In the aftermath of World War II, Europe was in ruins. After 6 years of war cities and industries across the continent were reduced to rubble from fighting and aerial bombings. Something needed to be done to return the countries back to their prewar levels. Enter the Marshall Plan.
Named after former US General and then current Secretary of State George Marshall, the 1947 plan outlined a strategy to provide relief to the battered European economies. The plan was actually called the European Recovery Plan (ERP), but it became synonymous with Marshall as he presented and championed the plan in 1947-1948.
A student of history, Marshall knew that the post war rebuilding effort needed to be drastically different than after WWI. The aftermath of political and economic instability (such as the hyperinflation of the German Mark) in various countries made a future war all but inevitable.
Breakdown of the Marshall Plan Aid by Country
Under the Marshall Plan, the US would provide aid to European countries in the form of grants and loans. A vast majority of the aid was considered grants, which did not have to be repaid to the US. This aid would go towards commodities such as food, fuel and machinery. In addition aid could be used for specific projects such as rebuilding and developing new infrastructure.
The aid was also used to encourage private investment into the European economies. US companies were encouraged to send engineers with expertise to help redevelop industrial capacity. The same was reversed as the aid allowed European citizens to visit the US and encourage learning and technological transfers.
The following list shows the Marshall Plan aid received by country:
- United Kingdom: ~$3.2B
- France: ~$2.7B
- Italy: ~$1.5B
- West Germany: ~$1.4B
- Netherlands: ~$1.1B
- Greece: ~$0.7B
- All Others: ~$2.7B
Operating over a period of four years the Marshall plan surpassed all expectations. The rampant hunger and starvation mostly disappeared, and economic activity skyrocketed. Each nation receiving funds had a higher economic output than their pre-war levels by 1952. It also had the benefited of reducing trade barriers and making European countries more interconnected. It is said the Marshall plan was the first step to the eventual European Union that is in existence today.
Critics of the Marshall Plan state that the program was just another form of American imperialism. Many of the stipulations provided arrangements that were also favorable to the US. It’s for this reason that the Soviet Union declined aid and blocked any of the Eastern European countries under their influence from receiving aid as well.
Throughout the decades the Marshall Plan has been lauded for the stability it brought Western Europe in the postwar years. For his efforts George Marshall won the Nobel Peace Prize in 1953.
Source: Marshall Foundation