The European Community and International Reaganomics, 1981-85

When the new Republican administration headed by Ronald Reagan took office in the United States in January 1981, it promoted for a deep “conservative revolution,” based on a tough approach against Communism worldwide and on a revival of unbridled capitalism domestically. From an economic standpoint, the administration’s choices resulted in a policy mix of deregulation, deficit spending, and tight money, which has gone down in history as “Reaganomics.” Given the size of the U.S. economy, and the military, diplomatic, and political power of the U.S. government, such an experiment could not but have worldwide resonance and consequences. This chapter explores the attitudes taken by the governments of the member states of the European Community (EC) vis-à-vis what the political scientist – and former member of Reagan’s National Security Council (NSC) staff – Henry Nau once called “international Reaganomics,” that is Reaganomics’ approach to and consequences on the international economy. In particular, the chapter focuses on the years between 1981 and 1985, when the U.S. administration pursued its economic policies in a unilateralist fashion