Marshall Plan

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Marshall Plan

or

European Recovery Program,

project instituted at the Paris Economic Conference (July, 1947) to foster economic recovery in certain European countries after World War II. The Marshall Plan took form when U.S. Secretary of State George C. MarshallMarshall, George Catlett,
1880–1959, American general and cabinet member, b. Uniontown, Pa. A career army officer, Marshall graduated from the Virginia Military Institute.
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 urged (June 5, 1947) that European countries decide on their economic needs so that material and financial aid from the United States could be integrated on a broad scale. In Apr., 1948, President Truman signed the act establishing the Economic Cooperation Administration (ECA) to administer the program.

The ECA was created to promote European production, to bolster European currency, and to facilitate international trade. Another object was the containment of growing Soviet influence (through national Communist parties), especially in Czechoslovakia, France, and Italy. Paul G. Hoffman was named (Apr., 1948) economic cooperation administrator, and in the same year the participating countries (Austria, Belgium, Denmark, France, West Germany, Great Britain, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, Turkey, and the United States) signed an accord establishing the Organization for European Economic Cooperation (later called the Organization for Economic Cooperation and DevelopmentOrganization for Economic Cooperation and Development
(OECD), international organization that came into being in 1961. It superseded the Organization for European Economic Cooperation, which had been founded in 1948 to coordinate the Marshall Plan for European economic recovery
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) as the master coordinating agency.

The ECA functioned until 1951, when its activities were transferred to the Mutual Security Agency. Over $12 billion was dispersed (1948–51) under the program. From the start the Soviet Union strongly opposed the Marshall Plan while the various countries in Eastern Europe denounced or ignored it. Completed in 1952, the Marshall Plan was one aspect of the foreign aidforeign aid,
economic, military, technical, and financial assistance given on an international, and usually intergovernmental level. U.S. foreign aid programs have included at least three different objectives: rehabilitating the economies of war-devastated countries,
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 program of the United States and greatly contributed to the economic recovery of Europe.

Bibliography

See S. E. Harris, ed., Foreign Economic Policy for the United States (1948, repr. 1968); H. B. Price, The Marshall Plan and Its Meaning (1955); J. B. DeLong and B. Eichengreen, The Marshall Plan (1991); G. Behrman, The Most Noble Adventure (2007).

Marshall Plan

 

the so-called European recovery and development program of economic aid from the USA instituted after World War II.

The Marshall Plan’s goal was to support capitalism in Western Europe, which had been shaken by the war, and to prevent the realization of progressive social changes in the countries of Europe through the creation of a united imperialist front against the growing liberation movement in the world and, first and foremost, against the USSR and the world socialist system that was in the process of formation. The Marshall Plan and the so-called Truman Doctrine preceded and contributed to the creation of the aggressive NATO bloc (1949).

The idea of the Marshall Plan was set forth by US secretary of state G. C. Marshall in an address at Harvard University on June 5, 1947. It was supported by Great Britain and France, which, at a conference in Paris of ministers of foreign affairs of the USA, Great Britain, France, and the USSR (June-July 1947), proposed the founding in Europe of an organization or a “steering committee” to explore the resources and needs of the countries of Europe and determine the development of the main branches of industry; this in reality would mean interference in the domestic affairs of these countries.

To counterbalance the Marshall Plan, the USSR introduced a proposal directed at ensuring equal economic cooperation while respecting the national sovereignty of states. This proposal, however, was rejected by the Western powers, which resulted in a refusal by the USSR and the countries of people’s democracy to participate in the Marshall Plan.

Sixteen capitalist states agreed to participate in the plan: Great Britain, France, Italy, Belgium, the Netherlands, Luxembourg, Sweden, Norway, Denmark, Ireland, Iceland, Portugal, Austria, Switzerland, Greece, and Turkey. In July these countries signed an agreement on the creation of the Organization (originally, Committee) for European Economic Cooperation, which was to develop a joint “program of European recovery.” The Marshall Plan began operating in April 1948, when a US law providing for a four-year program of “aid to foreign states” came into effect, furnishing assistance to Western European countries on the basis of bilateral agreements. Agreements were signed in 1948 with all the above-mentioned countries (except Switzerland, which refused to sign such an agreement, although it participated in the plan).

According to the agreements, the countries participating in the plan pledged to contribute to the development of “free enterprise,” encourage private American investments, cooperate in lowering customs tariffs, supply the USA with certain scarce goods, ensure financial stabilization, create special funds in the national currencies which would be released as a result of the receipt of American aid and the expenditure of which would be controlled by the USA, and report regularly on the use of the funds received. To exercise control over the implementation of the Marshall Plan, the Economic Cooperation Administration was created, headed by big American financial and political figures.

The aid was given out of the US federal budget in the form of subsidies or gratuitous loans. From April 1948 to December 1951 the USA spent approximately $17 billion on the plan. The main portion (around 60 percent) was received by Great Britain, France, Italy, and the Federal Republic of Germany (FRG), the latter also being included in the plan. (A bilateral agreement between the USA and the FRG was signed in December 1949.) On Dec. 30, 1951, the Marshall Plan officially expired and was replaced by a “mutual security” agreement (passed by Congress on Oct. 10, 1951) providing simultaneous military and economic aid.

REFERENCES

Inozemtsev, N. N. Vneshniaia politika SShA v epokhu imperializma. Moscow, 1960.
Allen, D. Plan Marshalla: Plan vosstanovlenia Hi voennyi plan? Moscow, 1949. (Translated from English.)
Price, H. B. The Marshall Plan and Its Meaning. [New York, 1955.]

D. S. ASANOV

Marshall Plan

U.S.-led project to rebuild post-WWII Europe. [Eur. Hist.: Van Doren, 515]