A Political and Economic Dictionary of Western Europe, First Edition
The Marshall Plan was a programme of aid provided by the USA to facilitate the economic reconstruction of Western Europe following the Second World War. The plan, also known as the European Recovery Programme, was announced on 5 June 1947 by US Secretary of State George Marshall. The US $13,300m. fund was allocated to 16 states over a four-year period. The main recipients were the United Kingdom, France, Italy and West Germany.
The USA offered aid to Europe via the Marshall Plan for a variety of reasons. It was recognized that US domestic economic development depended on the growth of US trade and investment abroad.
It was necessary to provide funds to European countries so that they could purchase imports from the USA, which produced one-half of the world’s manufactured goods in 1945. Moreover, it was thought that investing in the reconstruction of the European economy would improve the standard of living and make it more difficult for communists to take control of Western Europe. Third, by linking a target of European integration to the receipt of funds, the USA aimed to lock Germany into the Western Alliance and reduce the security risk attached to German economic recovery.
Aid under the Marshall Plan was originally made available to the whole of Europe and the Soviet Union (USSR) was invited to attend the Paris conference in June 1947 to discuss George Marshall’s offer. However, Soviet demands were not met and the USSR interpreted the plan as one to create an anti-Soviet bloc in Europe, which would include the western part of occupied Germany. The Soviet foreign minister, Vyacheslav Molotov, left the meetings, and urged Central and Eastern European Countries not to become involved in the plan. In this way, aid from the Marshall Plan cemented the ideological division that developed into the Cold War in Europe.
The Marshall Plan facilitated a period of rapid economic growth in Western Europe, in 1948–52. It also promoted the process of European integration, marked initially by the establishment of the European Coal and Steel Community by the Treaty of Paris of 1951. The Organisation for Economic Co-operation and Development was originally established as the Organisation for European Economic Development to manage the fund.
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