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What was the Marshall Plan?

In 1947, the US pledged billions of dollars to help rebuild war-torn Europe with the Marshall Plan. But the Soviets sensed an ulterior motive...

George C Marshall, architect of the Marshall Plan, which pledged billions of dollars to help rebuild war-torn Europe
Published: August 16, 2022 at 4:05 pm
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“It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health to the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country, but against hunger, poverty, desperation and chaos.”

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When United States secretary of state George C Marshall delivered these words, in a speech at Harvard University on 5 June 1947, he was sketching out the framework of a widespread package of aid to a Europe devastated by six years of war. The Marshall Plan carried echoes of Franklin D Roosevelt’s New Deal, which had accelerated the US’s economic recovery after the Wall Street Crash and the subsequent Great Depression. This time, the focus was the re-establishment – both economically and politically – of the war-battered great states of Europe.

Marshall’s speech emphasised that economic prosperity was the foundation for political peace, explaining that the US was keen to provide “friendly aid” to help rebuild both infrastructure and economies. He even left the door open for the Soviet Union and its satellite states in the eastern bloc to be recipients of the programme. “Europe as a whole” should benefit, he declared, while also advocating the removal of trade barriers.

The Marshall Plan provided nations with much-needed agricultural equipment
The Marshall Plan provided nations with much-needed agricultural equipment. (Photo by Keystone-France/Gamma-Keystone via Getty Images)

The Soviet Union, sensing – not without foundation – that the Marshall Plan was an attempt on the US’s part to secure geopolitical favour across Europe and to arrest the westwards spread of communism, declined the invitation, while also forbidding the countries within its sphere of influence from accepting aid from across the Atlantic.

Indeed, the Soviet Union countered with its own recovery programme for the region: the Molotov Plan.

Road to recovery

The initial tranche of US aid – $5bn split unevenly across 16 European states – was agreed by President Harry S Truman in April 1948. Despite there being a Democrat in the White House and the Republicans running Congress, the Marshall Plan received bipartisan support in Washington. Its politicians were united in believing that economic prosperity across western Europe was the best weapon with which to neutralise any expansionist impulses coming out of Moscow.

In all, the plan delivered over $13bn in aid – the equivalent of more than $150bn today. The UK received the most (around 24 per cent), with West Germany in receipt of nearly 11 per cent, France just over 20 per cent and the remainder shared by the other 13 countries.

UK officials await the first shipment of Caribbean sugar to be delivered to Britain under the Marshall Plan
UK officials await the first shipment of Caribbean sugar to be delivered to Britain under the Marshall Plan. (Photo by Hulton-Deutsch Collection/Corbis via Getty Images)

The Marshall Plan lasted until late 1951, when it was replaced by the Mutual Security Plan – a more overt name for arguably the biggest underlying purpose of the whole endeavour: political stability in western Europe. The plan had almost certainly fulfilled its twin political and economic intentions – solidifying the US’s European allies against Soviet influence and kick-starting national economies.

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By the time the plan was phased out, all of the recipient countries were reporting their economies to be at a stronger and more advanced level than in 1938, before the war. Postwar regeneration would have occurred without this American intervention, but it’s questionable whether such widespread recovery would have been so rapid without the Marshall Plan’s large-scale funding accelerating matters.

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Nige Tassell is a journalist specialising in history

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