Western Europe : Economic Development since 1969

The late 1960es and early 1970es saw large wage increases; the industry already suffered from a heavy social cost burden, when the OIL CRISIS struck in 1973. The consequence was rising unemployment, the economic boom was over.
A number of industries, among them agriculture, coal mining, steel production and shipbuilding had become largely unprofitable and required STATE SUBSIDIES, a policy which often merely kept workers in employment. Such subsidies, intended to be a temporary measure, became a permanent burden to the state treasury, as necessary restructuring was often not undertaken and other countries also subsidized their industries.

Rising unemployment and the termination of the recruitment of MIGRANT LABOUR indicated that the industry found a way to deal with the labour costs, by the means of RATIONALIZATION, reducing the amount of workers needed in the production process, by the means of relocating production facilities abroad.
There were still prospering industries, the car industries of Germany and Sweden, electronic and pharmaceutical industries etc.; yet a gap opened up between those who had a well-paid job in still booming industries and those who were without a job or had the 'wrong profession'. The term of the TWO THIRDS SOCIETY came up - two thirds being well off and the other third being neglected.

The end of the Oil Crisis in 1980 and the collapse of communism had a strong impact on the economies of western Europe. It became evident that the size of welfare programs many west European countries had legislated, could not be financed in the long term. So steps were taken to cut down on these expenses, in combination with the PRIVATIZATION of many state-owned industries.

It has been stated that high labour costs and the overall economic environment in Europe would discourage the emergence of new businesses and industries; the computer industry developed in the USA (conception) and in the Far East (production), with Europe claiming only a negligible share. Other businesses emgaged in industries of the future, such as biotechnology, complain about European legislation which slows down research or makes it impossible; some European businesses have moved their research labs to the USA. Britain and Ireland have successfully advertised themselves as offering a business-friendly environment, and attracted much foreign investment.


This page is part of World History at KMLA
First posted on August 2nd 2001, last revised on November 11th 2004

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