The Marshall Plan

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The Marshall Plan

The Marshall Plan was the initiative of America to assist European economies after the destruction that had been caused by the World War II. It is worth noting that the Marshall Plan was officially referred to as the European Recovery Program (ERP) and was adopted by the USA to prevent European economies from the spread of Soviet Communism that was gradually taking shape in the region. The United States came up with the plan in 1948 and it mainly focused on rebuilding devastated economies in Europe, modernizing industries in the region, eliminating barriers to trade, and boosting the prosperity of European nations. There was massive support for the Marshall Plan as both Republicans and Democrats agreed to support it and rescue European nations from collapse after World War II.

This essay explicates the development of the Marshall Plan, rejection by Soviets, implementation, and the effects and legacy Marshall Plan.

Development and Deployment of the Marshall Plan

The reconstruction plan for European states was agreed upon in a meeting held in 1947. It was geared toward offering some help to the Soviet Union and its allies, but they rejected it. It is worth acknowledging that the Marshall Plan came in place on April 3, 1948 after being signed by President Harry Truman. In line with the plan, 16 European nations were offered $5 billion that would play an instrumental role in their recovery process. The United States played an instrumental role in the reconstruction plan as it donated $13 billion to countries that had joined the Organization for European Economic Co-operation with the aim of developing them economically and technically (Kindleberger 22). America wanted to modernize all the European industries and introduce quality American practices that would facilitate their growth. In 1952 when the funding stopped, most European countries had experienced tremendous growth compared to their post-war years. Western Europe is deemed to have experienced unprecedented prosperity because of the Marshall Plan.

Rejection of the Marshall Plan

After listening to Marshall’s speech on radio, the British Foreign Secretary and the French Foreign Minister agreed immediately with the provisions that had been put in place to assist European nations recover from economic devastation. However, they were certain that it would be difficult to convince Soviet leaders such as Stalin to accept the deal because of the strong communist views they held.

The Soviet Union led by Stalin was quick to reject the Marshall plan because of the requirement of independent economic assessment of each of the countries that was supposed to receive support. Stalin felt that the level of economic scrutiny under the Marshall Plan was strict and not acceptable to the independence of his country. They did not want their economy to be scrutinized by the United States because of the differing economic approaches utilized in each of these countries.

More so, the Soviet Foreign Minister, Vyacheslav Molotov, rejected the plan because of the proposal for a compulsory European bloc. The U.S. was perceived to be taking excessive control of the region, which was not allowable to the Soviet Union (Hasanli 45). All countries that had a closer association with the U.S. were branded enemies by the Soviet Union. Again, the Soviet Union was quick to blame the U.S. for communist losses in elections in countries such as Italy, France, and Belgium. It emphasized the rejection of the Marshall Plan because of its unfavorable conditions and the lack of respect for European countries. Molotov reiterated the need to reject the plan because of the feeling that the United States was taking advantage of independent countries in the region.

The Szklarska Poreba meeting held by European Communist states in Poland also signified the rejection process. During the meeting, the countries in attendance read the Communist Party of the Soviet Union’s (CPSU) report that entailed anti-western views. The report affirmed that imperialist Americans had unfairly dominated global politics and controlled independent states at will. Therefore, they agreed to reject the Marshall Plan by the virtue of their independence.

Implementation of the Marshall Plan

The implementation of the Marshall Plan started in 1947 in tandem with the Truman Doctrine when countries such as Greece and Turkey received their first substantial aid. They received help in line with the belief that they had been on the frontline of rejecting communist views. However, the official implementation of the Marshall Plan began in 1948 after it had been duly signed by President Harry Truman.

The official intention of the Marshall Plan was to boost the growth and development of European economies, to remove trade barriers, to bolster the currency of European states, and to promote industrial production through modernization of industries. It also focused on curbing the growing communist ideas in the region by bring all countries on board through economic prosperity.

In the implementation of the Marshall Plan, money was transferred to different European countries and were jointly administered by the local government and the Economic Cooperation Administration (ECA) (Lambers 77). There was an ECA envoy in each of the European countries to offer the required level of advice on how to use the funds for economic development. The cooperative approach to funds allocation hence facilitated the overall growth of most countries in Western Europe.

The aid offered in tandem with the Marshall Plan was mainly used for the purchase of products from the U.S because most of these countries had exhausted their foreign reserves during World War II. The importation was aimed at strengthening them and allowing them to grow in the most effective way possible.

The implementation of the Marshall Plan also entailed the establishment of counterpart funds that were utilized in the establishment of funds in the local currency. The ECA needed countries to invest 60% of their counterpart funds in the development of their industries to achieve quality productive processes (Kindleberger 62). This was commonly used in Germany where many enterprises relied on these funds for their development process.

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