(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. 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. The Plan was signed into law by President 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

Historical Significance

  • The United States feared that the poverty, unemployment, and dislocation of the postwar period were reinforcing the appeal of communist parties to voters in western Europe.
  • 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. The following countries participated 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.
  • The Soviets early on withdrew from participation in the plan, however, and were soon followed by the other eastern European nations under their influence through  the Warsaw pact.
  • Under Paul G. Hoffman, the Economic Cooperation Administration (ECA), a specially created bureau, the Marshall Plan distributed over $13 billion worth of economic aid.
  • The Marshall Plan was very successful. The western European countries involved experienced a rise in their gross national products of 15 to 25% during this period. The plan contributed greatly to the rapid renewal of the western European chemical, engineering, and steel industries.

Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist.” George Marshall – Address at harvard June 5, 1947

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