The Marshall Plan and its Consequences

in the Post-World War II World

This paper aims at describing the post-war European

Recovery Program of 1947, later known as the Marshall Plan, and

exploring what long-term consequences it had on Western Europe

and on US-Soviet relations.

According to many historians, the fifth of June, 1947, was

a milestone in the history of the United States and of the

Western world. On this day, in a speech to Harward University’s

graduating class, Secretary of State George C. Marshall

announced the European Recovery Program. In his speech,

Marshall expressed the American government’s intention to

support the economic recovery of European countries damaged by

the recently ended war. Marshall, however, said something else

important:”The initiative, I think, must come from Europe”. In

other words, Europe would not receive any help from the United

States unless European nations (including even the occupied

Germany) sat down together and proposed a cooperative plan. In

less than a month, on July 12, 1947, sixteen nations began

meeting in the Grand Dining Room of the French Foreign

Ministry, as the Committee for European Cooperation. Many

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analysts view these meetings as the first step towards the

European Union.

Marshall, a former general, and some ’great minds’ who

worked for and with him (Dean Acheson, George Kennan, Charles

Bohlen, William Clayton) began drafting the plan, with

president Truman’s acquiescence, during the spring of 1947. On

April 3,1948, Truman signed the Economic Cooperation Act

implementing the Marshall Plan. From 1948 to 1952, the United

States gave $13 billion worth of money, goods and services to

the countries of Western Europe. Today this amount is

equivalent to about $88 billion. The amount of money was

distributed under the European Recovery Program between April

3, 1948 and June 30, 1952 in the following proportions:

(Total amount in millions of U.S.Dollars)

United Kingdom 3,189.8

France 2,713.6

Italy 1,508.8

Germany (West) 1,390.6

The remaining sum of money went to The Netherlands (1,083.5),

Greece (706.7), Austria (677.8), Belgium, Luxemburg (559.3),

Denmark (273), Norway (255.3), Turkey (225.1), Ireland (147.5),

Sweden (107.3), Portugal (51.2) and Iceland (29.3).

As a consequence, Western European countries were able to

start re-building their economies at a remarkable speed. Nearly

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all the great names of European industry were started or re-

started with American assistance after the war (For example

Renault, Pechiney and Dassault in France, Volkswagen and

Daimler-Benz in Germany, Fiat in Italy, Norse Crown Canning in

Norway). In addition, small businesses, merchants and farmers

were also put back on their feet. The Marshall Plan created a

mechanism that allowed each European nation to exchange its

currency freely with all the others to replace the damaged

system of bilateral exchange controls that had pervailed before

the war. It was called the European Payments Union and it

provided 600 million U.S. Dollars as a support.

Moreover, the Marshall Plan was one of the instruments of

the democratization of Western Europe, resulting in the

adoption of American ideas and institutions, e.g. progressive

income taxation, Social Security, installment buying, all of

which were leading towards the homogenization and the rising

prosperity of Western European countries.

In the five years of the Marshall Plan, industrial

production in Europe rose 36 percent. Much of this would have

happened without American aid, which accounted for a fraction

of total European investment, but scholars say it would not

have happened so fast, or in the way it did.

Next, we shall look at how the Marshall Plan effected US-

Soviet relations. Although the recovery plan was a milestone in

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the post-war economic development of Western Europe, it was not

a turning point concerning U.S. foreign relations. Two years

before the Marhall Plan was implemented, the U.S. government

and the American public oppinion viewed the Soviet Union as

their main ally, even sometimes at the expense of Britain. But

by the beginning of the year 1947, the Truman administration

had begun to look at the Soviet Union as America’s main

adversary. Three important events marked this direction of

foreign policy in 1947.

The first was the Truman Doctrine in March, committing the

United States to the defense of Greece and Turkey. At this

time, Truman was already convinced by those who forecasted

Soviet aggression, e.g. George F. Kennan, who, in his famous

’Long Telegram’(1946) from Moscow, assessed the Soviets under

Joseph Stalin as obsessed with communist expansion.

The announcement of the Marshall plan in June was the

second step which increased the distance between U.S. and

Soviet policies, although there was still hope that a definite

break with the Soviet Union might be avoided. This was because

Marshall, in his speech in June suggested that the offer was

open to the states of Eastern Europe too, and perhaps even to

the Soviet Union. The vague wording of Marshall’s speech made

it difficult for the Soviet leaders to reach definite

conclusions about the purpose of his offer, and they initially

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hoped it might prove to be a source of capital for the

reconstruction of the war-damaged USSR. As the details of the

Marshall Plan unfolded, however, the Soviet leadership came to

view it as an attempt to use economic aid not only to

consolidate the Western European bloc, but also to undermine

recently-won and still somewhat unstable, Soviet gains in

Eastern Europe. Thus the plan conceived by U.S. policy-makers

primarily as a defensive measure to prevent economic collapse

in Western Europe, proved indistinguishable to the Kremlin

leadership from an offensive attempt to subvert Soviet security

interests.

Finally, George F. Kennan’s ’X’ article published in the

July issue of Foreign Affairs defined the policy of Soviet

’containment’.

After these events, Stalin started to view the generosity

of the Marshall Plan as a cruel attempt from the part of the

U.S. to maintain an American presence in Eastern Europe, since

the program called for the establishment of ties with the U.S.,

including the temporary presence of American administrators.

Therefore, it is clear why Stalin refused to countenance

the Marshall Plan from its inception. Czechoslovakia, for

instance, hoped to remain a possible bridge between East and

West and it was ruled by a coalition government in which the

communists were amply represented, but which was parliamentary

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and democratic. This situation was dangerous for the Soviet

leadership, because the U.S. might have drawn Czechoslovakia

under its own influence, thus threatening Soviet integrity.

When the Prague government wanted to accept the offer of the

Marshall Plan, the Soviets intervened and forced it to refuse

the offer. In Febuary 1948, the Communists took over Prague.

Soon after came the Russian blocade of West Berlin, the Berlin

airlift, the final separation of Western from Eastern Germany

and the formation of NATO in early 1949.

Thus, it can be said that although the Marshall Plan was

not the direct reason for the Cold War, it still played a very

important part in everything what happened in European history

during the 40 years while East and West were separated by an

iron curtain. Still, the Soviet reaction to the Marshall Plan

has long been viewed by historians as a turning point in the

development of the Cold War. The major question was whether the

Soviet rejection of the plan was merely an implementation of a

policy of confrontation with the West which had been formulated

earlier, or whether the American offer of aid and the

conditions attached to it provoked a fundamental reappraisal in

Moscow of its policy towards the West. The answer is, usually,

that it was the totality of the foreign policies of each side

that became the object of attack by the other.

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 At the time, the United States viewed Moscow’s response to

the Marshall plan as additional evidence of inherent Soviet

hostility and aggressiveness. In his memoirs, George F. Kennan

saw the Soviet response as indicative of a Soviet desire to

seize the industrial and human resources of Europe. From this

point of view, then, the Marshall Plan was not only a generous

initiative to prevent economic catastrophy in Western Europe,

but it was also a necessary defensive step taken to prevent

Soviet expansion into Western Europe. Moreover, the Soviet

rejection of the plan was a natural response of a frustrated

aggressor state whose expansionist pans had been thwarted. As

opposed to this interpretation of the Soviet rejection of the

Marshall Plan, another interpretation appeared.

The so called revisionist accounts of the origins of the

Cold War pointed out the underlying economic motivations of the

plan. Revisionists say that there has been an American desire

after World War II to maintain open access to markets around

the world, including Eastern Europe. They viewed American

policies as not simply geostrategic moves to defend Western

Europe from communist expansionism, but also as aggressive

poicies designed to protect and even expand the reach of the

world capitalist system. From this perspective, one can see the

Soviet rejection of the Marshall Plan as the natural response

of a noncapitalist state trying to avoid integration into

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capitalist world economy, and the subordination to the

industrialized West which such integration would mean.

This latter view suggests that while Stalin may have been

opportunistically aggressive during the early years of the Cold

War, Soviet foreign policy was motivated as much by fear of

vulnerability and losses as by making revolutionary gains.

According to historians’ most recent views, Soviet policy

in 1947 was largely defensive and reactive. In the spring of

1947, U.S. officials feared that the deteriorating economic

situation in Western Europe could lead to communists coming to

power in e.g. France or in Italy. If this were to happen,

American security would be threatened. At the same time,Soviet

officials had the same kind of uncertainty in Moscow. Soviets

viewed themselves relatively vulnerable, well aware that their

country was much weaker in industrial and military capability

than the U.S. Therefore, their prime concern was consolidating

the territory and security gains which the USSR had won in the

second World War. Because the relative weakness of the S.U., a

policy of confrontation with the West would not serve this

goal, it would undermine it instead.

Although the Soviet policy did not favor confrontation, it

was clear already that the continuation of wartime levels of

cooperation with the West would not be possible, since the West

refused to accept Soviet predominance in Eastern Europe. It

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seems that Stalin still hoped to reach a negotiated settlement

on most areas of difference, especially on the question of

Germany’s future. The Marshall Plan, however, radically changed

Stalin’s calculus and led him to shift away from this more

moderate line and to adopt a strategy of confrontational action

to secure Soviet interests.

Today, most historians agree that the real difficulty and

source of conflict in 1947 was neither Soviet nor American

’agression’. Rather, it lay in the unstable international

economic and political conditions in key European countries,

which led both sides to believe that the current status quo was

unstable and that assertive action was required to defend that

status quo. It was in this environment that the Western powers

felt forced to design the details of the Marshall Plan in such

a way that it would stabilize Western Europe, but only at the

cost of provoking a confrontation with the USSR. The same

environment forced Stalin to respond to the plan with a series

of tactically offensive steps which made the situation even

worse.

The Marshall Plan in 1947was followed, less than two years

later, by the creation of NATO, an alliance that contributed to

a political division of Europe for fourty years. With the

retreat of the Russians from Eastern Europe in 1989 the Cold

War and the partition of Europe came to an end. Some people say

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that a new Marshall Plan would be necessary to help the Eastern

European bloc join the European Union, and to help even Russia

overcome its crises. Of course this would not be possible

today, partly because the United States is no longer the one

and only economic superpower in the world, and partly because

principle investments abroad do not require the principle

thrust of a government any more.

Bibliography

George F. Kennan: Memoirs, 1925-1950, Boston: Little, Brown

and Co., 1967.

William Appleman Williams: The Tragedy of American Diplomacy,

New York: Dell, 1972

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Marshall Shulman: Stalin’s Foreign Policy Reappraised,

Cambridge,MA, 1963, CO: Westwien Press,

1985.

Michael J. Hogan: The Marshall Plan: America, Britain and the

Reconstruction of Western Europe,

Cambridge, CUP, 1987.

Internet sources:

http://turnerlearning.com/cnn/coldwar.html

http://www.washingtonpost.com/marshall.htm

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