, one of the prominent "political" industrialists, and not only because of his CDU membership and seat in the Bundestag, became a committed advocate of Franco-German reconciliation. Though not represented on any BDI bodies, what he said, particularly on foreign policy questions, had considerable weight within the association too. 34

Arnulf Baring, Außenpolitik in Adenauers Kanzlerdemokratie. Bonns Beitrag zur Europäischen Verteidigungsgemeinschaft, München 1969, pp. 188 - 1 9 3 ; Gerard Braunthal, The Federation of German Industry in Politics, Ithaca (Ν. Y.) 1965, esp. pp. 284 - 334.

35

BDI-Jahresbericht 1958/59, p. 26.

188

Werner Bührer and Hans-Jürgen Schröder

The starting-point for his analysis in November 1949 was the statement that the situations of both countries, as a consequence of the "massive landslide that has come about in Germany since 1945", had come to resemble each other. 36 The Federal Republic wished to cling to the West because it saw itself "today threatened, exposed and defenceless", and was therefore "itself gripped by the demand for sécurité" that had in the neighbouring country been dominant "as strongly ever since 1918". Pointing to the "all-dominating fact" of the "Iron Curtain", he set Federal German relationships in a wider context, stressing that "yesterday's world had vanished, with all its ambitious goals and aspirations". Old rivalries had, in view of predominating geo-political contradictions, become "suicidal and senseless", and the Federal Republic had no new objectives of "future power politics in the West", but was aware that "in the age of the atom bomb old-style power politics can no longer exist", only "a desperately serious policy of securing one's own existence". By contrast with the 20s, it was clear from the circumstances of the Cold War that "the idea of sovereignty had to give place to higher requirements", when the "common weal and continued existence of Europe" was at stake. Concerned that he might not yet have dispelled all doubts, Henle went on to deny any kind of rearmament intentions. And, alluding to widespread fears in France, he explicitly stressed that there was no wish to "swallow up" the neighbour, since this was well beyond German strength, even if such confidence in West German "performance capability" was flattering. A category like "predominance" had now become outdated; whoever really wanted Europe ought to "rid himself of sentiments of this nature". This analysis, in particular the appraisal of the Franco-German relationship, was representative of the decisive circles in West German industry; for the BDI too, reconciliation with France was the "pivot of Europe's salvation". 3 7 The reference to Germany's own powerlessness was certainly not just coquetry; on the contrary, the commitment to Western European unification pointed to the fact that this shortcoming, felt as real, was to be compensated for through close cooperation with neighbouring countries. Further-reaching political considerations of this nature are, however, rare value in industrial circles. At the inaugural meeting of the BDI in October 1949, Hermann Reusch of the Oberhausen Gutehoffnungshütte ironworks, one of the decisive figures in the executive, had gone only briefly into questions of international relationships. His commitment to European cooperation was a result of the conviction that otherwise "Western culture" could not be saved. The role he assigned to the

36

Klöckner Archives, Europ. Bewegung/Der Deutsche Rat/Exekutiv-Komitee/1. 6 . - 1 1 . 12.: "Gedanken zu einer deutsch-französischen Aussprache", November 22, 1949; although the document is not signed, there is no doubt about Henle's authorship.

37

Bericht über die Tagung des BDI in Bad Dürkheim, March 28, 1950, p. 18.

189

G e r m a n y ' s Economic Revival in the 1950s

Federal Republic in this was a very weighty one: "Without Germany and without a strong German economy" a "European Community" was not conceivable, he said, referring to the "general conviction of the Western world". 3 8 The BDI had no illusions as to the Federal government's room for manoeuvre. The foreign-policy position, as Fritz Berg made clear in an economic policy statement of the association in March 1950, could be influenced by Germany "not yet directly, but only indirectly". 39 The goal the BDI hoped to reach with the help of improvement in bilateral relationships and by collaborating in the work of European unification was first and foremost equal rights. The association's leadership was further concerned with increasing Germany's room for manoeuvre and helping the principles of a market economy to win through. These were also the criteria by which the "value" of the individual integration initiatives and "integration clubs" was assessed. The first European organization into which the Federal Republic was taken "with equal rights" was the Organization for European Economic Cooperation. It enjoyed notably high esteem in the BDI during the whole of the 50s. Thus, the 1 9 5 4 - 5 annual report praised the OEEC as "so far the most successful instrument of European economic policy integration ... working ... without supra-national powers, merely through the assent of its members". 4 0 This description also shows what industry valued most about the Paris organization: because of the absence of supra-national elements, the decision-making powers of the individual governments ultimately remained unaffected. In the event of dispute, therefore, "national interests" mostly took priority over "European" ones, since no burdensome sanctions were to be feared. This was also the reason why the second model of integration, the European Coal and Steel Community (ECSC), encountered few supporters in the BDI from the start. 41 The BDI hoped that the Coal and Steel Community would mean the lifting of Allied controls and limitations on the basic industries, so central to reconstruction. But though this objective had been largely reached by 1952, and the agreement on the Ruhr industry held open the possibility of again establishing up a steel hegemony in Western Europe, the supra-national machinery of the ECSC was felt to be disturbing — even more in other industries 38

Bericht über die Gründung des 'Ausschusses für Wirtschaftsfragen' (as the BDI was first

35

Bericht über die Tagung des BDI in Bad Dürkheim, p. 18.

40

BDI-Jahresbericht 1954/55, p. 18.

41

See Werner Bührer, Ruhrstahl und E u r o p a . Die Wirtschaftsvereinigung Eisen- und Stahlin-

called), p. 6.

dustrie und die Anfänge der europäischen Integration 1 9 4 5 - 1 9 5 2 , München 1986; HansWolfgang Platzer, Unternehmensverbände in der E G

— ihre nationale und transnationale

Organisation und Politik, Kehl a m Rhein - Straßburg 1984.

190

Werner Biihrer and Hans-Jürgen Schröder

than in the two directly affected. If, as at the time seemed very possible, the path of sectoral integration was continued, other industries too were threatened with similar "dirigisme". The BDI, accordingly, warned in a March 1952 resolution against imitating the ECSC model, advocating "pursuing the goal of further European unification not by partial integration, but by resolute pursuit of the liberalization and gradual elimination of customs tariffs". 4 2 Accordingly, it was not only the broader sphere of application that made the BDI and other employer associations enthusiastic about the OEEC, but also the greater leeway in decision left up to the individual participating States. The building up of a loose Western European system of association as an intermediate stage on the way to world economic integration, on the model of pre-1914 relationships, was seen by these circles as the sufficient condition for an export-oriented economy like the West German one. And the possibilities offered by this sort of liberal world economy to an economically strong power, not least in political respects, ought not to be distorted from the outset by any further ties to supra-national decision-making structures. That a rapid comeback was guaranteed only by act of participation in efforts at economic integration of Western Europe, in whatever form, was, however, undoubted in decisive business circles. Positional gains for the Federal Republic were hoped for by the BDI, however, also from inclusion in military integration. The association kept out of the controversy over whether NATO or the EDC ought to be favoured, although not exactly concealing its preference for the NATO concept. 43 Consistently, the BDI leadership responded very calmly to the failure of the EDC, seeing it simply as proof of the infeasibility of supra-national methods of European unification, while the "conviction of the essential necessity for European cooperation" remained unshaken. 44 A setback in the efforts to secure State sovereignty was not feared by the BDI, and the soon-ensuing ratification of the Paris Treaties, and inclusion of the Federal Republic in NATO, ultimately also justified this expectation. While participation in the process of economic, military and political integration of Western Europe, and efforts to improve bilateral relations with the States of this region ought, in the BDI's view, to have been geared chiefly towards securing equality of rights with Germany's European neighbors, relations with the United States were from the outset marked by the under-

42 43

BDI-Jahresbericht 1952/53, pp. 25 - 26. See BDI-Archiv, Köln (quoted BDIA)/13: Report on his visit in the United States; also Volker Berghahn, Unternehmer und Politik in der Bundesrepublik, Frankfurt/Main 1985, pp. 266 ff.; Braunthal, Federation of German Industry, pp. 292 — 302, referring to opinion polls stresses a stronger support for the EDC-concept.

44

See BDI-Jahresbericht 1954/55, pp. 9 - 2 0 .

Germany's Economic Revival in the 1950s

191

standing that the latter was a world power. Understandably, relations with the US had therefore at least as much value for association leaders as those with the "archenemy", France. After all, the US had already demonstrated their overwhelming importance for relaunching the European and West German economy through the Marshall Plan, and the BDI had since its foundation endeavoured to restore good contacts. In summer 1951 came the first official visit by a BDI delegation to the US,45 and in December of the same year relations were expanded on the occasion of the first international congress of industrialists in New York. 46 The BDI acknowledged "a power and an economic potential ... such as has never before been present in the world", and a resulting "political responsibility for the leadership of the Western world". 47 In view of the "key position for the West" that many American politicians and industrialists assigned to the Federal Republic, the BDI hoped for rapid incorporation into the "NATO system", in order to be able to pursue the reconstruction of the domestic economy continuously. Alongside the West German security problem, unquestionably the priority in the age of nuclear weapons, in the first half of the 50s it was mainly three acute economic difficulties that the BDI hoped to overcome with American help: the productivity lag, the low foreign, particularly American, capital investments and the dollar shortage. The association in part decried massively protectionist tendencies in the US, which had been held responsible for the sometimes slow progress in these areas, and recalled the country's responsibility for the economic and political fate of the Western world. But even in such selfconscious criticism, the distinction in rank between the Federal Republic and the leading Western power was to be felt; a fact the BDI was no longer prepared to acknowledge in relationships with Western European neighbours. 48 The rise of the Federal Republic into the circle of European powers came about as a slow but nonetheless steady process. The securing of formal sovereignty on 5 May 1955, therefore, did not mean any qualitative leap in this development. Nevertheless, for the BDI too, following the completion of the Federal Republic's incorporation into the Western treaty system and its rise to third place among the world's trading nations, the signs now pointed to expansion. 49 45

44 47 48 49

Industriekurier, August 7, 1951 ("Erfolge der deutschen Industriedelegation") and August 8, 1951 ("Die USA-Reise der Delegation des Bundesverbandes"); see also various minutes in: Archiv der IHK Augsburg, Nachlaß Vogel, USA-Reise/Juli 1951. See BDIA/12, 1. Internationaler Industriellenkongress 1 . - 5 . 12. 1951. BDI-Jahresbericht 1952/53, p. 16. BDIA/12: B D I - N A M , Petersberg, 10. 6. 1953, Berg speech. BDI-Jahresbericht 1954/55, S. 18. See BDI-Jahresbericht 1954/55, p. 9 - 2 0 .

192

Werner Biihrer and Hans-Jürgen Schröder

The efforts of West German business to revive traditional trading relationships with the Near and Middle East and with South America had always been followed by the Western powers with a mixture of fear and admiration. 5 0 Actual foreign-trade turnover with the most important partners in these regions, however, shows that the sometimes hectic reactions in Paris or London were out of amazement more at the rapid reappearance of German competition in these markets than at any spectacular German successes. Sober analyses by foreign experts, while praising the ability of German businessmen, on the whole did not arrive at any particularly disquieting findings. 51 The first attempts at a more systematic policy towards the developing countries, begun after 1955 - until then it was primarily private industry that had been involved, admittedly with government support - did not bring much change in this. As was already the case with the Marshall Plan and European integration, however, it was very convenient for the Federal government and German industry that "national" or sectoral interests, sometimes even those of specific firms, again frequently fitted smoothly into American efforts to roll back "communist" influence in the developing countries. 52 However, the Germans operated very cautiously, so that the State Department, even occasionally, was compelled to call for greater commitment: the United States hoped, according to an internal memorandum of 1958, "that the Federal Republic, in view of its strong economic and financial position and its political interests in strengthening the free world, will further increase the amounts and very substantially lengthen the maturity dates of German lending not only to India, but also to other less-developed countries". 5 3 While the real development of trade with developing countries did not, then, go through any spectacular rise after 1955, the Federal Republic benefited from the general upsurge in trade with the East between 1953 and 1958 more than did its Western European competitors: in 1956 West German exports to the East reached the level of British ones, and after 1957 the Federal Republic even took the lead. 54 The start of diplomatic relationships with the USSR was,

50

See e. g. the detailed report, dated May 22, 1952, on German activities in the Near East by the French High Commission, in: Ministère des Affaires Etrangères, Archives Diplomatiques, Paris, EU-Europe 1 9 4 9 - 1 9 5 5 , Allemagne, Vol. 349.

51

On German competition in Pakistan during the years 1952 - 1 9 5 6 see the report of July 1957 by the United Kongdom Trade commission at Karatschi, in: NA, RG 59, 862A.0090D/ 7-2957. On Bonn's policy towards less developed countries see Klaus Bodemer, Programmentwicklung in der Entwicklungspolitik der Bundesrepublik Deutschland, in: Franz Nuscheier (eds.), Entwicklungspolitik, Opladen 1985, pp. 2 7 8 - 3 0 7 . State Department position paper of March 1958, in: NA, RG 59, 862 A.0091/3 - 2658. See, Claudia Wörmann, Der Osthandel der Bundesrepublik Deutschland. Politische Rahmenbedingungen und ökonomische Bedeutung, Frankfurt/Main 1982, pp. 1 9 - 3 5 .

52

53 54

Germany's Economic Revival in the 1950s

193

however, probably not the main reason for this; for it was not until 1958 that a comprehensive trade and payment agreement was reached. Instead, it was more likely West German industry's range of exports, suiting the need for investment goods of potential customers in the Eastern bloc, that made this success possible. Utilization of trade with the East for purposes of foreign policy, as pursued by the Federal government until as late as 1958, could only endanger this leading position, and therefore met with hardly any support from business circles. The drawbacks of "politicized" economic relationships were something the BDI was well aware of, even if this was not always recognizable from its public commitments to American global strategy and to the Federal goverment's foreign policy. Accordingly, even though 1955 did not mean any break in BDI policy, and the association strove to maintain an external display of continuity, it primarily wanted to use the Federal Republic's enhanced international influence to expand its own economic and political room for manoeuvre, or at least prevent any further limitation of it. The readiness to relinquish sovereign rights in favour of European institutions declined markedly after May 1955. This emerged clearly in the question of cooperation in the area of peaceful use of atomic energy. BDI efforts to undermine "Europeanization" of nuclear technology through bilateral agreements with Britain and the US failed, however, despite support from the Ministries of Economics and for Nuclear Energy, ultimately because of resistance by the American government. 5 5 While the Federal Republic had not yet gotten so far as to take political leadership in the unification process, S6 it nevertheless increasingly succeeded at expert level in putting its own market-economy stamp on integration. And the BDI's influence does seem to have been greater than is sometimes assumed. 57 The association leadership not only followed the course of negotiations very closely, but a specially created "executive sub-committee on questions of European integration" was aimed at bringing the BDI position home to both government and public alike. 58 The "Spaak Report" on economic and nuclear integration, presented in April 1956, was commented on very favourably by the executive. 59

55

56 57

58 59

See the relevant documents in FRUS 1955 - 1957, IV, esp. pp. 335 ff.; Joachim Radkau, Aufstieg und Krise der deutschen Atomwirtschaft 1945 - 1 9 7 5 , Reinbeck b. Hamburg 1983; Michael Eckkert, Die Anfänge der Atompolitik in der Bundesrepublik Deutschland, in: Vierteljahrshefte für Zeitgeschichte 37 (1989), S. 1 1 5 - 1 4 3 . See FRUS 1 9 5 5 - 1 9 5 7 , IV, pp. 2 8 3 - 2 8 7 , esp. p. 286. See Platzer, Unternehmerverbände, esp. p. 50. A dissenting opinion is presented by HansJürgen Küsters, Die Gründung der Europäischen Wirtschaftsgemeinschaft, Baden-Baden 1982, pp. 275 f. BDIA/13. Sitzungsprotokolle 1955/56: Niederschrift Sitzung Präsidium, January 20, 1956. See ibid., May 23, 1956. On the Spaak report see Küsters, Gründung, pp. 135 ff.

194

Werner Bührer and Hans-Jürgen Schröder

While reservations did persist about the future disappearance of agricultural imports as a "bargaining counter" in trade agreements, about the competition rules, and about the insufficient harmonization, in the association's view, of taxation systems and working conditions, there was no desire at all to become responsible for the possible failure of the whole project. Only the linkage between E U R A T O M and the Common Market was to be defended in all circumstances. The fact that the BDI, following signature of the Rome Treaties, declared its readiness to cooperate was not to be seen as unreserved assent; instead, it was now concerned with removing individual "quirks" and with placing the "right" people onto the European bodies. 60 In other respects there was confidence that the "elasticity" of the treaty system offered the possibility of "using the experience of the economy in the further shaping of the European Economic Community". 6 1 Subsequently, the BDI moved more strongly towards extending institutionalized cooperation in Europe beyond the EEC framework. It became a convinced advocate of a Western European free-trade area, and offered itself as mediator between the opposing interests of French and British industry. 62 The EEC, the association made clear, ought to be "not the final goal", since otherwise danger threatened of "splitting the economic life of our Community so far formed by the OEEC into two trading blocs". This warning was fully justified, since after all the countries of the later European Free Trade Association (EFTA) were until the end of the 50s scarcely less important as trading partners for the Federal Republic than the EC countries. But even this sort of "general Western European" perspective seemed inadequate to the BDI: it was now, at the end of the 50s, chiefly concerned with getting out of the "European bottleneck" and into the "Atlantic community". 6 3 Securing a footing in the so-called developing countries, and the efforts, crowned with success in 1958, at restoring convertibility of the most important European currencies, were significant steps along this road. 6 4 At the end of the 50s, on the whole a very successful decade, there was thus reason for satisfaction on the part of West German industry. How did it now define its role, how did it assess the chances of power politics in Europe? A good ten years after Günter Henle, at the BDI leadership conference in April 1960, an association official took a position on this question, with very apposite observations. His findings were very similar to Henle's: there were no longer any "power-policy prospects", the "age of European border wars 60

See BDIA/13, Sitzungsprotokolle 1957/58: Niederschrift Sitzung Präsidium, May 16, 1957.

61

BDI-Jahresbericht 1956/57, p. 42.

62

See BDIA/13, Sitzungsprotokolle 1957/58: Niederschrift Sitzung Präsidium, March 26, 1958.

63

Wilhelm Beutler at the 10th annual meeting of the BDI, June 23, 1959, BDIA/13, Sitzungsprotokolle 1959.

64

See the relevant sections of the annual reports for 1957/58 and 1958/59.

Germany's Economic Revival in the 1950s

195

and European political power demonstrations" was over; despite a "very considerable economic upsurge" in the last ten years, "the old European power position was lost". It was noteworthy how the speaker allocated the weight in the Western European area. He accepted the "reputation for spiritual and intellectual leadership" of Rome, of the Vatican; the "political centre of gravity" was in Paris, since "following the political events of the immediate past" a German claim to leadership was "blown for a long time, if not forever". Things were different, however, with the question of economic leadership: the economic performance of the Germans after 1945 had "made a deep impression on the whole world, and also among our European partner countries". It seemed "not to be ruled out" that the Federal Republic "would have greater weight in all questions in the economic sphere than other partners". 65

4. In summary, all that needs to be said is that the political and economic leading elites of the Federal Republic saw the economic development of the Western German sub-State as the decisive precondition for shaping the domestic and foreign policy framework conditions for the young Republic. "The history of the Federal Republic is above all its economic history", as Werner Abelshauser rightly stressed. "Nothing characterized the West German State more than its economic development, and in no area were its achievements greater than there". 66 The political consequences of the "West German economic miracle" are manifold: firstly, economic stability in the Federal Republic brought about political stability. This political dimension of economic restoration was displayed very clearly in Adenauer's impressive successes in the 1953 Bundestag elections. This convincing mandate greatly favoured the Adenauer government's effectiveness in action in both domestic and foreign policy, and, as far as domestic policy went, guaranteed the Federal Chancellor's pro-Western orientation. The consistent Western orientation and in particular the close dependency on the US in turn promoted the Federal Republic's positive economic development, among other things because Bonn's clear foreignpolicy course favoured foreign investments. Volker Berghahn has even spoken

65

66

BDIA/13, Sitzungsprotokolle 1960: Anlage 3 zur Niederschrift über die BDI-Geschäftsführerkonferenz, April 8, 1960. Abelshauser, Wirtschaftsgeschichte, p. 8.

196

Werner Bührer and Hans-Jürgen Schröder

of an "Americanization" oí the West German economy. 67 Taken as a whole, the German "economic miracle" was an important factor in securing equal rights again and ultimately in taking over an economically based leadership role in the Western part of the Continent. The growing self-awareness, particularly of the business elite, is testimony to this. In the first half of the 50s the economy as an instrument of foreign policy played such a big part, additionally, because the debate on the modalities of a West German defence contribution dragged on until the mid-50s. The calculation, repeatedly formulated by politicians and academics in the Federal Republic, of using West Germany's economic strength as an instrument towards a political restoration, was successful for both structural and conjunctural reasons. The framework conditions for foreign policy were certainly likewise an important prerequisite: this is particularly true of US foreign policy, since, for political and geo-economic reasons, West Germany after the Second World War was at the core of Washington's European policy. From the viewpoint of German business people and politicians, it was legitimate to force economic recovery and employ German economic potential to secure equal foreign-policy rights again. The employment of economic policy as an instrument of foreign policy was all the more successful the less this political dimension was publicly discussed. How successful this strategy ultimately was and is, is proved by the fact that the Federal Republic was repeatedly called, not only by journalists but also in academic analyses, a "world power against its will". 6 8 Such an understatement regarding the powerpolicy implications of German economic strength could not, in the long term, disguise the weight of the Federal Republic in the international system. The subjective estimate of the economic and concomitant political importance of West Germany, so rapidly risen since the Second World War, is, moreover, likewise a power-policy reality, irrespective of the objectively measurable figures of West German economic statistics. For both a subjective and an objective appraisal of the Federal Republic's power-policy position, ultimately, it is also significant that in bilateral relationships in the 20th century, economic factors have increasing weight. This general trend has still further strengthened the specific German development in its power-policy implications.

67

See the forthcoming article by Volker Berghahn, Z u r Amerikanisierung der westdeutschen Wirtschaft, in: Ludolf Herbst, Werner Bührer, H a n n o Sowade (eds.), Vom Marshallplan zur E W G . Die Eingliederung der Bundesrepublik Deutschland in die westliche Welt, München 1990.

68

Der Spiegel, January 6, 1975, cover story: Deutschland. Weltmacht wider Willen; Christian H a c k e , Weltmacht wider Willen. Die Außenpolitik der Bundesrepublik Deutschland, Stuttgart 1988.

The Italian "Economic Miracle" Revisited: New Markets and American Technology by Vera Zamagni

After the clearcut choice, made in the years of Reconstruction, of breaking away from the previous model of economic development (inward looking, protectionist, import-substituting, state supported) 1 , the Italian economy experienced an average rate of growth of 9.1% per year in manufacturing over a period of 15 years (1948 —632) and an average rate of growth of GDP of 5.9% (see tab. 1). Although the data show an acceleration after the creation of EEC, substantial growth was achieved also in the preceding years. Looking more in detail at the components of effective demand, it is immediately noticeable that: a) All components have been actively contributing to the final result, with the exception of exports in 1952 (slowing down of foreign markets after the Korean boom), investments in 1952 and 1958, and public consumption in 1949 (public spending was particularly slow in that year), 1953 and 1957. There are a few cases of compensation among the various elements of demand from one year to the next (see table 1 again), but more often than

1

This essay is to be considered a continuation of "Betting on the Future. T h e Reconstruction of Italian Industry, 1 9 4 6 - 1 9 5 2 " , in J. Becker —F. Knipping (eds.), Power

in Europe?,

Walter

de Gruyter, Berlin - N e w York, 1986. 2

T h e period 1948 - 63 constitutes an uninterrupted b o o m in Italy, as it can be seen in table 1. It has therefore been considered as a whole. For a similar approach, see M . Salvati, e politica

in Italia

dal dopoguerra

ad oggi,

Economia

Garzanti, Milano, 1984 ("La lunga crescita:

1 9 4 8 - 6 3 " , p. 47). It must also be stressed once again that the quality of Italian macrodata is not high, both for structural reasons (the existence of many small business not easily surveyed) and for the several methodological revisions in income accounting that have taken place after the end of the II World War and that so far have never been worked back to form a h o m o g e n e o u s long run series. T h e only remark worth making in this connection is that all revisions have been upwards and therefore the figures of the "economic miracle" could possibly be raised, certainly not diminished.

198

Vera Zamagni

not all elements were present, reinforcing each other, as the annual reports of the Bank of Italy were underlining. 3 b) Consumption grew on average less than exports and investments. Therefore, the composition of demand shifted in favour of exports and investments, continuing the trend that had appeared in the first fifty years after unification (see table 2). The acceleration in both exports and investments growth in the 15 years under consideration here can be appreciated in a long-run perspective in tables 3 and 5. With reference to exports and constructions, the overall rate of growth in the years 1948 — 63 appears higher than the overall rate of growth in the 87 previous years, elapsed after the unification of the country. In other investments, instead, the overall rate of growth for the period 1861 - 1 9 1 3 appears quite substantial, given the very low (perhaps too low) starting figure at unification. Finally, in table 4, the large increase in the weight of the most important industrial goods exported on total exports over the period 1911 — 1963 can be appreciated, as well as the dramatic shift away from textiles and in favour of metal-engineering-chemical exports after the II World War. c) However, under several accounts the behaviour of consumption was remarkable. Private consumption grew in 15 years almost as much as in the previous 87 years (see table 6), but what is more striking is that in 15 years

private consumption per capita doubled, while it had grown only 1/3 in the previous 87 years! Public consumption hardly kept pace with private consumption in the 1948 —63 period, confirming the well-established lack of dynamism in public spending during the period, while it had grown considerably more over the two World Wars and the fascist period. The results of the working of Engel's elasticities on the composition of private consumption can be seen in tables 7 and 8: while non-food consumption has in all subperiods grown more than foodstuffs, the very rapid spurt of durables in the post-II World War period stands out as the most prominent phenomenon to be discussed. There was enough quantitative evidence for the commentators of the time to speak of an Italian "economic miracle": Italian rates of growth of income were second only, but very close, to the German rates, in Europe, and among the OEEC countries only Japan had been doing better. It would, however, be 3

See for instance the Report referring to 1955: "Alla base di questi favorevoli sviluppi sono il continuo sforzo di rinnovo e ammodernamento delle attrezzature produttive, l'aumento della domanda interna di beni di consumo, che nel secondo semestre ha ricevuto impulso anche dalle maggiori disponibilità monetarie delle classi agricole, l'aumento infine della domanda estera, specialmente nei settori chimico, siderurgico e meccanico" (p. 133 of Banca d'Italia, Adunanza generale ordinaria dei partecipanti, 1955, Roma, Tip. Banca d'Italia, 1956). Similar arguments appear also in the reports for 1953, 1959, 1960, 1961 ("Nel corso dell'anno lo sviluppo della domanda è stato intenso in tutte le componenti", p. I l i ) and 1962.

The Italian "Economic Miracle" Revisited: New Markets and American Technology

199

a sign of considerable misunderstanding of Italian historical developments to think of the Italian economic miracle as a case of industrialization of a previously underdeveloped country. Although in some sense Italy was underdeveloped, it did not lack an industrial core, built with great troubles over a long span of time. But something to be considered really "miraculous" in the light of the previous Italian experience did in fact take place and this is the opening up of markets — both domestic and foreign — other than state markets for Italian industry. The existence of these new markets steadily growing, year after year, defeated the stagnationist approach of the Italian political left and reversed the pessimistic views of Italian entrepreneurs, who became increasingly confident in investing for the enlargement of domestic productive capacity. These investments could, for the first time, be directed towards mass production, absorbing a fair amount of American technology, which was the most highly productive technology of the time, and allowing therefore an increase in industrial competitiveness. The new size and strength reached by the industrial sector helped breaking former monopolies and geographical boundaries, raising the number of firms and the number of areas invested by industrialization. The development of new markets, the absorption of American technology and the spreading of industrialization in new areas of Italy will be the objects of this essay that will not, therefore, deal with the government policies of the period, another interesting topic ripe for reconsideration. This choice will inevitably confine the following pages more to a rational description of economic events than to the identification of causes, but it is the result of a lack of confidence in the possibility of finding "causes" really capable of explaining why it so happened, within the realm of an orthodox economic analysis of policies. I rather think that non-economic variables — peace in Western Europe, the presence of the Americans, the political hegemony of Christian Democracy, with its popular inspiration, its capability of mediation, its pragmatic approach — are the key explanatory factors of the emergence of the new economic framework in Italy. And the impact of such non-economic variables on the economy are likely to have followed more channels than economic analysis is used to consider, which makes the topic exceedingly demanding for a short essay. 4

4

An effort in this direction can be found in B. Bottiglieri, La politica centrista

(1948-1958),

ed. Comunità, Milan, 1945.

economica

dell'Italia

200

1.

Vera Zamagni

New markets for Italian

1.1 Domestic private

industry

consumption

There is little doubt that, although domestic private consumption grew at an average rate that was half the rate of growth of exports, it determined an absolute increase in quantities demanded, which at the beginning of the period was 4 times as large as that of exports, declining thereafter down to only 50% more in 1963. 5 If we add public consumption and investments, the domestic market provided the bulk of additional demand to industry, although the sheer presence and buoyancy of foreign markets might be held responsible for strategic investment decisions to raise the level of productivity, as I will discuss later. The first puzzling question to be discussed concerning the expansion of domestic private consumption is how it came about in the presence of a growth rate of money wages and salaries that hardly exceeded 4% per year throughout the economy up to 1961,6 increasing substantially more only in the two final years 1 9 6 2 - 6 3 . Given the current rates of inflation, the yearly real growth rate of wages and salaries till 1961 was below 2% per year, 7 while the yearly rate of growth of private consumption exceeded 5%. A host of reasons can be found that make the two things compatible. First of all, the Italian economy decreased unemployment and underemployment, without, however, raising employment in any substantial way (activity rates declined 8 ). Unemployment decreased from over 10% to 4 % , 9 while

5

From table 2, the weight of private consumption on G D P plus imports passed from 65% to 53%, while the weight of exports increased from 8.5% to 16% between 1948 and 1963. Applying a rate of growth of 6% to the former and of 12% to the latter, the ratio of the absolute increases is 4 : 1 in 1948 and 3 : 2 in 1963. This confirms the larger quantitative importance progressively acquired by exports during the period.

6

See the detailed calculations presented in P. Sylos Labini, Sindacati,

inflazione

e

produttività,

Laterza, Bari, 1972, pp. 43 - 44. 7

Ibidem,

p. 44: growth of real wages in industry 1 9 5 2 - 6 1 is calculated at 1.4% per year,

growth of real public salaries at 0.7% per year and of real private salaries at 1.7% per year. At the same time, productivity grew 6.6% per year in industry, 5.5% in agriculture and 2.4% in the distributive sector, allowing for the substantial increase in capital accumulation noted by all the literature. For the years up to 1959, see also the excellent essay by I. F. Mariani, "Livello, struttura ed evoluzione recente dei salari in Italia alla luce della documentazione statistica disponibile", in F. M o m i g l i a n o (ed.), Lavoratori mazioni

del processo

produttivo,

e sindacati

di fronte

alle

trasfor-

Feltrinelli, Milan, 1962. (Cfr. also Β. Braglia - L. Pellagrosi,

I salari in Italia dal 1951 al 1962, Rome, 1963). 8

The decline in activity rates coupled with demographical trends did raise the units of consumption per active person from 1.9 to 2.1 between 1951 and 1961, pushing up the share

The Italian "Economic Miracle" Revisited: New Markets and American Technology

201

employment remained steady at little less than 20 million people, but "permanent" 1 0 employment grew from 15.6 million in 1951 to 17.9 million in 1963. 1 1 T h e existence of unregistered jobs is also well established, although its quantitative dimension is difficult to estimate. T h e second major enlargement in the overall purchasing power of the Italian population came from a structural change, namely the decrease in agricultural jobs coupled with the increase in industrial and tertiary jobs. It can be seen in table 9, where I have reported the composition of the permanent working population in 1951 and in 1963, that agriculture expelled 1.5 million permanent workers, while industry produced about 2 additional million permanent jobs, the tertiary sector 1.5 million and the public sector 400.000. M a n y of these occupations provided an income higher than in agriculture and implied a large movement of population from the countryside to the towns. T h e proportions of this movement away from the countryside can be better judged using total figures of employment (permanent and part-time), that give a decrease of 3.3 million people employed in agriculture between 1951 and 1963 and a parallel increase of 3.5 million in

non-agricultural

employment. T h i s implies an increase of urban agglomerations of 6 —7 million people at least, not only with, generally speaking, a higher purchasing power, but with a tendency to spend a higher share of their incomes as a result of less self-consumption, the need to set up a new living quarter and more opportunities and inducements to acquire new goods and services. 12 In a recent essay of a young researcher, 1 3 the realization of the important role played by the opening up of new consumption markets 1 4 has pushed to the revisitation of the theory of "external markets", which underlines the fact that, when such markets are available, the situation is particularly favourable for investment, because there is no need to curtail profits through the granting of higher wages instrumental to the enlargement of an otherwise sluggish domestic market. T h e theory also reminds, however, that "external markets" are often transitory, as indeed they proved to be in Italy. of income consumed per employed person. The estimates quoted come from M. Livi Bacci, "I fattori demografici dello sviluppo economico" in G. Fuà (ed.), op. cit., v. II. ' V. Valli, L'economia e la politica Milano, 1979, pp. 1 7 2 - 7 3 . 10

11

economica

italiana

(1945 — 1979). Tendenze

e problemi,

Etas,

A worker was called "permanent" if it worked more than 32 hours a week in the course of the year, or less but with a permanent contract (like teachers). ISTAT, Sommario di statistiche storiche dell'Italia 1861-1965, Rome, 1968, table 97, p. 127.

12

An effort to build a quantitative estimate of this "urbanization" effect on consumption can be found in M. Livi Bacci, op. cit., pp. 52 — 59.

13

A. Chirco, "Alcune note sul ruolo dei consumi nella crescita italiana del secondo dopoguerra", Rivista di Storia Economica, June 1987.

14

The A. speaks of a "progressiva creazione di un nuovo, solido e stabilmente crescente sbocco per alcuni settori emergenti dell'economia italiana" (ibidem, p. 270).

202

Vera Zamagni

A final factor of some importance in raising private consumption must have been the transfer of purchasing power to the lower classes through emigrant remittances, new schemes of government intervention like the Cassa per il Mezzogiorno (1951) and welfare payments. N o direct overall quantitative estimate exists of such transfers, noted in the yearly reports of the Bank of Italy. 15 A good indirect evidence might be the trend in family income distribution, that points to a decrease in inequality in the very period 1948 —1963/ 64. 16 The poorest 20% received 6.3% of total income in 1948 and 8.4% in 1963/64, while the richest 10% received 33.9% of total income at the former and 23.4% at the latter date. As it is well-known, lower income brackets have a higher propensity to consume. After the expansion of total consumption, the evolution of its composition deserves some detailed comments. It has been already mentioned above that the growth of durables consumption - furniture, household appliances, private means of transport - was, in the years considered here, out of proportions with the growth of all other components of private consumption. The awareness of this gave origin in the second half of the 1960s to a debate on an alleged "distorsion" in the composition of private consumption. It was claimed that more cars and electric appliances were bought by Italian consumers than expected at their level of income, at the expenses of housing, education, health services and even richer foodstuffs (like sugar, meat, dairy products). 1 7 In support of this view, econometric analyses were run like the one by Vinci, 18 where the conclusion reached was that, while the elasticity of demand of necessities and luxury goods were in line with the experience of other western countries, the elasticity for "intermediate" goods (namely, richer foodstuffs and non durable goods) was not significantly different from the elasticity for necessities. It was also noticed that it was possible to label this 15

In the 1952 report, it is clearly stated that "deve essere ... tenuto presente, sempre ai fini della determinazione dell'ammontare del potere d'acquisto gravante sul mercato dei beni di consumo, il rilevante aumento dei trasferimenti di redditi operati attraverso il sistema delle assicurazioni sociali e i bilanci delle pubbliche amministrazioni" (p. 100).

16

The surveys on income distribution for the period under consideration here are not strictly comparable. An effort to put them together (including later years up to 1972) has been done in the essay by M. Bottiroli Civardi and R. Targetti Lenti, "Lo sviluppo del sistema economico italiano e la distribuzione dei redditi familiari", ¡I Politico, 1974, n. 4. Figures quoted in the text come from their elaborations.

17

See A. Graziani-G. Marenco - M. Terrasi - S. Vinci, "La distorsione dei consumi in Italia", Nord e Sud, a u g . - s e p t . 1967, p. 77: "Il consumatore italiano ... pur godendo di un livello di reddito assai inferiore a quello goduto dai consumatori di altri paesi industrializzati dedica una porzione considerevole della propria spesa all'acquisto di beni voluttuari, senza avere ancora raggiunto livelli di consumo soddisfacenti nel campo dei consumi essenziali".

18

S. Vinci, "La domanda dei beni di consumo in Italia dal 1953 al 1964. Analisi econometrica", Giornale degli economisti, 1967.

The Italian "Economic Miracle" Revisited: New Markets and American Technology

203

different behaviour of Italian consumers "distorted" only if the average western pattern was assumed as the desirable norm, 1 9 which was by no means an obvious assumption. In an effort to find out the reasons for such behaviour, arguments were tested that allow us some interesting comments. In the first place, it was remarked that foodstuffs and housing had a relative price that was higher in Italy than in other countries, as a result of the domestic price support of several agricultural products and of the effects of the shortage of houses, 20 and was rising appreciably, while the relative price of cars and electrical appliances was declining. 21 This gave a rational incentive to the consumers to increase the demand of the latter more than of the former goods. A less clearcut argument, in view of the evidence quoted above on the trend of the distribution of income, has to do with the segmentation of the labour market in a privileged group of employees with high wages and salaries that could afford the acquisition of durables and the remaining classes that could only buy necessities. 22 Before coming to the most widely recognized cause of consumption "distorsion", it is worthwhile noticing that, however, the consumption of certain foodstuffs like fruits and vegetables, meat, eggs and some unsophisticated dairy products might have been underestimated, due to the existence of a widespread self-consumption from private orchards and rabbits-chickensheep rearing for the family. Moreover, the lower incidence of animal fats and meat might also be due to a persistent preference for a Mediterranean diet, preference that was not only undervalued, but condemned at the time as a left-over from the poverty of the past. Finally, the extensive building reconstruction and urbanization 2 3 enhanced the needs for furniture and other household fittings, especially in the first ten years of the period (1948 —58).24

19

20

21

22

23 24

S. Vinci, "Elasticità della domanda e distorsione dei consumi", Nord e Sud, aug. - sept. 1967, p. 86. A. Graziani, "Distorsione dei consumi e struttura dei prezzi", ibidem, pp. 101 —106. See also G. Marenco, "Una possibile spiegazione delle "anomalie" dei consumi alimentari", ibidem, pp. 93 - 1 0 0 . Ibidem, p. 105: "A titolo di esempio, basterà ricordare che mentre il prezzo relativo della carne bovina è cresciuto (fra il 1951 e il 1965) di oltre 20%, il prezzo relativo degli elettrodomestici si è ridotto di oltre il 26% e quello degli autoveicoli di oltre il 33%". M. Terrasi, "Distorsione dei consumi e distribuzione dei redditi", ibidem, pp. 87 - 92. See also A. Graziani (ed.), L'economia italiana: 1945 — 70, Il Mulino, Bologna, 1972, Introduction. The book by M. Spallino, I consumi privati dal 1951 al 1980, ESI, Napoli, 1948 is not useful in the context of the present discussion because of a different grouping of consumption items. See F. Indovina (ed.), Lo spreco edilizio, Padova, Marsilio, 1964. As it was remarked by G. Ackley, Un modello econometrico dello sviluppo italiano nel dopoguerra, Giuffrè, Rome, 1963, p. 76.

204

Vera Zamagni

But the most widespread explanatory argument developed by contemporary and later commentators is the "international demonstration effect", first advanced by Nurkse in the early Fifties 25 and then adapted to different contests by economists, statisticians and sociologists. The "international demonstration effect" of the time was proposing the American style of life as the standard towards which every country was moving 2 6 and this style included as major components the car, the television, the fridge and the washing machine, beside canned foodstuffs and beverages (the coca-cola!), the blue jeans, and a long list of synthetic chemical products. All European countries were behind the US in the formation of a mass market for durable goods, but Italy was still in 1954 in the bottom group, with the exception of television sets, as it appears in table 10. In a D O X A survey of 1958, 84% of Italian families were reported not to o w n a television set nor a fridge nor a washing machine. 2 7 In such a situation, Italy, a country that proved capable of very high geographical and cultural mobility in the 1950s and 60s (as well as in many other periods of her millennia-long civilization) 28 was powerfully pushed to acquire American patterns of consumption, however not without some selectivity 29 and mediation, 3 0 with the help of a substantial increase in advertisement spending that, although still at low levels by international standards, 31 was rising rapidly. 32 What was also making the acquisition of durable goods easier was the increased availability of consumer credit. 33 A 1954 survey carried by the Italian

25 26

27

28 29 30 31

32

33

R. Nurkse, Problems of Capital Formation in Underdeveloped Countries, O x f o r d , 1953. S. Gundle, "L'americanizzazione del quotidiano. Televisione e consumismo nell'Italia degli anni cinquanta", Quaderni Storici, aug. 1986, n. 62 writes: "Il richiamo del modello americano è generale. Il suo dipendere da immagini visive e da beni tangibili garantisce il successo del suo impatto anche su un pubblico relativamente sofisticato" (p. 562). F. Momigliano - A. Pizzorno, "Consumi in Italia" in Aspetti e problemi sociali dello sviluppo economico in Italia, Proceedings of the IV World Congress of Sociology, Laterza, Bari, 1959, p. 197. See also F. Alberoni, Consumi e società, Il Mulino, Bologna, 1964. This is recognized in S. Gundle, op. cit., p. 591. Canned foodstuffs have never become really popular in Italy. Television became popular, but its cultural contents were accomodated to Italian values. In a report published in Mondo Economico (27 oct. 1962, η. 43) of a conference on the role of publicity, it appeared that, while Italy was spending in 1961 0.86% of her national income in advertising, USA were spending 2.46%, Great Britain 2.19%, West Germany 1.86%, Japan 1.51% and France 0.90%. In the same report, the Italian ratio was reported to have grown 46% between 1953 and 1961. While income was growing very fast, advertisement spending was growing much faster! This was recognized as early as in 1951 by the Bank of Italy, in its yearly report, in a passage that is worth being reported in full: "... si sono nuovamente palesate alcune tendenze significative di un mutato comportamento dei consumatori nei riguardi delle diverse categorie di beni di consumo. La domanda di beni durevoli di consumo si è mantenuta e si mantiene tuttora particolarmente intensa. Concorrono ad elevarla cause di diversa natura, quali lo

The Italian "Economic Miracle" Revisited: New Markets and American Technology

205

Ministry of Industry and Commerce 3 4 estimated that hire-purchase credit constituted 5 % of total private sales of consumer goods and 3 , 5 % of National Income in Italy. If we assume the figures reported in the Economic Survey of Europe, 1958 to be more or less comparable, it appears that Italy was second only to the US in the expansion of consumer credit, 35 particularly high by international standards for motor vehicles and furniture. Whatever could the value-judgement be on the desirability of such evolution in the composition of demand in favour of durable goods, its effects on the expansion of domestic industry — and the engineering industry particularly — were certainly positive, as it will be argued in the second section of this paper. But before turning to such section, the other new important outlet for Italian industry, namely foreign markets, must be briefly characterized and illustrated.

1.2

Exports

We have already seen in table 4 the growing importance of the share of certain industrial goods in total exports. We are now ready to unfold in more details the successful expansion of Italian industrial exports in the post II World War period. Industrial goods climbed from 6 0 % of exports in 1938 to 7 5 % in 1948, 8 3 . 5 % in 1953 and 9 0 % in 1963, confining agricultural exports to a very marginal role. Italian exports grew at a higher pace than world exports: they constituted 2 . 1 % of world exports in 1953 and 3 . 9 % or 4 . 5 % in 1963 (at current and at constant prices, respectively). T h e change in the commodity composition of industrial exports is reported in table 11. It must be recalled that the big shift away from textiles and towards metal-engineering goods had already taken place in 1947 —48. 36 Subsequently, the trend became reinforced. By 1963, only 1 8 % of industrial exports consisted of textiles and as much as 3 8 . 3 % of metal-engineering goods. Chemicals (excluding coal and oil products) had passed from 5 . 4 % in 1 9 5 1 - 5 3 to 1 2 % in 1 9 6 1 - 6 3 .

sviluppo dei mezzi di trasporto, l'incremento dell'attività edilizia con il connesso fabbisogno di beni di arredamento e la rilevante diffusione delle vendite rateali le quali interessano in modo precipuo proprio tale categoria di prodotto" (pp. 77 —78 of the 1951 Report, 1952). 34

35

Rome,

See a discussion of that survey in the article by C. Zacchia, "Il convegno sulle vendite a rate dei beni di consumo in Italia", Moneta e Credito, 1955, n. 32. Table 13, p. 25. Hire-purchase credit as a percentage of national income was in 1957 reported to be 5.5% in the USA, 1.6% in Belgium, 1.4% in West Germany, 1.8% in Ireland (1956), 2.2% in the UK, 0.8% in France, 0.9% in Austria and Norway. See also G. Caravale, 11 credito al consumo, UTET, Turin, 1960.

36

As I have underlined in my previous essay, "Betting etc.", cit., pp. 285 and 290.

206

Vera Zamagni

The change in the destination of Italian exports tells a very straightforward story, as it appears in table 12. While in 1948 46.6% of exports went to Europe, with the coming back of the German economy and the creation of EEC, the European destination reached 68.4% by 1963. Within Europe, EEC countries show the greatest increase in share, with West Germany passing from 8.1% in 1956 to as much as 17.9% in 1963. It can really be claimed that the markets that were opened up to Italian industry were European markets. Outside Europe, all shares of Italian exports fell, more or less, while the US share stabilized at around 9 % . In view of the previous historical experience of great troubles in finding foreign markets for Italian industrial goods, it is no wonder that this performance was considered unexpected and difficult to explain. The protagonists of the big export spurt themselves - namely Italian entrepreneurs - appeared somewhat surprised. One of the most prominent among them is reported to have said to a journalist at the end of the 1950s: "Do you know the hornet theory? Examining the anatomy of such an insect, scholars have all agreed that it cannot fly. It weighs too much, it has exceedingly small and weak wings; however, the hornet, disproving all theories, does fly. Well, the same thing applies to Italian capitalism!" 37 But of course there is an explanation for everything and I will propose mine in the next section of this paper. Before coming to that, I still have to review two important arguments: protectionism and the possibility of applying the theory of export-led growth to the period under consideration. As far as protectionism is concerned, there is a fundamental revision of conventional wisdom to be made. Following a calculation made by Corbino, 3 8 many commentators have held the view that the average Italian rate of protection that came into force in the middle of 1950 39 after the Annecy negotiations was 24.4%, the highest among the average rates of the western countries. This opinion has been reinforced by a comparative table published by GATT in 1953, where the same rate was quoted, although with a note saying that "the index for 1952 is based on the legal tariff, which was higher than the tariff in force", 4 0 a note that was widely disregarded. Indeed the tariff in force was lower, 41 because the Italian Government, although for internal and external reasons it wanted to have a high general 37 38

39

40 41

Quoted in E. Scalfari, Rapporto sul neocapitalismo in Italia, Laterza, Bari, 1961, p. 7. E. Corbino, "Le nuove tariffe doganali", Bancaria, 1950, n. 9 and Idem, "Nuove tariffe doganali", Il Globo, 27 oct. 1950. For a good account of the parliamentary and government activity connected with the Italian commercial policy during the reconstruction, cfr. M . L. Cavalcanti, La politica commerciale italiana 1945-1952. Uomini e fatti, ESI, Napoli, 1984. GATT, International Trade 1952, Geneva, 1953, p. 62. Only the very contemporary commentators denounced this; see, for instance, C. Zacchia, "La tariffa doganale italiana: caratteristiche e sviluppi, 1950—1953", Moneta e Credito, 1953, n. 23.

The Italian "Economic Miracle" Revisited: New Markets and American Technology

207

tariff available for negotiations, was very active in granting reductions whenever the opportunity came. According to calculations made by a student of mine, 42 in 1953 the average tariff in force was 14.5%, including items exempt from tariffs, and 16.7% excluding such items. If we now compare the latter rate with those of the other countries, using the above mentioned GATT table, we see that France shows a slightly higher rate (19%), while UK, US, Germany and Austria are all at the Italian level, between 16 and 17%. In view of this, it does not appear correct to conclude that one of the possible causes for the Italian industrial success of the 1950s was the higher level of protection enjoyed by Italian industry. However, this necessary clarification leaves a more subtle question still open. As many tariff experts had reminded long ago, 43 averages might conceal what could have happened in terms of protection of strategic products. We do have all the details available in the case of the Italian rates of protection of selected goods. It is, for instance, well-known that cars enjoyed a 45% rate of protection, 4 4 sugar 94%, motorcycles 31%, tractors 33%, ball bearings 31%; but these high rates were exceptional and there is no comparative material available to judge whether other countries too had a higher rate of protection for selected sensitive products. We can, therefore, provisionally conclude that, with the exception of motorvehicles and sugar, the height of tariffs is not a good explanation for the strengthening of Italian industry in the 1950s. 45 After having illustrated the export performance of the Italian economy, we are now in a position to say a few words on the debate over the applicability of the theory of export-led growth to the Italian case in the years under consideration. This debate started with Stern 46 and Graziani 47 in the second

42

43 44

45

46 47

C. Travaglino, La misura del livello daziario della tariffa doganale del 1950, a dissertation discussed in the Faculty of Political Sciences of Florence, a. y. 1986/87. See for instance F. Repaci, La misura delle variazioni delle tariffe doganali, Torino, 1934. For details, cfr. F. Feroldi, "Effetti del Mercato Comune nell'industria automobilistica", Rivista internazionale di scienze economiche, 1958, n. 5, where the A. states that the Italian tariff was higher than in the other EEC countries (p. 456). E. Scalfari, op. cit. comments: "La Fiat è stata sempre la più protetta delle aziende italiane: i dazi doganali altissimi, fino al 70 per cento ad valorem, commesse governative, produzione bellica hanno rappresentato fino dagli anni della prima guerra mondiale i puntelli di sostegno della più grande industria italiana" (p. 47). It must also be recalled that in 1957, following the creation of EEC, Italy had to start dismantling tariffs precisely with those countries absorbing the bulk of Italian exports. After some initial delay, it does not appear that Italy retarded this process appreciably. R. M. Stern, op. cit. A. Graziani, Lo sviluppo dell'economia italiana come sviluppo di un'economia aperta, Agnelli Foundation. Turin, 1969 and A. Graziani and others, Lo sviluppo di un'economia aperta, ESI, Naples, 1969.

208

Vera Zamagni

half of the 1960s. They both concluded in favour of a qualified applicability of the theory, and continued later on with a substantial revision 48 that restricted to the years 1959 - 63 the prominent role of exports as a result of the creation of EEC. Although I cannot enter here in a proper testing of the models proposed, which would entail a technical apparatus and a more extensive statistical enquiry, I can make a few remarks to help focussing the role of exports. In the first instance, it is possible to notice from table 11 that the share of exports in total industrial production increased from 8.6% in 1951/53 to 10.5% in 1955/57 and 16.4% in 1961/63, confirming the acceleration of exports in the second half of the period. 49 But sectorial shares behaved differently as a result of the combination of different growth rates of output and exports. In table 13 the two sets of growth rates are reported, together with the sectorial growth rates of investments. It can be seen that means of transport and chemicals come on top in all columns, while foodstuffs-beverages-tobacco is towards the bottom in all columns. But the picture is more mixed in other sectors. Take for instance clothing: it showed a growth rate of output below average, with evidence of a dominant role of exports in supporting production. A similar argument holds for textiles: the output and investment performance of this sector were dismal, but its export performance was not so bad, raising the share of exports from 20% to 45% of production. Consider now the case of the products of refineries: the growth rate of the exports of this sector was substantially above average, but is was certainly not an "export-led sector", because the internal market also grew substantially, leaving the export share stable around 22%. A similar argument holds for metallurgy. In both cases, investments growth rates were below average (in the case of refineries, even negative). It cannot therefore be argued that export markets only expanded for the new products, 5 0 nor that investments were growing fast only in the sectors 48

P. C i o c c a - R . Filosa - G . M . Rey, "Integrazione e sviluppo dell'economia italiana nell'ultimo

49

In no case the share of exports exceeds 50% and only for textiles — a mature traditional

ventennio: un riesame critico", Contributi

alla ricerca economica,

Rome, Dee. 1973, n. 3.

sector for Italy, that grew in this period much less than average — it reached 45.3% in 1961/ 63. Three other sectors - other manufacturing, machinery and oil-coal products -

exceeded

20% in 1961/63. 50

In the work by F. Falcone and others, Specializzazione

e competitività

internazionale

dell'Italia,

Il Mulino, Bologna, 1978, it is s h o w n that in the years 1953 — 58, 50% of industrial exports were in the traditional grouping, 33% in the intermediate, and only 17% in the advanced grouping. In 1959 - 63, the first group had declined 6% overall (but leather, furniture, clothing, shoes had grown very substantially), the second group had also declined 4% (but machinery and means of transport had grown 21%), while the third group had grown 35%. So, if overall the most advanced items had grown more rapidly, taking individual items separately, the picture is more mixed, as it w a s argued in the text. See also D. Ciravegna, Cicli e del commercio

estero dell'Italia

(1952-1978),

Il Mulino, Bologna, 1982.

tendenze

The Italian "Economic Miracle" Revisited: New Markets and American Technology

209

with high export growth rates. The role of exports in the modernization of Italian industry as well as their role in the quantitative expansion of it in the years under consideration must not be overplayed. It remains, however, true that the capability by the part of Italian entrepreneurs to face foreign competition allowed a smooth continuation of growth, preventing balance of payments crises. But this capability sprang from supply-side decisions that will be analyzed in the next section of this paper, as well as from the generally expansive prospects that the international situation suggested. 51

2. The Americanization

of Italian

industry52

If American consumption models found easy acceptance in Italy, American production processes and industrial organization methods won their way in the country more slowly and with a larger need for substantial adaptation. As a recent book argues with reference to West Germany: " N o doubt the Americans were well ahead of Europe in terms of technology and production organisation. This was also true of standardization ... However, it would be wrong merely to refer to the example which the US presented in the technological field ... many study groups [of European entrepreneurs visiting US] also informed themselves about questions of management and industrial relations; that is, about the 'human-psychological' aspects of the system across the Atlantic". 5 3 The two basic features of the American technological system were standardization in the product for mass indifferentiated markets and taylorization of the process, broken down in innumerable steps, fixed and linked in their sequence by a conveyor belt that at the same time "paced and disciplined" 54 the workers and avoided wastes of labour time in transporting spare parts. The rigidity of the conveyor belt encouraged the adoption of specialized 51

52

53 54

In the budget report of Fiat, 31 dec. 1959, it was stated: "Nel nuovo clima psicologico e politico della situazione internazionale si delineano forti azioni di sviluppo: verso maggiori e più estesi consumi e quindi maggiori produzioni, verso più larghi investimenti, insomma più vaste prospettive per tutti ... La previsione è che dobbiamo arrivare almeno al raddoppio delle possibilità attuali. Per ciò occorre ampliare stabilimenti, rinnovare e accrescere macchinari, attrezzature e processi di lavorazione il cui progresso tecnologico è continuo". Quoted in G. Zanetti —E. Filippi, Finanza e sviluppo della grande industria in Italia, L'Impresa ed., Turin, 1965, p. 138. This paragraph heading paraphrases the title of an interesting book: V. R. Berghahn, The Americanization of West German Industry 1945-1973, Berg, New York, 1986. Ibidem, p. 248. D. F. Noble, "Command Performance: a Perspective on the Social and Economic Consequences of Military Enterprise", in M . R. Smith (ed.), Military Enterprise and Technological Change, MIT, Harvard, 1986, p. 334.

210

Vera Z a m a g n i

machinery in substitution of the universal machine-tools that were previously in use and later on the automation of certain particularly repetitive steps through numerically controlled machinery. T h e advantages of such technology were, beside the possibility of keeping enormous markets steadily supplied, the reliability of the products and the large economies of scale that could be reaped with the gigantic plants installed by larger and larger corporations. In case of need, this could easily become a very successful military technology, with its almost infinite capability of reproducing weapons, standardized and reliable, easy to repair and to use. Piore and Sabel have pointed out that the success of such a technology over other available alternatives was historically determined by the rapidly growing size of the American domestic market as well as by the " m e a n " and democratic features that it showed, both converging towards a predominant stress on quantity and performance, rather than quality and design. 5 5 Also, they have underlined the necessary prerequisite for such a technology to work successfully: stable and ever growing markets, that allow the full exploitation of the gigantic plants installed with long and uninterrupted runs of production. If and when unimpeded markets were unfolding, productivity would be at its highest and all alternative ways of producing would become distinctly inferior. 5 6 Now, it can be argued that under many accounts Italian industrial technology was the exact opposite of American technology, with a few exceptions. As a result of markets that had always been small, diversified and unsteady, that had experienced sudden and short-lived spurts, followed by years of turmoil and stagnation, the predominant type of technology employed was a flexible one, based on all-purpose machinery and crafts skills. In a 1951 report by a team of American experts on the state of the Italian engineering industry, there is plenty of remarks on the fact that machinery was not specialized enough; that the lay-out of machinery on the shop floor was chaotic; that there was excessive confidence on the readiness to satisfy specific requests by improvising; that the organization of labour was not an object of careful study, but was more or less left to the workers to decide; that the little modern machinery that there was, was underutilized. 57 American 55

M . J . Piore - C. F. Sabel, Le due vie dello sviluppo zione

flessibile,

Possibilities 56

Isedi, Turin,

for Prosperity,

1987

industriale.

(Italian translation

Produzione

of The

Second

di massa e

produ-

Industrial

Divide.

Basic Books, 1984).

T h e highly vulnerable sides of American technology t o crises in effective demand were shown by the 1929 crisis.

57

CIS1M, Problemi

economici

e industriali

dell'industria

meccanica

italiana,

Tivoli, 1952. F o r

a very good and detailed e x a m p l e of such a type of work organization, see the recent early history of Alfa R o m e o in D. Bigazzi, Il Portello. 1906-1926,

Operai,

tecnici e imprenditori

all'Alfa

Romeo

F. Angeli, Milan, 1988. T h e difficulty by the part of large firms t o o of finding

sizeable enough markets is well described in the Ph. D. thesis by T. R o w , Economic alism in Italy: the Ansaldo

Company

1882 — 1921,

Johns Hopkins University, 1988.

Nation-

T h e Italian " E c o n o m i c M i r a c l e " Revisited: N e w Markets and American Technology

211

technology was generally known to Italian entrepreneurs even before the war, but there was little interest in it, with a few exceptions. 5 8 After the war and with the starting of the Marshall Plan, the incentives to consider such technology more seriously were increased, but it took time for Italian entrepreneurs to become confident that markets were expanding enough to make the adoption of mass production met'hods. 59 Even after they had adopted them, they were often heard to complain that E R P machines were " t o o productive" for the Italian market. 6 0 It is therefore no surprise that state-owned enterprises and the largest quasi-monopolistic private enterprises — like Fiat, Edison, Montecatini -

were the first to take the opportunity of

transforming their plants with American machinery financed on Marshall Plan money. Perhaps the most startling example of this difficult technological transformation of Italian industry can be given by steel. When in M a r c h 1946 Giovanni Falck, the representative of private Italian heavy industry, was questioned by the Economic Committee of Enquiry set up by the Constituent Assembly about the state and prospects of the Italian steel industry, he answered that Italy should not have a large steel industry and should be content with small electrical plants working scrap iron. As it is well-known, his view did not win and the state-owned Finsider finally implemented with E R P funds and American technology a decade-old plan for making steel from iron ore in large coastal plants, but the battle over this project was hard and lengthy. 61 Plenty of other examples could be quoted. In a report on the technological problems of the Italian paper industry towards the end of the 1950s, it was

58

An internationally well-known economist o f the time, w h o had studied the Italian economy, noticed this in connection with technical progress at Fiat: " T h e management of the Fiat ... already knew in the 1930s everything about American methods of automobile production. They did not introduce it, because the size of the Italian market did not justify mass production. When the Italian economy grew into a sufficient size, the previously known methods were introduced". P. N . Rosenstein-Rodan, "Technical Progress and Post-war R a t e of Growth in Italy", in II progresso tecnologico

59

tecnologico

sull'economia

industriale

e la società

italiana.

italiana 1938-1958,

Effetti

economici

del

progresso

Giuffrè, Milan, 1962, v. 1, p. 163.

Among the many authors that c o m m e n t on the dim prospects of Italian entrepreneurs, cfr. G. M a i o n e , Tecnocrati zionale

1945-1950,

e mercanti.

L'industria

italiana

tra dirigismo

e concorrenza

interna-

Sugarco, Milan, 1986, w h o writes, for example, at p. 248: " . . . gli indus-

triali non riuscivano neppure in sede di definizione di un p r o g r a m m a ad immaginare che la situazione della d o m a n d a e del m e r c a t o potesse evolversi in senso favorevole. A che cosa sarebbe valso l'acquisto di macchinari e di materie prime se le condizioni dell'economia rimanevano stagnanti?". p. 3 2 9 .

60

Ibidem,

61

See the Ph. D. thesis by R . Ranieri, L'espansione e la Comunità

del carbone

e dell'acciaio,

alla prova del negoziato.

1945 — 1955,

L'industria

italiana

Istituto Universitario Europeo, 1988.

212

Vera Zamagni

noticed that the most modern American plant producing paper for the news industry had an output that was double the size of the entire Italian market and that the smaller plants recommended by OEEC as convenient for smaller market were still too big for the Italian market. 6 2 Similarly, in the case of cement, while it was ascertained that larger plants had a cost of production at least 30% lower than smaller plants, it was also reported that the average Italian size of plants was 1/3 of the American size. 63 But it was in the machine-tool industry that the Italian — but not only the Italian, indeed the European industry — lagged behind more radically. In his report "on the productivity of operations in the machine tool industry in Western Europe", 6 4 Seymour Melman concluded that "the machine tool industry of Western Europe shows ... major deficiencies in its ability to supply both internal and external markets with low-cost, high-quality products. These deficiencies arise out of essentially "handicraft" type of tradition which has guided this industry, both in the design of its products and in their production. The technology of mass production has, in the main, not been applied in this industry65 ... In the light of available knowledge about mass-production machinery and similar products, it is possible to suggest, with confidence, a range of measures which could raise productivity of operations in the machine tool industry. These include: standardization of components; modular design of products; concentration of products in specialized plants; use of mass-production techniques for the production and assembly of machine tools". In such a situation, the Italian machine tool industry could not but suffer a prolonged crisis — because all the largest plants were built or renovated with American machinery — and could survive catering for smaller firms. Only much later, it could come back to the market with new vigour and up to date models. 66 As the markets for Italian industry were becoming larger, smaller firms expanded into medium-size firms and started becoming interested in modern62

63 64

65

66

P. Bersano, "Il progresso tecnologico dell'industria italiana della carta", in II progresso tecnologico etc., cit., v. III, p. 26. C. Cesareni F. Cova, "Il progresso tecnologico nell'industria italiana del cemento", ibidem. Appendix to "Economic Determinants of Mechanization", ibidem, v. 1, p. 71. Italics in the text. Elsewhere the A. had reported an OEEC estimate according to which in 1950 the level of productivity of the British machine tool industry was half the American level, while the Soviet productivity, because of the adoption of mass methods, was certainly higher than in Western Europe. Serious preoccupations about the British productivity gap were voiced in the book by D. G. Hutton, Le promesse della produttività, Bocca, Milan, 1954, translated into Italian and widely publicized. A revival of interest by the part of Italian investors for machinery made in Italy is noticed at the end of the 1950s by G. F. Micheletti, "Trasformazione tecnologica delle macchine utensili e dei trasporti interni", in II progresso tecnologico etc., cit., v. I.

The Italian "Economic Miracle" Revisited: New Markets and American Technology

213

izing their technology too. The case of these firms is perhaps more interesting than the well-known cases of large corporations like Fiat, that spent a large slice of the IMI-ERP scheme for the reequipment of Italian industry (about 150 million of present day dollars) entirely in American machinery. 67 We have two interesting surveys of medium size firms conducted by a student of prof. P. N. Rosenstein Rodan in the middle of the 1950s. One refers to the sewing machine industry, established already after the I World War and producing 140.000 sewing machines per year before the II World War. 68 The other is concerned with the motorcycle industry, present in Italy already before the I World War, 69 but producing only 7.500 units on the eve of the II World War. 70 Both industries experienced a great boom in the post-war period, as it can be seen in table 14. In both industries, many of the new entrants after the II World War were firms formerly producing war materials. 71 In both industries, domestic demand gave "the initial impetus to development. Since the goods are high in quality and advanced in design, they command a foreign market which promotes the further growth of light mechanical production". 7 2 In both industries there were a few firms that grew in size, acquired the most modern American systems of production and management and produced the bulk of the output. In the sewing machine industry, of the around 20 active firms, all located, with one exception, between Milan and Pavia, one - Necchi — produced more than half of the total output. Necchi "mass manufactures its machines from high precision interchangeable parts ... Necchi's managing director makes final decisions and acts as coordinator, much as a president of an American firm ... During the last two years, Necchi has been studying the latest American production scheduling methods with an idea to adopt the most suitable one ... On the world market, Italian firms match the prevailing prices in the competition country ... Between 1947 and 67

68

69

70

71

72

And the very best American machinery, according to comments made by Americans and reported in P. Bairati, Valletta, UTET, Turin, 1983, p. 125 ff. Substantive evidence of the massive transfer of American machinery to the new large thermoelectrical plants, integrated steel mills, oil refineries, petrochemical plants can be found in CIR, Lo sviluppo dell'economia italiana nel quadro dell'economia europea, Roma, 1952. S. H. Wellisz, "Studies in the Italian Light Mechanical Industry: II. The Sewing Machine Industry", Rivista Internazionale di Scienze Economiche, 1957, η. 12. V. Zamagni, Industrializzazione e squilibri regionali. Un bilancio dell'età giolittiana, Bologna, Il Mulino, 1978, p. 59. The estimate for 1911 was of an output of 1117 motorcycles. S. H. Wellisz, "Studies in the Italian Light Mechanical Industry: I. The Motorcycle Industry", Rivista Internazionale di Scienze Economiche, 1957, η. 11. It is interesting to notice that the major firm of the sewing machine industry, Necchi of Pavia, was established during the I World War as an iron foundry and converted to the production of sewing machines after having bought an artisan shop at the end of the war. S. H. Wellisz, "Studies etc.", I, p. 1181.

214

Vera Zamagni

1955 Necchi's zig-zag machine was radically redesigned three times until it became fully authomatic and could sew an unlimited number of designs". 73 A similar picture can be drawn of the motorcycle industry. Of the 114 firms existing in 1955, two - Innocenti and Piaggio — produced half of the output, five firms 70% and 10 as much as 90%. The localization of the motorcycle industry was not geographically as concentrated as the sewing machine industry, Piaggio being a Tuscan firm and Bologna housing eleven manufacturers, among whom Ducati and Benelli. In this industry: "the largest and most modern firms use specialized equipment and some automatic transfer machines ... Time-and-motion studies are carried out in many firms ... and rationalization of transport arrangement as well as of floor spacing is proceeding rapidly and account for a substantial part of the recent increase in productivity ... Comparisons of prewar with post-war manufacturing methods show that great strides were made by the Italian motorcycle industry in passing from the use of labor-intensive (and often quite antiquated) manufacturing methods to the use of modern machinery and from an artisanlike organization to the newest business methods". 74 Concerning foreign markets, Wellisz notices that "the absorption possibilities of the domestic market were so great, that foreign market possibilities were largely neglected. Instead of making a major effort to export to protected markets, large manufacturers prefer to grant production licenses or to set up their own subsidiaries abroad. Thus Innocenti has set up its own plants in France and in Argentina, and has granted licenses to German and Spanish concerns, while Piaggio has its own Spanish company, and has given licenses to French, German and British firms". 75 What can be remarked is that not only machinery, but organizational methods were borrowed from the Americans, as it was recognized in the late 1960s by an expert, 76 although this proved to be an even lengthier and 73 74 75 76

Idem, op. cit., II, passim. Idem, op. cit., I, passim. Ibidem, p. 1060. F. A. Grassini, "Il progresso tecnico nell'industria dopo la seconda guerra mondiale", in G. Fuà (ed.), Lo sviluppo economico etc., cit., v. III. He mentions the lay-out of machinery, quality control, the adoption of electronic computers, marketing techniques, budgetary indicators as the "disembodied" technical progress of American inspiration that started being spread in Italian industry in the 1950s-early 60s. More pessimistic about these development was G. Martinoli, who concluded a report on organizational changes in industry by stating that: "Una volta di più sembra di rilevare un aspetto abbastanza curioso della nostra industria, capace di affermazioni tecniche in qualche caso estremamente audaci, moderne, intelligenti, ma generalmente inabile nel ricavarne vantaggi, completando il frutto dell'ingegno creativo con l'apporto di un minimo di spirito organizzativo" ("Trasformazioni nell'organizzazione aziendale in funzione del progresso tecnologico, 1945 - 1 9 6 0 " , in Trasformazioni nell'organizzazione aziendale in funzione del progresso tecnologico 1945 — 1960, Il Mulino, Bologna, 1961, p. 35).

The Italian "Economic Miracle" Revisited: New Markets and American Technology

215

complicated process of learning than the mere adoption of American machines, and became really widespread and rooted only as late as the 1970s —80s. The most obvious, but nonetheless striking, result of this technological change was an unprecedented quantitative expansion of Italian industry. From the figures reported in table 14, I quote a few examples: steel production increased 5 times between 1948 and 1963, the output of cars 26 times, surpassing the million units, the output of computing machines, typewriters, washing machines, refrigerators passed from a few thousands to 700 — 900 hundred thousands. The second major achievement of the adoption of more modern technology was the substantial improvement of the productivity of workers, that grew in industry at the average real rate of 6.6% per year. Widespread was the realization that this growth of productivity was mainly due to the increased scale of production that allowed the adoption of mass production methods. 7 7 The entrepreneurs themselves, when asked why they had installed new machines, invariably answered that this had become necessary in view of the expansion of markets and in very few cases mentioned cost reductions, that was seen by them rather a consequence than a cause of technical change. 78 This point can also be proved by the fact that productivity rose more in the new and expanding industries than in the old ones like the cotton or wool industries, but efforts were made to spread it in all sectors of the economy. 79 As a third relevant consequence of technical progress, I will mention the relatively modest increase in employment that the spectacular increase in production documented above actually implied. This was especially true in the first half of the period and was noticed by foreign observers like Vera Lutz, 80 who commented at length on the difficulties for the Italian government 77

78 79

80

N . A n d r e a t t a , "Fattori strategici dello sviluppo tecnico dell'industria italiana (1938 — 1958)", in II progresso tecnologico etc., cit., v. I, writes: "Il singolo fattore ... che ha avuto il ruolo più importante e più generale tra le diverse cause che spingono all'aumento della produttività è stato certamente l'aumento della scala di produzione con la seguente possibilità di sfruttare le economie della produzione di massa" (p. 21). Ibidem, p. 25. A national committee for the improvement of productivity (CNP) was founded in October 1951 under the auspices of ERP. See P. P. D'Attorre, "Anche noi possiamo essere prosperi. Aiuti ERP e politiche della produttività negli anni '50", Quaderni Storici, apr. 1985. The A. argues that: "La campagna produttivistica mancava di obiettivi generali ... ma apriva la strada ad un rinnovamento notevole della cultura e della politica industriale del paese" (p. 73). V. Lutz, "Alcune caratteristiche dello sviluppo economico in Italia nel quinquennio 1950 — 55", Moneta e Credito, 1956, n. 36, where the A. wrote that: "L'aumento nell'"intensità di capitale" fu in parte dovuto ad un aumento della meccanizzazione, ma in parte anche ad una espansione più rapida dei settori ad elevata capitalizzazione rispetto ai settori meno capitalizzati" (pp. 2 5 1 - 5 2 ) .

216

Vera Z a m a g n i

to enact effective policies for the absorption of unemployment. 81 Another foreign economist was later estimating that technical progress between 1951 and 1960 had "destroyed" 9 million jobs, a very speculative calculation based on inapplicabile static premises, but quite effective in conveying the idea of how powerful such technical progress had actually been. 82 Finally, the "virtuous circle" effect on exports 83 must be briefly touched upon. If wages do not eat up all the effects of productivity increases, it is known that profits increase and prices can remain steady or even fall. Because wages did grow slowly in this period in Italy, as I have recalled above, what actually happened was that from 1951 to 1959 manufacturing prices, with some fluctuations, decreased, increasing thereafter very moderately up to 1962 and rapidly only in the single year 1963. But the prices of certain consumer durables or chemical products registered spectacular cuts of 5 0 % or more. 84 This made Italian industrial products increasingly competitive on world markets and accounts better than any other explanation, in my opinion, for the Italian exports success following the creation of the Common Market. Italian capitalism flew, after all, on the wings of wage moderation and technical modernization.

3. The 1963 watershed At the end of the convulsive period of growth illustrated above, Italy had become in many ways another country, not only because of the quantitative achievements reached, but because some of the old and entrenched socioeconomic features of the country had been deeply shaken. First of all, a culture of expansion had firmly substituted the former culture of survival and endurance, as one of the most well-known Italian 81

T h e debate around V. Lutz's proposals is reviewed in a dissertation discussed by a student of mine, P. Rontini, II dibattito cupazione,

post bellico

sull'emigrazione

come

valvola

di sfogo

alla

disoc-

Faculty of Political Sciences of the University of Florence, a. y. 1 9 8 6 / 8 7 . On V. Lutz,

cfr. also Ente Einaudi, Moneta,

dualismo

e pianificazione

nel pensiero

di Vera C. Lutz,

Il

Mulino, Bologna, 1984. 82

G. Ackley, Un modello

econometrico

dello

sviluppo

italiano

nel dopoguerra,

cit., p. 58. H e

writes: " U n o degli aspetti di maggior rilievo dello sviluppo e c o n o m i c o italiano del dopoguerra è senz'altro costituito dal considerevole aumento verificatosi nella produttività del lavoro. Da un certo punto di vista, anzi, si potrebbe addirittura affermare che al notevolissimo sviluppo del reddito abbia sostanzialmente contribuito l'aumento della produttività, con la conseguenza di impedire il raggiungimento di una situazione di pieno impiego delle forze di l a v o r o " (p. 5 8 ) . 83

F o r an excellent theoretical exposition of the "virtuous circle" effect of increased productivity and stable wages on exports and then back on domestic productivity, see J . Cornwall, Capitalism.

84

Its Growth

and Transformation,

M . Robertson, London, 1977, ch. I X - X .

Often because new, more popular models were manufactured.

Modern

T h e Italian " E c o n o m i c M i r a c l e " Revisited: N e w M a i k e t s and American Technology

217

journalists was recognizing: " T h e times, in which the economists of pessimism — the respectable professors of the gloomy science - were preaching, have gone and have given way to the times of the economic optimism of the bold prophets of the multiplications of things". 85 The economic crises that were to follow could never endanger this new cultural acquisition, certainly not peculiar to Italy alone, but in Italy contrasting in a striking way with former experiences. In the second place, the geographical concentration of industry in the industrial triangle, that had been greatly strengthened by the two world wars, was finally broken with the spreading of industrialization to Venetia, EmiliaRomagna, Tuscany and, in a less substantive way, to other central regions (that will develop more later on), as a comparison between the 1936 (or 1951) and the 1961 censuses quite clearly shows. 86 It was precisely the rapid growth of consumer goods that allowed these newly industrializing regions to adapt their traditions to the creation of networks of small firms producing light consumer goods. 87 This success fuelled the hope that, by massive injections of public money, the South too could be driven to industrialize rapidly. Although this hope proved later on to be an illusion, the process of industrialization of the South was indeed started and this too was a major break with the past. A third major change came about in the equilibria of the industrial powergroups, with the disappearance of the "electrical potentates" through nationalization of electricity in 1963; the rise of the new public enterprise ENI, led by the dynamic Mattei, that broke'the quasi-monopoly of Montecatini in 85

G. Bocca, La scoperta

dell'Italia,

Laterza, Bari, 1963, my translation of the following passage:

" . . . anche da noi sembra finito il tempo in cui predicavano gli economisti del pessimismo, "i rispettabili professori della triste scienza"; è giunto quello dell'ottimismo e c o n o m i c o per "i disinvolti profeti della moltiplicazione delle c o s e " " (p. 2 8 - 2 9 ) . This fundamental change in expectations was indeed a European phenomenon, as it was widely recognized by historians. See, for example, D. Landes, Τ be Unbound

CUP, Cambridge, 1969, w h o states:

Prometheus,

" T h i s was in a w a y the greatest change of all — a revolution of expectations and values" (pp. 5 6 3 ) . 86

For

a regional

analysis of Italian population

and

industrial

censuses

1881 — 1981,

cfr.

V. Z a m a g n i , "A Century of Change: Trends in the Composition of the Italian L a b o u r F o r c e , 1881 - 1 9 8 1 " , Historical

Social

Research,

P. Saraceno, L'Italia verso la piena

oct. 1 9 8 7 , n. 4 4 . F o r a c o n t e m p o r a r y account, see

occupazione,

Feltrinelli, Milan, 1963, p. 158: "Il processo

di industrializzazione, allargandosi progressivamente dalle regioni nord-occidentali, ha ormai investito l'Italia centro-orientale e lambisce, in C a m p a n i a e in Abruzzo, l'Italia meridionale, oltre ad aver dato luogo alla formazione di alcune grosse isole di industrializzazione in altre regioni del M e z z o g i o r n o " . 87

On the characterization o f this " s e c o n d " Italy, intermediate between the industrial triangle and the South, see A. Bagnasco, Tre Italie. La problematica

territoriale

dello sviluppo

Bologna, Il Mulino, 1977 and G. F u à - C . Zac.chia (eds.), Industrializzazione Bologna, Il Mulino, 1987.

senza

italiano, fratture,

218

Vera Zamagni

many chemical branches; the establishment of FIAT as the largest and most influential private enterprise and the appearance of new self-made men, like Monti or Ferruzzi. The new situation that was created at the top of Italian industry was more open and fluid than before, though sometimes chaotic, as the story of the relationships between ENI and Montecatini, later Montedison, proves. 88 Finally, 1963 witnessed also the end of the long lasting policy of low wages that the Italian industrial capitalism - as most other successful capitalisms at their beginnings — had practised, perhaps for a longer period than usual, to compensate for the lack of technological sofistication. Wages grew in the two years 1962 —63 as much as they had grown in the previous seven years (in money terms) and although the event was circumscribed for the time being, wages demand exploded even more violently a few years later. With higher wages, the workers also demanded better working conditions, a more efficient welfare state and improved industrial relations. It took a long time before all these "novelties" could be digested by Italian society. The years after 1963 were difficult. Entrepreneurs had a crisis of confidence; different social groups resorted to violence; the state increased deficit spending; the insistence on American large-scale technology produced plants that could never be put in operation, because of lack of demand. And then the world 1973 crisis was superimposed on all this. But the changes impressed by the "economic miracle" proved irreversible.

88

T h a t story, rich of stage-effects, has not seen its epilogue in 1988 with the joining of some Montedison and ENI chemical plants into a unified chemical pool — Enimont —, but in 1990, with the withdrawal of Montedison out of Enimont, passed wholly under ENI control.

The Italian "Economic Miracle" Revisited: New Markets and American Technology

„

rH es •Ί; ro Ό OS Ο rH ri ri (Ν ri ri ró

bo c

IO o O Μ ^ f i 00 ci I — ι I so o Ö 00 IO rò S η

(14)

00

Os o '-1

I rT

itfl s"T? c -S o 3

ro

3>

c

'—'

bo C «

o,

e3 -

(10)

U

>

OC c rt

"5 IO

o1 ^

so

^

1

1

•O t- Os

(S Os

tv

^

00 00 ^

so l o

Os so TT rO ro "O ró tv r¡ ro rO •Φ

00 r l so tv

so Os κ t^

Ό

ro 00

?

l o IV 00 00

û O bD c η S ε bo c« „9 J5 g

O

Ό so o 1 "i •o ro •"i ri

00

s

η

1

so

tv

o T)- O 00 tv O rH

Os rH Tf ro só l o

o Os IO

"Î tv Os •o SÓ tv Os Ö rs

I

00 ro 00

r i 00 00 00

IO

η 00

Os

tv I rH o OS ρ rs ro r-í ro T-4

tv

so

1956

1955

s !

os

Os

Tl- SO Os l o o tv ro 00 Ό IO SÓ só tv

I

O

rO o 00 O O OS ρ