The share of the aid per country, based on the accumulative total, is as follows: United Kingdom : Switzerland was also a recipient of Marshall Plan aid, but was not assigned a total by the source.
The source gives a total sum of It is unclear which figure is correct. Release date is date of most recent access. Historical Data. GDP and manufacturing output growth in Western European countries Employment growth in Western European countries GDP growth in the U. This feature is limited to our corporate solutions. Please contact us to get started with full access to dossiers, forecasts, studies and international data.
Skip to main content Try our corporate solution for free! Single Accounts Corporate Solutions Universities. Between and , the U. Notable exceptions from this aid were Spain, due to Franco's unpopularity in the U.
While money was roughly split between nations based on population size, larger, industrialized countries received a disproportionately higher share of the aid as it was believed their success would trickle down to smaller states.
Economic insignificance? The term "Marshall Plan" has become something of a synonym for economic recovery plans in recent decades, yet the modern consensus is that the economic impact of the original was fairly overstated at the time. This investment of capital did help, but European recovery was well underway before the first installments were paid by the U.
S, and it was European integration which laid the groundwork for recovery. Unlike the period following the First World War, the victorious powers had learned that cooperation between former adversaries, rather than punishment and reparations , would be the key to future success. It was the ideological influence of the Marshall Plan had the largest impact; Western European business structures became more Americanized, international trade barriers and tariffs were removed, and the transition to more capitalist economies eventually led to the most prosperous period ever recorded in European history, known as the "Golden Age" The transfer to India was made by presidential order presidential letter of June 15, Table 1 contains one estimate of funds made available for the ERP to June and omitting the interim funding and lists the sources of those funds in detail.
Table 2 lists recipient nations and gives an estimate, based on U. Agency for International Development figures, of amounts received at the time. Figure 1. Percentage of Country Allocations. Table 2. Source: U. The European Recovery Program assumed the need for two implementing organizations, one American and one European.
These were expected to continue the dialogue on European economic problems, coordinate aid allocations, ensure that aid was appropriately directed, and negotiate adoption of effective policy reforms.
Due to the complex nature of the recovery program, the magnitude of the task, and the high degree of administrative flexibility desired with regard to matters concerning procurement and personnel, Congress established a new agency—the Economic Cooperation Administration ECA —to implement the ERP.
Another reason for its separate institutional status was a strong distrust by many members of the Republican-majority Congress of a State Department headed by a Democratic Administration. However, because many in Congress were also concerned that the traditional foreign policy authority of the Secretary of State not be impinged, it required that full consultation and a close working relationship exist between the ECA Administrator and the Secretary of State.
Paul G. Hoffman was appointed as Administrator by President Truman. A Republican and a businessman President of the Studebaker Corporation , both requirements posed by the congressional leadership, Hoffman is considered by historians to have been a particularly talented administrator and promoter of the ERP.
A man regional office located in Paris played a major role in coordinating the programs of individual countries and in obtaining European views on implementation. It was the most immediate liaison with the organization representing the participating countries.
Averell Harriman headed the regional office as the U. Special Representative Abroad. Missions were also established in each country to keep close contact with local government officials and to observe the flow of funds. Both the regional office and country missions had to judge the effectiveness of the recovery effort without infringing on national sovereignty sensitivities. As required by the ERP legislation, the United States established bilateral agreements with each country.
These were fairly uniform—they required certain commitments to meet objectives of the ERP such as steps to stabilize the currency and increase production, as well as obligations to provide the economic information upon which to evaluate country needs and results of the program.
A European body, the Organization for European Economic Cooperation OEEC , was established by agreement of the participating countries in order to maintain the "joint" nature by which the program was founded and reinforce the sense of mutual responsibility for its success.
Earlier, the participating countries had jointly pledged themselves to certain obligations see above. The OEEC was to be the instrument that would guide members to fulfill their multilateral undertaking.
To advance this purpose, the OEEC developed analyses of economic conditions and needs, and, through formulation of a Plan of Action, influenced the direction of investment projects and encouraged joint adoption of policy reforms such as those leading to elimination of intra-European trade barriers. At the ECA's request, it also recommended and coordinated the division of aid among the 16 countries. Determining assistance allocations was not an easy matter, especially since funding declined each year.
As a result, there was much bickering among countries, but a formula was eventually reached to divide the aid. The framers of the European Recovery Program envisioned a number of tools with which to accomplish its ends see Table 3. These are discussed below. The ECA provided outright grants that were used to pay the cost and freight of essential commodities and services, mostly from the United States.
Conditional grants were also provided requiring the participating country to set aside currency so that other participating countries could buy their export goods. This was done to stimulate intra-European trade. The ECA also provided loans. ECA loans bore an interest rate of 2. The ECA supervised the use of the dollar credits. European importers made purchases through normal channels and paid American sellers with checks drawn on American credit institutions. The Administrator had decided that loans in excess of these amounts should not be made because of the inadvisability of participating countries assuming further dollar obligations, which would increase the dollar gap the Plan was attempting to close.
Table 3. The content of the dollar aid purchases changed over time as European needs changed. From a program supplying immediate food-related goods—food, feed, fertilizer, and fuel—it eventually provided mostly raw materials and production equipment.
Project financing became important during the later stages of the ERP. ECA dollar assistance was used with local capital in specific projects requiring importation of equipment from abroad.
The advantage here was leveraging of local funds. Many others were devoted to rehabilitation of transport infrastructure.
Each country was required to match the U. The participating country's currency was placed in a counterpart fund that could be used for infrastructure projects e. Each of these counterpart fund projects, however, had to be approved by the ECA Administrator.
In the case of Great Britain, counterpart funds were deemed inflationary and simply returned to the national treasury to help balance the budget. Five percent of the counterpart funds could be used to pay the administrative expenses of the ECA in Europe as well as for purchase of scarce raw materials needed by the United States or to develop sources of supply for such materials.
For example, enterprises were set up for development of nickel in New Caledonia, chromite in Turkey, and bauxite in Jamaica. Technical assistance was also provided under the ERP.
A special fund was created to finance expenses of U. Funds could be used only on projects contributing directly to increased production and stability. The ECA targeted problems of industrial productivity, marketing, agricultural productivity, manpower utilization, public administration, tourism, transportation, and communications. In most cases, countries receiving such aid had to deposit counterpart funds equivalent to the dollar expenses involved in each project.
Technical assistance was a major component of the "productivity campaign" launched by the ECA. Production was not merely a function of possessing up-to-date machinery, but of management and labor styles of work.
As one Senate Appropriations staffer noted, "Productivity in French industry is better than in several other Marshall-plan countries but it still requires four times as many man-hours to produce a Renault automobile as it does for a Chevrolet, and the products themselves are hardly comparable.
Guaranties were provided for convertibility into dollars of profits on American private sector investments in Europe. The purpose of the guaranties was to encourage American businessmen to invest in the modernization and development of European industry by ensuring that returns could be obtained in dollars.
The risk covered was extended as well to include compensation for loss of investment due to expropriation. The individual components of the European Recovery Program contributed directly to the immediate aims of the Marshall Plan. Dollar assistance kept the dollar gap to a minimum. The ECA made sure that both dollar and counterpart assistance were funneled toward activities that would do the most to increase production and lead to general recovery. The emphasis in financial and technical assistance on productivity helped to maximize the efficient use of dollar and counterpart funds to increase production and boost trade.
The importance to future European growth of this infusion of directed assistance should not be underestimated. But the aims of the Marshall Plan were not achieved by financial and technical assistance programs alone.
The importance of these American-sponsored programs is that they helped to create the framework in which the overall OEEC European program of action functioned. American aid was leveraged to encourage Europeans to come together and act, individually and collectively, in a purposeful fashion on behalf of the three themes of increased production, expanded trade, and economic stability through policy reform.
The first requirement of the Marshall Plan was that European nations commit themselves to these objectives. On an individual basis, each nation then used its counterpart funds and American dollar assistance to fulfill these objectives. They also, with the analytical assistance of both fellow European nations under the OEEC and the American representatives of the ECA, closely examined their economic systems.
Through this process, the ECA and OEEC sought to identify and remove obstacles to growth, to avoid unsound national investment plans, and to promote adoption of appropriate currency levels. Thanks to American assistance, many note, European nations were able to undertake recommended and necessary reforms at lesser political cost in terms of imposing economic hardship on their publics than would have been the case without aid. In this regard, some argue that it was Marshall Plan aid that enabled economist Jean Monnet's plan of modernization and reform of the French economy to succeed.
However, contending with deeply felt sensitivities regarding European sovereignty, U. Where it controlled counterpart funds for use in capital projects, American influence was considerable. Where counterpart funds were simply used to retire debt to assist financial stability, there was little such influence. Some analysts suggest the United States had minimal control over European domestic policy since its assistance was small relative to the total resources of European countries.
But while it could do little to get Europe to relinquish control over exchange rates, on less sensitive issues the United States, many argue, was able to effect change. Italy was threatened with loss of aid for not acting to adopt recommended programs and, in April , aid was actually withheld from Greece to force appropriate domestic action.
As a collective of European nations, the OEEC generated peer pressure that encouraged individual nations to fulfill their Marshall Plan obligations. The OEEC provided a forum for discussion and eventual negotiation of agreements conducive to intra-European trade.
For Europeans, its existence made the Plan seem less an American program. European men came together, knew each other, and were ready for cooperation.
By asking the OEEC to take on a share of responsibility for allocating American aid among participating countries, the ECA elevated the organization to a higher status than might have been the case otherwise and thereby facilitated achievement of Marshall Plan aims. Assistance to Europe was not new with the Marshall Plan. Two factors that distinguish the Marshall Plan from its predecessors are that the Marshall Plan was the result of a thorough planning process and was sharply focused on economic development.
Because the earlier, more ad hoc and humanitarian relief-oriented assistance had made little dent on European recovery, a different, coherent approach was put forward. The new approach called for a concerted program with a definite purpose. The purpose was European recovery, defined as increased agricultural and industrial production; restoration of sound currencies, budgets, and finances; and stimulation of international trade among participating countries and between them and the rest of the world.
The Marshall Plan, as illustrated in the preceding section, ensured that each technical and financial assistance component contributed as directly as possible to these long-range objectives. Other aspects of its deliberate character were distinctive. It had definite time and monetary limits. It was made clear at the start that the U.
In addition to broad objectives, it also supported, by reference to the CEEC program in the legislation and, more specifically, in congressional report language, the ambitious quantitative targets assumed by the participating countries.
The Marshall Plan was also a "joint" effort. By bringing in European nations as active participants in the program, the United States ensured that their mutual commitment to alter economic policies, a necessity if growth was to be stimulated, would be translated into action and that the objective of integration would be further encouraged. The Marshall Plan promoted recognition of the economic interdependence of Europe. By making Congress a firm partner in the formulation of the program, the Administration ensured continued congressional support for the commitment of large sums over a period of years.
Further, the Marshall Plan was a first recognition by U. Unlike previous postwar aid, which was two-thirds repayable loans and one-third relief supplies, Marshall Plan aid was almost entirely in the form of grants aimed at productive, developmental purposes.
The reason for this large infusion of grants in peacetime was that U. Governments whose citizens were unemployed and unfed were unstable and open to communist advancement. Only long-term economic growth could provide stability and, as an added benefit, save the United States from having to continue an endless process of stop-gap relief-based assistance. The unique nature of the Marshall Plan is perhaps best emphasized by what replaced it.
In September , the ECA informed the European participants that henceforth a growing proportion of aid would be allocated for European rearmament purposes. Although originally scheduled to end on June 30, , the Plan began to wind down in December when aid to Britain was suspended. In the following months, Ireland, Sweden, and Portugal graduated from the program.
The use of counterpart funds for production purposes was phased out. To attack inflation, which resulted from the shortage of materials due to the Korean War, the ECA had begun to release counterpart funds. Under the Mutual Security Act of and subsequent legislation, although in lesser quantities and in increasing proportions devoted to defense, aid continued to be provided to many European countries.
The joint nature of the Marshall Plan disappeared as national sovereignty came to the fore again. France insisted on using post-Marshall Plan counterpart funds as it wished, commingling them with other funds and only later attributing appropriate amounts to certain projects to satisfy American concerns.
To many analysts and policymakers, the effect of the Marshall Plan policies and programs on the economic and political situation in Europe appeared broad and pervasive.
While, in some cases, a direct connection can be drawn between American assistance and a positive outcome, for the most part, the Marshall Plan may be viewed best as a stimulus which set off a chain of events leading to the accomplishments noted below.
The Marshall Plan agencies, the ECA and OEEC, established a number of quantitative standards as their objectives, reflecting some of the broader purposes noted earlier. Viewed in terms of the increase from , the achievement is more impressive. Figure 2. Growth in European Production: The Senate report on the ERP authorization had noted a set of production goals that the Europeans had set for themselves, goals that they noted "seem optimistic to many American experts.
By , they had achieved 60 million. In the end, they managed a four-fold increase. The goal for coal production was million tons, an increase of 30 million over prewar production.
In , participating countries could pay for only half of their imports by exporting. Even though trade rose substantially, especially among participants, the volume of imports from the rest of the world rose substantially as well, and prices for these imports rose faster than did prices of exports. As a result, Europe continued to be strained. One obstacle to expansion of exports was breaking into the U.
Related to the overall balance of trade was the deficit vi s- a - vis the dollar area, especially the United States.
At the end of , trade volume within Europe was almost double that of Some benefits of the Marshall Plan are not easily quantifiable, and some were not direct aims of the program. Many believe that the role of the Marshall Plan in raising morale in Europe was as great a contribution to the prevention of communism and stimulation of growth as any financial assistance. As the then-Director of Policy Planning at the State Department George Kennan noted, "The psychological success at the outset was so amazing that we felt that the psychological effect was four-fifths accomplished before the first supplies arrived.
The United States had a view of itself as a model for the development of Europe, with individual countries equated with American states.
As such, U. To encourage intra-European trade, the ECA in its first year went so far as to provide dollars to participating countries to finance their purchase of vitally needed goods available in other participating countries even if these were available in the United States. In a step toward encouraging European independence from the dollar standard, it also established an intra-European payments plan whereby dollar grants were made to countries that exported more to Europe as a group than they imported, on condition that these creditor countries finance their export balance in their own currencies.
The European Payments Union EPU , an outgrowth of the payments plan, was established in by member countries to act as a central clearance and credit system for settlement of all payments transactions among members and associated monetary areas such as the sterling area. At ECA request, the congressional authorization withheld funds specifically to encourage the pursuit of this program since successful conclusion of the EPU depended on an American financial contribution.
Many believe that these and other steps initiated under the ERP led to the launching of the European Coal and Steel Community in and eventually to the European Union of today.
Perhaps the greatest inducement to the United States in setting up the Marshall Plan had been the belief that economic hardship in Europe would lead to political instability and inevitably to communist governments throughout the continent. In essence, the ERP allowed economic growth and prosperity to occur in Europe with fewer political and social costs. Plan assistance allowed recipients to carry a larger import surplus with less strain on the financial system than would be the case otherwise.
It made possible larger investments without corresponding reductions in living standards and could be anti-inflationary by mopping up purchasing power through the sale of imported assistance goods without increasing the supply of money.
The production aspects of the Plan also helped relieve hunger among the general population. Human food consumption per capita reached the prewar level by In West Germany, economically devastated and besieged by millions of refugees from the East, one house of every five built since had received Marshall Plan aid.
Perhaps as a result of these benefits, communism in Europe was prevented from coming to power via the ballot box. It is estimated that communist strength in Western Europe declined by almost one-third between and Champions of the Marshall Plan hold that its authorizing legislation was free of most of the potential restrictions sought by private interests of the sort to later appear in foreign aid programs. Nevertheless, restrictions were enacted that did benefit the United States and U.
Procurement of surplus goods was encouraged under the Economic Recovery Program legislation, while procurement of goods in short supply in the United States was discouraged. It was required that surplus agriculture commodities be supplied by the United States; procurement of these was to be encouraged by the ECA Administrator.
Sugar and nonferrous metals made up the bulk of purchases from outside the United States. In several respects, however, the U. The book value of U. Furthermore, while the Marshall Plan grew out of a recognition of the economic interdependence of the two continents, its implementation greatly increased awareness of that fact. Finally, the act of U.
Many of the operational methods and programs devised and tested under the Marshall Plan became regular practices of later development efforts. For example, the ECA was established as an independent agency with a mission in each participating country to ensure close interaction with governments and the private sector, a model later adopted by the U. Unlike previous aid efforts, the Plan promoted policy reform and used commodity import programs and counterpart funds to ease adoption of those reforms and undertake development programs, a practice of USAID programs in later decades.
The Marshall Plan also launched the first participant training programs bringing Europeans to the United States for training and leveraged private sector investment in recipient countries through the use of U. Hundreds of American economists and other specialists who implemented the Marshall Plan gained invaluable experience that many later applied to their work in developing countries for the ECA's successor foreign aid agencies.
Not everyone agrees that the Marshall Plan was a success. One such appraisal was that Marshall Plan assistance was unnecessary.
It is, for example, difficult to demonstrate that ERP aid was directly responsible for the increase in production and other quantitative achievements noted above. European economies, in this view, were already on the way to recovery before the Marshall Plan was implemented. Some claim that the dollar gap was not a problem and that lack of economic growth was the result of bad economic policy, resolved when economic controls established during the Nazi era were eventually lifted.
Even at the time of the Marshall Plan, there were those who found the program lacking. If Marshall Plan aid was going to combat communism, they felt, it would have to provide benefits to the working class in Europe. Many believed that the increased production sought by the Plan would have little effect on those most inclined to support communism. In congressional hearings, some Members repeatedly sought assurances that the aid was benefiting the working class. Would loans to French factory owners, they asked, lead to higher salaries for employees?
George C. Europe was devastated by years of conflict during World War II. Millions of people had been killed or wounded. Much of Europe was on the brink of famine as agricultural production had been disrupted by war. Transportation infrastructure was in shambles. The only major power in the world that was not significantly damaged was the United States. From through , the United States was already assisting European economic recovery with direct financial aid.
Military assistance to Greece and Turkey was being given. The newly formed United Nations was providing humanitarian assistance. In January , U. And if any man was entitled to balk and ask for a rest, he was. In just a few months, State Department leadership under Marshall with expertise provided by George Kennan, William Clayton and others crafted the Marshall Plan concept, which George Marshall shared with the world in a speech on June 5, at Harvard. Marshall was convinced the key to restoration of political stability lay in the revitalization of national economies.
Further he saw political stability in Western Europe as a key to blunting the advances of communism in that region. Sixteen nations, including Germany, became part of the program and shaped the assistance they required, state by state, with administrative and technical assistance provided through the Economic Cooperation Administration ECA of the United States. Marshall Plan funding ended in Marshall Plan nations were assisted greatly in their economic recovery.
From through European economies grew at an unprecedented rate. Trade relations led to the formation of the North Atlantic alliance. Economic prosperity led by coal and steel industries helped to shape what we know now as the European Union. It was compiled by Mr.
Vaughn Gary. Skip to content. George Catlett Marshall Support Subscribe. Aid to Europe From through , the United States was already assisting European economic recovery with direct financial aid. The European Recovery Program Sixteen nations, including Germany, became part of the program and shaped the assistance they required, state by state, with administrative and technical assistance provided through the Economic Cooperation Administration ECA of the United States.
Results Marshall Plan nations were assisted greatly in their economic recovery. Chronology with excellent coverage of the committees established by President Truman and House of Representatives to analyze the initial report of the Committee of European Economic Co-operation and study the impact on the U.
Excerpts from U. Pages of Introduction and Chronology of the Marshall Plan from June 5 — November 5, list the membership of the three committees.
Blueprint for Recovery by Michael J. Hogan — Article published on the U. Embassy website in Germany celebrating the 50th anniversary of the Marshall Plan. The article, by the former editor of Diplomatic History, reviews the origins of the Marshall Plan, why the plan succeeded, and lessons learned.
Marshall Foundation, Donovan from the U. Reflections on the Marshall Plan by Henry A. Committee on Foreign Affairs. Emergency Foreign Aid: Hearings. Washington: GPO, Committee on Foreign Relations. Interim Aid for Europe: Hearings. European Recovery Program: Hearings. Department of Commerce. Foreign Aid by the United States Government, Department of State. Foreign Relations of the United States, The key published American documents for any study of the Marshall Plan.
See especially volumes 2 and 3 for this year. Economic Cooperation Administration. Country Data Book: [country]. The ECA issued one of these extremely useful books for each of the sixteen countries participating in the Marshall Plan. Report to Congress. These thirteen quarterly reports June 30, June 30, are valuable for their statistics and descriptions of Marshall Plan activities.
New York: Norton, A magisterial account of the postwar years by the former Secretary of State who was one of the principal architects of U. Adenauer, Konrad. Memoirs, Translated by Beate Ruhm von Oppen. Chicago: Regnery,
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