The Marshall Plan And Its Consequences

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,

announced Marshall

the

Secretary

European

expressed

the

of

State

George

Recovery

Program.

In

American

government’s

C.

Marshall

his

speech,

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 Ministry,

in as

the the

Grand

Dining

Committee

Room

for

1

of

the

European

French

Foreign

Cooperation.

Many

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

equivalent

to

of about

Western $88

Europe.

billion.

Today

The

this

amount

of

amount money

is 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 2

all the great names of European industry were started or restarted 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 USSoviet relations. Although the recovery plan was a milestone in 3

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

adversary.

to

look

Three

at

the

important

Soviet events

Union

as

marked

America’s

this

main

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 4

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 5

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 7

to

avoid

integration

into

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 8

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 9

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

10

Marshall

Shulman:

Stalin’s

Foreign

Cambridge,MA,

1963,

Policy CO:

Reappraised,

Westwien

Press,

1985. Michael J. Hogan: The Marshall Plan: America, Britain and the Reconstruction

of

Western

Cambridge, CUP, 1987.

Internet sources: http://turnerlearning.com/cnn/coldwar.html http://www.washingtonpost.com/marshall.htm

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Europe,