Marshall Plan





Known officially following its enactment as the European Recovery Program,
the Marshall Plan was one of the United States plan for reconstruction of
Europe after World War II (see also Morgenthau plan ). The initiative is
named after secretary of state Gen. George Marshall, who in a speech at
Harvard University (5 June 1947) outlined the U.S. government's preparedness
to contribute to European recovery. President Harry Truman signed the
Marshall Plan into law on April 3, 1948.

Between 1948 and 1951, the United States contributed more than thirteen
billion dollars (nearly $100bn at present-day U.S. prices) of economic and
technical assistance toward the recovery of 16 European countries which had
joined (16 April 1948) in the Organisation for European Economic
Co-operation (OEEC, forerunner to today's OECD) in response to Marshall's
call for a joint scheme.

The plan was rejected by the Soviet Union and its eastern European satellite
countries owing to U.S. insistence on economic liberalisation and
pan-European co-ordination of recovery efforts, but gave impetus to the
formation in the west of the North Atlantic Treaty Organization and to the
European Economic Community.

The Marshall Plan has often been cited as an example of how massive economic
assistance can produce prosperity. However, some have pointed out that
post-war reconstruction of Europe was a far easier problem than the
development or reconstruction of areas in today's Third World. In the case
of Europe, despite being devastated by war, there was still significant
physical infrastructure along with technical skill in the population. In the
case of the Third World, the infrastructure and technical skills do not
exist to the same extent.

Critics of the Marshall Plan's claim to a decisive role in Europe's recovery
point out that growth in many European countries revived before the
large-scale arrival of U.S. aid, and was fastest among some of the lesser
recipients. While Marshall aid eased immediate difficulties and contributed
to the recovery of some key sectors, growth from the post-war nadir was
largely an independent process. European socialists argue that a similar
amount of reconstruction money could have been obtained by nationalizing the
holdings of wealthy Europeans who deposited their money in US banks during
World War II.

Marshall Plan Expenditures

     Economic Assistance, April 3, 1948 to June 30, 1952 (in millions of
     dollars)

COUNTRY                          Total   Grants    Loans
Total for all countries      $13,325.8$11,820.7 $1,505.1
Austria                          677.8    677.8       --
Belgium-Luxembourg               559.3    491.3    68.0a
Denmark                          273.0    239.7     33.3
France                         2,713.6  2,488.0    225.6
Germany, Federal Republic of   1,390.6  1,173.7   216.9b
Greece                           706.7    706.7       --
Iceland                           29.3     24.0      5.3
Ireland                          147.5     19.3    128.2
Italy (including Trieste)      1,508.8  1,413.2     95.6
Netherlands (*East Indies)c    1,083.5    916.8    166.7
Norway                           255.3    216.1     39.2
Portugal                          51.2     15.1     36.1
Sweden                           107.3     86.9     20.4
Turkey                           225.1    140.1     85.0
United Kingdom                 3,189.8  2,805.0    384.8

Regional                        407.0d   407.0d       --

Notes:

   * a. Loan total includes $65.0 million for Belgium and $3.0 million for
     Luxembourg: grant detail between the two countries cannot be
     identified.
   * b. Includes an original loan figure of $16.9 million, plus $200.0
     million representing a pro-rated share of grants converted to loans
     under an agreement signed February 27, 1953.
   * c. Marshall Plan aid to the Netherlands East Indies (now Indonesia) was
     extended through the Netherlands prior to transfer of sovereignty on
     December 30, 1949. The aid totals for the Netherlands East Indies are
     as follows:
     Total $101.4 million, Grants $84.2 million, Loans $17.2 million.
   * d. Includes U.S. contribution to the European Payments Union (EPU)
     capital fund, $361.4 million; General Freight Account, $33.5 million;
     and European Technical Assistance Authorizations (multi-country or
     regional), $12.1 million.