The Marshall Plan 1948

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Map Code: Ax02291

In the immediate aftermath of the German surrender on 8 May 1945, US President Franklin D. Roosevelt implemented a plan that had been drawn up by Treasury Secretary Henry Morgenthau to partition and de-industrialize Germany, dismantle its arms industry, start rebuilding Europe’s wrecked transport and agricultural systems, and alleviate the starvation that was threatening to engulf the continent. In 1948 this policy was replaced by a second, less draconian ‘Marshall Plan’ (or ‘European Recovery Program’, ERP) authorized by President Harry Truman and named after US Secretary of State George Marshall. Over four years about $17 billion, representing roughly 5 percent of US GDP, was to be spent on the promotion of a stable and prosperous western Europe to provide a bulwark against the expansion of the communist USSR. The biggest recipient was the UK, with 26 percent of the aid, 18 percent went to France and 11 percent to West Germany. Similar aid was also offered to Russia and its satellite states, but Stalin, suspicious of American interference, declined this and responded instead with his own rebuilding programme, dubbed the Molotov Plan. The Marshall Plan fostered the modernization of industry, the lowering of trade barriers, and the creation of the Organization for European Economic Cooperation (OEEC), a forerunner of the European Economic Community (EEC).

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