Marshall Plan

Great Seal of the United States
The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe, in which the United States gave over $13 billion (nearly $110 billion in 2016 US dollars) in economic assistance to help rebuild Western European economies after the end of World War II. The plan was in operation for four years beginning on April 3, 1948. The goals of the United States were to rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity, and prevent the spread of Communism. The Marshall Plan required a lessening of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, trade union membership, as well as the adoption of modern business procedures.

The Marshall Plan aid was divided amongst the participant states roughly on a per capita basis. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for general European revival. Somewhat more aid per capita was also directed towards the Allied nations, with less for those that had been part of the Axis or remained neutral. The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total), followed by France (18%) and West Germany (11%). Some eighteen European countries received Plan benefits. Although offered participation, the Soviet Union refused Plan benefits, and also blocked benefits to Eastern Bloc countries, such as Hungary and Poland. The United States provided similar aid programs in Asia, but they were not part of the Marshall Plan.

However, its role in the rapid recovery has been debated. Most reject the idea that it alone miraculously revived Europe, since the evidence shows that a general recovery was already under way. The Marshall Plan's accounting reflects that aid accounted for less than 3% of the combined national income of the recipient countries between 1948 and 1951, which means an increase in GDP growth of only 0.3%.

After World War II, in 1947, industrialist Lewis H. Brown wrote at the request of General Lucius D. Clay, A Report on Germany, which served as a detailed recommendation for the reconstruction of post-war Germany, and served as a basis for the Marshall Plan. The initiative was named after United States Secretary of State George Marshall. The plan had bipartisan support in Washington, where the Republicans controlled Congress and the Democrats controlled the White House with Harry S. Truman as President. The Plan was largely the creation of State Department officials, especially William L. Clayton and George F. Kennan, with help from the Brookings Institution, as requested by Senator Arthur H. Vandenberg, chairman of the Senate Foreign Relations Committee. Marshall spoke of an urgent need to help the European recovery in his address at Harvard University in June 1947. The purpose of the Marshall Plan was to aid in the economic recovery of nations after WWII and to reduce the influence of Communist parties within them. To combat the effects of the Marshall Plan, the USSR developed its own economic plan, known as the Molotov Plan, in spite of the fact that large amounts of resources from the Eastern Bloc countries to the USSR were paid as reparations, for countries participating in the Axis Power during the war.

The phrase "equivalent of the Marshall Plan" is often used to describe a proposed large-scale economic rescue program.

The reconstruction plan, developed at a meeting of the participating European states, was drafted on June 5, 1947. It offered the same aid to the Soviet Union and its allies, but they refused to accept it, as doing so would allow a degree of US control over the communist economies. In fact, the Soviet Union prevented its satellite states (i.e., East Germany, Poland, etc.) from accepting. Secretary Marshall became convinced Stalin had no interest in helping restore economic health in Western Europe.

This page was last edited on 18 June 2018, at 06:41.
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