Role of the Marshall Plan in Europe’s Economic Development

This essay discusses the role of the Marshall Plan in Europe’s economic development after World War II and its impact on the stability and growth of European countries.

Running Head: HISTORY ESSAY 0
Role of the Marshall Plan in Europe’s Economic Development
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HISTORY ESSAY 1
Role of the Marshall Plan in Europe’s Economic Development
After World War II, Europeans countries suffered a huge loss, including the leading
industrial countries such as Belgium, Italy, Great Britain, France, and Germany. Due to these
losses, there were some of the regions, which had the extreme scarcity of food. This brings
the crucial crisis in Europe and to improve the conditions, implementation of the Marshall’s
Plan became necessary. In 1948, the United States helps Europe in the financial crisis, under
the program named ‘Marshall Plan’. The other name of the Marshall Plan was ‘European
Recovery Program’. The Series of reforms and strategies, which can help in rebuilding the
economic structure of European Countries, specified in the ‘Marshall Plan’ (Marshall Plan,
1948, 2009). This crisis happened after World War II. This plan established in the
controversial period, when European countries suffering from very bad economic conditions.
To remove destructions and poverty in European countries, the United States made the
‘Marshall Plan’ to recover the economic stability in Europe. Under this act, the U.S. gave
Europe more than $12 billion to cure Europeans countries. This aid helped the European
nation in economic development. Officially, the plan established on April 3rd, 1948 and in
1951, U.S. funding ended (Elder, 2015). This discussion explains the role of the Marshall
Plan in Europe’s economic development.
In January 1947, Harry S. Truman, who was the President of the U.S., appoints
George C. Marshall, as the Secretary of State. He was a military officer who headed the army
of World War II at that time. In Addition, Marshall earned the position in the administration
of the American public. President appoints him as a secretary of state to bring stability in
economic conditions of European Countries (George Catlett Marshall, 2019). George C.
Marshall knew that economic stability would only happen, when the condition of the
European people stabilized. Soon after the appointment of Marshall, critical conditions took

HISTORY ESSAY 2
place in Greece. Marshall realized that only U.S. was economically able to help Greece. In
World War II, the U.S. was the only place not suffered with the crisis. Hence, the American
decides to help them, to rebuild their economic conditions. The major losses where Europe
needed help were the areas related to agriculture, roads, factories and transportations. In
addition, the U.S. had a fear that the scarcity of food, poverty, and unemployment would
boost the formation of the Communist party in Europe and Marshall does not want that
Communism spread in Europeans countries. Therefore, in the White House, President
Truman called off a meeting with congressional leaders, Secretary of State Marshall and
some of the important authorities. At that meeting, they all had debated on Greece conditions
and then they decided to support Marshall Plan. After this, Marshall faced many political
obstacles against the European Recovery Program. Some of the European authorities strongly
opposed this idea, as they do not want their country dominated by Americans. However, at
the end, Marshall conquered beliefs of European people and convinced them for the
execution of Economic Recovery Program.
The roots for Marshall Plan initiated in the year, 1946 (Gimbel, 1978). The State
Department, Russian specialist, George F. Kennan analysed the Soviet intentions and wrote a
telegram about it. This telegram published as an article, by a magazine named as Foreign
Affairs. This article had a greater impact as it was widely discussed. According to Kennan,
the Soviets were unsecured because of the surrounded capitalist countries. In order to secure
the Soviets, they needed their power expanded. Marshall, the Secretary of State had
appointed Kennan for heading a plan. This plan accomplished to assess the condition of
European nations, that whether they need the expansion or not. Kennan reported Marshall
about the declining condition of the European people. Many of the people were homeless,
unemployed and not able to bear their necessities (Knapp, 1979). Because of inflation, the
people who had a job were also suffering from these problems. All the water resources,

HISTORY ESSAY 3
power plants, roads, bridges and factories destroyed after the war. Farmers and industrialists
both the communities had a huge loss. To get rid of these problems, Kennan proposed the
U.S. to help the European countries by rebuilding their society’s economic conditions
(Ellwood, 1992). He suggested this idea, as it would help in re-establishing the market in
Europe, which untimely helps the United States. As when the Europe economic conditions
improve, they would able to buy the American products and services. These
recommendations helped Marshall, in convincing the President Truman to help the European
society financially.
On June 5th, 1947, Marshall suggested the innovative proposal in a speech at Harvard
University (Hogan, 1989). He called for the joint efforts by the European countries for fixing
up the economic conditions and this would only happen when Europe supports the United
States for the Marshall Plan implementation. Under this plan, the U.S. would provide the
necessary funds to the Europeans countries. In addition, the plan clearly stated that is was not
against any country, but was against the starvation, chaos, desperation and poverty (Kapstein,
2015). Unfortunately, the Soviet Union refused to participate, as Americans suggested this
plan. In addition, if they join their hands with the U.S., they had to exchange their economic
information. The Soviet thought that the Marshall Plan charged to dominate the economy of
Europe. In July 1947, the Western European Counties met together to associate with the
America for economy recovery plan (Patterson, 2007). Soon Americans got disappointed
when they found Europeans countries not unified as each country had its own list. In
addition, French was disagreed with it because they do not want Germany to be the part of
the war again. Marshall knew that if soviet does not support him, Truman would not accept
the plan because it could cause Soviet-Americans conflicts. This meant that the plan only be
executed, if the Soviet Union participates in it without any objection. By observing the poor
participation of the Western Europeans countries, the Marshall urged them that if they follow

HISTORY ESSAY 4
the plan in a unified manner, soon, they would be able to achieve an autonomous economy,
better living standard and trade barrier would also remove with the establishment of this plan.
Marshall expected all this would happen in four years. He forced German to participate in
this plan fully as it was necessary for the fulfilment of the plan. The pressure of Marshall
made the European compromised and then they submitted this plan to the United States in
September 1947. European states that they need $17 billion to carry out the Marshall Plan.
After the recommendation, in November 1947, President Truman called a meeting in which
they discussed the leaders to take immediate actions in favour of Marshall Plan. This Plan
had a specified funding request of $17 billion for four years (Policy Recommendations: A
Marshall Plan Moment, 2014). To justify the funding part of Marshall Plan, Truman
administration called for a debate between the experts which argued for funding the Marshall
Plan or not. They reviewed that Marshall Plan enactment helps the European countries by
preventing them from economic depression.
Finally, in 1948, President decided to implement the Marshall Plan as soon as
possible. In addition, the Economic Cooperation Act of 1948 passed, which approved the
funds for the Marshall Plan at a slightly lower level from requesting one. $13 Billion amount
of fund approved by the United States in the favour of the European economic development
for the period of four years (Leffler, 1988). Under the Economic Cooperation Act, the
Marshall Plan executed, to ensure the independent economy, freedom in institutions and
individual liberty by re-establishing the proper economic system of Europe. In these four
years, Western Europe had evaluated several economic plans, reforms and strategies under
Marshall Plan. The Implementations of the Marshall Plan focus were to remove the scarcity
of food, rebuild the transportation system and increment in the production of agriculture and
industrial products. In addition, this plan regulates the economic resources, which would help
in transforming the market structure of European countries (Marshall Plan, 2009).

HISTORY ESSAY 5
After the implementation of the Marshall Plan, at some part it worked as a technical
assistance for the European society. The technical peers and advisors appointed by the United
States under the economic corporations act. These experts belong to the American banks,
farmer’s organization, businesses and labour union. All these groups helped in increasing and
improving the productions. American helped Europeans countries in monetary terms by
proving them funds, which helped them in buying their necessities such as food, oil and
materials, which are required for the reconstruction of transportation, roads, houses and
factories (Painter, 2009). Under the Marshall Plan, aids were provided to 16 nations of
Europe and to avoid the conflicts among these nations, the U.S. had a constant pressure to
divide them on these aids among the European countries so that, they could use them
collectively. Some Europeans had a doubt about American intentions, but after some time
these doubts were vanished. During the year, between 1948 -51, North America and
European countries also formed an organization named as North America Atlantic
Organization (NATO). This was an intergovernmental military alliance signed between the
two countries (Parrish, 2016).
The Marshall Plan duration ended in the year 1951. As a result, Western Europe had
huge benefits in the industrial productions. The production rose after the completion of the
Marshall Plan. Not only production rose, there were increments in the trade sector also. This
successful completion of Marshall Plan helped the European people in rebuilding their
standard of living. In addition, the communist party lost their control everywhere. Overall,
Marshall Plan had a great success, which involved the increment in Western European
countries GNP. In addition, Chemical steel and engineering industries had a greater
improvisation under this plan. President Truman appreciated the efforts of Marshall. He said
that, Marshall Plan would be one of the America’s greatest contributors toward the world
peace. George C. Marshall also won the Nobel Peace Prize in 1953 for this tremendous

HISTORY ESSAY 6
contribution the world peace (Matthew, 2010). This plan helped in cutting the cycle of wars
that had harmed the Nations for centuries as two of the major continents, working together
under the same plan to achieve the same goal.
Before the implementation of the Marshall Plan, a survey says that 47 % of French
citizen were not in the favour of this plan. They thought that this plan made mainly for the
benefit of Americans. Only 18% of the French people thought that the U.S. had good
intentions of helping them in the crisis. However, in 1953, these percentages had a
tremendous change. Up to 57 % of the French citizens were now in the favour of Marshall
Plan. Only 14% of people in France gave the negative opinions about this plan (OZER,
2014).
Every plan has its own positive and negative impact and in this scenario, situations
had both effects. On one side, the negative aspects concluded that the Economic Problem of
Europeans not fully cured by the Marshall Plan, till 1951 as the survey says that some of the
food still imported for the nation but this plan had constructed basis structure for their further
growth in the market. In addition, there were some areas, which had less progress and the
trade barriers not fully removed. On the other hand, the positive aspects concluded that the
economic structure rebuilt its stability in the international market, which helps the European
countries to accelerate the process of growth in different sectors. European countries were
getting open trade opportunities after the completion of this plan.
Therefore, Marshall Plan not only helped in economic stability, it also provides
political stability in Europe by encouraging integration. In addition, the Marshall Plan
influenced the European Economic development in a positive manner, but this plan does not
work up to the expectations, as some of the areas were not able to develop up to the mark

HISTORY ESSAY 7
under this plan. At the same time, it established a great economic and political stability.
Marshall Plan marks its name in world history, as it was the largest economic recovery effort.

HISTORY ESSAY 8
Bibliography
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