The crisis of the 1980s

The sharp increase of interest rates under the leadership of the newly appointed governor of the Federal Reserve Bank, together with the slump of commodity prices in the early 1980s, sparked off an economic crisis, the consequences of which were felt not only in South America, and the oil exporting countries of the Middle East. Insufficient attention has been paid to the core countries of the Council for Mutual Economic Assistance (CMEA) and their reaction to the crisis of the 1980s. The example of Iraq shows how the crisis of the South reached the East with delay. The war that Saddam Hussein was waging against his neighbor Iran did not impair relations to the CMEA on paper. If the CMEA countries wanted to muddle through the crisis and wait for better days to come, they thus had to lend more and more.