Marshall Plan

Marshall Plan, (April 1948–December 1951), U.S.-sponsored program designed to rehabilitate the economies of 17 western and southern European countries in order to create stable conditions in which democratic institutions could survive.

The United States feared that the poverty, unemployment, and dislocation of the post-World War II period were reinforcing the appeal of communist parties to voters in western Europe. On June 5, 1947, in an address at Harvard University, Secretary of State George C. Marshall advanced the idea of a European self-help program to be financed by the United States, saying

Cold War Events

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Truman Doctrine

March 12, 1947

Marshall Plan

April 1948 - December 1951

Berlin blockade

June 24, 1948 - May 12, 1949

Warsaw Pact

May 14, 1955 - July 1, 1991

U-2 Incident

May 5, 1960 - May 17, 1960

Bay of Pigs invasion

April 17, 1961

Berlin crisis of 1961

August 1961

Cuban missile crisis

October 22, 1962 - November 20, 1962

Nuclear Test-Ban Treaty

August 5, 1963

Strategic Arms Limitation Talks

1969 - 1979

Mutual and Balanced Force Reductions

October 1973 - February 9, 1989

Korean Air Lines flight 007

September 1, 1983

Reykjavík summit of 1986

October 11, 1986 - October 12, 1986

collapse of the Soviet Union

August 18, 1991 - December 31, 1991

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The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products—principally from America—are so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of a very grave character.

On the basis of a unified plan for western European economic reconstruction presented by a committee representing 16 countries, the U.S. Congress authorized the establishment of the European Recovery Program, which was signed into law by U.S. Pres. Harry S. Truman on April 3, 1948. Aid was originally offered to almost all the European countries, including those under military occupation by the Soviet Union. The Soviets early on withdrew from participation in the plan, however, and were soon followed by the other eastern European nations under their influence. This left the following countries to participate in the plan: Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, the United Kingdom, and western Germany.

Under Paul G. Hoffman, the Economic Cooperation Administration (ECA), a specially created bureau, distributed over the next four years some $13 billion worth of economic aid, helping to restore industrial and agricultural production, establish financial stability, and expand trade. Direct grants accounted for the vast majority of the aid, with the remainder in the form of loans. To coordinate the European participation, 16 countries, led by the United Kingdom and France, established the Committee of European Economic Cooperation to suggest a four-year recovery program. This organization was later replaced by the permanent Organisation for European Economic Co-operation (OEEC), to which West Germany was ultimately admitted.

The Marshall Plan was very successful. The western European countries involved experienced a rise in their gross national products of 15 to 25 percent during this period. The plan contributed greatly to the rapid renewal of the western European chemical, engineering, and steel industries. Truman extended the Marshall Plan to less-developed countries throughout the world under the Point Four Program, initiated in 1949.