Could the Iron Lady Have Handled the Euro Crisis?

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Ironclad convictions

Anyone who experienced the events depicted in The Iron Lady recalls the smells of that period. 1978 heralded the Winter of Discontent — public-sector strikes that blanketed British cities in rotting drifts of uncollected trash and helped seal Margaret Thatcher's election victory the following May. Her 11 years on Downing Street ushered in a new set of pungencies: the acrid tang of riots, a whiff of cordite drifting from the Falkland Islands, the aromas of wealth and despair. Thatcher wrenched Britain from its economic malaise — but at considerable human cost. Her biopic fleetingly acknowledges this cost but fashions a feel-good movie from the unlikely material. Nostalgia sure isn't what it used to be.

The dis-United Kingdom of 2011 looks ripe for a similar treatment. The government, led by another Conservative, Prime Minister David Cameron, is again locking horns with the unions. The tinder that sparked last summer's rioting remains in plentiful supply. Budgetary plans anticipate years of austerity. Measures to reduce the national debt, now projected to peak at 78% of GDP in 2015, will push up joblessness. Pay freezes and benefit cuts threaten to hit low-paid and part-time workers hardest, as the gap between the richest and poorest yawns. It all feels so very 1980s. No wonder some Britons perceived in Cameron's enthusiasm for the NATO-led military engagement in Libya a desire for a Falklands moment that would boost his political fortunes the way the successful liberation of a distant British dependency boosted Thatcher's.

Yet just as Cameron is proving to be no Thatcher — for one thing, he's less ideological than his predecessor — the differences between the current turbulence and the world Thatcher inhabited are profound. The reason The Iron Lady reassures, despite a few nods to the polarizing impact of Thatcherism, is that it evokes a time when national politics, and national politicians, mattered much more. Thatcher could impose her vision on the U.K., for good and ill; she liberated markets — some would say too effectively — but was not ruled by them. There's a throwaway line in the film when a Minister asks her about Europe's newfangled single currency. "I don't think Britain's ready for it," Thatcher replies.

Britain never was ready for the single currency, and for much of this year, the unraveling of the euro dream unleashed among its citizens a wave of what one might call schadenfreude, if Euroskeptic Brits tolerated such foreign words. Politicians congratulated themselves on their wisdom in keeping the pound. The anti-Europe strain that had lain largely dormant in the Conservative Party has re-emerged with new virulence, with some backbenchers calling not only for the repatriation of powers from Brussels but also for an exit from the European Union. Cameron promised the former while demurring on calls for a referendum, whether on Britain's future in the E.U. or on any measure designed to stabilize the euro.

A popular vote will be triggered if Cameron commits Britain to transferring further competencies to Europe. He insists he will not do so. Critics say revisions to the architecture of the euro zone, spearheaded by German Chancellor Angela Merkel and French President Nicolas Sarkozy — a duo so single-minded in their efforts to save the single currency that they've merged into a single entity, Merkozy — would fundamentally change the E.U. and therefore Britain's position in it. These critics aren't wrong, and worsening economic forecasts show how inextricably linked the U.K. economy is to the euro's fate.

But Cameron's reluctance to put the question — any question — to the public underlines a key lesson of recent times, not only in the U.K. but in the rest of Europe, the U.S. and, most markedly, across the Middle East. People are less biddable than they were. They don't trust the promises of their ruling classes. Even in full-fledged democracies, they don't accept that governments know what's best.

Watching European leaders flounder as markets and credit-ratings agencies delivered blow after blow to their plans, or observing U.S. Treasury Secretary Tim Geithner's mission to stiffen the sinews of those leaders for their Dec. 9 summit while his own government's debt-reduction plans remained gridlocked in Washington, it's easy to understand such doubts. Along with the benefits of globalization — and, yes, the benefits of the euro — came huge challenges regarding how to reshape institutions and political systems for an interconnected, interdependent age. Those challenges have barely been acknowledged, much less surmounted. And that's what casts a golden glow over memories of Thatcher. Not everyone agreed with the Lady's ironclad convictions, but unlike today's leaders, she more than proved her mettle.