Download “Iron Curtain” had fallen in Europe as the various countries allied

During and after the Cold War in Europe the economic policies of both the
Eastern and Western governments were defined by the relationship and tension
between the United States and the Soviet Union. The Cold War was a period from
approximately 1945 to 1991 when the world was divided along ideological lines of
democracy and communism. An “Iron Curtain” had fallen in Europe as the
various countries allied themselves either with the democratic U.S. or the
communist Soviet Union. Throughout the Cold War and after the economic
policies were defined by these “alliances” such as when rebuilding after the
devastation of World War II, the establishment and possible expansion of the
European Union, and the opposing policies of privatization in the West and
establishing communist economies in the East.
In 1945 when World War II ended, it left most of Europe devastated,
economically, politically, and socially. The only intact industrial country in the
world coming out of the war was the United States, however the Soviet Union
was very quick to recover and assert its influence as well. Initially the United
States offered to all European countries money in order to rebuild, this was
known as the Marshall Plan. The money came attached to a requirement, that
any government receiving the help would establish themselves a democracy.
Despite the fact that all European governments were given this opportunity only
those states in Western Europe agreed to the stipulations. It was long before the
Soviet Union took advantage of the Eastern European states, offering them aide
with the requirement that they would establish themselves as communist states.
The decision of these countries to take loans from either the United States or the
Soviet Union will define their economic decisions from this point on.
As the United States and the Soviet Union continued to emerge as two
economic super powers, the countries of Eastern and Western Europe needed to
find a way to compete with them. In 1957, the Treaty of Rome established the
European Economic Community or EEC, this was a promise amongst the Eastern
European States to work together to integrate their economies in order to
compete with the economic strength of the US and the USSR. The EEC eventually
became the EC, and today is known as the European Union. In 2002 the European
Union introduced the euro and fully integrated the economies of the member
states. Since the collapse of the Soviet Union and the end of the Cold War the
question has arisen as to whether or not to expand the EU to include the former
Communist states of Eastern Europe. In many ways this goal of expanding the EU
has helped these states, like Poland, the Czech Republic and Slovakia transition
successfully from communism. The strength of the US and USSR economies
during the Cold War forced the economic integration of the European states
which served as a benefit for those countries who had to transition out of
communism once the Cold War ended.
The Economic policies of Eastern Europe were centered around
Communism during the Cold War, and in Western Europe by the end of the Cold
War there was move towards Privatization. Communism inherently relies on the
government to own and operate all means of production and in Eastern Europe
that defined the economic policies throughout the Cold War. Under Stalin’s 5
Year Plans the USSR went through a period of Collectivization, where the kulaks
were forced in to communal government run farms. On the flip side in Western
Europe there was an initial move towards a Welfare State in order to recover
from World War II. In Great Britain the Beveridge Report promoted an economic
cushion for the population that would protect the people from “the cradle to the
grave.” However in the 1980s under Margaret Thatcher Great Britain moved
towards the Privatization of the economy, selling off government run industries
such as housing to private owners. Thatcher’s decision was an attempt to catch
up to the economic success that the United States was experiencing in the 1980s,
much the same as the communist economies of Eastern Europe were defined by
the economic policies of the Soviet Union.