After the Cuban missile crisis in 1962, East-West détente was widely seen as the only option to ensure the world's long-term survival. Washington became increasingly interested in East-West détente and pushed NATO in the same direction. As early as May 1964, President Johnson had spoken of the need for "building bridges," and in October 1966 he advanced the idea of "peaceful engagement" with the countries of the Eastern bloc. The Harmel Report, approved by NATO member states in December 1967, spoke explicitly of the Western aim "to further a détente in East-West relations." However, it was made clear that any détente would have to be based on NATO's and the West's cherished policy of strength. During the NATO Council of Ministers meeting in Reykjavik in June 1968, all NATO members emphasized their willingness to embark upon East-West negotiations regarding troop reductions in Europe. In fact, Washington hoped that NATO would become one of the instruments driving détente; in an era of lessening threat perception it would help to give the Atlantic alliance a new sense of purpose. It would also discourage the European allies from pursuing bilateral policies of détente, as for example the French and especially the West Germans were doing.
Washington's readiness in the late 1960s and early 1970s to use NATO as a vehicle for embarking upon détente with the Soviet Union, thus giving in to European calls for a relaxation of the Cold War, was strongly influenced by American economic and financial problems. Some commentators began speaking of relative American decline and the end of the American century. This was symbolized by Richard Nixon's termination in 1971 of the 1944 Bretton Woods economic system by his sudden suspension of the dollar's convertibility into gold, which resulted in the free floating of international currencies and an effective devaluation of the dollar. Simultaneously, the president imposed a 10 percent protective tariff on imported goods. These measures were solely dictated by domestic economic requirements in the United States, and any negative economic consequences for its European allies were disregarded. America's problems were largely due to the costs of the Vietnam War, the lingering burden of financing the domestic Great Society programs of the 1960s, and the relative overvaluation of the dollar, which helped European and Japanese exports. The European Community's imposition of quotas, exchange controls, and import licenses on goods from outside the community as well as its protectionist common agricultural policy (CAP), inaugurated in 1966 also, contributed to America's ever-larger budget deficit. The United States had not only accumulated a considerable balance-of-payments deficit, but from 1971 it also had a considerable trade deficit as well as inflationary problems, rising unemployment, and almost stagnant wages; further, the position of the dollar, the world's leading reserve currency, was weakening. Transatlantic relations were becoming increasingly difficult, and this included relations within NATO.
America's relative economic and financial decline, in combination with global détente and the accompanying perception that the military threat from the Warsaw Pact was receding, decisively contributed to undermining the Nixon administration's commitment to the European continent and, to some extent, to NATO. Congress had also grown increasingly skeptical about the benefits of America's involvement in Europe. During the 1970s, Senator Mike Mansfield introduced eight amendments for U.S. troop reductions in Europe. Within the administration, it was the national security adviser Henry Kissinger, a keen student of nineteenth-century European power politics, who insisted on basing America's relations with its western European allies on a purely bilateral nation-state basis within the Atlantic framework. Establishing a united and federal Europe, as the creators of NATO originally had envisaged, was now seen as counterproductive for Washington's hegemony in the Western world. In Kissinger's realist worldview, it was unlikely that "Europe would unite in order to share our burdens or that it would be content with a subordinate role once it had the means to implement its own views." Kissinger even recognized that once "Europe had grown economically strong and politically united, Atlantic cooperation could not be an American enterprise in which consultations elaborated primarily American designs."
However, as far as public rhetoric was concerned, the Nixon administration continued speaking out in favor of a united federal Europe with a large single market, fully integrated into the Atlantic system. It was still assumed in Washington that a united Europe would share "the burdens and obligations of world leadership" with the United States. In particular, the Nixon White House favored the envisaged expansion of the European Community. It hoped that Britain's entry and the revival of the Anglo-American "special relationship" would lead to an improvement in transatlantic relations and within NATO. Yet on the whole Nixon and Kissinger were not prepared to accept the growing maturity of Europe and the realities of a more pluralistic and interdependent world. The Nixon administration still expected a largely docile Europe. As far as East-West relations and the NATO alliance were concerned, Washington certainly wished to be in full control. Ostpolitik, West Germany's fairly independent variant of détente, was therefore only grudgingly accepted by the U.S. administration. Nixon and Kissinger disliked the independence and confidence with which the West Germans proceeded with Ostpolitik and competed with Washington's own strategy of superpower détente.
By 1973 Kissinger realized that transatlantic relations were in urgent need of revision and repair. To the anger of the European Community countries who had not been consulted, he grandly announced the "Year of Europe." The Nixon administration had been largely occupied with the Vietnam War and the development of détente with China and the Soviet Union during its first years in office, and the "Year of Europe" was Kissinger's attempt to improve U.S.–EC relations inside and outside NATO while safeguarding Washington's leadership role. Kissinger proposed a new Atlantic Charter and did not hesitate to emphasize that the United States had global responsibilities while the EC countries only had to deal with regional problems. Moreover, he insisted on a greater degree of military burden-sharing, arguing that only Europe's economic contribution would guarantee the continued functioning of America's security umbrella. The so-called Nixon Doctrine of 1970 had emphasized that America's allies ought to assume more of the burden of defending themselves.
The linkage between economic and security concerns led to severe difficulties between Washington and the western Europeans. Kissinger, however, managed to persuade the Europeans to agree to a clause in the new Atlantic Declaration, signed in June 1974, stating that Washington should be consulted before the EC countries arrived at important decisions that impacted on transatlantic issues. Thus, American ideas of the nature of the transatlantic relationship had largely won the day. In practice, however, allied relations remained tense. Severe friction occurred during the Yom Kippur War of October 1973 when Washington wholeheartedly backed Israel and many European countries hesitated to do so. The European Community was much more dependent on Middle Eastern oil than the United States, and many countries (like France, the United Kingdom, and West Germany) had strong economic links with the Arab countries in the region. Thus the war and the energy question were closely connected with both security and economic prosperity.
American-European differences with respect to the Year of Europe and the Yom Kippur War pushed the European Community into developing more sophisticated processes of cooperation, not least in order to resist pressure to fall in line with American wishes. The 1973 Declaration on European Identity was influential in gradually leading to a tentative common European foreign policy. It encouraged EC members to use the instrument of European Political Cooperation (EPC), created in 1970, to ensure that foreign policy positions would be coordinated among all EC countries. In 1968 the informal Eurogroup of EC defense ministers had been founded to discuss European defense cooperation. In late 1970 this led to the launch of the European Defense Improvement Program (EDIP) to build up NATO's infrastructure and national European forces. But as some authors have argued, this may have been less a demonstration of European independence in defense matters than an attempt to impress the United States with Europeans' willingness to help themselves. Thus, most authors view the 1970s as a "dark age" for both transatlantic relations and European integration. The two oil crises and the accompanying economic recession (best characterized by the term "stagflation"), as well as the expansion of the European Community from six to nine countries with the addition of the United Kingdom, Ireland, and Denmark on 1 January 1973, caused a severe, long-lasting crisis of adaptation within Europe.
It certainly weakened the ability of the European member states of NATO to embark on any decisive initiatives to reform the problem-ridden alliance. However, "the disarray of Europe" worked to the benefit of the United States. Washington was able to insist on the importance of the Atlantic framework and regain, as Alfred Grosser says, "its position as the leading power among the partners who were unified only when under its direction." Still, under Nixon and Kissinger an important reevaluation of U.S.–EC relations inside and outside NATO had taken place. Washington had begun to look after its own economic and political interests much more than before. It was no longer prepared to accept unilateral disadvantages in the hope of obtaining vaguely defined benefits in the long run. But it was still not prepared to accept western European emancipation from American tutelage.
The rising tide of Eurocommunism in southern Europe (particularly in Italy, France, and Spain) worried the United States much more than it did the Europeans. Despite the Eurocommunists' independence from Moscow and their ambition to democratize their party structures, Washington feared that NATO might not survive the international developments of the 1970s. Greece withdrew from NATO in August 1974 in view of the West's ambiguous attitude toward the Turkish invasion of Cyprus after the Greek-inspired coup. The ruling military regime in Athens had hoped to unite the island with Greece and thus improve their plummeting domestic popularity.
From the mid-to late 1970s the western and eastern Europeans cautiously began to diverge from the policies pursued by their masters in Moscow and Washington. With hindsight it seems that the European nations became gradually aware again of their common European identity and their shared interests in world affairs. In fact, the greater the respective difficulties with Washington and Moscow appeared, the more united the European countries became. Serious problems in superpower cooperation in the mid-1970s—for example, the prolonged MBFR arms control talks regarding conventional armaments in Geneva and Vienna beginning in 1972 and the SALT II negotiations during the Carter administration—as well as the strengthening of the American neoconservative movement in the 1970s appeared to foreshadow a new hostile phase in the Cold War. European public opinion and many western European politicians refused to go along with this. Yet European politicians also felt the need to ensure that the United States remained committed to Europe. They were torn between opposition to a policy of renewed East-West tension and the awareness that the American security umbrella was still vital for the protection of the European continent.