18th JULY 2018
Answer questions in NOT MORE than 200 words each. Content of the answer is more important than its length.
Links are provided for reference. You can also use the Internet fruitfully to further enhance and strengthen your answers.
Q1The North Atlantic Treaty Organization (NATO) was formed after the Second World War along with financial aid to Europe. Discuss the reasons for giving such aid. Do you agree that although the rationale for the NATO military alliance is lost its importance the European Union is still an important organization.
- In the aftermath of the Second World War, the U.S. promoted economic integration among its European allies as an essential condition for the post-war revival of world trade. At war’s end, wealth had become concentrated in the new superpower – it accounted for 48% of world industrial capacity and 70% of gold reserves. With the demobilisation of some 10 million soldiers in the U.S., the shift to a peacetime economy needed allies to open their markets to U.S. products and investments. Its European allies were too poor to provide a market and the notorious ‘meat-axe’ 80th Congress unwilling to undertake a programme for European reconstruction. A Congress that was not willing to aid Clement Attlee’s “socialist welfare state” was eager to rebuild Western Europe and Japan as levees to defend the ‘free world’ against ‘godless communism’.
- Along with NATO founded in 1949 was the Marshall Plan instituted in 1948. It was innovative not because of its size – $17 billion over four years was not substantially more than the $9 billion the U.S. had channelled to its European allies in the previous two years – but because it pressured West European states to reduce tariffs between themselves and to standardise regulations to facilitate the creation of a market viable enough to reap the economies of scale and for U.S. corporations to invest in the continent. This trans-Atlantic U.S. corporate expansion was welcomed by European governments and trade unions as these were the only entities with the funds to create employment. A trans-Atlantic military alliance and European economic integration were thus the twin projects of a successful post-war reconstruction.
- Economic integration proceeded rapidly over the last 40 odd years, with the European Union (EU) becoming the largest economy on the planet and thereby threatening the U.S. As Britain’s difficulties in exiting the union indicates, supply chains are so integrated across the continent that breaking up the EU would have disastrous consequences for production for all its member states and may even risk a global economic downturn.
- At the same time, the rationale for the NATO military alliance – to protect Western Europe from Soviet expansion and to tie Germany to its neighbours – has largely evaporated with the breakup of the USSR and the dissolution of the Warsaw Pact.