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AP European History Western Europe After WW II Bretton Woods Conference (1944): created International Monetary Fund (IMF) Lay foundations for modern monetary system; based on U.S. dollar IMF (World Bank) designed to loan money to struggling countries to prevent economic crises and anarchy; instrumental in post-war economic boom. United Nations created in 1945: Security Council (12 nations including 5 permanent members had powers to act; General Assembly had powers to advise (included all nations of the world) Western Europe political recovery Economic hardship after WWII: scarcity of food, runaway inflation, black markets Many people believed Europe was finished. Suffering was worst in Germany Political restructuring Christian Democrats inspired by common Christian and European heritage. Rejected authoritarianism & narrow nationalism; had faith in democracy and cooperation. Catholic parties also progressive in nature Socialists and Communists also emerged with increased power and prestige, especially in France and Italy. Result: social reform and political transformation created foundations for a great European renaissance. Italy: Christian Democrats gained control in 1946 led by Alcide De Gasperi Pushed for social change and economic reform with considerable success. Socialist influence: social benefits came to equal a large part of the average worker’s wages France: General Charles De Gaulle, inspiring wartime leader of Free French, re-established free and democratic Fourth Republic (resigned in 1949) Catholic party provided some of best postwar leaders e.g. Robert Schuman Socialist influence: large banks, insurance companies, public utilities, coal mines, and the Renault auto company were nationalized by gov’t. Britain followed same trend Federal Republic of Germany (West Germany): 1949, Konrad Adenauer began long, highly successful democratic rule. Christian Democrats became West Germany’s majority party for a generation Great Britain: Clement Attlee, socialist Labour party leader, defeated Winston Churchill and the Conservatives in 1945. Attlee moved toward establishment of a “welfare state.” Many industries nationalized, gov’t provided each citizen with free medical service and taxed the middle and upper classes more heavily. “Economic Miracle”: unprecedented economic growth in European history Europe entered period of rapid economic progress lasting into late 1960s. By 1963, western Europe produced more than 2.5X more than before the war. Causes: Marshall Plan aid helped western Europe begin recovery in 1947 Korean War in 1950 stimulated economic activity. Economic growth became a basic objective of all western European governments. Governments accepted Keynesian economics to stimulate their economies. Germany and France were especially successful and influential. In most countries many people willing to work hard for low wages; expanding industries benefited. Increased demand for consumer goods. Many economic barriers eliminated and a large unified market emerged: Common Market. German economic recovery led by finance minister Ludwig Erhard Combined free-market economy & extensive social welfare network inherited from Nazi era. By late 1950s, West Germany had robust economy, full employment, a strong currency and stable prices. France Combined flexible planning and a “mixed” state and private economy to achieve most rapid economic development in its history. Jean Monnet: economic pragmatist and architect of European unity. France used Marshall Plan aid money and the nationalized banks to funnel money into key industries, several of which were state owned. European Unity Council of Europe created in 1948 European federalists hoped Council would quickly evolve into a true European parliament with sovereign rights, but this did not happen. Britain, with its empire and its “special relationship” with U.S., opposed giving any real political power—sovereignty—to the council. Schuman Plan, 1950 created the European Coal and Steel Community Put forth by French statesman Jean Monnet and Foreign Minister Robert Schuman. Special international organization to control & integrate European steel and coal production. West Germany, Italy, Belgium, Netherlands, & Luxembourg accepted in 1952. Britain refused to enter Immediate economic goal: a single competitive market w/o national tariffs or quotas. "The Six": By 1958 coal and steel moved freely among six nations of the European Coal and Steel Community Far-reaching political goal: bind six member nations so closely together economically that war among them would become unthinkable and virtually impossible. European Economic Community (EEC) Treaty of Rome, 1957 Created European Economic Community (EEC) or the Common Market Signed by same six nations in the Schuman Plan – “the Six” First goal of treaty: Gradual reduction of all tariffs among the Six in order to create a single market almost as large as the U.S. Other goals: Free movement of capital and labor. Common economic policies and institutions. Tariffs were rapidly reduced and regions specialized in what they did best. EEC encouraged hopes of political and economic union. Union frustrated in 1960s by resurgence of more traditional nationalism. Euratom (European Atomic Energy Agency) also created by agency. Communist states responded by forming their own economic association--COMECON France steps back from European unity Bitter colonial war in Algeria resulted in the election in 1958 of General De Gaulle who established the Fifth French Republic and ruled as president until 1969. Withdrew France from "US controlled" NATO and developed own nuclear weapons program. De Gaulle twice vetoed application of pro-American British to European Union. Britain did not inter until 1973.