“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 analysis reveals how a market-oriented economic experiment in Budapest first sparked the prime minister’s interest in Hungary and inspired her foreign policy in Eastern Europe. It documents the 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 of the historical literature about Thatcher’s chosen method of combating communism and Britain’s long-term strategy towards the Eastern bloc.