1947

The Marshall Plan

The Marshall Plan was a United States initiative to provide aid to western Europe after the end of World War II. It was announced in a speech by George Marshall, the US Secretary of State, in 1947. The plan was intended to prevent the spread of Soviet influence in Europe as Marshall was convinced that communism thrived on poverty and social turmoil.

The US granted a total of USD 13 billion in economic aid (around USD 140 billion in today’s money), spread over four years, to 16 European countries, including France and Germany. It also proposed aid to eastern European countries, but the offer was rejected by Moscow.

The aid - consisting essentially of donations - was used to buy American goods. States benefiting from the funds were encouraged to stimulate investment, and were also required to coordinate with each other on how the aid should be allocated, leading to the creation of the Organisation for European Economic Cooperation or OEEC (which became the OECD in 1961).

The Marshall Plan contributed to the revival of the European economy; it also boosted the US economy by helping to sustain economic activity in the post-war period.