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Britain at the end of history

What Margaret Thatcher’s failures over German reunification can teach Brexit Britain 30 years on. 

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In September 1989, Margaret Thatcher flew to Moscow for talks with the Soviet leader, Mikhail Gorbachev. It was a time of hope, when the first cracks were appearing in the Iron Curtain between East and West in Europe. Soviet troops were withdrawing from Hungary and Czechoslovakia. Poland had formed a non-communist government, ending more than 40 years of one-party rule. Hungary had opened its border with Austria, and protests were spreading in East Germany. Yet Thatcher’s message at the Kremlin was so inflammatory that she asked for the recording to be stopped, so there would be no official record of her remarks.

Britain, Thatcher told Gorbachev, was deeply worried about where the upheaval might end. “We do not want the unification of Germany. It would lead to changes in the postwar borders, and we cannot allow that.” Unification “would undermine the stability of the entire international situation, and could lead to threats to our security”.

Over the 12 months that followed, Europe was transformed beyond recognition. Communism collapsed, the Berlin Wall fell and, on 3 October 1990 – 30 years ago this month – East and West Germany were formally reunited. For Thatcher, the end of communism, the collapse of the Warsaw Pact and the emergence of a peaceful, united Germany might have been the pinnacle of her career. Instead, she saw it as her biggest foreign policy failure.

As Thatcher reflected in her memoirs: “If there is one instance in which a foreign policy I pursued met with unambiguous failure, it was my policy on German reunification.” This left her weakened internationally and isolated at home. It contributed to her downfall in 1990 and had lasting consequences for Britain’s relations with the European Union. Thirty years on, it offers a cautionary tale for British diplomacy after Brexit: not least in its tendency to exaggerate British influence; to vest too much in displays of “strength” and “resolve”; and to blame others for its mistakes.

***

The summer of 1989 found Thatcher under growing domestic and international pressure. With inflation rising, interest rates doubled, prompting a surge in mortgage failures and home repossessions. Ambulance workers were on strike over pay, while the disaster of the poll tax would trigger protests, riots and a collapse in the polls. The signature achievements of the Thatcher era – curbing inflation, extending home ownership and taming the unions – all seemed at risk, as did her prospects at the next general election.

Thatcher was also at odds with her senior lieutenants. Her chancellor, Nigel Lawson, resigned two weeks before the wall came down, while her foreign secretary, Geoffrey Howe, was banished to the leadership of the House of Commons. Towards the end of 1989, she even faced a leadership challenge. Her opponent, the little-known Anthony Meyer, was comfortably beaten, but 60 Conservative MPs either rebelled, abstained or spoiled their ballots. As Thatcher’s campaign manager George Younger warned, “the result is not as good as the figures”: a more substantial challenger would find her vulnerable. One of her whips put it more bluntly: “We are talking about the beginning of the end of the Thatcher era.”

While the prime minister was firefighting at home, her position was deteriorating abroad. In January 1989, one of the great love affairs of modern diplomacy came to an end, as US president Ronald Reagan left the White House. His successor, George HW Bush, did not share Reagan’s affection for Thatcher, calling her a “very difficult” woman who “talks all the time when you’re in a conversation”. Bush saw West Germany, not Britain, as America’s “partner in leadership”, making it harder for Thatcher to amplify her influence through the “special relationship”.

Relations were also poor with West Germany. The federal chancellor, Helmut Kohl, thought Thatcher “ice-cold” and “dangerous”, while Thatcher herself made no secret of their “acrimonious discussions”. She got on better with the French president, François Mitterrand, who credited her with “the eyes of Caligula, and the lips of Marilyn Monroe”. Yet the two had little in common politically, and Thatcher had spent much of the summer belittling the bicentenary of the French Revolution of 1789.

Thatcher took pride in her stubborn and antagonistic style of diplomacy. “I am not always the world’s greatest diplomat,” she told an Anglo-German dinner in 1990, “and thank goodness for that!” Yet even the Daily Mail became alarmed at her “sour” attitude and “megaphone diplomacy” during her final year in office. This would have mattered less if there had been a stronger voice from the Foreign Office. But on the day the Berlin Wall opened, on 9 November 1989, Thatcher was on her third foreign secretary in less than four months. The most recent, Douglas Hurd, had been in post for two weeks. It was Margaret Thatcher’s own voice, therefore, that rang out most clearly in the early stages of unification.

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The opening of the wall took almost everyone by surprise, which made it hard to predict how events might unfold. It was not the first time change had blown through eastern Europe, and the precedents warned of danger ahead. In Hungary, in 1956, and in Prague, in 1968, reformist movements had been crushed by Soviet hardliners. In June 1989, just months before the wall fell, Chinese tanks rolled into Tiananmen Square: a reminder that an authoritarian communist regime could strike back. The shadow of Tiananmen Square, and the possibility of a Soviet backlash, weighed heavily on Thatcher’s mind over the next 12 months.

Thatcher had little patience with some of the more visionary rhetoric emerging from the US. When, in the summer of 1989, the political scientist Francis Fukuyama published “The End of History?” in The National Interest magazine, Thatcher thought the argument of the essay dangerously naive.

Fukuyama’s article became the most discussed work of non-fiction in the post-Cold War age for its Hegelian reading of the new international scene. After the titanic conflicts of the 20th century, the victory of economic and political liberalism over all competitors meant not just the end of the Cold War, or the passing of a particular period of history, but, as Fukuyama wrote, “the end of history as such: that is, the end point of mankind’s ideological evolution and the universalisation of Western liberal democracy as the final form of human government”. Fukuyama admitted his thesis was “a kind of Marxist” interpretation of history that led to a non-Marxist conclusion: to liberal capitalism as the last system standing.

Thatcher had been encouraged to read the article by her private secretary, Charles Powell, who suggested rather mischievously that she might “enjoy” it. Thatcher annotated the article in detail, etching into the margins her disapproval at predictions of the end of ideological competition, while Fukuyama’s reference to “the common marketisation of international relations” saw her pen nearly fall off the page.

John Whittingdale, her political secretary, told speechwriters that she was “anxious to rebut the arguments of Francis Fukuyama. She strongly believes that the battle is not won and that there are always evils in the world to be opposed.” In foreign affairs, at least, Thatcher was always a ‘conservative’: someone who was suspicious of utopian visions of change.

She was particularly concerned for Gorbachev. Thatcher liked to believe she had discovered the Soviet leader, and she became heavily invested in his success. In 1984, when Gorbachev was a rising figure in the politburo, she had taken the unusual step of inviting him to Chequers for talks, famously telling reporters: “I like Mr Gorbachev. We can do business together.”

The gamble paid off when he became leader of the Soviet Union the following year. In an interview with the Wall Street Journal in 1990, it was Gorbachev whom Thatcher chose as her “Man of the Century”: not “Winston”, not “Denis”, but a lifelong communist.

The reform process in East Germany, Thatcher believed, raised special difficulties. Unlike the protests in Poland, Hungary or Bulgaria, demands for change in the GDR could not be contained within a single state. Without the ideological frontier erected by communism, the existence of two German states had no obvious rationale. As the Foreign Office noted: “Take away ideology and you are left with Germany.” That was sure to raise the question of unification; or, as Thatcher put it, “the German problem”.

Like many of her generation, Thatcher had a complex view of Germany. She admired the statesman Ludwig Erhard and respected the Bundesbank for its firm line on inflation. But she combined a fear of German power with a visceral suspicion of the German character. For most of her life, those concerns had been submerged beneath the threat from the Soviet bloc. As that danger receded, so her fears about Germany were reactivated.

Discussing “the German problem” in her memoirs, Thatcher wrote: “I do not believe in collective guilt… But I do believe in national character.” Since the age of Bismarck, she claimed, Germany had “veered unpredictably between aggression and self-doubt”. “The true origin of German angst,” she declared, “is the agony of self-knowledge.” Her adviser, the Hungarian émigré George Urban, was appalled by her “Alf Garnett version of history” (“once a German, always a German”); while cabinet meetings were punctuated by what Hurd called the “usual diatribe against German selfishness”.

***

Over the winter of 1989-90, Thatcher gave a series of inflammatory press interviews, warning of a resurgence of German nationalism. “What is reunification all about?” she asked rhetorically. “One people, one fatherland.” She underlined references to the two World Wars in documents, and astonished George Bush and François Mitterrand by pulling out wartime maps from her handbag. Notes for one speech were scribbled on the back of a newspaper cutting on the 1938 Munich Agreement: an indication, perhaps, of what she was requesting from the archives.

Charles Powell did little to moderate her behaviour. As he wrote to her in February 1990: “For the first time in 45 years Germany is out in front… After decades of sober and cautious diplomacy… they are in the driving seat and Toad is at the wheel. The exhilaration is unmistakeable… The Germans’ moment has come: they are going to settle their destiny.”

Powell was at the centre of one of the most damaging incidents of this period: the Chequers seminar of March 1990. Thatcher had invited a group of historians – including Gordon Craig, Hugh Trevor-Roper, Norman Stone and Timothy Garton Ash – to discuss Germany, and Powell produced a hair- raising summary of the talks. An account of the German “national character” included “angst, aggressiveness, assertiveness, bullying” and “egotism” in a veritable alphabet of insults. There were still questions to be asked as to “how a cultured and cultivated nation had allowed itself to be brainwashed into barbarism”; and the “way in which the Germans currently used their elbows… suggested that a lot had still not changed”. The document was leaked to the Independent, causing outrage in Bonn and dismay in other capitals.

***

Privately, some world leaders shared Thatcher’s concerns. Mitterrand, who had been a German prisoner of war between 1940 and 1941, complained that unification was turning the Germans “into the ‘bad’ Germans they used to be”. Where he and Thatcher differed was on how to respond. Mitterrand told Thatcher that “it would be stupid to say no to reunification… None of us were going to declare war on Germany. Nor judging by his statements was Mr Gorbachev… [At] the end of the day they could not prevent reunification.”

Rather than resisting the inevitable, Mitterrand concluded that France should aim to shape reunification in a way that suited its interests. That was also the approach favoured by the Foreign Office, but Thatcher thought it too pessimistic. According to Powell, she “did not necessarily agree there was nothing to be done… She thought that we had a stronger hand on German reunification than President Mitterrand believed.” It was to prove a serious miscalculation.

Mitterrand thought the best way to constrain Germany was to tie it down within a more integrated Europe. Thatcher disagreed. The problem, she wrote, would “not be overcome by strengthening the [European Community]. Germany’s ambitions would then become the dominant and active factor.” “Tying ourselves more closely to Germany” would leave Britain and France “even more under her sway”. The European Community, she warned Bush, “might become Germany’s new empire”.

Thatcher was not, at this point, straightforwardly anti-European. Her government had been one of the driving forces behind the single market, which it hailed as “Thatcherism on a European scale”. Even in the notorious Bruges Speech of 1988, she insisted that “Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe.” She was, however, strongly anti-federalist, and the idea that unification might give rise to a more federalised, German-dominated Europe was another reason to delay it for as long as possible.

As the pace of events in Germany accelerated over the winter of 1989-90, Thatcher pursued two main strategies. First, she tried to push the discussion of unification as far into the future as possible. On the day after the wall opened, she simply ignored questions about unification. Even when asked if it was “an idea you could live with within your lifetime”, she replied: “You are going much too fast.” There was “too much euphoria”, she told Bush, and “too much of German reunification”.

When diplomatic attempts to slow the process failed, Thatcher switched to a second tactic: the construction of a balance of power in Europe that could restrain Germany. That meant rethinking the role of the Soviet Union. As Powell put it: “We have to bear in mind – although not say – that we might one day need the Soviet Union as a counterbalance to a united Germany.” Thatcher put the same point to Bush in a phone call. Germany, she reminded him, “was surrounded by countries, most of which it had attacked or occupied in the course of this century”. With Germany reunited, “only the Soviet Union could provide balance in the political equation”.

Bush was so appalled by this conversation that he had to take a walk to calm down. The president, Thatcher was warned in a memorandum, “could not conceive how you could think of the Russians as possible allies against Germany”. Thatcher scrawled in the margin “1941-45”, which says much for the mental universe she was inhabiting.

At times, Thatcher seemed more anxious than the Kremlin to uphold Russian influence. Her efforts, she complained in June 1990, “had not received much support” from Gorbachev, and she criticised him in her memoirs for extracting too low a price for unification. When she spoke of upholding the Warsaw Pact, Thatcher was not simply being sensitive to Gorbachev’s position; she was trying to maintain a counterweight against German power in future.

Yet her efforts faced three obstacles. First, throughout the Cold War, the British government had repeatedly endorsed the principle of unification. Thatcher herself had issued a joint statement with Kohl in 1984, asserting “that real and permanent stability in Europe will be difficult to achieve so long as the German nation is divided against its will”. She may not have taken these commitments seriously, but it was hard to retract them without a charge of hypocrisy.

A second obstacle was that, while Thatcher was keenly attuned to the dangers of change, she was less sensitive to the risks of delay. By the start of 1990, the situation in East Germany was becoming untenable. The economy was close to ruin and emigration to the West was at unsustainable levels: nearly 344,000 people since the opening of the border. Free elections to the East German parliament had to be brought forward for fear that the state might collapse in the interim. The more unstable things became, the bigger the danger of a collision with Soviet troops. The pace of unification accelerated, not because “Toad” was “at the wheel”, but because of the unravelling of East Germany.

Third, Thatcher overestimated Britain’s ability to influence events, while understating the extent to which her own rhetoric was diminishing that influence. The British ambassador in Bonn warned that the UK was perceived as “the least positive of the three Western allies [the US, France and the UK], and the least important”.

Diplomats reported that Bush disliked “the prime minister’s dismissive references to the Germans”, and that a negative attitude to unification would “diminish our ability… to influence… the Americans”. The effect was to make Britain seem not just hostile to unification, but also impotent.

When unification went ahead in October 1990, Bush and Mitterrand filmed personal messages of congratulation. Thatcher did not. Nor did she attend the anniversary celebrations in Berlin ten years later. Doing so, she wrote, would have made her “uneasy”. She could not “then or now regard Germany as just another country”.

As is so often the case in British politics, Thatcher chose to blame other countries for her own diplomatic failures. The US secretary of state James Baker was “wet”, Gorbachev was “wavering” and Mitterrand had “made the wrong decision for France”. Yet the truth was that her strategy had failed at every turn. She had failed to prevent or slow unification; she had failed to extract meaningful concessions in return; and her phobia of German power had left Britain looking sour and irrelevant.

Thatcher’s mishandling of unification deepened some of her supporters’ misgivings about her judgement. The Daily Mail thought her “paralysed by her fears of the past”. Thatcher had always seen herself as a war leader, riding into battle against strikes, socialists and the Soviet Union. That had played well in the more combative politics of the 1980s; but by 1990, the restless search for new dragons to slay was causing growing alarm.

When Thatcher's campaign team reconvened after the leadership contest in 1989, it reported the view on the back benches in stark terms: “She has been magnificent in the Eighties but she is not for the Nineties.”

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Yet the more pacific mood of Conservatism in 1990 would not endure. German unification hastened the movement towards monetary and political union in Europe, fuelling Tory concerns about federalism and the loss of British sovereignty. The end of the Cold War also enabled the expansion of the EU to the east, changing the debate about immigration; and as the Soviet threat receded, some on the right began to see Europe less as a bulwark against communism, and more as a vehicle for German influence. The effect was to accelerate one of the great tectonic shifts of modern British politics: the transformation of the Conservative Party from the party of Europe to the party of Euroscepticism.

The end of the Cold War closed an era in British history, not simply in the history of eastern Europe. In May 1990, Margaret Thatcher had told party members: “As socialism goes down all over Europe, so it will be in Britain. And tomorrow, as today, will be ours.” Instead, she herself would become a casualty of the passing of the Cold War world. On 20 November 1990, the day of the leadership election that ended her premiership, Thatcher was in Paris, signing the treaties that brought the Cold War to a close. It was only fitting, perhaps, that as communism collapsed in eastern Europe, so the Iron Curtain fell in Britain on the Iron Lady of the West.

Robert Saunders teaches history at Queen Mary University of London. His most recent book is Yes to Europe! The 1975 Referendum and Seventies Britain

This article appears in the 09 October 2020 issue of the New Statesman, Long Covid