1939 - 1945

World War II: a conflict with major economic consequences

In human terms, World War II turned out to be the bloodiest war of all times, with over 55 million victims. These human losses caused a sharp decline in the labour force. Material losses were also very high: in the areas that were bombed, the infrastructure was almost entirely destroyed. In addition, in order to finance the war and then reconstruction, countries often resorted to borrowing. This resulted in a general price rise in many countries (in France, the inflation rate was close to 50% between 1945 and 1948) and a weakening of public finances due to increased debt. In addition, at the end of the war, the society started changing. European countries took measures towards greater social protection and laid the foundations of the welfare state: government spending, which had already risen sharply during the war, reached a lastingly high level. Finally, Europe was divided in two by the « iron curtain »: in the West, parliamentary democracies allied with the United States; in the East, countries under Soviet influence. Two opposing economic models. The United States became the creditors of Western European countries. International cooperation emerged, with the creation of the Organization for European Economic Cooperation (OEEC, which in 1961 became the Organization for Economic Cooperation and Development - OECD) in charge of the Marshall Plan designed to help rebuild European economies. The Eastern European countries, which, in the footsteps of the USSR, refused the Marshall Plan aid, set up the Council for Mutual Economic Assistance (COMECON).