CONCEPT – THE MARSHALL PLAN

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CONCEPT – THE MARSHALL PLAN

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• The Marshall Plan: It was called the European Recovery Program. After the second world war, USA started providing aid to Western Europe to help rebuild it. This plan was enacted in 1948 and provided more than $15 billion. Post-war Europe was in dire straits, with millions of citizens killed or wounded in war, or the Holocaust.
• Who conceptualised it? The U.S. Secretary of State George C. Marshall crafted it as a four-year plan to reconstruct cities, industries and infrastructure damaged in the war and to remove trade barriers between European neighbors. He also wanted to foster commerce between those countries and the USA. (main aim)
• Stop Communism! In addition to economic goals, a strategic goal of the Marshall Plan was to halt the spread of communism (by USSR) on the European continent.
• Cold War commences: Implementation of the Marshall Plan was also the beginning of the Cold War between the United States and its European allies, and the Soviet Union. The USSR had taken control of much of central and eastern Europe (areas earlier under the Nazis) and established its satellite communist republics.
• NATO: The Marshall Plan was a push towards the creation of NATO (North Atlantic Treaty Organization), the mmilitary alliance between North American and European countries established in 1949.
• President Harry Truman: He signed the Marshall Plan in April 1948 as part of his Truman Doctrine, and aid was distributed to 16 European nations, including Britain, France, Belgium, the Netherlands, West Germany and Norway. That amounted to a huge 5 % of U.S. gross domestic product at the time. Aid was on a per capita basis, with larger amounts given to major industrial powers, such as West Germany, France and Great Britain.
• Profit for American companies: Most  resources and goods purchased with Marshall Plan funds came from the United States itself. This was good for American exporters and domestic industries. It helped the US to recover from a short-term economic slump in 1946-7 and enter a period of economic boom. American corporations built networks and established trade links in Europe that continued well after the ERP had run its course. The age of free trade had begun.

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• SUMMARY

1. WHAT? The Marshall Plan was another name for the European Recovery Plan (ERP). It was an extensive aid program for post-war Europe, approved by President Harry Truman in 1947.
2. WHEN? In the four-year period between 1947 and 1951, more than $13 billion of American aid was advanced to European nations for post-war reconstruction.
3. HOW? Marshall Plan aid was overseen by the ECA and remitted with strict conditions. Among them were the adoption of free-market economic policies and liberal-democratic political systems.
4. RESULT? This aid led to the post-war reconstruction of Europe. It helped American commercial interests by stimulating the US economy and opening up Europe for future trade. A Trans-Atlantic pact was alive now.
5. CONTEXT? In the context of the Cold War, the Marshall Plan helped weak and war-ravaged governments and economies to recover and avoid falling prey to communist revolutions.