MARSHALL PLAN

formally European Recovery Program (April 1948December 1951), U.S.-sponsored program designed to rehabilitate the economies of 17 western and southern European nations in order to create stable conditions in which democratic institutions could survive. The United States feared that the poverty, unemployment, and dislocation of the postwar 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. 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. Aid was originally offered to almost all the European countries, including those under military occupation by the U.S.S.R. The U.S.S.R. early on withdrew from participation in the plan, however, and was soon followed by the other eastern European nations under its 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 Cooperation (OEEC), to which West Germany was ultimately admitted. The Marshall Plan was very successful; the several western European countries 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. The Marshall Plan concept of economic aid was so successful that President Harry S. Truman extended it to less developed countries throughout the world under the Point Four Program, initiated in 1949. Additional reading Studies of the Marshall Plan include John Gimbel, The Origins of the Marshall Plan (1976); Imanuel Wexler, The Marshall Plan Revisited: The European Recovery Program in Economic Perspective (1983); Charles L. Mee, Jr., The Marshall Plan: The Launching of the Pax Americana (1984), for a general audience; Michael J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 19471952 (1987); and Armand Clesse and Archie C. Epps (eds.), Present at the Creation: The Fortieth Anniversary of the Marshall Plan (1990), essays by those who worked on the Marshall Plan.