In the 30 years following the enunciation of the Truman Doctrine in March 1947, promising military aid to Greece and Turkey, America's relations with her Western European allies have been subject to many tensions and fallen into many vagaries, but the alliance has been underpinned by a clear perception of common interest at the most fundamental levels of strategic argument. For the United States, Western Europe has represented not only a vital extension of the American economic system but also a bulwark against geopolitical encroachments on that system by the Soviet Union. For Western Europe, the United States has been not only the sole credible source of military security but - notwithstanding Europe's increasing prosperity - the ultimate provider of her economic security as well.

These basic truths are worth restating at the outset of any account of transatlantic relations in 1978. It is so easy to overestimate the extent to which they have been challenged at various points during the last 30 years; and equally easy to underestimate how much they were shaken during the last two. The point is best understood by comparing 1978 with the period of greatest strain within the alliance during the previous three decades - that is, the early 1960s when General de Gaulle launched his frontal assault on the "American challenge." The Gaullist attack failed at that time for a variety of reasons, the chief of which was that it failed to carry the West German government with it. The Germans still felt psychologically and militarily dependent upon the American connection and, as far as economics was concerned, the net American outflow of about one billion dollars a year appeared to the Germans as to nearly all the other allies (and despite French mutterings about the American takeover) to deliver growth without excessive inflation. From the American perspective, the Gaullist position, though irritating, seemed equally irrelevant to essentials. The cohesion of the rest of NATO and the social stability of the rest of the European Economic Community reassured successive American governments that Europe was essentially "sound."

At the end of 1978 it was still possible to maintain that these assumptions were valid. But most of them had lost their air of immutability, and some had had to be abandoned altogether. Notably, belief in the American economy and the dollar as the mainspring of the Western economic system was badly undermined in Europe; and although Europe's overriding reliance on U.S. arms for protection was undiminished, the reassertion of the power and rights of Congress vis-à-vis the Carter Administration created fundamental doubts about the stability of American foreign policy. From the American point of view the Europeans still looked like reasonably reliable allies, but the political and social alarms of the previous 12 months had aroused a whole legion of ideas and possibilities that had never hitherto penetrated American consciousness on a wide scale. In part, of course, these doubts on both sides of the Atlantic only differed in degree from those which have beset the alliance from its beginnings. In two respects, however, they represented a transformation of kind. In 1978, a West German government thought and acted for the first time on Gaullist, or at least semi-Gaullist, principles; and, on the other hand, it dawned on many Americans that the alliance in Western Europe might be destroyed not by an external attack but by the corrosive action of various forces within.

II

As it turned out, the most dangerous of these disintegrative forces were not the ones most American commentators had expected. The specific political danger most feared and discussed in the United States in the early months of the year - namely the prospect that the southern flank of Europe might fall prey to a dangerously seductive heresy called Eurocommunism - failed to realize its ominous potential, and indeed, after the spring, faded almost completely from the scene, leaving the incumbent non-communist coalitions looking a good deal stronger than they had for some time past. In Italy and Spain the two propositions on which the idea of Eurocommunism had been based - that is, that socialism is a democratic concept demanding a permanent, and not merely transitional, respect for parliamentary democracy and, second, that the schism between Communists and Socialists within the workers' movement should be healed - were unable to make headway in the face of intractable political difficulties at home. In France they were jettisoned ruthlessly by the French Communist Party itself.

Among these sagas the eclipse of the French Communist Party (PCF) was most immediately significant, since it strengthened the position of the French President and thus altered the balance of power within the European Community as well as casting general doubt on the credibility of Eurocommunist claims. The PCF, having for some years put itself forward as a moderate democratic party purged of Leninist doctrine and supporting a moderate Common Program alongside the Socialists, found itself at the beginning of 1978 faced with the nightmare of being virtually swallowed up by its Socialist partners in the parliamentary elections in March. Opinion polls and by-elections showed that its moderation had entirely benefited the more plausible left-wing party and that in the first round of the forthcoming elections it might well find itself beaten into second place by the Socialists in all but a handful of contests and with no hope, under the present system, of recouping in the second round. In these circumstances the Communist Party leaders were obliged to turn their guns on the Socialists, demanding an extravagant new left-wing Common Program, and denouncing the Socialists as reactionaries and backsliders when they predictably refused to agree. In this way they succeeded in regaining control over their traditional vote and in driving away moderate support from the Socialist-led coalition of the Left. The Communists' share of the total vote was only slightly down from 1973, and they actually made a net gain nationally of 13 seats. But in achieving this result the PCF not only destroyed its own chances of coming to power as part of a left-wing coalition government, but revived its own scowling and aggressive Stalinist image and blasted the fortunes of the Left.

The majority of 90 seats won by the Center-Right coalition parties was far better than the most optimistic forecasts on the government side. Moreover, President Giscard d'Estaing's Union pour la Democratie Française emerged in a greatly strengthened position in relation to its Gaullist partners. The Gaullist leader, Jacques Chirac, whose personal popularity had also been damaged in the election, was obliged to patch up a temporary truce with the President and thus, with the Left in disarray, to leave him free to pursue far less constricted economic policies than he had been able to afford in the past. By the fall, indeed, both Gaullists and Socialists were embroiled in ferocious intra-party struggles. Meanwhile, the ideological in-fighting, lasting through the summer and conducted mainly in the columns of Le Monde, among leading French Communist theoreticians over the correctness of the strategy and the internal state of the Party, was evidence, perhaps, that the PCF is by no means a Stalinist monolith; but it did nothing to erase the impression that beneath the sheep's clothing of the last few years the wolf's paw was in fact waiting to "strike once and strike no more."

If the situation in France showed Eurocommunism outflanked on its Right, the dramatic unfolding of events in Italy showed an abortive attempt to outflank it on the Left. The growing violence in the Italian streets, the terrorist attacks on prominent individuals, and, finally, the kidnapping of the Christian Democratic Party chairman, Aldo Moro, by the Red Brigades in March were the price that Italy had to pay for the so-called historic compromise between the Communist Party and the Christian Democrats. The decision of the Communists under Enrico Berlinguer to commit Western Europe's largest communist party to achieving power by democratic means and to supporting in the Chamber of Deputies a minority coalition led by the Christian Democrats left a vacuum on the far Left filled by young middle-class militants who declared an "armed struggle" against the state. The Red Brigades had apparently intended to kidnap Berlinguer, but, finding him too well guarded, had seized Moro, presumably with the intention of forcing the government to recognize their legitimacy and to negotiate with them. This the government, backed strongly by the Communists, refused to do, though there was some revulsion of public feeling against it when Moro's bullet-riddled body was eventually recovered in the trunk of a car at a point equidistant from Christian Democrat and Communist headquarters.

Outside observers could derive some relief from the shock these events caused. A strong anti-terrorist bill went through the Italian parliament by a vast majority, and the "well-behaved" Communist Party suffered a marked setback in the provincial and municipal elections that were held a week after the final dénouement of the Moro tragedy. The government, with Communist support, was also able to carry through a major economic stabilization plan: an unpleasant dose of fiscal, military and administrative conservatism that enabled the Italian balance of payments to make a spectacular recovery and inflation to be reduced from more than 22 percent at the beginning of the year to an annual rate of only 12 percent at the end. Still, the underlying picture in 1978 never looked less than depressing and ominous. The spectacle of the impotence of the Italian police, the strains and the inequities of the Italian economy, rising unemployment, and corruption that has been rife in every part of the Italian state and that finally implicated President Leone himself in a scandal which obliged him to resign in June - all suggested that the uneasy balance of forces could not remain in place for very long.

Elsewhere in Europe the communist issue was hardly a serious one. Even in Portugal, where it seemed in 1974 and 1975 that the extreme Left might easily take over in the confusion that followed the end of the Salazar dictatorship, the pendulum of political power swung in a very narrow arc. While the country had no less than three governments during 1978, President Eanes had no great difficulty in creating a rough public consensus, embracing the army and the main political parties and allowing him to set up a moderate, "non-party" administration.

This temporary banishment of the communist factor in West European politics was not the only hopeful symptom of improved political health within the alliance. In West Germany, the five strange years of neo-anarchist urban terrorism associated with the names Andreas Baader and Ulrike Meinhof came to an end; Northern Ireland had its quietest year in the last ten; and Scottish separatism took some hard electoral knocks. Above all, the young democracy of Spain seemed more and more firmly rooted. In spite of the violent activities of the Basque separatists and some rather farcical right-wing plots, the centrist government of Alfredo Suarez easily survived a hard year for the Spanish economy, and the Spanish people overwhelmingly endorsed their new democratic constitution at the referendum in December.

III

These political successes, however, have floated on the surface of an economic stream which most observers perceived to be flowing in the opposite direction. And it was the fear that this current could sweep away all prospect of cooperation within Europe or even within the NATO alliance that haunted leaders on both sides of the Atlantic. It is true that the performances of the main economies of Western Europe were rather better than in the two or three previous years. The average rate of price inflation was slightly reduced within Europe, and the divergencies between individual inflation rates narrowed in comparison with the mid-1970s. In Italy the rate was cut from 17 to 12 percent and in the United Kingdom from nearly 16 to just over 9 percent, the latter being the rough average for Western Europe. This provided greater stability of exchange rates within Europe itself (though not, of course, of the rates against the dollar). On the other hand, growth remained at well under three percent both as an average and in the strongest single economy, that of West Germany; and unemployment remained enormously high, with more than five million out of work in the European Community alone.

Moreover, the individual industries of Western Europe were under attack on two fronts. On one side, the newly industrializing countries of the Third World were moving steadily into traditional markets for manufactured goods, and, on the other, American and Japanese companies were more and more firmly entrenched in the high-technology fields which European industry aspired to invade. The social and political difficulties of adjusting to this challenge by modernizing and deploying declining industries would impose severe strains on European governments in the best of times. In a period of no growth and high uncertainty it is hardly surprising that ominous cracks began to appear throughout the whole fabric of West European cooperation.

By far the most serious of these fissures was the one which yawned between the aspirations of the European Economic Community and its actual performance. At the economic level the members of the Community resorted to all sorts of protectionist measures. Some, like the Davignon price cartels in man-made fibers, shipbuilding and steel, were sanctified by a Community-wide approach. Others were national devices to protect domestic industries concealed by a variety of subterfuges: preferences by public authorities in purchasing contracts; automatic licensing systems; and the zealous application of rules concerning public quality or public health. The European Commission was sufficiently alarmed to warn during the summer that it would take action against these practices, but they continued to proliferate all the same. Similarly the Common Agricultural Policy (CAP) of the Community remained unreformed at the end of the year despite its mounting internal absurdities and in the face of increasing hostility in the outside world to its propensity for producing huge farm surpluses and dumping them on world markets with gigantic export subsidies. At the summit conference of the nine heads of government in Bremen in July it was agreed that the CAP's soaring cost could not be allowed to continue. Yet the Brussels summit two months later showed how difficult it is to get agreement on something as relatively straightforward as a farm price freeze, let alone any radical reform, so long as the exigencies of German domestic politics give such power to the farm lobby.

At the political level, the Community appeared at the beginning of the year to reach an impasse. The ringing declaration of the 1972 Paris summit, proclaiming European union by 1980, had been completely annulled. In the aftermath of the 1973 oil price increase, inward-looking national governments had elbowed aside the European Commission and almost all supranational aspects of the Community. Some external coordination of policies had been achieved among the Nine, but positive initiatives on the big issues in which the interests of some or all the Nine were deeply engaged had been almost completely absent.

A serious attempt was made in 1978 to plan a breakout from this European stalemate and the effort itself was encouraging. Yet the final result was not; for, by the end of the year, it had begun to look as if two of the three main exit roads proposed might very well lead back into the maze, while the third might provide an escape for the Community only at the cost of weakening the alliance. The path least strewn with pitfalls was the election of a European Parliament by direct suffrage due to take place for the first time in June 1979. Throughout 1978, however, as the national parliaments passed the legislation necessary to put this process in train, it became ever clearer that the French and British governments were still determined to prevent such a parliament encroaching on the powers of national governments. The British Labour Party, it is true, grudgingly allowed a bill providing arrangements for the polls but then proceeded to select candidates to contest them, the vast majority of whom were commited to root and branch opposition to the European Community in general and the European Parliament in particular. In Paris the Gaullists not only forced Giscard to concede that France would veto any extra powers of the Parliament, but actually threw out, in December, the bill financing European elections in France. In short, although a parliament would be elected and might even succeed in amassing more democratic power over the years, this process would be at best slow and uncertain.

Equally doubtful seemed the consequences of the enlargement of the Community by the accession of Greece, Portugal and Spain. Negotiations with Greece continued throughout the year and indeed, after a negotiating breakthrough in December, seemed doomed to succeed. Those with Portugal began in October and those with Sapin were due to begin in 1979. The nine existing members of the Community welcomed the applications on political grounds and, from the point of view of the United States, the consolidation of NATO's vulnerable southern flank looked very attractive. Yet throughout 1978 the difficulties of enlargement loomed larger and larger and began to affect the calculations and negotiating positions of members of the existing Community. Leaving aside the institutional and linguistic problems of a Community of Twelve, one has only to mention the fears of French and Italian farmers in the face of competition from Spanish and Greek agriculture or the fears of, say, Germany, that Spain will both prove a formidable competitor in exports of cars and steel and yet need expensive nursing in other sectors, to see that problems are being raised here which could easily cause further protectionism in the Community and an eventual collapse of the whole structure. The "three wise men" appointed at the December summit to explore the institutional implications of enlargement were certainly bound to make the best of it but any serious examination of the problem seemed doomed to reach the conclusion that at best a very different and much looser European Community would emerge at the end of a long and stormy process; and at worst the Community would cease to provide the stability in the West that the United States has always regarded as its main advantage.

The third method proposed for pulling Western Europe out of its rut appeared to have a greater chance of immediate success. Certainly the scheme for a European Monetary System (EMS), which in 1977 had been no more than a gleam in the eye of Roy Jenkins, the President of the European Commission, moved forward to implementation at the beginning of 1979 at a speed which was astonishing considering that it was conceived as a rather desperate means of getting back on to the road to full economic and monetary union that was one of the ultimate aims of the Community's founding fathers. Mr. Jenkins revived the debate in his Jean Monnet lecture in November 1977, with the idea that by setting up a monetary framework the Community might give a boost to the harmonization of the nine economies, itself the prerequisite of further political and economic unification. To those who replied that it was literally preposterous to put the monetary cart before the harmonization horse in this fashion, Mr. Jenkins replied that monetary union could only take place if there was a firm commitment on the part of the wealthier members to transfer resources on a massive scale to the poorer; and he was thought by many, perhaps most, observers to have destroyed his own case by this proviso, since there was virtually no chance of such a transfer being agreed to by the West Germans.

The matter would no doubt have rested there if it had not been for the unwitting assistance of the American Administration. By allowing the dollar to fall precipitously in the early months against the main currencies and particularly against the Deutschemark, President Carter and his advisers gave a new and highly practical motive to the Europeans for trying to take joint defensive action. Germany's Chancellor Helmut Schmidt was particularly angry with what he saw as American aggression against the German economy. He found himself in the unpleasant political position of facing either the wrath of German exporters, whose goods were being priced out of the market by the appreciation of the German currency, or the fury of inflation-sensitive public opinion, which knows that intervention by the Bundesbank to keep down the exchange rate increases the money supply and stokes up inflationary pressure. The Chancellor's reaction was to try to prevent the Deutschemark from floating into the stratosphere by mooring it firmly to the other main European currencies in a new "zone of monetary stability."

This idea, which he put forward at the Copenhagen summit in April, was limited in scope and indeed constituted not much more than an attempt to reexpand the existing "snake" - the device by which West Germany, Denmark and the Benelux countries agreed to limit the fluctuations of their currency to within 2.25 percent on either side of a central rate - but it captured a wide constituency. It pleased the European Commission and the smaller European countries that saw in it at least a step in the direction of European Monetary Union. It suited those countries like France and Italy, which were engaged in a cold shower treatment for their industries and were glad of an external excuse for imposing severe monetary policies. It was clearly intended to cut the dollar down to size and therefore pleased the Gaullists in Paris. It was attractive to all those European currencies - that is, most - that had suffered from the fluctuations of the dollar. Those who distrusted it did so either because they felt it was another encroachment on national sovereignty, or because they feared it would force them into a deflationary, monetarist straitjacket, or because they felt it was bound to fall apart and those who tried to prop it up would probably have to spend a lot of their reserves in the attempt for no good purpose. James Callaghan, the British Prime Minister, subscribed to at least the last two of these arguments, and most of his Labour Party followers to all three - which is why he was from the outset the foremost skeptic among the nine heads of government.

The detailed scheme worked out (mainly by the Germans and French) for the July Bremen summit took account of some of these doubts.1 But when the technicalities were stripped away, the main haggle was over who would pay and how much. The weaker economies, chiefly the British, Italian and Irish, harked back to the original arguments about a European Monetary Union. They could not, it was said, stand the strain of excessively high exchange rates in relation to their inferior growth and inflation performances unless there was a firm commitment on the part of the richer economies, i.e., Germany, the Netherlands, Belgium and France, to transfer resources to them. Furthermore, in a situation where it was widely agreed that the dollar was the main culprit, why should "innocent parties" like the pound, the lira, or indeed the franc, be involved in expensive operations to prevent an embarrassing appreciation of the German currency?

The answers hammered out at the Brussels summit in December were dictated by a complex mixture of political and economic considerations. President Giscard, having put his money firmly on political solidarity with the Germans, gave up his attempt to make the rules of the intervention game slightly less biased toward Germany. However, bowing to Gaullist pressures, he also vetoed a German attempt to sweeten the Italian and Irish waverers by expanding the European Regional Fund and supplementing subsidized loans from the European Investment Bank. The Irish and Italians, failing to get what they wanted in cash, left the summit apparently determined to stay out, but they eventually decided to come in - the Italians for complicated internal political reasons, the Irish apparently because they felt they had overplayed their hand.

The British decision to remain outside the system was, as a whole, a matter of domestic politics. At a critical moment for Mr. Callaghan in his attempt to impose a wage policy on his trade union allies, a major row with the left wing over the Common Market would have been unwelcome, to say the least. The final element in the British calculation, however, is the most interesting because the more disinterested. Throughout the nine months of discussions Mr. Callaghan consistently took the view that a European scheme was too narrow and basically too anti-American. His settled conviction (and we should remember that this is the man who nearly allowed his name to be put forward for the Managing Directorship of the International Monetary Fund) was that no scheme that did not attempt to solve the problem of the dollar in a direct and cooperative fashion was likely to survive.

IV

It is a moot point to what extent the EMS, as it finally emerged, was indeed "anti-American." The U.S. Administration itself seemed unable to decide the point. Secretary of State Cyrus Vance in his Chatham House speech in London early in December welcomed it as an "important step toward the economic integration of Europe." But White House and Treasury sources were quoted in the press as taking a different view. A European cynic might remark that this ambiguity has been characteristic of American policy toward the Community from the start, and that the United States has been all in favor of European integration until it starts to become effective. But in the case of the EMS, it was hard to say whether these unworthy thoughts were appropriate or whether the State Department and White House roles should be reversed. It seemed possible that the new system would collapse like the original "snake" from which Britain and France were fairly rapidly forced to withdraw, leaving the Community even more demoralized than it was before the attempt was made. What is certain, however, is that the EMS was conceived in a spirit of exasperation if not actual hostility toward American policy caused by European perceptions of President Carter's weak leadership in the latter months of 1977 and the first part of 1978. Those American feelings about the precariousness of democracy within the alliance, which I have already described, were mirrored by an equally strong European sense that in the United States democracy had in some way gotten out of control.

The chief evidence of this was thought to lie in the economic field, where the President's difficulties with the Congress over energy policy and with the electorate at large over the attack on inflation seemed both extraordinary and dangerous. But the economic malaise would not have been so acute if it had not reinforced and been reinforced by difficulties in other areas. The story of West German alarm at Mr. Carter's impulsive human rights initiatives, and of French and West German annoyance at the Congress' rather muddled interference with plans to sell nuclear technology to Pakistan and Brazil, belong to 1977 although they cast their shadows forward into the following year. But there were other issues in 1978 which caused concern in Europe, not so much because they were enormously important in themselves but because their handling showed signs of ineptitude and divided counsels in Washington that cast doubts on the President's will and ability to deal with the supreme issues of war and peace. The neutron bomb controversy was just such a case.

A plan to produce a new nuclear battlefield warhead, designed to destroy life by massive radiation, was naturally a difficult and emotional issue, and nobody blamed the Carter Administration for treating it with some caution. Even Mr. Carter's abrupt decision in April to postpone the production of the weapon was not in itself regarded as necessarily a bad one. The West German position that it should be produced and then used as a bargaining chip in disarmament negotiations with the Soviet Union was not so different from the Administration's position that its non-production could be used as a chip in the arms control game. What annoyed and alarmed the European allies was the Administration's attempt to shuffle the responsibility for the decision onto governments in Europe, which were far more embarrassed politically by the argument than was the President, and then, just when European politicians were beginning to weather the storm and gain acceptance for the deployment of the warhead, the President made a unilateral volte-face and left them looking foolish. The announcement in October that the United States would proceed with production of a new generation of tactical nuclear warheads that could be adapted for use as neutron weapons closed the controversy for the time being, but there is no doubt that considerable damage was done to morale.

Another example of what was perceived as American unreliability was the muddle over the final stages of the Tokyo-round trade talks toward the end of the year. The course and substance of these negotiations is described in detail elsewhere in this issue; but it hardly needs an understanding of the technical issues to realize that the significance of these talks for the alliance and indeed for the world at large can hardly be overestimated.2 The consequences of failure were bound to be calamitous both in practical and psychological terms and would most likely plunge the developed world back into the protectionist nightmare of the interwar years. Yet the U.S. Administration was unable to prevent the Congress last October from failing to extend a waiver on legislation which obliged it to impose countervailing duties on subsidized imports after January 4, 1979. Not unreasonably, the reaction of the Europeans was to refuse to negotiate under what they saw as a serious threat, and it took endless persuasion from Mr. Robert Strauss, the U.S. Special Trade Representative, to make the European Economic Community accept the promise that the Administration would table and actually get passed a bill extending the waiver as soon as the Congress reconvened in the middle of January. Everyone always expects the final part of any trade negotiation to be a cliff-hanger, and no one supposed that the negotiating parties would be anything less than very tough; but the fact that the incident occurred underlined for many the unreliability of American policy in a period of congressional supremacy. The claim that the waiver was not extended owing to a mistake only worsened this impression.

V

The anxiety and irritation caused by such incidents made a strange counterpoint to the genuine achievements of the Western alliance in 1978, some of them certainly attributable to European perceptions of the ever-increasing military menace of the Soviet Union, but some, too, to the encouragement and exhortation of the President himself. On the whole, NATO had a good year. The NATO summit meeting in Washington in May was a landmark in two respects. First, it contained a remarkably forceful speech by Mr. Carter reaffirming the American commitment to the defense of Western Europe, if necessary with strategic nuclear forces. Second, it formally unveiled the results of the first year in the crusade against NATO's shortcomings, which the President launched at the London summit in May 1977. These results had been impressive. Nearly all the allies had agreed to a three percent real annual increase in their budgets between 1979 and 1984. Moreover, agreement was reached on the long-term defense program, under which the allies promised to look at what needed to be done over the next 10 to 15 years to strengthen and streamline NATO in every department, including the reinforcement of troops in Europe, the mobilization of reserves, and the improvement of weaponry including technical nuclear weapons. Agreement, announced later in the year, on a NATO airborne early-warning system (the so-called AWACS) may be said to be the first fruits of this program.

Even the perennially dismal subject of NATO's southeastern flank looked rather less daunting by the end of 1978. The tension between Greece and Turkey continued, of course, accompanied by bitter slanging matches over the unsolved problems of national sovereignty in the Aegean. But the Administration's achievement in persuading Congress to lift its embargo on arms shipments to Turkey resolved the three-year crisis in that country's relations with the United States and appeared, at least temporarily, to have put an end to a potentially dangerous Turkish flirtation with the Soviet Union. Greece remained withdrawn from the military wing of the alliance, and the possibility of her return remained entangled with the Turkish quarrel. Nevertheless, Prime Minister Caramanlis' slogan that "Greece belongs to the West" remained in force, and the way to a return to NATO was opened by the withdrawal of the Greek stipulation that negotiations on the subject would not take place while Turkish troops still occupied part of Cyprus.

Against all this must be set the fact that during 1978 the Warsaw Pact proceeded with its apparently inexorable buildup of military forces. Not only was the Soviet Union apparently continuing to spend about 12 percent of its gross national product on defense, but the year was punctuated by commentaries from Western military strategists on the improved quality and equipment as well as the increasing size of the Pact's ground forces in Central Europe, its vast naval program and the improvement of its air forces. The attempt to deal with this disparity by arms control and disarmament agreements as well as by counterimprovements continued, but at a sluggish pace. The force reduction talks in Vienna (MBFR) became hopelessly bogged down in an argument about the facts upon which the concept of parity between the two sides is supposed to be built. On the Western side, this deterioration of the talks into a squabble over data probably reflected a cooling-off based on two calculations. The first was that, given the buildup of Soviet forces and their ability to reinforce more easily than the United States, NATO would be placed at a disadvantage in any agreement based on parity, and key aspects of the new long-term defense policy might be bargained away for no corresponding real concession on the Soviet side. Second, to the extent that MBFR was regarded as a useful means of combating the remnants of the Mansfield lobby in the U.S. Congress that would urge unilateral troop withdrawals, that objective was best served by a prolongation of the talks.

Meanwhile the Comprehensive Test Ban Treaty negotiations remained stalled on the question of verification and the second round of strategic arms limitation talks (SALT II) dragged its slow way toward a probable agreement in early 1979 - more than a year after the expiration of SALT I. By and large, the European allies had been satisfied with the consultative process whereby Washington kept them informed of these bilateral discussions and, once reassured that the United States had resisted Soviet pressure to prevent their acquiring the cruise missile, they were content to leave the running pretty much to the Carter Administration.

Where there had been deep concern on the European side was over the prospect of SALT III, which will presumably follow close upon SALT II. A fierce debate was already raging behind the scenes during 1978 about the desirability of bringing intermediate-range nuclear systems, targeted on Western Europe or the Soviet Union, into future negotiations. The West Germans, who are in the front firing-line as far as the Russian SS-20 missile or the Backfire bomber are concerned, are anxious to discuss these weapons. The British and French, on the other hand, are not anxious to bargain with their own nuclear deterrents, and, in addition, the British argue on more general grounds that it is against European interests to encourage the idea that there is a regional "Euro-strategic" balance which can be distinguished from the overall balance of forces between NATO and the Warsaw Pact. The deployment of long-range tactical nuclear weapons on the NATO side, such as the cruise missile or the Pershing II, might foster the illusion that European security was not reliant on the U.S. strategic umbrella.

VI

It is hard to construct a coherent picture out of all these contradictory forces. And yet, as I hinted at the beginning of this article, some themes do emerge from the confusion. The newsworthy phenomena of urban terrorism and Eurocommunism, which apparently came as such a shock to American public opinion, were only two symptoms of a deeper instability that affected the whole of Western Europe. This instability was caused in the first instance by a sharp attack of inflation and stagnation brought on by the oil price increase in 1973 and later by the side-effects of conventional deflationary treatments applied to the original disease.

In 1978 there were some signs that the fever had been checked and had even begun to decline, but many European countries were also left in a state of debility and confusion. Almost every European government had to spend a good deal of political capital trying to achieve an economic balance - some by frantic stimulation, others by stern monetary discipline. Arrayed against them were militant workers, a discontented middle class and an assortment of more specialized pressure groups such as taxpayers and "green revolutionaries," who are apt to proliferate in societies under pressure. The British Labour government ended the year in a dangerous confrontation with its trade union allies; the Italian coalition was virtually breaking apart under the stress of a rigorous conventional monetary policy; the Danish work force was heading for a showdown on pay. Even the supposedly dynamic West German government was seriously embarrassed by labor troubles in the steel industry. In Austria, the ecology lobby shook Chancellor Kreisky, and in Sweden, in October, it actually caused the downfall of the government.

The second theme was that all these governments tended to blame their difficulties on the United States. They had been used to regarding the American economy as the motor driving European prosperity for so long that it seemed self-evident that lack of prosperity must stem from troubles with the motor and its driver. The manifest muddle of the Administration in economic matters confirmed this general impression and concealed the fact that the Europeans were themselves hopelessly divided over whether they wanted the American economy to cure their unemployment or their inflation. Had President Carter succeeded in evolving a coherent economic policy earlier and managed to maintain a stable dollar in the markets, many of his other so-called eccentricities and fumblings in the political and security fields would have been forgiven him.

Those European countries that could congratulate themselves on having weathered the economic storm without the assistance of the United States, or even perhaps in spite of it, were in a mood not simply of exasperation but of independence. President Giscard, as soon as his domestic political position was consolidated by the National Assembly elections in the spring, branched out all over the place with independent initiatives that revived a positive form of Gaullism instead of the merely negative one practiced by himself and his predecessor in the immediate past. The French military expedition to rescue Europeans stranded in Zaïre, the rather futile French proposals for conventional disarmament put forward at the U.N. Special Session on Disarmament, the eager seizure of the EMS idea, the hosting of the four-power Western summit in January 1979, all pointed to a reversion to an activist French diplomacy designed to re-establish France as a member of an Alliance directorate, such as General de Gaulle himself frequently proposed.

An even more remarkable development - indeed the most notable feature of politics in Western Europe in 1978 - was the emergence of West Germany in a similar role. For the first time since World War II Germany began to claim political rights that would match its economic ascendancy. The main practical manifestation of this was, of course, the scheme for EMS, but in many smaller ways Germany's partners in the European Community noted an increasing tendency on the part of the Germans to demand automatic deference to their interests in a fashion hitherto monopolized by the French (a tendency which caused, incidentally, a serious revival of anti-German sentiment in French public opinion). The old postwar inhibitions still applied in the military sphere and, for that reason as well as geographical vulnerability, there was no sign in 1978 that Germany would carry a quarrel with the United States to extreme lengths. Nor should the important extension of cooperation with East Germany, enshrined in the agreement in June to build a new northern Autobahn link from West Berlin to Hamburg, be taken as a symptom of creeping "Finlandization" in Bonn. Yet it is almost certainly true that even two or three years previously Bonn would not have dared to embark on anything as "anti-American" as the EMS which, though it is in practice not much more at the outset than the "snake" of six years earlier, was conceived in an atmosphere radically more pretentious and more sulphurous.

It is not clear how far this new German spirit, or the revival of its French counterpart, can be successfully harnessed to wider purposes. Many Europeans, including myself, hope that it may breathe new life into the Community - and to some extent the EMS promises to fulfill this expectation. Yet the experience of 1978 suggests that neither the attempt to coordinate a common European external policy nor the necessary effort to achieve some greater equalization among the Nine (and soon perhaps Twelve) economies of the Community, would be possible without some further modification of the national neuroses of Germany and the fierce nationalism of France.

The British, with their post-imperial insularity, their hoard of North Sea oil and their stubbornly broken-down economy, were another fearful obstacle to European progress. But there was at least one saving facet to their vices, enhanced at present by their phobia of the European Community - namely their tendency to think instinctively in terms of the American connection. Mr. Callaghan's cooperation with President Carter over southern Africa was constructive as well as self-interested; and the same can be said of his attempts to put the EMS into a wider context. What he failed to realize was that his unpopularity in Europe as a result of his European policies deprived him of any credibility as the honest broker of the alliance. The central question for 1979 is whether French aspirations to take part in a directorate of Western policy and German feelings of renewed national self-confidence can be turned to similarly constructive purposes but with more effect.

Footnotes

1 For a more detailed description of the emerging European Monetary System, see Marina Whitman's article, "A Year of Travail: The United States and the International Economy," in this issue.

2 See Marina Whitman, ibid.

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  • David Watt is the Director of the Royal Institute of International Affairs (London).
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