1. Home
  2. Knowledge Base
  3. Marshall Plan – Definition

Marshall Plan – Definition

Marshall Plan Definition

The Marshall Plan refers to an American sponsored initiative which was created and passed in 1948 for the purpose of assisting 17 Western and Southern European countries, to rebuild their economies after being destroyed by World War II. The brain behind this initiative was the United States Secretary of State George C. Marshall, who the initiative was named after.

The United States Congress then approved the establishment of the Marshall Plan, also known as the European Recovery Program (ERP), which was signed into law by Harry S. Truman, who was then the president of the United States.

A Little More on What is the Marshall Plan

During World War II, many European countries were extremely destroyed. Following the destruction of these countries, the United States saw the possibilities of these countries lavishing in poverty, which in turn would make its citizens takes interest in becoming communists. For this reason, the United State feared that the situation would give the Soviet Union an opportunity to dominate countries in Europe, something that the United States was not willing to prevent  at all costs.

The Implementation of the Marshall Plan

Generally, the plan gave out more than $15 billion in an effort to achieve the above goals. Several Western European countries benefited from this plan. Some of the recipients who were large beneficiaries included the United Kingdom which received 26% of the total contributions, France received 18% while West Germany got 11% respectively. Other 18 European countries also benefited from plan. However,  the Soviet Union rejected the benefit plan and even blocked the benefit plan from reaching other countries such as Poland.

What was the Marshall Plan Set to Achieve

The purpose of America coming up with this plan was for the purpose of achieving the following:

  • Reconstructing industries, cities, and infrastructures which were badly destroyed during the war.
  • To ensure that trade barriers brought about by many regulations between European countries are removed.
  • To adopt business procedures that are productive.
  • Lastly, to foster commerce between The United States and the war-torn countries.
  • To stop communism from spreading to the European continent. This is because America saw communism as a threat to European stability.

Did Marshall Plan have an Impact

It is important to note that by 1952, the European countries that benefited from the Marshall Plan and even exceeded the pre-war damages. This is a clear indication that the program did have a positive impact, especially in reviving economies of those countries.

However, there has been a debate on the effectiveness of this plan as far as a real economic benefit is concerned. Reports back then suggested that Western Europe had already made a milestone in recovering from the effects of World War II, by the time the Marshall plan was becoming effective. This, therefore, means that the Marshall plan cannot be given full credit as far as reviving of these countries’ economies are concerned.

Also, it has been argued that despite the United States investing significantly in this plan, it was only able to account for 3% and below of the national’s total income of the beneficiary countries. This resulted to slow GDP growth in these countries for the four years’ period that the plan was in motion.

Effects of the Marshall Plan

The Marshall plan had the following effects:

  • Generally, there was an opening of trade avenues between the United States and Europe because of the reliance on America’s assistance.
  • Also, the act of ensuring that unity prevailed in European countries contributed to the establishment of the European Union.
  • In addition, the Marshall plan was seen as a key player in the founding of the North Atlantic Treaty Organization (NATO). NATO refers to North American and European countries’ military alliance which was founded in 1949.

Generally, it is important to note that ;the America’s Marshall plan did bring positive effects in the European countries. For instance, without the support of America to the European countries, there would be no huge networks of things such as airports, railroads, and highways in the modern society.

References for “Marshall Plan

https://en.wikipedia.org/wiki/Marshall_Plan

https://www.history.com/topics/world-war-ii/marshall-plan-1

https://history.state.gov/milestones/1945-1952/marshall-plan

https://www.britannica.com/event/Marshall-Plan

https://www.marshallfoundation.org/marshall/the-marshall-plan/

Was this article helpful?