Jacques Delors came from a working-class Catholic background. His grandfather had five hectares and seven children. Delors’ father moved to Paris, worked as an errand boy and later a collection agent at the Banque de France. Delors himself, born in 1925, grew up in Ménilmontant, a historically working-class district that had fought to the bitter end during the Paris Commune of 1871. He belonged to the Christian Workers’ Youth (Jeunesse ouvrière chrétienne), was a devout Catholic, and the only boy from his elementary school to continue to a lycée, the university-oriented secondary school in France.

His background in the aspirational Catholic French working class placed Delors at the heart of Western European post-war society. He could relate to both of its main pillars: the trade union movement, in which he was active throughout his life, and the Christian Democratic milieu, which appreciated his sincere faith and his commitment to social justice in line with Catholic doctrine. More so than the loud Margaret Thatcher, the left-wing François Mitterrand or the stolid Helmut Kohl, he was fit to shake up European post-war society when it reached its limits.

That was exactly what he set out to do when he was appointed President of the European Commission in 1985. «European industrial society used to be a model of efficiency. It is less so today – there can be no doubt about it. It is fighting for its life (…). Reforms are needed»¹, Delors said in his inaugural speech to the European Parliament on January 14, 1985.

Sharing the Losses

What happened? The decades from 1945 to 1975 had catapulted West-Germany, France, Italy and the Benelux countries into high modernity. Cars, refrigerators and washing machines, televisions and long-distance travel had become a part of everyday life. Gross domestic product (GDP), now publicly tracked and discussed, grew by five, six or seven percent each year. Widespread prosperity and permanent full employment relaxed the tensions of the inter-war years. Memories of mass unemployment, street battles and political extremism faded.

After thirty years of continuous growth—the so-called Wirtschaftswunder or Trente Glorieuses—the expectation that economic growth would continue unabated was firmly established. Over time, a dense social and economic fabric was woven around these expectations, consisting of both individual life plans and legal or economic obligations such as collective bargaining agreements, credit contracts, corporate profit expectations, mortgages, pension plans, and social security- and tax systems. As a whole, this fabric depended on the assumption that growth rates of roughly five percent would be the norm for the foreseeable future.

With the oil crises of 1973 and 1979 and the end of the Wirtschaftswunder, the material basis for this fabric crumbled. Growth became lower and more volatile. Many governments attempted to revive growth through economic stimulus programs. Nixon and Burns in the US, Heath and Wilson in the UK, Giscard d’Estaing and (as Prime Minister) Chirac in France or Schiller and Brandt in Germany—the zeitgeist was Keynesian.

These attempts failed. Five percent growth never returned. Yet the fabric of expectations and contracts remained. When growth rates stabilized around three percent, promises that could have been kept at five percent had to be broken sooner or later. It was only a matter of time. Pensions, credit contracts, wage- and profit expectations all came under pressure, life plans were disappointed, the fabric started to tear. Suddenly, in the middle of an affluent society, losses were starting to mount.

Eurosclerosis

In France, President Mitterrand tried to use taxation and capital controls to make investors shoulder the losses. This attempt failed. His team never found a satisfactory method for organizing productive investment without (or against) private investors.

In the UK and the US, Reagan, Thatcher and Paul Volcker bludgeoned the unions until a weakened workforce surrendered. A pandemic of rust and shutdowns swept through Glasgow and Detroit, Liverpool and Pittsburgh. Productivity was decoupled from wage growth, new profits lured back old investors, industrial societies were transformed into service economies.

In continental Europe, strong communist parties (particularly in France and Italy) and the unique challenges posed by a divided Germany rendered a similarly confrontational approach unthinkable. The risk of opening old wounds was too great, the memories of the interwar period too fresh.