By 1951, the world was changing. During 1948 - 1951 years. All told, the U.S. provided $13.3 billion (about $140 billion in 2017 dollars) in assistance between 1948 and 1951 to 16 Western European countries through the ECA, with the vast majority of funds allotted to commodity purchases. Farms and towns were destroyed, industries bombed, and millions of civilians either killed or maimed. Please refer to the appropriate style manual or other sources if you have any questions. George Marshall was awarded the 1953 Nobel Peace Prize for his role in creating the Marshall Plan. C) European economic recovery meant that the sale of U.S. goods to European countries would increase. The money would be used to buy goods from the United States, and they had to be shipped across the Atlantic on American merchant vessels. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for the general European revival. About one fourth of the aid was given to Great Britain. Definition and Examples, Containment: America's Plan for Communism, Luxembourg (administered jointly with Belgium). What did the Marshall Plan do? 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. Ultimately, 17 countries would benefit from the Marshall Plan. the Marshall plan was launched to prevent an economic collapse that would aid the spread of Communism. Although the Soviet Union was not excluded from participating in the Marshall Plan, the Soviets and their allies were unwilling to meet the terms established by the Plan. The program provided about $15 billion to help finance the reconstruction of cities, industries, and infrastructure of Western Europe. It made European countries dependent on the USA and was refused by Soviet-occupied countries in Eastern Europe. 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. Kennan was known for his idea of containment, a central component of the Truman Doctrine. The plan contributed greatly to the rapid renewal of the western European chemical, engineering, and steel industries. Between 1948 and 1951, the United States undertook what many consider to be one of its more successful foreign policy initiatives and most effective foreign aid programs. ThoughtCo, Aug. 28, 2020, thoughtco.com/marshall-plan-economic-aid-1779313. It was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent. Marshall called upon two State Department officials, George Kennan and William Clayton, to assist with the construction of the plan. It stipulated that American aid to Europe could only be spent on American products. Truman tasked George Marshall with developing a plan to carry out this goal. The Marshall Plan, it should be noted, benefited the American economy as well. The May 1948 issue of Kiplinger was devoted to taking advantage of the Marshall Plan's economic ripple effect. Both used economic aid to court European allies. Because of its location a continent away, the United States was the only country that did not suffer major devastation during the war and thus it was to the U.S. that Europe looked for help. Secretary of State George C. Marshall was appointed to office by President Truman in January 1947. Explanation: The Marshall Plan, or European Recovery Program, was an initiative by the United States to help restore the economy of western Europe after World War II and serve US economic and political interests as well. Initially announced in 1947, the Marshall Plan was a U.S.-sponsored economic-aid program to help Western European countries recover following World War II. The CIA actually obtained 5 percent of the money distributed through the Marshall Plan. Omissions? The damage was severe and most countries didn’t have enough resources to help even their own people. While the economies of Western European countries were becoming relatively stable, the Cold War was emerging as a new world problem. In what way did the Marshall Plan benefit the United States economically? The Marshall Plan, also known as the European Recovery Program, was a U.S. program providing aid to Western Europe following the devastation of World War II. The Marshall Plan After World War II, Europe was in ruins. The Marshall Plan was crafted to provide specific economic aid to European countries to revitalize their economies by focusing on the creation of modern post-war industries and the expansion of their international trade opportunities. While every effort has been made to follow citation style rules, there may be some discrepancies. An exact figure is difficult to ascertain because there is some flexibility in what is defined as official aid administered under the plan. The Marshall Plan was launched in 1947 in order to rebuild Europe, it included loans of over 13 billion dollars. The six years of World War II took a heavy toll on Europe, devastating both the landscape and the infrastructure. Additionally, countries used the funds to purchase manufacturing and revitalization supplies from American companies; therefore fueling the American post-war economy in the process. The Marshall Plan (officially called the European Recovery Program [ERP]) was a plan of the United States for rebuilding the allied countries of Europe after World War II. George Marshall devised a plan for long-term economic and industrial recovery for most of Europe. Be on the lookout for your Britannica newsletter to get trusted stories delivered right to your inbox. Design. 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. At the end of 1951, the Marshall Plan was replaced by the Mutual Security Act. Millions of refugees from eastern Europe fleeing to the West after World War II. Ultimately, however, the Marshall Plan was replaced by the Mutual Security Plan at the end of 1951. He received the Nobel Prize for Peace in 1953. The beginnings of the plan were announced on June 5, 1947, during a speech by Marshall at Harvard University, but it wasn’t until April 3, 1948, that it was signed into law. The plan contributed greatly to the rapid renewal of the western European chemical, engineering, and steel industries. Jennifer Goss is a Holocaust historian and history educator. The United States gave 13 billion dollars to Europe in the Marshall Plan. George C. Marshall, general of the army and U.S. Army chief of staff during World War II (1939-45) and later U.S. secretary of state (1947-49) and of defense (1950-51). The European Recovery Program he proposed in 1947 became known as the Marshall Plan. The Marshall Plan provided an estimated $13 billion in aid to 17 countries over a four-year period. The United States, on the other hand, was different. (Some historians include the “unofficial” aid which began after Marshall’s initial announcement, while others only count aid administered after the legislation was signed in April 1948.). The economy of Western Europe rebounded significantly during its administration, which also helped to foster economic stability within the United States. Yugoslavia had already become a Communistic state. https://www.thoughtco.com/marshall-plan-economic-aid-1779313 (accessed May 22, 2021). The basic purpose of the Marshall Plan, according to the Economic Cooperation Act, was to ensure “individual liberty, free institutions, and genuine independence” But the change was very slow and the economic, physical, moral, and political decline of Germany which had begun with the unconditional surrender took great efforts to reverse. How did the US and Europe both benefit from the Marshall Plan? ThoughtCo. The Marshall Plan benefited the United States economically through trade with Europe by rapidly getting Europe back in business. As a result of these failed efforts, Marshall elected to proceed with a wider European reconstruction plan. The purpose of the Marshall Plan—as the program came to be called—was not only to support economic recovery in Western Europe, but also to create a bulwark against Communism by drawing participating states into the United States’ economic orbit. The Marshall Plan. The Soviets early on withdrew from participation in the plan, however, and were soon followed by the other eastern European nations under their influence. The original Marshall Plan label, “For European Recovery—Supplied by the United States of America,” was replaced in 1955 with “Strength for the Free World—From the United States of America,” which appears on the jeeps in this photograph. The initial announcement of the Marshall Plan occurred on June 5, 1947, during a speech Marshall made at Harvard University; however, it did not become official until it was signed into law by Truman ten months later. The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe, in which the United States gave over $12 billion (approximately $120 billion in value as of June 2016) in economic support to help rebuild Western European economies after the end of World War II. Much of Europe was on the brink of famine as agricultural production had been disrupted by war. Trade creates wealth and the more trade, the more wealth for all involved. The Marshall Plan also included a Technical Assistance Program, which funded engineers and industrialists to visit the United States, to gain first-hand experience of industrial capitalism and technological transfer. Nations that fought with the Allies were given more aid per capita under the Marshall plan than neutral and Axis-affiliated countries (excepting West Germany). Let us know if you have suggestions to improve this article (requires login). 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. The United States, on the other hand, was different. However, recovery in Europe was progressing much slower than initially expected by the world community. Get a Britannica Premium subscription and gain access to exclusive content. The Marshall Plan (officially the European Recovery Program, ERP) was the American initiative to aid Europe, in which the United States gave economic support to help rebuild European economies after the end of World War II in order to prevent the spread of Soviet Communism. Click again to see term 1/4 The Marshall Plan will remain for all time a glorious page in the history of the United States of America. Looked to Mexico for Labor, What Is Colonialism? Industrial and residential centers in England, France, Germany, Italy, Poland, Belgium and elsewhere lay in ruins. Truman hoped that by enacting the Marshall Plan two main goals would be accomplished. Because of its location a cont… One of the first challenges Marshall faced in office was a series of discussions with the Soviet Union regarding the economic restoration of Germany. Goss, Jennifer L. (2020, August 28). Our editors will review what you’ve submitted and determine whether to revise the article. Under the same program, American engineers came to Europe, to advise and provide technical support to developing industries. Prior to his appointment, Marshall had an illustrious career as the chief of staff of the United States Army during World War II. Goss, Jennifer L. "The Marshall Plan." The legislation was titled the Economic Cooperation Act and the aid program was called the Economic Recovery Program. The Marshall Plan’s lead official in Europe, Ambassador Averell Harriman, was steadfast in insisting that “the purpose of [U.S. aid] is to stimulate countries to … Officially named the European Recovery Program (ERP), it soon became known as the Marshall Plan for its creator, Secretary of State George C. Marshall. Millions of people had been killed or wounded. Aid was originally offered to almost all the European countries, including those under military occupation by the Soviet Union. The Marshall Plan (the Plan) and the European Recovery Program (ERP) that it generated involved an ambitious effort Retrieved from https://www.thoughtco.com/marshall-plan-economic-aid-1779313. Certainly, U.S. industries profited from the jolt of exporting to Western Europe. The money would be used to buy goods from the United States, andthey had to be shipped across the Atlantic on American merchant vessels. The Marshall Plan was a joint effort between the United States and Europe and among European nations working together. The Marshall Plan was very successful. Europe was devastated by years of conflict during World War II. European countries compose a significant segment of the world economy; therefore, it was feared that the slow recovery would have a ripple effect on the international community. 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. Concepts of the Marshall Plan also laid the foundation for future economic aid programs administered by the United States and some of the economic ideals that exist within the present European Union. 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. The plan was proposed by US Secretary of State - George C. Marshall. As military actions heated up in Asia, the State Department felt that this piece of legislation would better prepare the U.S. and its Allies for active engagement, despite the public mindset that Truman hoped to contain, not combat communism. She serves as a consultant for the United States Holocaust Memorial Museum and the USC Shoah Foundation. The Marshall Plan, it should be noted, benefited the American economyas well. Somewhat more aid per capita was also directed toward the Allied nations, with less for those that had been part of the Axis or remained neutral. Discover the life of the refugees and displaced people migrating from East to West Germany after World War II. From the end of the war in 1945 until the beginning of the Marshall Plan, the U.S. provided $14 million in loans. But the $10.25 billion plan was more than just a humanitarian effort, it was meant to … This organization was later replaced by the permanent Organisation for European Economic Co-operation (OEEC), to which West Germany was ultimately admitted. Updates? The Marshall Plan was a U.S.-sponsored program implemented following World War II The western European countries involved experienced a rise in their gross national products of 15 to 25 percent during this period. Because of his stellar reputation during the war, Marshall was viewed as a natural fit for the position of secretary of state during the challenging times that followed. Harry S. Truman on April 3, 1948. I served in Germany in Schweinfurt, the number one target of Allied bombing after WWII. Corrections? How were the United States' and Soviet Union's policies in Europe similar during the mid-1940s? One of the main reasons this was done was to stop communism (basically the USSR). Farms and towns were destroyed, industries bombed, and millions of civilians either killed or maimed. The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe, in which the United States gave $13 billion) in economic support to help rebuild Western European economies after the end of World War II. The damage was severe and most countries didn’t have enough resources to help even their own people. These goals were: It would lead to the recovery of production abroad, which was essential both to a vigorous democracy and to a peace founded on democracy and freedom, and which, in the eyes of the United States, the Soviet Union had thus far prevented. The Russian rejection probably made passage of the measure through Congresspossible. Truman extended the Marshall Plan to less-developed countries throughout the world under the Point Four Program, initiated in 1949. Goss, Jennifer L. "The Marshall Plan." The Marshall Plan would run for four years and cost more than $US13 billion. This was one of the first actions of containment outlined in the Truman Doctrine. Then, when Britain announced that it could not continue to support the battle against communism in Greece and Turkey, the United States stepped in to provide military support to those two countries. These funds were given in grant funds that did not need to be repaid. They were: It is estimated that over $13 billion dollars in aid was distributed under the Marshall Plan. The Marshall Plan - Rebuilding Western Europe After WWII, Profile of General George Marshall, US Army Chief of Staff in WWII, How US Foreign Aid is Used in Foreign Policy, Biography of Harry S. Truman, 33rd President of the United States, The Bracero Program: When the U.S. Direct grants accounted for the vast majority of the aid, with the remainder in the form of loans. The Marshall Plan (officially the European Recovery Program, ERP) was the American initiative to aid Europe and Asia, in which the United States gave $17 billion (approximately $160 billion in current dollar value) in economic support to help rebuild European economies after the end of World War II. The six years of World War II took a heavy toll on Europe, devastating both the landscape and the infrastructure. Clayton was a businessman and government official who focused on European economic issues; he helped lend specific economic insight into the plan’s development. Today, the Marshall Plan is widely viewed as a success. This aid not only facilitated The Marshall Plan aid was divided among the participant states roughly on a per capita basis. 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. Ring in the new year with a Britannica Membership, This article was most recently revised and updated by, https://www.britannica.com/event/Marshall-Plan, The George C. Marshall Foundation - The Marshall Plan, Organisation for European Economic Co-operation. Historians have generally agreed that the Marshall Plan contributed to reviving the Western European economies by B) American exports would be reduced, while imported goods would increase. Marshall could not reach a consensus with the Soviets regarding the best approach and negotiations stalled after six weeks. But it worked. wHAT were the conditions of the Marshall Plan? The largest recipient of Marshall Plan money was the United … The sheer size of the grant demanded the American public's approval as well, and that pro-Marshall Plan message extended into the United States. The Marshall Plan stimulated European unification because its architects celebrated the benefits of economic integration and did what they could to bring it about. 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. Truman extended the Marshall Plan to less-developed countries throughout the world under the Point Four Program, initiated in 1949. Additionally, U.S. President Harry Truman believed that the best way to contain the spread of communism and restore political stability within Europe was to first stabilize the economies of Western European countries who had not yet succumbed to communist takeover. Marshall Plan, formally European Recovery Program, (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. The Marshall Plan also helped the United States prevent the further spread of communism within Western Europe by restoring the economy in that area. The rising issues related to the Cold War, particularly in the realm of Korea, led the U.S. to rethink the use of their funds. Eastern Europe had fallen under Communistic Control. This legislation created the short-lived Mutual Security Agency (MSA), which focused not only on economic recovery but also more concrete military support as well. The Marshall Plan benefited the United States as well as western Europe because A) payments were made to American companies as well as European ones.

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