The Marshall Plan

 

The Need

Europe was devastated by years of conflict during World War II.  Millions of people had been killed or wounded.  Industrial and residential centers in England, France, Germany, Italy, Poland, Belgium and elsewhere lay in ruins.  Much of Europe was on the brink of famine as agricultural production had been disrupted by war.  Transportation infrastructure was in shambles.  The only major power in the world that was not significantly damaged was the United States. 

 

Aid to Europe

From 1945 through 1947, the United States was already assisting European economic recovery with direct financial aid.  Military assistance to Greece and Turkey was being given.  The newly formed United Nations was providing humanitarian assistance.  In January 1947, U. S. President Harry Truman appointed George Marshall, the architect of victory during WWII, to be Secretary of State.  Writing in his diary on January 8, 1947, Truman said, “Marshall is the greatest man of World War II.  He managed to get along with Roosevelt, the Congress, Churchill, the Navy and the Joint Chiefs of Staff and he made a grand record in China.  When I asked him to [be] my special envoy to China, he merely said, ‘Yes, Mr. President I'll go.’  No argument only patriotic action.  And if any man was entitled to balk and ask for a rest, he was.  We'll have a real State Department now.” 

In just a few months, State Department leadership under Marshall with expertise provided by George Kennan, William Clayton and others crafted the Marshall Plan concept, which George Marshall shared with the world in a speech on June 5, 1947 at Harvard.  Officially known as the European Recovery Program (ERP), the Marshall Plan was intended to rebuild the economies and spirits of western Europe, primarily.  Marshall was convinced the key to restoration of political stability lay in the revitalization of national economies.  Further he saw political stability in Western Europe as a key to blunting the advances of communism in that region.   

 

The European Recovery Program

Sixteen nations, including Germany, became part of the program and shaped the assistance they required, state by state, with administrative and technical assistance provided through the Economic Cooperation Administration (ECA) of the United States.  European nations received nearly $13 billion in aid, which initially resulted in shipments of food, staples, fuel and machinery from the United States and later resulted in investment in industrial capacity in Europe.  Marshall Plan funding ended in 1951. 

 

Results

Marshall Plan nations were assisted greatly in their economic recovery.  From 1948 through 1952 European economies grew at an unprecedented rate.  Trade relations led to the formation of the North Atlantic alliance. Economic prosperity led by coal and steel industries helped to shape what we know now as the European Union.