What is the Marshall Plan?

The Marshall Plan (officially called the European Recovery Program – ERP) was a massive US economic aid program for Western Europe after World War II. It was designed to:

-Rebuild the economies destroyed by the war

-Prevent hunger, unemployment, and poverty from pushing European countries toward communism (the beginning of the Cold War)

-Reopen European markets to American exports

-Politically stabilize Western Europe

It is considered one of the largest and most successful economic aid programs in history.

Origin and Beginning

-June 5, 1947: US Secretary of State George C. Marshall delivers a famous speech at Harvard University in which he proposes an aid plan for Europe. He doesn't mention figures, but he does say that the US is willing to help any European country (even the USSR and its satellites) as long as they cooperate with each other.

-The Soviet Union and Eastern European countries immediately rejected the offer (Stalin saw it as American imperialist interference) and forced Poland, Czechoslovakia, and others to do the same.

-April 1948: The US Congress approved the plan, and it was signed by President Harry Truman. The European Recovery Program was officially born.

-The plan actually began in the spring and summer of 1948.

Duration and End

-The Marshall Plan lasted four years: from 1948 to 1952 (specifically, from April 3, 1948, to June 30, 1952, although the final funds were distributed until 1953).

-In total, the United States provided approximately $13–14 billion at the time (equivalent to approximately $150–170 billion today, depending on the method of calculation).

Main Beneficiary Countries

Sixteen countries participated (the so-called "16 Marshall Plan countries"):

Italy, France, West Germany, the United Kingdom, the Netherlands, Belgium, Luxembourg, Austria, Switzerland, Norway, Denmark, Reveille, Ireland, Portugal, Greece, and Turkey. Italy received approximately $1.5 billion at the time (second only to France and the United Kingdom in absolute terms).

Results

-Western Europe experienced the so-called "economic miracle" in the 1950s.

-Industrial production already exceeded pre-war levels by 1951.

-A climate of economic cooperation was created that would later lead to the ECSC (1951) and then the EEC (1957), the foundations of the European Union.

-The "Iron Curtain" consolidated: Europe was definitively divided into two blocs.

Chronological overview

-June 5, 1947 → Harvard Address

-April 1948 → US Congress approves the plan

-1948–1952 → Disbursement of aid

-1952/1953 → Official end of the program

The Marshall Plan was not a "loan" but mostly non-repayable aid (about 90%), although a small portion was in the form of loans at very low interest rates.