Modern Times: The World From the Twenties to the Nineties (149 page)

In East Germany, Poland, Czechoslovakia and Hungary, however, the changes were fundamental and permanent, and by the middle of 1991 democracy appeared to be firmly established in all four. Indeed, one of them, East Germany, had ceased to exist, since the last remnants of the Allied occupation, in Berlin, had been dissolved, and, with the consent of Russia, the United States, France and Britain, the Germans had agreed to unify themselves.
Länder
elections had taken place in October 1990 and federal elections in December, confirming the Christian Democrat leader Helmut Kohl as first Chancellor of a united Federal Republic of all Germany. The merger was not without grave economic problems, for it had been accompanied, much against the advice of the head of the West German Bundesbank, Karl Otto Pohl, by a financial arrangement which put the West and East German marks at parity. Since East German industry was grotesquely inefficient and under-capitalized by comparison with West Germany’s, the foreseeable result was the collapse of many East German firms, unemployment soaring to 25 per cent of the population, and more mass demonstrations, especially in Leipzig – this time against the workings of the capitalist system.
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On the other hand, East Germany, now part of the Federal Republic, was also part of the European Community, and few doubted that, in the medium term, the former East Germans could be absorbed into the Community system and made affluent like the rest.

But if the Prussians and the Saxons could be part of the EC, as of right, how could entry be denied to other historic European races: the Poles, the Hungarians, the Czechs and Slovaks, and indeed the Slovenes and Croats, if they could prise themselves loose from the grip of Serbian Belgrade? That was the question confronting the Community in the early 1990s. No one doubted that, now these East European peoples had chosen to repudiate Communism and embrace the market, much responsibility rested on the wealthy members of the EC to help finance what would inevitably be an expensive transfer. The infrastructures, transport systems, industries and educational provisions of these states were all inadequate and
run-down, and, the more closely they were examined, the higher the bill mounted to make them competitive with Western Europe. The cost would run into hundreds, perhaps thousands of millions of dollars, and would clearly have to be spread over many years. There were also debts. Many Western banks had already made provisions to regard East European debts as unrecoverable, and, as a gesture, the United States government, in March 1991, wrote off all loans to Poland. But what of future finance, urgently required?

The question was linked to the entire long-term strategy of the Community. As a free-trade area it had done exceptionally well, and by the end of the 1980s all members had passed legislation to complete the process of abolishing customs duties during 1992, making what was termed a ‘single market’ (with special transitional provisions for some countries). But two questions remained open, both of them serious. The first concerned external barriers. Was the EC to remain an outward-looking group, with low external tariffs, abetting the process begun in the late 1940s by the General Agreement on Tariffs and Trade, whose ultimate aim was a single world market? Or was it, rather, to be inward-looking, with a high tariff wall against the world outside? This question was itself linked to the future of farming subsidies, part of the Common Agricultural Policy, which by the end of the 1980s was being slowly dismantled. The world’s leading agricultural exporters, especially the United States, Canada and Australia, accused the EC of excessive protectionism and conduct likely to destroy the whole GATT structure. A conference in 1990, called to resolve the argument, not only failed to do so but ended in acrimony.

The second question concerned the way in which the EC itself was to develop. Now that the single market was established, some members, notably the French, led by the Socialist President of the European Commission, Jacques Delors, wished to proceed rapidly to financial, economic and political union, involving, in the first place, a common currency and a Community Central Bank. The British, especially while Margaret Thatcher was still in charge of their affairs, argued that a common currency was either going to displace national currencies, or prove a failure, and that not enough homework had been done on how it would work, or on what powers the new Central Bank would exercise. If the currency displaced national ones, and the Central Bank ran it, then national parliaments would sacrifice a huge part of their sovereignty, and political union would have to follow, whether or not public opinion was ready for it. In Britain’s case it was not, and there was a strong suspicion that the same was true of France and Germany, whatever their leaders might say in public. Not everyone in British politics
agreed with Mrs Thatcher, and her hostile attitude to further European unity was one reason why she was overthrown in November 1990. On the other hand, Germany’s enthusiasm for a common currency, strong in 1989–90, waned noticeably as the experience of blending the Eastern and Western mark revealed how difficult it was to bring currencies into a satisfactory alignment; in 1991 Pohl moved closer to the British position, before resigning. There was also a school of thought which argued that, instead of concentrating on vertical progress – that is, uniting the economies and political systems of existing members and deepening the Community – it should rather expand horizontally, and devote its resources and energies to taking in the newly-liberated states of Eastern Europe.

There remained, moreover, the unresolved problem of Russia. Was it part of Europe, and therefore a future candidate-member of the EC, or not? Gorbachev indicated repeatedly that Russia was European. De Gaulle himself had spoken of ‘a Europe from the Atlantic to the Urals’. He had also made the point, in the early 1960s, before Britain became a member, that the community was not so much an economic or political as a cultural concept; he referred to ‘the Europe of Dante, of Goethe and of Chateaubriand’. After Britain’s entry, it was fair to add ‘and of Shakespeare’. But if Europe was a cultural federation, not only was it wrong to exclude the countries which had produced Liszt, Chopin,
Dvořák
and Kafka, it was also unacceptable to deny – in the long term – the homeland of Tolstoy and Turgenev, Chekhov, Tchaikovsky and Stravinsky. This was certainly a question the Community would have to resolve, if not in the 1990s then in the early decades of the twenty-first century.

In the meantime, however, Russia’s internal problems mounted. The Union of Soviet Socialist Republics was a paper edifice, in which all real power was exercised by Greater Russians from Moscow. In short it was, as Reagan had said, an empire, though in the later 1980s it became marginally less evil. As it became less evil, however, and its subjects less frightened of their masters, the constitution of the USSR tended to become less of a construct and more of a reality. While Gorbachev’s failure to implement market economics raised ever more serious economic problems, the decline of the fear factor produced ever-growing regional ones. The two were of course connected; the more the centre failed to fill the shops, the more the regions wanted to take charge of their own affairs. The most easily managed were the central Asian republics, run in effect by the
KGB.
But from 1989 all three of the Baltic republics, Estonia, Latvia and Lithuania, began to campaign not merely for greater
autonomy but for outright independence, such as they had enjoyed between 1918 and 1940, when they fell victim to Stalin under the terms of the 1939 Soviet-Nazi pact and its secret protocols. In March 1991, all three held referenda, in which the demand for independence was endorsed by overwhelming majorities, including majorities among their Russian-speaking minorities. Georgia too, demanded independence, and in the Ukraine, largest and wealthiest of the Republics if we exclude Russia itself, there was a similar drift towards autonomy, if not yet outright independence. South of the Caucasus, the Christian Armenians and the Muslim Azerbaijanis actually fought each other, and large numbers of Soviet troops had to be despatched to separate the combatants.

Gorbachev’s regional problems were compounded by the behaviour of Russia itself (as opposed to the USSR, ‘the centre’) with its 150 million inhabitants, its vast territories, including almost all of Siberia, and its natural resources. It was a standing grievance of all the USSR’s satellites, and all its republics, that they were the victims of Russian exploitation; it was equally the passionate conviction of the Russians themselves that they were being milked by satellites and republics alike: ‘We poor Russians pay for all,’ as they put it. The fact, of course, was that Russians, republics and satellites alike had been the victims of an incorrigibly inefficient system. In so far as anyone did the exploiting, it was the
nomenklatura
, the privileged caste of high Communist Party officials and army officers, which existed in all of them. Perhaps Gorbachev’s most fundamental mistake was not to abolish the caste and its privileges right from the beginning: then all those in positions of authority, brought up against the reality of shortages, would have accepted the inevitability of abolishing Leninism itself. But he left the privileges intact, and the USSR remained two nations: the ruling class and the
hoi polloi
, just like a society in antiquity. The Gorbachev family enjoyed the perks as much as anyone; in New York, during the Gorbachev-Reagan summit in Washington in December 1987, Mrs Raisa Gorbachev went shopping with an American Express Gold card, illegal in Russia and punishable with a long prison term. But she was above the law: a
nomenklatura
wife.

It is not, therefore, surprising that, as Gorbachev’s popularity plunged, the man who replaced him in the affections of ordinary Russians was Boris Yeltsin, a high functionary who had voluntarily relinquished, for himself and his family, the privileges of party rank. The former Moscow party leader, he had been sacked by Gorbachev in 1987 for complaining publicly that the reforms were not proceeding fast or far enough. He then stood for the first fairly contested elections for the Congress of People’s Deputies, held on 28
March 1989, and, in the Moscow constituency of 7 million people, was returned with 90 per cent of the votes. Subsequently, and despite much hostile manoeuvring by Gorbachev and his henchmen, Yeltsin was elected President (that is, head of the government) of the Russian Republic, the largest constituent of the USSR.

The stage was thus set for a constitutional crisis which, as in Yugoslavia, had undertones of a
putsch
or possibly civil war. Yeltsin had his critics, as did Gorbachev. But Yeltsin was popular, which Gorbachev was not (except abroad). Moreover, Yeltsin had been elected by the people, whereas Gorbachev was President of the USSR only by courtesy of a Party caucus. Yeltsin stood for regionalism, Gorbachev for ‘the centre’. When Gorbachev held a countrywide referendum in March 1991, asking Soviet citizens if they wished to remain part of the USSR, some of the republics, including all the Baltic states, refused to take part; others, including Russia and the Ukraine, asked additional questions not framed by ‘the centre’. Yeltsin’s Russia was asked: do you want the Presidents of the Republics elected by universal suffrage? Both Gorbachev and Yeltsin got the answers they wanted, or said they had. So little was resolved by this democratic exercise, such as it was. In June 1991, however, Yeltsin strengthened his position by becoming the first Russian president to be directly elected, winning nearly 60 per cent of the vote.

In the meantime, two processes seemingly outside the control of either Gorbachev or Yeltsin appeared to proceed inexorably. The first was the recovery of the Communist hardliners, especially in the army, the KGB and the bureaucracy, who in 1990–1 began to regain some of their lost confidence and pulled ‘the centre’ more in their direction. They evaded orders they did not like and took actions which the Kremlin, or at any rate Gorbachev himself, claimed he had not sanctioned, such as seizing broadcasting stations, newspaper buildings and other emblems of regionalism in the Baltic republics, in one case with considerable loss of life. In the autumn of 1990, Gorbachev’s liberal Foreign Minister, Eduard Shevardnadze, resigned in protest at the behaviour of what he called ‘these occult forces’. By the spring of 1991, Soviet Russia was suffering from an absence of clear lines of authority. In many countries, this would have constituted the curtain-raiser to a military coup. However, it was worth noting that Russia had no tradition of generals seizing power; the only occasion when such had been attempted, the famous Decembrist movement of 1825, had ended in complete fiasco. Moreover the army at home, swollen by troops who had left their comfortable quarters in Eastern Europe reluctantly to return to overcrowded barracks and empty shops, was demoralized.

This was aggravated by the accelerating decline of the Soviet economy as a whole. Food shortages have been noted earlier. In fact the industrial sector was performing, by the end of 1990, far more sluggishly than agriculture, which at least was still producing food, even if the state could not distribute it. On 9 March 1991, someone in Moscow leaked a secret report from Gosplan, the USSR’s central planning agency, giving a forecast for 1991.
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This predicted that, during the year, agricultural production would fall by 5 per cent, industrial production by a staggering 15 per cent and
GNP
as a whole by 11.5 per cent. It also envisaged what it called ‘an imminent collapse’ in capital investment, and concluded that the USSR was facing ‘an economic catastrophe’.

Hence, in the early 1990s, the Soviet Union presented the image of a bewildered, blind and staggering giant, conscious that it was stricken but uncertain of where it was going or ought to go. There was, however, a useful nineteenth-century diplomatic adage, probably coined by Talleyrand, which runs: ‘Russia is never as strong as it looks; Russia is never as weak as it looks.’ There was some concern in Washington and London at the mood of the Soviet armed forces, or their commanders; and evidence that some of the provisions of the disarmament agreements, drawn up by Presidents Reagan and Bush, and by President Gorbachev, were being evaded by the Soviets. On the other hand, it was clear that, during the 1980s and early 1990s, some things in the great power relationships had changed permanently. Following a shipboard summit held off Malta on 3 December 1989, the Soviet spokesman, Gennady Gerasimov, had been emboldened to say: ‘The Cold War ended at 12.45 today’ That remained a fact. Increasingly, in the 1990s, the United States, Soviet Russia and other leading powers were able to discuss issues in the traditional, realistic terms of old-style power-politics, without ideological overtones. That was not a formula for Utopia, but it was progress of a sort. The Warsaw Pact was disbanded, and there was even talk of enlarging
NATO
into a world security role, sharing some responsibilities with Soviet Russia. The notion of a thermonuclear exchange between the two superpowers receded into the realm of practical impossibility. Indeed, it was no longer plausible to see Soviet Russia as a true superpower; the United States was, in practice, the only one.
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