Marshall Plan | Summary & Significance | Britannica (original) (raw)

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Formally:

European Recovery Program

Date:

April 1948 - December 1951

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Marshall Plan, (April 1948–December 1951), U.S.-sponsored program designed to rehabilitate the economies of 17 western and southern European countries in order to create stable conditions in which democratic institutions could survive.

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The United States feared that the poverty, unemployment, and dislocation of the post-World War II period were reinforcing the appeal of communist parties to voters in western Europe. On June 5, 1947, in an address at Harvard University, Secretary of State George C. Marshall advanced the idea of a European self-help program to be financed by the United States, saying

The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products—principally from America—are 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.

On the basis of a unified plan for western European economic reconstruction presented by a committee representing 16 countries, the U.S. Congress authorized the establishment of the European Recovery Program, which was signed into law by U.S. Pres. Harry S. Truman on April 3, 1948. Aid was originally offered to almost all the European countries, including those under military occupation by the Soviet Union. The Soviets early on withdrew from participation in the plan, however, and were soon followed by the other eastern European nations under their influence. This left the following countries to participate in the plan: Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, the United Kingdom, and western Germany.

Cold War Events

Consider President Truman's reasoning for using atomic bombs against Japan and issuing the Truman Doctrine Truman Doctrine March 12, 1947 George C. Marshall Marshall Plan April 1948 - December 1951 Berlin blockade and airlift Berlin blockade June 24, 1948 - May 12, 1949 NATO and the Warsaw Pact Warsaw Pact May 14, 1955 - July 1, 1991 Francis Gary Powers U-2 Incident May 5, 1960 - May 17, 1960 Bay of Pigs invasion April 17, 1961 Brandenburg Gate Berlin crisis of 1961 August 1961 Kennedy announces U.S. naval blockade of Cuba Cuban missile crisis October 22, 1962 - November 20, 1962 John F. Kennedy: Nuclear Test-Ban Treaty Nuclear Test-Ban Treaty August 5, 1963 Strategic Arms Limitation Talks 1969 - 1979 default image Mutual and Balanced Force Reductions October 1973 - February 9, 1989 Korean Air Lines flight 007 September 1, 1983 Reagan, Ronald; Gorbachev, Mikhail Reykjavík summit of 1986 October 11, 1986 - October 12, 1986 collapse of the Soviet Union August 18, 1991 - December 31, 1991

Under Paul G. Hoffman, the Economic Cooperation Administration (ECA), a specially created bureau, distributed over the next four years some $13 billion worth of economic aid, helping to restore industrial and agricultural production, establish financial stability, and expand trade. Direct grants accounted for the vast majority of the aid, with the remainder in the form of loans. To coordinate the European participation, 16 countries, led by the United Kingdom and France, established the Committee of European Economic Cooperation to suggest a four-year recovery program. This organization was later replaced by the permanent Organisation for European Economic Co-operation (OEEC), to which West Germany was ultimately admitted.

The Marshall Plan was very successful. The western European countries involved experienced a rise in their gross national products of 15 to 25 percent during this period. The plan contributed greatly to the rapid renewal of the western European chemical, engineering, and steel industries. Truman extended the Marshall Plan to less-developed countries throughout the world under the Point Four Program, initiated in 1949.

The Editors of Encyclopaedia BritannicaThis article was most recently revised and updated by Jeff Wallenfeldt.