Margaret Thatcher: European.

The French Socialists’ internal policy machinery has been activated to express increasing frustration and anger at the constraints of the Eurozone, in the context of rising unemployment and basically no sign of anything improving. Specifically, they’re trying to start a row with the Germans, and somewhat less obviously, Britain. The key quote is here:

“Le projet communautaire est aujourd’hui meurtri par une alliance de circonstance entre les accents thatchériens de l’actuel premier ministre britannique – qui ne conçoit l’Europe qu’à la carte et au rabais – et l’intransigeance égoïste de la chancelière Merkel – qui ne songe à rien d’autre qu’à l’épargne des déposants outre-Rhin, à la balance commerciale enregistrée par Berlin et à son avenir électoral”, écrivent également les dirigeants socialistes pour qui “la France possède aujourd’hui le seul gouvernement sincèrement européen parmi les grands pays de l’Union”.

So, they accuse Angela Merkel of thinking of nothing but German creditors, the German trade surplus, and her party’s prospects, and describe this as intransigent egoism. Well, perhaps they have a point. They blame all this on David Cameron for having a “Thatcherite tone” and only thinking of “Europe a la carte and with a rebate”. And apparently, the French government is the only sincerely European one.

Now I had no idea Merkel was such a poor weak insignificant figure that her policy was dictated by Britain. You may be surprised to learn that this diplomatic triumph is insufficiently publicised in the UK. Further, I clearly remember that the reason for austerity in the UK was meant to be that things were bad in the eurozone and we were going to be like Greece. Don’t just ask the prime minister, ask Sir Mervyn King. It’s as if British politicians tend to blame everything on the EU and French politicians tend to blame everything on the Brits, or something.

However, not only are they right on the actual issues, they have a point about Thatcherite Europe.

Margaret Thatcher was underrated as a European politician. As prime minister, she was very much in favour and deeply engaged in the creation of the Single European Act and therefore of the single market. It is a cliche to say that the Brits only think of the European Union as a single market, but this is ahistorical – in the mid-80s, single market completion was the absolute top priority on the European agenda. If Europe is a project under construction, the single market was the phase that was completed in the 80s. The notion of catching up with Europe, competing with Europe, trading across Europe – all of this was ingrained in Thatcherite style, tone, and rhetoric.

British macro-economic policy in the Thatcher years was also driven by European integration. After giving up on monetarism, the UK government decided to establish a fixed exchange rate with the D-Mark, and later formalised this by joining the Exchange Rate Mechanism. In fact, the UK spent as much time under Thatcher tracking the D-Mark as it did targeting the money supply. The notions of “importing credibility” that were used to promote the Euro in the 90s and 00s had an earlier run-out in the UK in the 1980s.

With an open capital account and a currency pegged to the D-Mark at a dramatically high parity, the UK in the late 1980s looks rather like a peripheral European economy of the mid-2000s, with inflows of capital chasing yield, a growing financial sector, a trade deficit, a housing bubble, and a political elite frantically clapping themselves on the back, before the crash.

The UK’s broader foreign and defence policy could have been reduced to the word “NATO”, which is another way of saying that it was focused on Europe. In the early 1980s, UK defence plans were all about the BAOR operational area in Germany and the NATO Northern Flank. In fact, if it hadn’t been for the accident of the Falklands, they would have been much more so, sharply reducing the Navy at the expense of the Army and RAF and the nuclear world. Similarly, Thatcher really didn’t care about the Commonwealth or anything much outside, yes, Europe or the North Atlantic.

I can hear a storm of whataboutery building by now. What about the rebate? What about “give me my money back”?

Well, what about it? A lot of European politicians spent the 1980s ripping into each other over narrowly national interests. (They did in the 70s and 90s and 00s, too.) Were any of the various ferocious defenders of the CAP as it applied to them un-Europeans? Was Helmut Kohl un-European for insisting on reunification, to head right for the reductio ad absurdum? Germany was obviously pretty keen on exporting cars – was Hans-Dietrich Genscher a Eurosceptic, then? This is simply hypocrisy, with a dash of sexism chucked in. (Do we have to quote Mitterrand fancying her again?)

I also think it’s important to distinguish Thatcher, prime minister, from Thatcher, post-prime-ministerial pontificator. Her swing to Euroscepticism was post-1990, post-power, rather like her swing towards the climate-change deniers. It’s worth noting that the Eurosceptics were not passive, either – they deliberately sought to claim the Thatcher myth as a source of legitimacy for their efforts to topple John Major. She also, I think, adopted Euroscepticism as a way of projecting influence in the Tory Party after leaving office. That said, we should surely consider action before 1990 as weightier than words after 1990. And her foundation was very much involved in the Central European transition to a certain idea of democracy – in the EU, in NATO, in the stability pact, eventually in the Euro.

So why isn’t this more obvious? I think the answer is that the European Union has not turned out to be the nice alternative to Thatcherism it was sold as in the 1990s. Ask a Spaniard. No, go ahead.

The policies it delivers – open trade, austeritarian macro-economics, open capital flows, no real redistributive budget, and a permanent war on inflation – are basically nothing Margaret Thatcher would not have welcomed. Even the way she thought tact was something sailing-ships did would fit right in with German newspapers claiming Cyprus is a richer country than Germany. And the EU’s generally sane approach to things like environmental regulation would work for the post-1987, Montreal Protocol and IPCC-championing, “first scientist prime minister” version of Thatcher. It did at the time.

I wonder, in conclusion, if Thatcher can be understood from a European point of view as an ordoliberal politician, rather than a libertarian or just a conservative? Britain has always been more like Germany than it lets on. Thatcher was a European; it’s Europe that’s the problem.

3 thoughts on “Margaret Thatcher: European.

  1. Pingback: [LINK] “Margaret Thatcher: European.” | A Bit More Detail

  2. You might have stretched the devil’s advocacy a bit too far- she was still PM when she delivered the infamous Bruges Speech for example. But the post does illustrate the way that politics can operate within European institutions, in spite of the discourse from right and left in the UK that suggests the EU is some kind of monolithic capitalist or socialist imperium. I think you’re right in saying that Thatcher would identify with the sort of austerity politics that are currently being pursued through the ECB and the EU in general, but the Tories are incapable of realising this due to the fact that many are too stupid to differentiate between the EU and the ECHR. There is hope for the Left too, if we actually engage with European institutions and understand that there is some potential within them for radical action.

  3. “In the early 1980s, UK defence plans were all about the BAOR operational area in Germany and the NATO Northern Flank. In fact, if it hadn’t been for the accident of the Falklands, they would have been much more so, sharply reducing the Navy at the expense of the Army and RAF and the nuclear world. Similarly, Thatcher really didn’t care about the Commonwealth or anything much outside, yes, Europe or the North Atlantic”

    It’s rather more nuanced than that. There were two main determinants at wok here. First was financial. MoD spending and cost controls was a disaster area, whenever a cash limit was imposed by the Treasury, MoD promptly exceeded it within a matter of months. Compounding this was a hopelessly mismanaged change in accounting procedures that left the centre with little if any idea of where and how cash was actually being spent.
    Second was the Cabinet battle between the Wets and the Dries. Francis Pym was seen by many Wets as a potential Tory leader; the man most likely to oust Thatcher. This gave him a perceived influence that was out of proportion to what he actually wielded. For the RN, seeing him as the coming man, they worked very hard to ally the Service with Pym and the Wets. Unfortunately whilst they succeeded in getting Pym onside, they hadn’t reckoned on him being sacked so quickly leaving them completely at odds with Nott when he arrived at the MoD. Nott was sent in with a brief not so much to make cuts, but to sort out the ongoing financial chaos and an outmanoeuvred RN found itself offered up as the only real place MoD could make substantial savings given that the Army and RAF were pretty much ring-fenced with their NATO commitments. Don’t forget that BAOR and 2nd TAF were commitments backed up by substantial treaties, Extracting the UK from those commitments would have been *extremely* difficult. Especially at a time when the US was ramping up the Evil Empire rhetoric and memories were still fresh of the Dutch attempt to cut a division from NORTHAG in 73-74, an attempt that ended in screaming matches on the NATO assembly floor, the resignation of several Dutch defence ministers and ultimately precipitated the fall of the the entire government.
    Another way of looking at it is to ask what options are open to Nott in 81 given that there’s no more money forthcoming and he’s going to have to cut *something*? That said, while I’m not convinced that she’didn’t care’ about all this, I think it’s more that her and most of her Cabinet had little understanding of the foreign and defence issues that they faced. This was a difficulty compounded by their insistance on viewing said issues through the lens of a balance sheet and being unwilling and/or unable to think about such things in any other way.