Europe’s Fragile Cooperation

During the Cold War that followed World War II, two military alliances and two economic alliances formed in Europe. In the twenty-first century, one of the military alliances and one of the economic alliances continues, whereas the other two have been disbanded.

Europe’s Economic Alliances

During the Cold War, two economic alliances formed in Europe:

• European Union (EU). The EU (formerly known as the European Economic Community, the Common Market, and the European Community) formed in 1958 with six members. The EU was designed to heal scars from World War II (which had ended only 13 years earlier).

• Council for Mutual Economic Assistance (COMECON). COMECON formed in 1949 with six members; ten countries ultimately joined. COMECON was designed to promote trade and sharing of natural resources in Communist Eastern Europe. COMECON disbanded in 1991.

The European Union in the Twenty-first Century

With the end of the Cold War, economic cooperation throughout Europe has become increasingly important. The EU expanded from its original six countries to 12 during the 1980s and 28 during the first decade of the twenty-first century. The most recent additions have been former members of COMECON.

European Union

The main task of the European Union is to promote development within the member states through economic and political cooperation. A European Parliament is elected by the people in each of the member states simultaneously. Subsidies are provided to farmers and to economically depressed regions. Most goods move across borders of member states in trucks and trains without stopping. With a few exceptions, a citizen of one EU member state is permitted to work in other states. A bank or retailer can open branches in any member country with supervision only by the corporation’s home country.

The Eurozone

The most dramatic step taken toward integrating Europe’s nation-states into a regional organization was the creation of the eurozone. A single bank, the European Central Bank, was given responsibility for setting interest rates and minimizing inflation throughout the eurozone.

Most importantly, a common currency, the euro, was created for electronic transactions beginning in 1999 and in notes and coins beginning in 2002. France’s franc, Germany’s mark, and Italy’s lira—powerful symbols of sovereign nation-states—have disappeared. Twenty-five countries use the euro, including 19 EU members.

European leaders bet that every country in the region would be stronger economically if it replaced its national currency with the euro. For the first few years that was the case, but the future of the euro has been called into question by economic and political turmoil in Europe. The economically weaker countries within the eurozone, such as Greece, Ireland, Italy, and Spain, have been forced to implement harsh and unpopular policies, such as drastically cutting services and raising taxes, whereas the economically strong countries, especially Germany, have been forced to subsidize the weaker states.

Many Europeans do not feel connected to the institutions that govern the EU, or to the officials working in EU offices (see Debate It! feature). Opposition to EU policies, especially free movement of citizens among EU member countries, induced a majority of United Kingdom voters in 2016 to support the country’s withdrawal from the EU in 2019, a move known as “Brexit.” Yet despite the north–south tensions within the EU, future enlargements are possible: Albania, North Macedonia, Montenegro, Serbia, and Turkey are in various stages of negotiations.

Pause & Reflect 8.3.4

What might be the benefits and disadvantages for the European Union to let in new members—from the point of view of both the EU and of the prospective members?

Europe’s Military Alliances

After World War II, most European states joined one of two military alliances:

• North Atlantic Treaty Organization (NATO). A military alliance among 16 democratic states in Europe, plus the United States and Canada.

• The Warsaw Pact. A military agreement among Communist Eastern European countries. The Warsaw Pact disbanded in 1991 following the end of communism in Eastern Europe.

NATO and the Warsaw Pact were designed to maintain a bipolar balance of power in Europe. For NATO allies, the principal objective was to prevent the Soviet Union from overrunning West Germany and other smaller countries. The Warsaw Pact provided the Soviet Union with a buffer of allied states between it and Germany to discourage a third German invasion of the Soviet Union in the twentieth century. Some of Hungary’s leaders in 1956 asked for the help of Warsaw Pact troops to crush an uprising that threatened Communist control of the government. Warsaw Pact troops also invaded Czechoslovakia in 1968 to depose a government committed to reforms.

In a Europe no longer dominated by military confrontation between two blocs, the Warsaw Pact was disbanded, and the number of troops under NATO command was sharply reduced. NATO expanded its membership to 28 states by adding the former Warsaw Pact countries except for Russia as well as several states formerly republics within the Soviet Union (Figure 8-43). Membership in NATO has offered Eastern European countries a sense of security against any future Russian threat as well as participation in a common united Europe. Russia’s annexation of Crimea in 2014 and continued support for rebels in eastern Ukraine have heightened fears of renewed confrontation.

Nato Members in Europe

Canada and the United States are also members.