The Marshall Plan was the economic aid plan for the recovery of European economies instituted by George Marshall when he was secretary of state in the Truman administration in the USA. He first suggested the plan in a famous speech at Harvard in June 1947. The idea was that a very large dollar programme of aid would be provided for post-war reconstruction on condition that the European powers first started by indicating a serious intent to collaborate rather than compete against each other. Warmly welcomed by France and Britain the plan was bitterly opposed by the Soviet Union, which saw it as an attempt to exert American influence on post-war Europe, and thus as a threat to their own control. The Western European nations rapidly set up the Organization for European Economic Co-operation (OEEC, which later became the OECD) to allocate the funds, and by 1948 the dollars started flowing in. In the four years between 1948 and 1952 over US $17,000 million were given, with the United Kingdom and France, along with West Germany, being the main beneficiaries. Though Marshall would have been prepared to seek congressional approval for aid to Eastern European nations, Soviet opposition precluded even this possibility.
As well as being the major single cause of the rapid economic recovery of Europe, the supply of these funds during the early days of the cold war (the Berlin Blockade, for example, coincided with the first payments) helped cement the alliances that later became NATO and the Warsaw Pact. The UK would certainly have found the recovery even harder had it not been for Marshall aid, especially as the initial post-war defence cuts had to be reversed with the increasing political tension, especially over the Korean War. Other countries, notably France, were able to take advantage of the dollars and the dislocation of social patterns arising from the war not just to repair, but massively to modernize their economies; by the late 1950s the French economy was no longer recognizable as a development of the Third Republic economy. The Marshall Plan lives in American political memory as their most generous effort to help democracy, and has become a catchword, so that plans to aid the post-communist Eastern European economies were often referred to as ‘a new Marshall Plan’. It has not escaped critics that the Marshall Plan was, in the long term, both politically and economically helpful for the USA. It not only strengthened pro-American governments threatened by domestic communist parties, as in France, but ensured useful markets for American exports. Doubtless similar observations could be made about the Eastern European countries receiving aid 40 years later.
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