What is the Marshall Plan and What Did It Accomplish?

Author: Notre Dame International Security Center

Ndc Marshallstamp 1080 Reduced

World War II’s consequences on Europe have been well-documented. Millions of people lost their lives, industrial and cultural centers had been destroyed, and food production had been interrupted, bringing many areas to the brink of famine. It was obvious Europe needed to be rebuilt from the chaos and carnage of the War. 

Conversely, the United States had been largely spared of the destruction and became a global hegemon. Now President, Harry Truman appointed George C. Marshall as Secretary of State. Marshall prioritized rebuilding Europe in part because of his fear that an economically weak Europe would align with the Soviet Union and turn to communism. In support of his effort, in 1948, Congress passed the Economic Cooperation Act—also known as the Marshall Plan. 

What was the Marshall Plan? 

Marshall believed that the key to rebuilding Europe was to prioritize larger, more industrial countries. As these countries recovered, he believed others would benefit from the windfall.  

In his book, The Marshall Plan: Fifty Years After, Martin Schain noted three countries were granted over half of the over $12 billion earmarked for the Marshall Plan: 

  • Great Britain received approximately 26% 

  • France received 18% 

  • West Germany received 11% 

In total, the U.S. sponsored recovery efforts in 16 countries, including Norway, Iceland, Portugal, Switzerland, Austria, Italy, Greece, Turkey, Belgium, and the Netherlands. 

Not all countries benefited from the Plan equally. Italy (as a former Axis country) and Switzerland (a neutral country), for example, received less aid. The exception was, obviously, West Germany. After the Third Reich fell, the country was split into the communist East Germany overseen by the Soviet Union and the capitalist West Germany overseen by the U.S, France, and U.K. 

What did the Plan Accomplish? 

As mentioned, part of Marshall’s motivation for supporting Western Europe was to prevent the spread of communism. The investment in West Germany’s reconstruction was an intentional choice to differentiate the collective West’s support for “their half” of Germany from the Soviet’s comparative neglect on the eastern side of the Iron Curtain. Marshall wanted to make free market capitalism look as appealing to countries on the proverbial fence as possible. 

A consensus on the Marshall Plan, though, is elusive. 

Ndc Marshallbridge 600x400
In southwest Berlin, a bridge bearing Sec. Marshall’s name spans the Landwehr Canal. 

Was the Marshall Plan Effective or Even Needed?

On the economic front, some reports claim Europe was more than capable of its own rehabilitation. In fact, the money the U.S. invested often represented less than 3% of the beneficiaries’ GDP.  

However, though the plan was only in effect until 1952, the countries receiving aid enjoyed economic growth surpassing pre-war levels. Herman Van der Wee, a Belgian economic historian, wrote in 1984 the Plan “made a decisive contribution to the renewal of the transport system, the modernization of industrial and agricultural equipment, [and] the resumption of normal production.” 

The Beginning of the Cold War 

On the national security policy front, though, the implementation of the Marshall Plan is often thought of as the beginning of the Cold War. Over in the Soviet Union, Joseph Stalin and his Foreign Minister Vyacheslav Molotov were unhappy with Truman, the anti-communist tendencies of his Secretary of State’s Plan for Europe, and the willingness to help rebuild Germany. Originally, the Marshall Plan was designed to include Eastern European countries like Poland and Romania, but the Soviet Union (USSR) blocked access. 

Rather, Stalin and Molotov answered the Marshall Plan in the Western Bloc with the Molotov Plan in the Eastern Bloc. With the USSR acting as hegemon, 6 countries would be beneficiaries: Poland, Czechoslovakia, Hungary, Romania, Bulgaria, and East Germany. The Molotov Plan later evolved into the Council for Mutual Economic Assistance (Comecon). 

Marshall Plan to NATO; Comecon to the Warsaw Pact 

If you’re familiar with the North Atlantic Treaty, its original 12 signatories, and its expansion over time, you’ve doubtlessly noticed the overlap between countries who benefited from the Marshall Plan and the members of NATO. In fact, of the 16 recipients, all but 4 of them (Austria, Ireland, Switzerland, and Sweden (a country applying at the time of this writing)) are now in NATO

In response to the foundation of NATO, the Soviets, the 6 members of the Molotov Plan, and Albania formed a collective security alliance of their own with the Warsaw Pact. 

What Lessons Does the Plan Teach Us? 

If there’s any lesson to be learned from the Marshall Plan, it’s that every action on the international stage has ramifications on the future of international relations (IR) and diplomacy. Even well-meaning initiatives can bring about potentially negative outcomes. To learn more about the lessons of IR’s history, and the impact this history makes on the present and future, consider studying at the Notre Dame International Security Center. At NDISC, we teach students of all specialties and backgrounds about foreign policy so you can be an informed citizen on the latest events in world politics.