What Was the Marshall Plan?

With the name of the Marshall Plan, the economic recovery program of some European countries is known, promoted and financed by the United States after the end of World War II.

This plan owes its name to who at that time was the United States Secretary of State, General George Marshall, who had been Head of Washington General Staff, appointed by President Franklin D. Roosevelt.

Although it was also called the Kingdom Plan, officially the name of this plan is the European Recovery Plan, and it was developed between 1947 and 1952.

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Why did the Marshall Plan emerge?

The devastation caused by Second World War In the countries that participated in the conflict, it had social, political and, above all, economic implications, especially in Germany, which was left with a severe economic crisis.

The entire productive apparatus, made up of small, medium, and large factories and industries from various European countries had been bombed and destroyed practically in its entirety, so it could not recover by itself.

Germany, who had lost the war, suffered the consequences of the separation of its territory in 1945, occupied by Soviets and Americans; and, later, in 1949 the well-known Cold War, in addition to the division of Germany into two countries.

Thus, after George Marshall’s proposal, the European Recovery Plan was approved by the United States Senate on March 14, 1948, with the support of the Democratic and Republican representatives. The purpose of the United States with the Marshall Plan was to recover and improve the conditions of the areas that suffered the consequences of the six years of devastation caused by the Second World War (1939-1945).

What’s more, the Plan was intended to remove trade barriers, modernize the industry and grow production so that the countries of Western Europe were economically stable nations.

Politically, the Plan was intended to limit the advance of communism and prevent this political current from entering that side of Europe.

The initial contribution of the Marshall Plan was $ 13 billion They were distributed in several European countries with greater industrial potential, the most benefiting countries being the United Kingdom, which obtained 26% of the total credit; West Germany and France with 11%, and 18 other nations that had these benefits.

Critics

Seen roughly, the Plan had an intention, if you will, noble, since no one can refuse to rebuild a country after heavy warfare. Nevertheless, this Plan has been severely criticized due to the interest of the United States of, on the one hand, keeping the advance of communism at bay, and on the other, improving the economy of European countries as a source of consumption for US production companies.

At the same time, the economic recovery of Europe opened the doors to American companies, which in a certain way also produced the fear that eventually the countries would become economically dependent on the United States.

How did it work?

The application of the Marshall Plan included the creation, in the United States, of the Office of Administration for Economic Cooperation (ACE), while the beneficiary countries formed the European Organization for Economic Cooperation (OECE), in order to make efficient management of financial aid.

Among the member countries were Germany, Austria, Belgium, Denmark, France, Greece, Ireland, Iceland, Italy, Luxembourg, Norway, the Netherlands, Portugal, the United Kingdom, Sweden, Switzerland and Turkey; then Canada, Spain and the United States, among others, were annexed.

The operation of the Marshall Plan consisted in that the aid sent by the United States was transferred to each local government, but the administration of the resources was joint between the countries and the ACE; while a commissioner from the North American office gave advice on the most appropriate way to manage money.

With the economic boost that Europe had, thanks to the Marshall Plan, The United States managed to promote the consumption of merchandise produced by them, which were initially basic necessities, and later were products for the reconstruction of cities (roads, distribution of basic services, communication routes of all kinds, etc.) and to recover infrastructures.

Of the 13,000 million dollars allocated to Europe by the Marshall Plan, about 3,200 went to the purchase of food and fertilizers, 3,400 went to raw materials and semi-manufactured products, about 1,900 went to vehicles and machinery, and 1,600 to fuels .

During the years of implementation of the Marshall Plan, that is, between 1948 and 1952, Europe showed a flourishing, improvement, prosperity and advancement of its economy. However, there are opinions about whether the Plan was simply one more factor that led to the development of the continent’s economy, considering the policies of each nation in terms of interest and the urgency of recovery.

What leaves no doubt is that during that period, the production of the European industry had an increase of 35%; agriculture also experienced production levels higher than those of the countries before the war; there was a considerable and noticeable reduction in poverty and hunger and the general standard of living was recovered. Furthermore, the Marshall Plan is also credited with laying the foundations for the formation of international organizations, such as the European Communities, forerunners of the European Union.

Despite the opinions and interpretations about the Marshall Plan, history shows that this was a plan that helped on a large scale the recovery of the countries of Europe and the configuration of the world as we know it today.

In conclusion, and with conflicting opinions, the Marshall Plan had its clear objectives:

  • Overcome the European economic insolvency due to the consequences it would bring to the United States’ own economy.
  • Avoid the development and expansion of communism.
  • To form an economic structure that would strengthen the formation of democratic countries and governments.

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