“Creative Ferment in Eastern Europe”: Thatcher’s Diplomacy and the Transformation of Hungary in the Mid-1980s

Abstract

This analysis of British Ostpolitik focuses on Margaret Thatcher’s diplomacy, exploring her quietly pragmatic efforts to bring about a gradual transformation of Eastern Europe, at the cost of supporting selected communist regimes. The article investigates how a market-oriented economic experiment in Budapest first sparked Thatcher’s interest in Hungary, ahead of other Warsaw Pact countries. It documents the assiduous British search for a socialist transition “model,” which led to unprecedented diplomatic overtures towards a small enemy state on the brink of bankruptcy. Based on extensive archival research in Budapest and London, as well as on the personal recollections of three senior British diplomats, this case study challenges some of the common assumptions about Thatcher’s chosen method of combating communism, and about Britain’s long-term strategy towards the Eastern bloc.