By most historical standards 1989 should have been a year of triumph for Margaret Thatcher – and judged in a historical perspective, it was exactly that. It was the year that saw the fulfilment of her main political and personal hopes with the fall of the Berlin Wall, the collapse of the Soviet Empire in Europe, and unmistakable signs that the USSR itself was fatally struck. Paradoxically, it was also the year in which she herself was beset by increasing difficulties in both foreign and domestic affairs, quarrels with her closest allies and colleagues, avoidable major errors, and the first intimations of her own political mortality.

But Thatcher’s long march to 1989 began in 1984 with her visit to Hungary. It was written up at the time as evidence of the “softening” of Thatcher. She had visited a street market in Budapest and received a “warm, indeed passionate”, welcome from the crowds of shoppers. The British press reported that she had discovered Communists were human beings like herself. In fact Thatcher had always known that. What she discovered – or, rather, confirmed for herself – was that the shoppers were not Communists. Wherever she went in Eastern Europe before the fall of Communism, she received a warm, indeed passionate, welcome because she was regarded by ordinary Eastern Europeans as a symbol of opposition to Communism.

Her visit to Budapest had been conceived as a roundabout method of reopening contacts with the Soviet Union. János Kádár, who had ruled Communist Hungary since the Soviet suppression of the 1956 Hungarian Revolution, was close to the Soviets and especially to Andropov, who as Soviet Ambassador to Budapest in 1956 had masterminded that suppression. Kádár was a cynical but faithful old Communist who made plain the rules of Hungary’s Cold War game: the Soviets would allow him considerable freedom to experiment with a quasi-capitalist economy provided that the country’s membership of the Warsaw Pact was never questioned.

That did not surprise Thatcher, who was hoping to send Kádár as a messenger boy to the Kremlin. She and Reagan had been sending out messages of interest in better East–West relations for a year in their speeches. But these had either been ignored or not understood as such by a paranoid Andropov. Thatcher reiterated these messages to Kádár, telling him that Reagan had been disappointed at the summary dismissal of his personal appeal to Brezhnev. Andropov should know that Reagan was still interested in better relations. In turn Kádár told Thatcher that Andropov was a hard, calculating man but one who listened and could be dealt with. Was not he ill? Yes, but he was improving.

President Ronald Reagan and Prime Minister Margaret Thatcher During a Working Luncheon at Camp David. 22 December 1984. Author: White House Photographic Office. Source: Wikimedia Commons

All this information about Andropov proved useless as well as misleading six days later, when he died. Thatcher reported back to Reagan that establishing better relations would be a “long and slow process”. But Gorbachev had already been identified by the British as a better prospect – and five months later, during the short rule of the sickly Chernenko, she met him at Chequers and the process of establishing better relations began in earnest. There was, however, a subtext to Thatcher’s visit that was to prove highly significant.

One motive for the Hungarians in inviting her was to demonstrate the relative success of the “liberalised” Hungarian economy. Communists all over the Eastern Bloc were increasingly aware that the legitimacy of their regimes was quietly collapsing. They were looking for a substitute legitimacy as Marxism became more and more of a laughingstock. Some opted for extreme nationalism – notably, Slobodan Milošević in Yugoslavia. Others saw that democracy was the only real modern legitimacy. They were calculating that they should reinvent themselves as social democrats, lose the first multi-party elections, and return to power when the chaos they had left behind doomed the first democratic government. (Hungarian, Czech, Slovak and Polish Communists all managed this trick in the next decade.) The Hungarian Communists would have liked Thatcher’s imprimatur on their reforms. She was quite open to persuasion on their value. In the event she was extremely disappointed.

Even so the Communists’ desire for capitalist approval, in particular for Thatcher’s approval, gave rise to a distinctive British diplomacy over the next few years. It had three stages: first, to establish better trade and commercial relations with Eastern Europe in order to lessen its reliance on the COMECON Bloc; second, to make an improvement in human rights a condition of improving these economic ties; and third, to insist on internal political reforms in return for greater investment.

This economic diplomacy was supplemented with gestures of political support for democratic and religious dissidents: for instance, the British foreign minister was the first Western diplomat to place a wreath on the grave of Father Popiełuszko in Poland. In other words, as the Communist political structures of Eastern Europe began to crack under such pressures as John Paul’s campaign for religious liberty and the growing resistance of dissident movements, Thatcher stepped forward to offer economic inducements for Communist governments to do the right thing and open up avenues to liberty. And as time went on, her conditions for help became tougher.

Her next visit was to the Soviet Union in 1987. This was one trip from which she had something personal to gain – an election was coming up and she would benefit from the sheer glamour of the Iron Lady conquering Moscow, if only by agreement. From that standpoint the visit was an unqualified success: she enjoyed enormous and almost entirely favourable publicity. International press reports gave out that her debate with Gorbachev over the relative merits of Communism and capitalism had gone well over schedule because both sides had enjoyed it. She debated three Soviet political commentators on Moscow television and, as even Gorbachev privately admitted to the Politburo, made mincemeat of them with her experience in parliamentary repartee. As in Hungary, she was mobbed by friendly crowds at a Moscow housing estate and on a trip to Georgia. All of this – against exotic Russian and Georgian backgrounds – greatly boosted her election prospects at home. She went home to win a landslide election victory.

János Kádár, General Secretary of the Hungarian Socialist Workers’ Party in a meeting with Margaret Thatcher on 3 February 1984. MTI photo: Lajos Soós

By the time Thatcher left Moscow, she had concluded that the ground was cracking under the Soviet system – even if, as she noted, the regime still had enough residual power to stage a delegation of “impeccably distinguished Soviet stooges” who hymned the achievements of socialism in advance of her meeting with the great dissident Andrei Sakharov and his wife, Yelena Bonner. But perestroika and glasnost were generating more hopes than they could fulfil. And as she observed, quoting de Tocqueville, the moment a despotism begins to reform is the moment of its greatest danger.

Her visit to Poland in November 1988 was more consequential because Poland’s Communist system had advanced further toward disintegration. The “artificial peace of totalitarianism”, imposed by the declaration of martial law seven years earlier, had failed to “normalise” the country. Pope John Paul II’s third pilgrimage to Poland in June of the previous year had cracked the ice and revived Solidarność or the Solidarity Movement. And the shoots of free politics were now beginning to grow again.

President Ronald Reagan meeting Prime Minister Margaret Thatcher in the Oval Office. 16 November 1988. Source: Wikimedia Commons

Thatcher had consulted the Pope before setting out. It was plain to both of them that Eastern European Communism, especially in Poland, was at the point of collapse. The regimes were so discredited that they had to rely on the moral authority of their opponents for their continued power – first the Pope, then Wałęsa, now Thatcher. General Jaruzelski’s main motive for inviting the British Prime Minister was the hope she might argue that economic rationality required support for his economic reforms. On the eve of her visit, the regime announced that it was closing the Lenin Shipyard on the “Thatcherite” grounds that it was unprofitable, indeed sustaining heavy losses.

A trap was being sprung for her: she was supposed to endorse treating Lech Wałęsa as if he were the leader of the UK miners’ strike, Arthur Scargill. If that was what the regime expected, what it got was a lecture in the true nature of free market economics. Thatcher pointed out that profits and losses were concepts that made sense only if there was a market. Since the Lenin Shipyard was selling to only one customer, namely the Soviet authorities, its viability depended almost entirely on changes in the rouble–zloty exchange rate. And even so the shipyard was making smaller “losses” than its “competitors”. It was being proposed for closure because the regime felt political resentment towards it.

Throughout the official portions of her visit – including the state dinner where she was alongside Jaruzelski – she made these and similar points about Poland’s economic troubles. She also repeated the Pope’s moral arguments for Solidarity: if the Communist government wanted the Polish people to show economic responsibility, it should grant them the freedoms that go with it. And she gave these arguments a sharp personal edge. When it came to applying tough economic reforms to deep-seated problems, she told Poland’s Communist leaders, the difference between them was that she had been elected three times to carry the reforms out.

More important than her official engagements, however, was her demonstration of sympathy with Solidarity. She did not only lay a wreath on the grave of Father Popiełuszko but also visited his parents and his church. Next day she flew to Gdańsk where, accompanied by Wałęsa, she laid another wreath on the shipyard memorial to the workers who had been shot down in 1970. She had a meeting over lunch (cooked by Wałęsa’s confessor, Father Jankowski) with the Solidarity committee in Gdańsk. She then visited the Solidarity church, where a packed congregation of families rose at her entrance and sang “God Give Us Back Our Free Poland”.

Everywhere in the city she was cheered by huge crowds – from the moment she arrived, when hundreds of workers threw their caps into the air in unison, to the moment of her departure in a small boat, when the huge shipyard cranes were dipped seawards in her honour.

It was, she writes in her memoirs, one of the most moving days of her life. She was unable to hold back her tears. But she also drew a very practical lesson from it. Before leaving Warsaw, she saw Jaruzelski a final time and told him, as one hard-headed politician to another, that Solidarity looked to her like an unstoppable political force. He made no comment.

Two months later – on 19 January 1989 – Solidarity was recognised as an independent labour union. Three weeks after that the round-table negotiations on new political structures began. An agreement on new elections was signed in April, and the elections themselves were scheduled for June. The method of voting was an unusual one: the voters crossed out the names of those candidates they wanted to reject. Voters joyfully crossed out the names of the Communists who had oppressed them for forty years. Solidarity won every contested seat but one. In July the new parliament dominated by Solidarity kept its word given in the round-table negotiations and elected Jaruzelski president – by one vote. One month after that, Jaruzelski, whose own candidate for Prime Minister had failed to form a government, asked Tadeusz Mazowiecki (whom he had jailed eight years before) to be the next Prime Minister.

British Prime Minister Margaret Thatcher visits the Great Market Hall in Budapest on 4 February 1984. MTI photo: Attila Manek

Mazowiecki took office at the head of Poland’s first post-Second World War democratic government on 12 September 1989 – exactly ten years and three months after John Paul II had landed in Poland and appealed to God, “Let Your Spirit come down and renew the face of the land – this land”.

On the day before that, the Hungarian government had opened its border to allow East Germans vacationing in the country to escape to the West. Two months later the Berlin Wall was opened up. By spring 1990 the Soviet Empire had shrunk down almost to the territory of the USSR itself.

Yet that triumphant year also marked in January the end of her historic partnership with Ronald Reagan who left the presidency that month, and except for a handful of modest interventions, left politics too. She was the recipient of his last message as President, as she had been his last official visitor in November 1988, when the three-day event had been a nostalgic celebration of their joint stewardship of the Anglo-American special relationship. She was the guest of honour at dinners given by Reagan and his successor George H. W. Bush and at a farewell lunch given by Secretary of State George Shultz. As a former Thatcher aide, I was invited to the last of those occasions which was bathed in an atmosphere of warm affection – she and Shultz had generally been on the same side in diplomatic and even internal administration rows – and he gave her a large expensive handbag as a parting gift to amused applause. In retrospect these farewell courtesies benefited greatly from the fact that Reagan had one of the very few political careers that end in unqualified success in which she rightly shared.

Prime Minister Margaret Thatcher received by Prime Minister József Antall in Budapest, in September 1990. Source: WikiCommons

Most observers assumed that the British Prime Minister would continue to enjoy the same warm personal and political alliance with the first President Bush since they had been friends during the previous eight years, liked each other, and seemed to be on the same broad ideological wavelength. All those reasons were valid enough, but the expectation of another Anglo-American partnership unravelled quite quickly. It did so on the issue of nuclear weapons in Germany.

Thatcher’s own successful Cold War diplomacy, amplified by together with Western Europe’s “Gorbymania”, meant that German opinion was moving in an almost pacifist direction. It was particularly (and reasonably) concerned about the likelihood that in any conflict the short-range nuclear missiles would fall on Germans on both sides of the rusting Iron Curtain. With an election coming up, Kohl had to reflect those fears. Thatcher, on the other hand, was legitimately concerned that the more the West reduced its nuclear missiles, the more it would be compelled to increase defence spending to counter the USSR’s massive superiority in conventional forces. A year later this dispute would look archaic. But both sides had a reasonable case, and both looked to Bush to decide the matter at the NATO summit.

In the run-up to the summit, Bush began by sympathising with Thatcher. He was still conducting his own review of foreign policy prior to jumping into NATO politics. The first smoke signals that emerged from it suggested that the Bush administration would be tougher than Reagan which might have helped Thatcher who since Reykjavik had worried that US policy was dangerously flexible on nuclear weapons. Soon, however, a different narrative began to be heard: the Brits were too obstructive not only on NATO but also on European integration; Germany was the leading economic power in Europe which would have to be reflected in US policy; and Thatcher, though admirably brave and principled, was rigid, and preachy, and isolated within the alliance; and Kohl, a loyal ally, needed NATO’s help to stay in office. It also became clear that even though Bush genuinely liked Thatcher, he was not comfortable or easy with her, and still more significant, that his aides would not be averse to taking her down a peg.

In the usual crabwise diplomatic dance, the Bush administration gradually swerved to support Kohl over Thatcher. At the NATO summit it was decided that nuclear negotiations would cover medium-range missiles and not completely rule out covering short-range ones in time. Bush had made a clear choice. It was seen in the media and elsewhere as a clear defeat for Thatcher. That judgement is confirmed in the third volume of Charles Moore’s official biography in which he cites Thatcher’s diplomatic alter ego (and effectively her unofficial Foreign Secretary) Charles Powell, as saying: “Once Bush turned to Germany, that was the end of it all.” To that Moore adds: “He meant it was the end of the Anglo-American dominance in international affairs which she and Reagan had achieved and which, she believed, had brought victory in the Cold War.”

It was not, though, the end of her premiership which had two years to run. But as Hamlet remarked, when troubles come, they come not in single spies but in battalions. And in 1989 Thatcher had to confront large problems, rebellious senior colleagues, and a restive public opinion that weakened and hampered her conduct of policy. The two main problems were “Europe” and the UK economy. In the next two years they would bring about the resignations of her Foreign Secretary, her Chancellor of the Exchequer, and in due course herself.

“Europe” as an issue had seemingly been put into political cold storage by the Single European Act in 1986 which Thatcher hoped would shape a freer and more competitive European economy. But the EU Commission President, Jacques Delors, reversed the impact of the Act by making it a vehicle for extending regulation through regulatory “harmonisation”. In September 1988 he then urged the British trade union movement to take advantage of it to challenge her economic and social reforms. She responded twelve days later in the Bruges Speech by declaring that she had not reformed Britain in order to see Brussels reversing her reforms. That speech is sometime seen as the first step to Brexit. It certainly ignited a long debate within her party that won her strong support from ordinary party members but also pitted many of her most senior colleagues against her on maybe the single biggest issue in UK politics.

“Europe” was implicated too in her troubles over the economy. In 1988 and 1989 the UK economy suffered from a return of inflation that Chancellor Lawson sought to restrain by getting the pound to join the EU’s Exchange Realignment Mechanism (ERM, a sort of ante-room to the euro). He was joined in his campaign by Foreign Secretary Geoffrey Howe, and for two years they pressed hard on Thatcher to do so. She lost both of them – Lawson resigned in late 1989 – through her sceptical resistance to joining the ERM which continued until a few weeks before she lost office in 1990. But the difficulties caused by the inflation, the measures to restrain it, and the ERM dispute all weakened the government and made every other domestic difficulty (for instance, the unpopular poll tax in local government) that much more damaging. By late 1989 the seeds had been sown that would gradually lead to Geoffrey Howe’s resignation, a challenge to her leadership by former Defence Minister Michael Heseltine, her failure to win in the first ballot and her withdrawal from the second, her replacement by John Major – his first major statement as Prime Minister that Britain was at the heart of Europe, and a little later Britain’s forced withdrawal from the ERM.

All these events seemed to confirm the wisdom of a personal letter Charles Powell – who was both a great public servant and, together with his wife Carla, a devoted and attentive friend to Lady Thatcher to the day of her death – had written to the Prime Minister on the morrow of her 1987 election triumph. It suggested that she should retire while she was at the height of her success. The letter became public only years later. But it has shaped the conventional wisdom about her career, namely that she stayed on too long and that her reputation had suffered as a result. It is certainly an arguable view. But is it a view that does justice to the achievements of her final two years (in which Powell himself played a distinguished part) and of events beyond that?

Margaret Thatcher talks to people on Váci Street in Budapest in September 1990. MTI photo: Géza Szebellédy

We know from declassified papers that Thatcher’s departure was regarded with incomprehension in Washington, Moscow and around the world. That was because despite her internal battles, Thatcher had remained a major figure in settling international disputes and maintaining progress in liberating and democratising Europe despite her weakened position right through 1989 and later.

Her almost unknown achievement in this was her shepherding South Africa out of Apartheid and into democracy without the bloodbath that many thought would inevitably accompany that transition. It is unknown because most people do not want to know it. They interpreted her opposition to sanctions as support for white South Africa when it was in fact a necessary adjunct to a vigorous diplomatic engagement with the South African government to persuade it to accept the necessity of democracy and black majority rule, win an election on that basis, negotiate with the African National Congress, free Nelson Mandela and move to regime change. Indeed, in the mid-1980s she had waged a vigorous and very tough diplomatic engagement with the South African government. But she lacked a South African Gorbachev until February 1989 when F. W. de Klerk became State President. She helped him persuade the white electorate to accept freedom for Mandela and a multi-racial democracy. We now have all the details of that diplomacy thanks to Moore’s comprehensive biography, the book describing how that diplomacy was conducted by her ambassador to Pretoria, Robin Renwick, and not least the testimony of both Mandela and de Klerk. That success alone justified her staying on beyond 1987 – not to mention a Nobel Peace Prize.

Dinner reception in honour of Prime Minister Thather on 18 September 1990. From left: Minister of Foreign Affairs, Géza Jeszenszky; British PM Margaret Thathcer and Hungarian PM József Antall. MTI photo: Lajos Soós

Her second and far greater achievement was the fall of the Berlin Wall. That was the achievement of many hands, but she and Reagan played the main Western roles (along with Pope John Paul II) in the First Act of the play, and she played a vital subordinate role in the Second Act. When the Wall fell, she had two immediate reactions and shortly afterwards a third. Her first response was a simple unadorned delight that people across Central and Eastern Europe had recovered their freedom. Her second was a nervous anxiety that the reunification of Germany (which she saw was a logical consequence of giving Germans their democratic liberties) risked destabilising the balance of power in Europe by making Germany too powerful and in particular might undermine Gorbachev’s position in Moscow and even reverse his perestroika and glasnost reforms there. And her third response was to reject the argument that the reunification of Germany should be accompanied by a rapid progress towards the political unity of Europe since – she argued – that would strengthen rather than restrain German power. In addition there was a contradiction in the idea that restoring national independence to the new democracies should be remedied by the surrender of sovereignty to Brussels by all of Europe’s democracies.

József Antall is greeting British PM Margaret Thatcher in his office on 18 September 1990. In the background, Gyula Kodolányi, Senior Foreign Policy Adviser to PM Antall. MTI photo: Géza Szebellédy

Thatcher’s anxieties over German reunification were driven by her visceral dislike of Germany, but her arguments were both reasonable and prescient, and initially they were shared by Mitterrand, Bush and Gorbachev. As with the NATO decision on nuclear weapons earlier in the year, however, Bush gradually moved to support Kohl (who emerges from those days as one of his country’s greatest statesmen) in his shrewd drive towards German unity. And when Bush moved, Thatcher’s allies in high places left her side one by one.

As she admits in her memoirs, her German policy met with unambiguous defeat. Probably too she was fighting an inevitability – as among others her good friend, Hungarian Prime Minister József Antall, recognised clearly. Again, however, she was amply justified in trying to ensure that the democratisation of Central and Eastern Europe did not proceed in a way that threatened Gorbachev’s position since if he went, the whole process of Soviet reform might be halted or even reversed. That was a real possibility as the 1991 Soviet counter-coup showed. It is significant, however, that the counter-coup occurred so late as to make its failure almost inevitable and to guarantee the survival of post-Soviet democracy. At least for a time. As Moore notes in his biography, one of those who thought that Gorbachev’s surrender to the West over reunification was a humiliating defeat for his country was the KGB Resident in Dresden, one Vladimir Putin.

And as for her struggle to defend national sovereignties against Brussels, when Cabinet colleagues rebelled against her over her resistance to the accelerating surrender of national powers to Brussels in late 1990, Thatcher lost that battle too. At least for a time.


When Thatcher lost office in the dying days of 1990, having received the decisive blow to her hopes of remaining Prime Minister at the Paris Conference that ratified the liberation of Central and Eastern Europe, the end of the Cold War, and her own world-historical status, she went into a deep depression. Friends and colleagues rallied round to help her, most from admiration and affection, a few from the desire to ensure she would cause the Tory Party and its new leader as little trouble as possible. They arranged a private office, a business manager and team of talented advisors, accommodation in Westminster, and a crowded social diary. But no one could really provide her with what she really needed: the challenge of serious political activity that counted for something. And given that she was now a private citizen, how could she possibly get that?

In August 1991 she got it. Soviet hardliners imprisoned Gorbachev in his Crimean villa, announced a state of emergency on television, sent tanks and troops into Moscow, made some arrests, and planned to attack the Russian Parliament (the White House where Boris Yeltsin had repaired to lead the resistance). Western governments initially dithered, some assuming the coup would succeed. President Mitterrand referred to Yanayev as the “new leader” of the Soviet Union on television; Helmut Kohl said merely that he hoped the Soviet Union would respect the agreements made by Gorbachev; others disappeared into meetings. (Thatcher happened to be meeting with Galina Starovoitova, a former spokesperson for Yeltsin, and learning she had his mobile number, rang him up on the barricades. He answered the call, and asked her to help. She immediately stepped onto the street outside her office and told the world via television that “we shouldn’t necessarily assume the coup would succeed” because the “young people were no longer servile” and “people power could prevail”.

That prediction was immediately confirmed by events. In short order the coup collapsed, Gorbachev returned to Moscow, Yeltsin took charge, the Soviet Union was constitutionally buried, and it was replaced by independent republics including a sovereign Russia governed by Yeltsin.

Bush and John Major had been irritated by Thatcher’s intervention, but Yeltsin was “thrilled” by it; József Antall, not coincidentally, had also rallied Central Europe against the coup; and Thatcher was reinvigorated, going on to write her memoirs and to remain a powerful presence in British politics for another decade.

One year later, Britain crashed out of the ERM, effectively dooming any chance of Britain joining the euro, and justifying her earlier resistance to it. From the grave she won the internal British debate over EU membership when the country voted for Brexit in one referendum and two elections. And it is becoming clearer daily – see the decision of the German constitutional court that challenges the EU’s legal supremacy – that euro-integration is not solving the problem of German power but making it more problematic for both Germany and the EU.

Would those things have happened as they did if Thatcher had retired in 1987? Or would they rather have been tackled earlier if she had remained in office after November 1990? Over to the counter-factual historians.

Most recent

Newsletter signup

Like it ? Share it !

Share on facebook
Share on twitter
Share on linkedin
Share on pocket
Share on email