Officially known as the European Recovery Program and passed by Congress in March 1948, the Marshall Plan provided unequaled sums of money to an impoverished Western Europe, stopping a humanitarian disaster and helping spur long-term economic recovery. Speaking to his Harvard audience about the deprivation and wanton suffering in Europe, Marshall came to the crux of his speech — “it is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace.”
On this, the 70th anniversary of a momentous U.S. foreign policy milestone, here’s why the Marshall Plan had such an enduring legacy for U.S.-European relations:
1) Europe was still a mess. The war may have ended in May 1945, but Europe remained in tatters in spring 1947. The United States had already provided vast sums of aid, but it was not creating the recovery needed. As one historian said, “Production had stalled, trade languished, and Europeans lacked the dollars to purchase urgently needed American goods. Acute shortages of food and fuel were exacerbated by a crippling summer 1946 drought and a bitterly cold winter.”
As Marshall hammered home in his speech, without urgent U.S. aid, Europe would “face economic, social and political deterioration of a very grave character.” Subsequent congressional trips to Europe in fall 1947 brought the acute suffering home to members of Congress skeptical of American internationalism on such a large scale, converting several to support the plan.
2) The Marshall Plan was one piece in the larger Cold War puzzle. Although Truman administration officials believed true peace would come only once Europe was rebuilt and the region was set upon a solid path for the future, fears of growing communist and Soviet influence in Western Europe also were a motivating factor. The Cold War was in full swing by 1947, with the Truman Doctrine announced in March, and U.S. aid to Greece and Turkey dispatched to combat internal struggles against communist forces.
Key Western European nations such as Italy and France had large left-leaning political parties. U.S. officials feared that continued economic stagnation would lead to socialist and communist victories in upcoming elections, leading to Soviet partners in the heart of Western Europe.
These officials believed that by shoring up the economic base of these nations — providing citizens with livelihoods based on the Western democratic model — voters would reject leftist parties at the polls. This is indeed what took place.
Here’s an often-forgotten fact: The United States even invited Moscow and its satellite countries in Eastern Europe to participate in the Marshall Plan but issued terms that Washington knew they were unlikely to accept. Ultimately, a major Cold War incident — the early 1948 communist coup in Czechoslovakia — proved the catalyst for congressional approval of the Marshall Plan.
3) The aid was unprecedented … and successful.
From 1948 to 1952, the United States provided more than $13 billion in aid to 16 nations. As one historian said, “The United States funds performed a dazzling array of tasks, helping to rebuild Italy’s Fiat automobile plant, modernizing mines in Turkey, and enabling Greek farmers to purchase Missouri mules.”
Over the previous decade, from 1938 to 1947, Europe’s standard of living had dropped precipitously, with West Germany seeing a 15.4 percent decrease, Italy 25.8 percent, and Austria 39.5 percent. Under the first three years of the Marshall Plan, GNP in these nations grew 33.5 percent.
All the more important, the aid and growth during this period spurred tremendous economic growth throughout the decades to come. The standard of living in participating countries grew almost 150 percent over the next three decades, and the strong economic base that the Marshall Plan provided also benefited the United States, leading to significant U.S. export growth to Western Europe.
4) The plan helped spur European integration.
Many in the Truman administration were hoping to replicate America in Europe, creating a type of “United States of Europe.” The first steps in this process were actually launched in Marshall’s speech itself, when he called on the Europeans to come together to hash out their priorities and needs on their own.
The 16 participating European nations met to discuss a comprehensive plan a little more than a month after Marshall’s speech. While certainly not the only factor driving Europeans toward integration, as Marshall Plan scholar Michael Hogan notes, the plan “helped to set the Europeans on a road that led from the economic autarky of the 1930s to the Common Market of the 1960s.” Likewise, many of these same nations would sign the Brussels Treaty of 1948 on mutual defense, the precursor to the formation of NATO the following year.
Ultimately, the Marshall Plan was one of several components that drove European recovery. It also created a vast well of goodwill between the United States and Europe. Now, 70 years after Marshall’s speech, that goodwill seems to be in much lower supply.
Kelly M. McFarland is a U.S. diplomatic historian and director of programs and research at Georgetown University’s Institute for the Study of Diplomacy and an adjunct professor in the Walsh School of Foreign Service.