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Marshall Plan

Known officially following its enactment as the European Recovery Program, the Marshall Plan was one of the United States plans for reconstruction of Europe after World War II (see also Morgenthau plan ). The initiative is named after secretary of state Gen. George Marshall, who in a speech at Harvard University (5 June 1947) outlined the U.S. government's preparedness to contribute to European recovery. President Harry Truman signed the Marshall Plan into law on April 3, 1948.

Between 1948 and 1951, the United States contributed more than thirteen billion dollars (nearly $100bn at present-day U.S. prices) of economic and technical assistance toward the recovery of 16 European countries which had joined (16 April 1948) in the Organization for European Economic Co-operation (OEEC, forerunner to today's OECD) in response to Marshall's call for a joint scheme.

The plan was rejected by the Soviet Union and its eastern European satellite countries owing to U.S. insistence on economic liberalization and pan-European co-ordination of recovery efforts, but gave impetus to the formation in the west of the North Atlantic Treaty Organization and to the European Economic Community.

The Marshall Plan has often been cited as an example of how massive economic assistance can produce prosperity. However, some have pointed out that post-war reconstruction of Europe was a far easier problem than the development or reconstruction of areas in today's Third World. In the case of Europe, despite being devastated by war, there was still significant physical infrastructure along with technical skill in the population. In the case of the Third World, the infrastructure and technical skills do not exist to the same extent.

Criticism of the Marshall Plan became prominent among historians of the revisionist school during the 1960s and 1970s. They argued that the plan was American economic imperialism, and that it was an attempt to gain control over Western Europe just as the Soviets controlled Eastern Europe.

In the 1980s criticism of the Marshall Plan's claim to a decisive role in Europe's recovery developed. These critics point out that growth in many European countries revived before the large-scale arrival of U.S. aid, and was fastest among some of the lesser recipients. While Marshall aid eased immediate difficulties and contributed to the recovery of some key sectors, growth from the post-war nadir was largely an independent process. The first person to make this argument was the economic historian Alan S. Milward. European socialists argue that a similar amount of reconstruction money could have been obtained by nationalizing the holdings of wealthy Europeans who deposited their money in US banks during World War II.

Marshall Plan Expenditures

Economic Assistance, April 3, 1948 to June 30, 1952 (in millions of dollars)

COUNTRY Total Grants Loans
Total for all countries $13,325.8 $11,820.7 $1,505.1
Austria 677.8 677.8 --
Belgium-Luxembourg 559.3 491.3 68.0a
Denmark 273.0 239.7 33.3
France 2,713.6 2,488.0 225.6
Germany, Federal Republic of 1,390.6 1,173.7 216.9b
Greece 706.7 706.7 --
Iceland 29.3 24.0 5.3
Ireland 147.5 19.3 128.2
Italy (including Trieste) 1,508.8 1,413.2 95.6
Netherlands (*East Indies)c 1,083.5 916.8 166.7
Norway 255.3 216.1 39.2
Portugal 51.2 15.1 36.1
Sweden 107.3 86.9 20.4
Turkey 225.1 140.1 85.0
United Kingdom 3,189.8 2,805.0 384.8
Regional 407.0d 407.0d --


Statistics & Reports Division
Agency for International Development
November 17, 1975