This chapter focuses on the period beginning with the Democrat Party’s electoral triumph in 1954 and ending with its 1955 parliamentary group crisis, when the government nearly fell. In this period, economic conditions ceased to favor the party. A slump in global demand reduced Turkey’s access to foreign exchange, while the government’s expansionary monetary policies encouraged inflation. As economic challenges intensified, economic policy became as much of an electoral liability as a strength. Facing domestic criticism, Democrat-led governments limited the bounds of public dissent in schools, media, and political organizations. Prime Minister Menderes and his allies resisted calls from economic liberals in their own party (as well as the United States) to devalue the lira, increase taxes, and develop a long-term economic plan. The resulting tensions fractured the party, leading to the departure of many of its liberal members. These efforts to constrain institutions that provided checks and balances on the government constituted a policy of de-democratization. At the same time, the party’s leaders played international creditors off against one another and sought access to additional credit.

This chapter covers the period between the Democrat Party’s 1955 political crisis and its greatest financial crisis (a devaluation and bailout in 1958). During this period, Prime Minister Menderes and his allies sought to sustain their economic policies while also retaining political power. Achieving these goals required illiberal tactics while seeking aid from the United States and other allies with increasing desperation. Democrat Party leaders marginalized intraparty critics and silenced the media, academics, and opposition. Unlike in previous chapters, however, we see Democrat Party leaders’ gambits either failing outright or achieving less than satisfactory results. In this period, US and European creditors took a harder line with the government; radical political movements gained popularity in neighboring states such as Syria and Iraq; and turnout in the 1957 elections fell such that the Democrat Party won with only a plurality of the vote. By the summer of 1958, a currency devaluation and bailout were no longer avoidable. Only the uncertainty caused by a revolution in Iraq enabled the Democrat-led government to secure comparatively favorable terms in negations.

Tenenbaum and his family returned from Berlin to Washington DC in September 1948. In October, he started working for the European Recovery Administration (ECA). His friend Charles P. Kindleberger had been the head of the German desk within the State Department to which ECA was attached. But Kindleberger had just left to assume his professorship of economics at MIT. At ECA Tenenbaum was employed as “Assistant Chief (Finance) of the European Trade Policy Branch,” which was part of the Fiscal and Trade Policy Division, of which he finally became Director. He mainly worked on plans for the founding of the European Payments Union in 1950 and on European trade liberalization and market integration. For almost a year, 1950–51, he worked for the IMF on Multiple Currency Practices in the Exchange Restrictions Department. In May 1951, he went back to ECA, which a few months later merged into the MSA. Here he worked on Greek fiscal and currency problems as well as on plans for a currency reform, hopefully as successful in stopping inflation as the West German one. But Greece, in contrast to the German situation in 1948, had its own government and strong interest groups. Therefore, this one of Tenenbaum’s missions failed. This chapter contains reliable annual-income data for his jobs in Berlin and in Washington DC.

The concluding chapter of the book summarises the main findings of the present study and puts these in the conceptual and historiographical framework of the introduction of the book. This chapter reconnects to the central question of the present study and shows how and why the developments in the transatlantic management of economic and monetary affairs created decisive political momentum for bold Franco-German (supranational) initiatives in European integration, but also which transatlantic and European ideational and emotional undercurrents co-steered this development. Furthermore, this chapter highlights the increasingly central role of Western Germany in this history.

This chapter is the third and final building bloc of a wider reconstruction of the main economic, (geo)political, and ideational forces that enabled European integration to take off as of the spring of 1950, It describes the practical unfolding of European integration after the Second World War. This part of the book tries to uncover deeper layers (of psychology and belief) in this history through three crucial sub-histories. This chapter deals with the third of these sub-histories. It explains how—against the background of the beginnings of the Cold War and growing British aloofness in European affairs— ‘the (West) German re-entry’ became the driving force in the process of emerging European integration. This development crystallised first in the OEEC, subsequently through the EPU, and finally in the launch of the ECSC. This process was not only political and economic in nature, but also to a great extent intellectual via the deep influence of (German) ordoliberalism in the politics of the FRG and Christian Democracy in Western Europe.