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Europe: How The Marshall Plan Took Western Europe From Ruins To Union

Prague, 26 May 1997 (RFE/RL) - The winter of 1946-47 was brutally cold in Europe, the worst in the memory of those of had survived six years of war.

Much of the Continent was still in rubble, poverty present almost everywhere, hunger common in many areas, starvation a particular threat in defeated Germany. The Soviet Union controlled Europe's eastern half and large communist parties in France, Italy and elsewhere threatened the same fate for Western Europe. An exhausted Britain had already said it could no longer afford to protect Greece or Turkey, and the United States had stepped in with the Truman Doctrine to fill the gap in southeastern Europe. But what, U.S. statesmen asked themselves, could keep Western Europe from falling under Soviet influence?

The answer, of course, was the Marshall Plan, which one contemporary historian calls "the defining moment of the early Cold War." More formally known as the European Recovery Program (ERP), over the next three years the plan poured an unprecedented $13.3 billion --more than $100 billion in today's dollars--into 16 Western European economies. By contrast, between 1948 and Stalin's death in 1953, the Soviet Union stripped Eastern Europe of goods then worth more than $14 billion.

In Berlin, Marshall aid reconstructed a power station that had earlier been dismantled as war reparations. In Austria, it played an important part in building the Limberg Dam and other components of a vast hydroelectric project. Elsewhere, U.S. funds served to upgrade manufacturing, mining, transportation and communications industries. Yet many U.S. and European historians have recently concluded that the Marshall Plan's impact in Western Europe was more important politically and psychologically than it was economically.

Their assessment is based, first, on data that shows West European recovery was well underway, particularly in Germany, before the first Marshall Plan sacks of wheat and other goods reached the continent in mid-1948. Early historians lauded the ERP's economic effect in rather extravagant terms. For example, Britain's Richard Mayne spoke of Europe's "great leap forward (that saved the continent) from imminent economic ruin." But barely a decade later, U.S. historian Charles Maier concluded that Marshall aid served as what he called the "lubricant in an engine -- not the fuel -- which allowed a machine to run that would have otherwise buckle and bind."

In fact, the more recent historians say, the Marshall Plan provided Europeans as much psychological reassurance as it did recovery. And politically, it was crucial. Europeans had not forgotten the U.S.' isolationism both after World War I and before 1939. In France and Italy, the promise of U.S. aid helped persuade Center-Left political parties to break with the communists and, in France's case, with Soviet foreign policy. It also helped overcome France's unwillingness to see the rebuilding of the then Western-occupied zones of Germany and, in 1948, win Paris' acceptance of the creation of a new West German state. Until the ERP was enacted, French policy-makers sought not only a demilitarized but a decentralized and deindustrialized Germany.

Marshall's dramatic offer was necessary before skeptical Europeans would embark on a course that went against their postwar swing to the Left. In Italy, two weeks after the ERP was enacted, Christian Democrats won almost half of the popular vote, reversing a three-year electoral trend to the Left. After the ERP was passed, too, there was far less talk throughout Western Europe of a possible "third force" that would avoid close alignment with either of the two new superpowers.

Not that West European anti-Americanism collapsed overnight with the announcement of the Marshall Plan. The French National Assembly maintained its ban on the sale, manufacture and import of Coca-Cola for some time afterwards. Winston Churchill had called the Marshall Plan "the most unsordid act in history." But critics, mostly Left-of-Center, insisted the plan benefited the United States as much as Western Europe. And some historians today tend to agree not with Churchill but with the critics.

In their view, that's because the U.S. initiative, while remembered for its altruism, was neither naive nor devoid of self-interest. Those bags of wheat that fed Germans and others had to come from the U.S.' mid-Western grain belt, and many were paid for in so-called counterpart local funds which the United States could spend as it wished in Europe. What's more, at the outset of 1947, Washington feared that Europe's mounting problems and lack of purchasing power for U.S. goods, would intensify the beginnings of a recession in the United States.

Under-Secretary of State for Economic Affairs William Clayton, after Marshall himself the single most important U.S. official dealing with the ERP, put it this way: "Let us admit right off that our objective has as its background the needs and interests of the people of the United States. We need markets -- big markets -- in which to buy and sell."

The Marshall Plan had one other great effect on West Europe's evolution over the past four decades: It encouraged the economic integration that led, first, to the creation of the European Coal and Steel Community among six nations -- Belgium, France, Germany, Italy, Luxembourg and the Netherlands -- in 1950. Eight years later, the same six took a qualitative jump into the more integrated European Economic Community. And five years ago, the EEC took a quantum leap into the European Union, which currently numbers 15 nations -- and has 10 Central and East European neighbors now seeking rapid membership.

The Marshall Plan stimulated European unification because its architects celebrated the benefits of economic integration and did what they could to bring it about. They believed that an integrated economic order, particularly one headed by central institutions, would help to channel constructively Germany's revitalized strength -- and so far, they have been proved right. These assumptions grew fundamentally out of U.S. domestic experience, where a large integrated economy has made vast economic growth possible. They were not all accepted by the West Europeans, but they had a great influence over them.

Witness the recent words of former German Chancellor Helmut Schmidt: "The United States ought not to forget that the emerging European Union is one of its greatest achievements: it would never have happened without the Marshall Plan."