Most reject the idea that it alone miraculously revived Europe, as evidence shows that a general recovery was already underway. [124] By looking at polling data over time from pre-World War II to post-World War II, one would find that there was a change in public opinion in regards to ideology. [38], The United States was already spending a great deal to help Europe recover. [34] Historian Nicholas Balabkins concluded that "as long as German industrial capacity was kept idle the economic recovery of Europe was delayed. Aid was originally offered to almost all the European countries, including those under military occupation by the Soviet Union. Through the Office of Policy Coordination money was directed toward support for labor unions, newspapers, student groups, artists and intellectuals, who were countering the anti-American counterparts subsidized by the communists. [7], Criticism of the Marshall Plan became prominent among historians of the revisionist school, such as Walter LaFeber, during the 1960s and 1970s. The plan contributed greatly to the rapid renewal of the western European chemical, engineering, and steel industries. Would it have been possible for the US to return to an isolationist foreign policy? "[63]It argued that "the bosses of Wall Street" were "tak[ing] the place of Germany, Japan, and Italy". This surprising result suggests that Europe itself was primarily responsible for its own reconstruction, and that the Marshall Plan and IBRD loans may have played a much smaller role in aiding European reconstruction than previously thought. Marshall Plan aid allowed the nations of Western Europe to relax austerity measures and rationing, reducing discontent and bringing political stability. He states that it was Erhard's reductions in economic regulations that permitted Germany's miraculous recovery, and that these policies also contributed to the recoveries of many other European countries. In an attempt to keep the speech out of American papers, journalists were not contacted, and on the same day, Truman called a press conference to take away headlines. ! These efforts had important effects, but they lacked any central organization and planning, and failed to meet many of Europe's more fundamental needs. [116], In accordance with the agreements with the Soviet Union, shipment of dismantled German industrial installations from the west began on March 31, 1946. In 1947 U.S. Secretary of State George C. Marshall, for whom the Marshall Plan is named, advanced the idea of a European self-help program to be financed by the United States, saying that "Europes requirements for the next three or four yearsare so much greater than her present ability to pay that she must have substantial additional help or face deterioration of a very grave character.". He accused the United States of attempting to impose its will on other independent states while at the same time using economic resources distributed as a relief to needy nations as an instrument of political pressure. The Soviet Reaction to the Marshall Plan, 1947 Scott D. Parrish Lecturer, Department of Government University of Texas at Austin Introduction The Soviet rejection of the Marshall Plan in the summer of 1947 has long been viewed as a turning point in the development of the Cold War. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. During that conference, on the initiative of the delegations of Australia and Mexico, a motion was adopted which, without explicitly mentioning Spain, referred to it with these terms: With regard to paragraph 2 of chapter III, the delegation of Mexico considers that this paragraph can not be applied to States whose regimes were established with the help of military forces from countries that have fought against the United Nations as long as these regimes remain in power. [115], The Soviet Union had been as badly affected as any other part of the world by the war. She is a young woman who is eager to learn and has a keen mind. [117] Examples of material received by the Soviets were equipment from the Kugel-Fischer ballbearing plant at Schweinfurt, the Daimler-Benz underground aircraft-engine plant at Obrigheim, the Deschimag shipyards at Bremen-Weser, and the Gendorf powerplant. While the Plan refers to the official number of poor in the country as 33,600 households or 122,700 individuals, the Government is initially focusing on the absolute poor, about 10,000 households . The BLS used these statistical technologies to create Factory Performance Reports for Western European nations. Spain joined the North Atlantic Treaty Organization (NATO) in 1982. Any government that is willing to assist in recovery will find full co-operation on the part of the United States. Receive updates in your inbox as soon as new content is published on our website, The Marshall Plan: Design, Accomplishments, and Significance, A New Look at the Bretton Woods Agreement, The Arsenal of Democracy: The United States in World War II, The COVID-19 Recession in Historical Perspective, Read more about the author and her research. It was formally called the European Recovery Program. [citation needed], The U.S. government did not give money directly to the participating countries so that they could buy whatever they thought they needed. Sources. By Paulina Restrepo Echavarria , Brian Reinbold. He offered American aid to promote European recovery and reconstruction. He offered aid, but the European countries had to organize the program themselves. Citing Literature Volume 65, Issue 1 February 2012 Pages 91-119 Information When the Soviet Union refused to participate or allow its satellites to participate, the Marshall plan became an element of the emerging Cold War. [69] The poverty and starvation of the immediate postwar years disappeared, and Western Europe embarked upon an unprecedented two decades of growth that saw standards of living increase dramatically. In order not to cause enmity with the Soviet Union, Marshall announced that, The Marshall Plan sparked a resurgence in European industrialization and attracted extensive investment to the region. The emerging doctrine of containment (as opposed to rollback) argued that the United States needed to substantially aid non-communist countries to stop the spread of Soviet influence. To remain in Mexico, a Spaniard had to gain exceptions to both national and state laws. If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked. Some eighteen European countries received Plan benefits. How come instead of the policy of "Containment", the U.S. didn't try an "Open Immigration" policy instead? The American supplier was paid in dollars, which were credited against the appropriate European Recovery Program funds. The countries that received funds under the plan didnt have to repay the United States, as the monies were awarded in the form of grants. They write new content and verify and edit content received from contributors. 2023, A&E Television Networks, LLC. The United Kingdom and France received the most at $33 billion and $28 billion, respectively. In all, Great Britain received roughly one-quarter of the total aid provided under the Marshall Plan, while France was given less than one fifth of the funds. They state: It was not large enough to have significantly accelerated recovery by financing investment, aiding the reconstruction of damaged infrastructure, or easing commodity bottlenecks. The two agreed that it would be necessary to invite the Soviets as the other major allied power. On the morning of May 9, 1945, Europe awoke at peace but also in financial ruins. To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. Another 16 billion marks represented postwar loans by the US. ", noted Representative Frederick Smith of Ohio. The British government considered it politically impossible to cooperate with Spain within the Marshall Plan. [C] "Marshall Plan" has become a metaphor for any very large-scale government program that is designed to solve a specific social problem. On June 13, 1940, when the Germans were about to enter Paris, Franco abandoned "strict neutrality" and declared himself "non-belligerent", which was the status that Italy had before entering war. Furthermore, Europes average imports to GDP from 1950-60 were about 10%, which is relatively small compared with future decades. Herbert Hoover noted that "The whole economy of Europe is interlinked with German economy through the exchange of raw materials and manufactured goods. Welfare Loss Cap 19471955 26 percent GDP. Why didn't the eastern bloc accept the Marshall aid? What benefit did the Marshall Plan bring to the United States? Franco did not try to expand the borders of Spain. [114], Large parts of the world devastated by World War II did not benefit from the Marshall Plan. The analyses in the Factory Performance Reports and the "hands-on" experience had by the European productivity teams effectively identified productivity deficiencies in European industries; from there, it became clearer how to make European production more effective. From July 1945 through June 1946, the United States shipped 16.5 million tons of food, primarily wheat, to Europe and Japan. If you look at socialist and communist nations such as Russia, Venezuela, China, North Korea and others, you will find that their economies are mostly terrible. Yes, the US used money from illegal arms sales to Iran to fund Contra rebels fighting communists in Nicaragua (Iran-contra scandal). The opposition argued that it made no sense to oppose communism by supporting the socialist governments in Western Europe; and that American goods would reach Russia and increase its war potential. Notably, invitations were extended to the Soviet Union and its satellite states. The brainchild of U.S. Secretary of State George C. Marshall, for whom it was named, it was crafted as a four-year plan to reconstruct cities, industries and infrastructure heavily damaged during the war and to remove trade barriers between European neighborsas well as foster commerce between those countries and the United States. Doesn't make sense to me, can someone explain? [2] The Marshall Plan proposed the reduction of interstate barriers and the economic integration of the European Continent while also encouraging an increase in productivity as well as the adoption of modern business procedures. [63]It described the world now breaking down "into basically two campsthe imperialist and antidemocratic camp on the one hand, and the anti-imperialist and democratic camp on the other". SOURCES: Tarnoff, 2018; Bureau of Labor Statistics; and authors calculations. [99], Ireland which received US$146.2 million through the Marshall Plan, received US$128.2 million as loans, and the remaining US$18 million as grants. You also have the option to opt-out of these cookies. Hope this helps! [20], By 1952, as the funding ended, the economy of every participant state had surpassed pre-war levels; for all Marshall Plan recipients, output in 1951 was at least 35% higher than in 1938. While the thousands of European leaders took their work/study trips to the United States, they were able to observe a number of aspects of American society as well. This could compare to "Why were the British so concerned about the spread of the French empire?" Direct grants accounted for the vast majority of the aid, with the remainder in the form of loans. They observed a democratic society with open universities and civic societies in addition to more advanced factories and manufacturing plants. Its recovery is attributed to traditional economic stimuli, such as increases in investment, fueled by a high savings rate and low taxes. 2) The U.S. is a capitalist country, and so its prosperity depends on having people buy its products all over the world. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System. President Harry Truman signed the Marshall Plan on April 3, 1948, and aid was distributed to 16 European nations , including Britain, France, Belgium, the Netherlands, West Germany and Norway. France's major concern was that Germany not be rebuilt to its previous threatening power. Much of this aid was designed to restore infrastructure and help refugees. IBRD lending also supplemented European reconstruction, and the following figures show IBRD disbursements to Europe from 1947-60 by year and by country, respectively. [99] The proportion of Marshall Plan loans versus Marshall Plan grants was roughly 15% to 85% for both the UK and France. [83] The US Bureau of Labor Statistics (BLS) contributed heavily to the success of the Technical Assistance Program. The countries that remained were Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, the United Kingdom, and western Germany. The Marshall Plan was a massive program of aid from the United States to sixteen western and southern European countries, aimed at helping economic renewal and strengthening democracy after the devastation of World War II. This counterpart money, in turn, could be used by the government for further investment projects. [36], With a communist, although non-Soviet, insurgency threatening Greece, and Britain financially unable to continue its aid, the President announced his Truman Doctrine on March 12, 1947, "to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures", with an aid request for consideration and decision, concerning Greece and Turkey. It was enacted in 1948 and . The Soviet Union's "alternative" to the Marshall plan which was purported to involve Soviet subsidies and trade with western Europe, became known as the Molotov Plan, and later, the Comecon. He said it was without economic justification; however, it was "absolutely necessary" in "the world battle against communism." To highlight the significance of Americas largesse, the billions committed in aid effectively amounted to a generous 5 percent of U.S. gross domestic product at the time. Communism, in some degrees, is impossible to realize. Yet few know much about it. At the start of the plan, these imports were mainly much-needed staples such as food and fuel, but later the purchases turned toward reconstruction needs as was originally intended. Direct link to joicewhx's post OK, very good question. Still, not all participating nations benefitted equally. Before proposing anything to Congress in 1947, the Truman administration made an elaborate effort to organize public opinion in favor of the Marshall Plan spending, reaching out to numerous national organizations representing business, labor, farmers, women, and other interest groups. Language links are at the top of the page across from the title. [61]Communist parties were to struggle against the US presence in Europe by any means necessary, including sabotage. France, for example, sent 500 missions with 4700 businessmen and experts to tour American factories, farms, stores, and offices. To clarify the American position, a major address by Secretary of State George Marshall was planned. "In effect, he told the Nation that we have lost the peace, that our whole war effort was in vain. The Marshall Plan was originally scheduled to end in 1953. [120], From the end of the war to the end of 1953, the US provided grants and credits amounting to $5.9 billion to Asian countries, especially Rep. Of China (Taiwan) ($1.051 billion), India ($255 million), Indonesia ($215 million), Japan ($2.444 billion), South Korea ($894 million), Pakistan ($98 million) and the Philippines ($803 million). Corrections? This website uses cookies to improve your experience while you navigate through the website. [citation needed], In January 1947, Truman appointed retired General George Marshall as Secretary of State. In the latter years, under pressure from the United States Congress and with the outbreak of the Korean War, an increasing amount of the aid was spent on rebuilding the militaries of Western Europe. Furthermore, Gallup polls in England, France, and Italy showed favorable majorities over 60%. Given the refusal to participate on the part of the so-called Eastern Bloc of Soviet states, the initiative certainly reinforced divisions that were already beginning to take root on the continent. Direct link to Isaac Ashdown's post Because, Europe was so vu, Posted 7 years ago. In addition, the Francoist State overcame the storm through the so-called substitution policies, bridging with Spanish-American republics and Arab countries in the hope that the Western countries, driven by the Cold War, rectify their attitude towards Spain.[6]. How is the political model of communism any less sound than the model of capitalism and a democratic republic? However, countries returned about 5 percent of the money to cover the administrative costs of implementing the plan. In view of the Soviet failure to do so, the western zones halted the shipments east, ostensibly on a temporary basis, although they were never resumed. Japan saw a large infusion of US investment during the Korean War. NOTE: We exclude countries that do not belong to our Europe aggregate; the excluded amount is less than $5 billion in 2019 dollars. The Marshall Plan, just as GARIOA, consisted of aid both in the form of grants and in the form of loans. A Gallup Poll taken between the months of July and December 1947 shows the percentage of Americans unaware of the Marshall Plan fell from 51% to 36% nationwide. The main reason for the reluctance of the Spaniards to enter the war was due to Spains dependence on US imports. What was the primary goal of the Marshall Plan? [104] Since Germany chose to repay the aid debt out of the German Federal budget, leaving the German ERP fund intact, the fund was able to continue its reconstruction work. Great question! This caused most Europeans to rely on a 1,500 calorie per day diet. The other 40% of the counterpart funds were used to pay down the debt, stabilize the currency, or invest in non-industrial projects. Replacing an earlier proposal for a Morgenthau Plan, it operated for four years beginning on April 3, 1948. ", "European Recovery Program" redirects here. To help rebuild after the war, the United States pledged $13 billion of aid to Europe in the Marshall Plan. Necessary cookies are absolutely essential for the website to function properly. "Prologue to the Marshall Plan: The Origins of the American Commitment for a European Recovery Program,", Reynolds, David. Over the next decade, a considerable amount of American aid would go to Spain but less than its neighbors had received under the Marshall Plan. In today's dollars, America paid more than $88 billion for Europe's recovery compared to $2 billion, the . "[39] Hoover's report led to a realization in Washington that a new policy was needed; "almost any action would be an improvement on current policy. Posted 7 years ago. Also, you are from Spain, you never got Marshall Plan, why do you lie? Who were the three allies in World War II? Marshall's speech called on European nations to work with each other and the United States on economic recovery, rather than to simply receive an injection of financial aid to rebuild Europe. Europe includes the following countries: Austria, Belgium, Denmark, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey and the United Kingdom. HISTORY.com works with a wide range of writers and editors to create accurate and informative content. Spain's American empire The conquests. Copyright 2023 - globalanswers - All Rights Reserved, The British could not accept the inclusion of Spain in the ERP. Of the Soviet Union Truman said, "The situation in the world today is not primarily the result of the natural difficulties which follow a great war. [42] Already in 1943, the United Nations Relief and Rehabilitation Administration (UNRRA) was founded to provide relief to areas liberated from Germany. The Marshall Plan helped with supplies for factories. Rpke criticized the Marshall Plan for forestalling the transition to the free market by subsidizing the current, failing systems. Direct link to David Alexander's post This could compare to "Wh, Posted 2 years ago. Thus the plan ended in 1951, though various other forms of American aid to Europe continued afterward. Updated: November 1, 2022 | Original: December 16, 2009. [53] Stalin only changed his outlook when he learned that (a) credit would only be extended under conditions of economic cooperation, and (b) aid would also be extended to Germany in total, an eventuality which Stalin thought would hamper the Soviets' ability to exercise influence in western Germany. ", Elwood, David, "Was the Marshall Plan Necessary?" Emma Lazarus' great poem is not the law of the land LOL. [70] The plan also had some opponents on the left, led by Henry A. Wallace, the former vice president. By implementing technological literature surveys and organized plant visits, American economists, statisticians, and engineers were able to educate European manufacturers in statistical measurement. The truth of the matter is that Europes requirements for the next three or four years of foreign food and other essential productsprincipally from Americaare so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of a very grave character. We strive for accuracy and fairness. Direct link to Kamryn Cooley's post So, I have a question- so, Posted 2 years ago. In fact, it could be argued that the only world power not structurally damaged by the conflict had been the United States. After winning the war, Franco became leader of the now one-party Spain, which he ruled until his death. 3 What countries were part of the Marshall Plan? To conduct this analysis, the BLS performed two types of productivity calculations. Commonly known as the Marshall Plan, it aimed to stabilize Europe economically and politically so that European nations would not be tempted by the appeal of communist parties. With the escalation of the Cold War, the United States reconsidered its position and in 1951 embraced Spain as an ally since it was encouraged by Franco's aggressive anti-communist policies. The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total). [12] To combat the effects of the Marshall Plan, the USSR developed its own economic recovery program, known as the Molotov Plan. In addition, the regions transportation infrastructurerailways, electric utilities, port facilities, roads, bridges and airportshad suffered extensive damage during airstrikes and artillery attacks, and the shipping fleets of many countries had been sunk. European Recovery Program assistance is said to have contributed to more positive morale in Europe and to political and economic stability, which helped diminish the strength of Both the Americans and many of the European leaders felt that European integration was necessary to secure the peace and prosperity of Europe, and thus used Marshall Plan guidelines to foster integration. The George C. Marshall Foundation.Truman and the Marshall Plan. The Marshall Plan did not, in and of itself, cause Western European economic recovery. [100] By 1969 the Irish Marshall Plan debt, which was still being repaid, amounted to 31 million pounds, out of a total Irish foreign debt of 50 million pounds. What is thought to influence the overproduction and pruning of synapses in the brain quizlet? In the West, the bombing had destroyed 5,000,000 houses and apartments, and 12,000,000 refugees from the east had crowded in. The Korean War. The trade relations fostered by the Marshall Plan helped forge the North Atlantic alliance that would persist throughout the Cold War in the form of NATO. How many countries were assisted under the Marshall Plan and how much assistance was given? Truman is seated on a chair in front of an outdoor landscape with the US Capitol Building in the background. London tried to convince Washington that that American economic aid, especially to the sterling currency area, was necessary to solve the dollar shortage. What were the benefits and potential pitfalls of Truman's offer to support any country trying to resist communism? The Benelux countries (Belgium, Netherlands, and Luxembourg), despite also suffering under the Nazis, had long been closely linked to the German economy and felt their prosperity depended on its revival. The British could not accept the inclusion of Spain in the ERP because it would give weight to the negative image that the USSR promoted in relation to the ideology of the Marshall Plan.. Please refer to the appropriate style manual or other sources if you have any questions. In France, and most other countries, the counterpart fund money was absorbed into general government revenues, and not recycled as in Germany. Let us know if you have suggestions to improve this article (requires login). First, given the wars destruction to Europes manufacturing base, we would have expected Europe to import large amounts of manufacturing goods primarily from the U.S., since the region likely would not have been able to manufacture enough goods needed to meet the demands of reconstruction. Probably because it received the least damage from battles in WWII and did not need as much rebuilding. It was the ideological influence of the Marshall Plan had the largest impact; Western European business structures became more Americanized, international trade barriers and tariffs were. Technically known as the European Recovery Program, the plan was passed by the U.S. Congress with a decisive majority and was signed by President Truman on April 3, 1948--just in time to influence the Italian election in that year. 2. These cookies will be stored in your browser only with your consent. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. The $17 billion was in the context of a US GDP of $258 billion in 1948, and on top of $17 billion in American aid to Europe between the end of the war and the start of the Plan that is counted separately from the Marshall Plan. Over 42 months, the Marshall Plan cost the United States just $13.3 billion. The plan had bipartisan support in Washington, where the Republicans controlled Congress and the Democrats controlled the White House with Harry S. Truman as president. In the popular board game Twilight Struggle the Marshall Plan is represented by a 4-point US Early War card of the same name. The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down. Counterpart funds were used to finance large-scale tours of American industry. Reports provided to Marshall suggested that some regions of the continent were on the brink of famine because agricultural and other food production had been disrupted by the fighting. [21][B] Over the next two decades, Western Europe enjoyed unprecedented growth and prosperity, but economists are not sure what proportion was due directly to the ERP, what proportion indirectly, and how much would have happened without it. [121], Canada's infrastructure was damaged little by the war, as most of the war was fought in Europe, Asia, and the Pacific. [54] It claimed that "marshallization" must be resisted and prevented by any means and that French and Italian communist parties were to make maximum efforts to sabotage the implementation of the Plan. IBRD lending had a much more limited scopeit only funded specific, approved projectsand total IBRD lending to these countries during this period amounted to only about $12 billion in 2019 dollars, which pales in comparison to the Marshall Plan. [123] By the time the Marshall Plan was ready to be implemented, there was a general consensus throughout the American public that this was the right policy for both America, and the countries who would be receiving aid. Its worth noting, too, that the Central Intelligence Agency (CIA), the secret service agency of the United States, received 5 percent of the funds allocated under the Marshall Plan. At the same time, the nonparticipation of the states of the Eastern Bloc was one of the first clear signs that the continent was now divided.

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