This text comes from our book, Light to the Nations, Part 2.
As we have seen, the late 1940s and the decade of the 1950s were periods of economic prosperity for much of Western Europe. Germany, France, and Italy, in particular, dug themselves out of the ruins of war and built new industries or rebuilt old ones. During the same period, European nations granted independence to most of their overseas colonies in Africa, Asia, the Pacific regions, and the Americas. Nevertheless, the loss of these empires did not hurt the economies of Western Europe.
Socialism and even Communism continued to attract large numbers of Europeans in the two decades after the war. The Western European nations, however, did not become Communist or even socialist—nor did they entirely embrace laissez-faire capitalism. Western European economies were indeed capitalistic; they were characterized by a few who possessed capital and many who worked for the owners for a wage. Yet, European governments worked with unions and business owners to create systems to protect workers’ rights and give them some economic stability. Governments, too, provided direct aid to citizens, including state-run medical insurance systems that assured very inexpensive or free medical aid to all citizens. Thus, Western Europe nations became neither socialist nor entirely capitalist. They created what has been called social democracy.
Yet, despite all the prosperity, many Europeans worried that old rivalries might again create problems for Europe—in particular, the old rivalry between France and Germany. Not every Western European country was enjoying prosperity. Austria, in particular, still was struggling in the late 1950s and had a strong socialist party (though it was anti-Communist). It was clear that to keep Western European nations from becoming socialist or Communist, all the Western European nations had to enjoy economic prosperity.
The United States military remained in Europe and so provided one guarantee against Soviet conquest of the West. The United States also pushed for greater unity among the European nations. Such a unity, it was thought, would ease tensions between nations and bring prosperity to all. The United States, and many Europeans, favored a United States of Europe—a kind of federal government to which each nation would send representatives.
The first steps toward such a union were the formation of the European Payments Union and the European Coal and Steel Community. The first group was established to make sure all members could easily trade with each other and that European industries could compete with industries from outside Europe. The Coal and Steel Community was founded to assure that no one member country could hoard coal or iron from other members. The member countries were Belgium, France, West Germany, Italy, and the Netherlands.
The next step in European unity came on March 25, 1957 when Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands signed the Treaty of Rome, forming the European Economic Community (EEC). The treaty removed trade tariffs between the member countries and set up tariffs to protect the EEC from cheap goods imported from other countries. The EEC did not create a United States of Europe, but it was an important step toward it.
The final step toward European unity thus far occurred in 1993 with the founding of the European Union (EU). The EU, which today includes 27 European states, serves as a kind of federal government for them. The member states have given over some of their authority to the EU government while keeping much of the authority they had before the union. The EU thus is not as tight a union as the United States, but it is more than just an alliance between independent nations.