Europe had a terrorism problem in the 60's and 70's from the extreme left (Red Faction Etc). How was this handled by authorities and how come political terrorism of that kind die out? (Bonus points for public perceptions)

A quick initial note: the terrorism you are referencing didn't really happen in the 60s (though it's roots are clearly from the 60s).

Speaking in terms of the Red Army Faction (certainly the most prominent of the Left Wing German terror groups), their trajectory and ultimate end is the product of a series of different factors over their course of their existence (roughly May of 1970 through spring of 1998).

The early years of the group (1970-1972), when the group was commonly referred to as the "the Baader-Meinhof Gang," the structure of the group was such that it was almost designed to fail. Unlike other terrorist groups, they were not structured in cells; it was a large, amorphous group with the identities of all major members well known. And the leadership of the group participated in essentially all major terrorist actions, rather than pushing off the work to underlings.

But because the group, initially, mostly focused on robbing banks, stealing cars, etc... they were not considered as dire a national security threat as they would be considered later. But in May of 1972, when they started bombing and killing Americans, and attacking other parts of the German state; the authorities responded overwhelmingly and within a few weeks the entire leadership was captured and imprisoned.

Essentially all of the terrorist actions throughout the mid 70s, by the underling members that had NOT be captured, was geared towards attempts to secure the release of their leaders in prison. Later, after the leadership of the group committed suicide in prison, the members on the outside just focused their energies on occasional terrorist attacks on American bases, politicians, etc. But many members simply wanted out of the life and sought (and found) secret refuge in East Germany; given new identities by the Stasi.

This was basically the start of a long petering-out of the group. It was a product of a couple of things; dramatically more effective police work than there had been early on; a revulsion among potential followers after the reality of their killings became apparent (it became MUCH harder to recruit or gain new members).

And ultimately the final death knell was the fall of the Berlin Wall and the resulting marginalization of the the Marxist and Socialist ideology that inspired them in the first place.

By the time the remaining members of the RAF faxed a press release announcing their dissolution in 1998, the group had only done a single semi-significant terrorist action in the previous decade.

Since you asked about public perception; the RAF has a remarkable historical footnote. from Baader-meinhof.com:

A remarkable poll by the respected Allensbach Institute is published. One in five Germans under thirty expresses “a certain sympathy” for the members of the Red Army Faction. The survey also asked “Assuming that someone from this group would ask you for shelter for the night, would you take him/her in the one night?” Five percent of all Germans said “yes,” they would harbor a member of the RAF, while and another nine percent said they would consider it, meaning that eight and a half million Germans out of 60 million expressed a willingness consider housing a member of an organization who were dedicated to the violent overthrow of their own government. The members of the RAF, hoping to expose what they saw as a fascist underbelly of the German state and cause ordinary Germans to rise up and revolt, are greatly encouraged by the poll results.

But when the group began their bombing campaign 1 year later; and images of dead Americans and maimed Germans blanketed German newspapers and TVs, this "support" utterly vanished. In retrospect it was clear that the support was basically a kilometer wide and millimeter thick. People were expressing a vague theoretical support for a group that seemed to be a vanguard for the progressive future they wanted. But it was all amorphous; the reality revolted much of the population and the group turned pariah.

For a very brief time, however, you had 8 million people, out of a population of 60 million, express open support for violent revolution; certainly the last time a significant portion of the population of a western democracy openly advocated for violent revolution.

Further Reading:

www.baader-meinhof.com

Aust, Stefan. "The Baader-Meinhof Complex" 1988 (updated in 2008).

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