History of Western Civilization II

Ch. 29 The Cold War

The Marshall Plan and Molotov Plan

32.3.2: The Marshall Plan and Molotov Plan

In June 1947, in accordance with the Truman Doctrine, the United States
enacted the Marshall Plan. This was a pledge of economic assistance for
all European countries willing to participate, including the Soviet Union,
who refused and created their own Molotov plan for the Eastern Bloc.

LEARNING OBJECTIVE

Distinguish between the Marshall Plan and the Molotov Plan

KEY POINTS

In early 1947, Britain, France, and the United States un-

successfully attempted to reach an agreement with the
Soviet Union for a plan envisioning an economically
self-su cient Germany.

In June 1947, in accordance with the Truman Doctrine,

the United States enacted the Marshall Plan, a pledge
of economic assistance for all European countries will-
ing to participate, including the Soviet Union.

The years 1948 to 1952 saw the fastest period of growth

in European history; industrial production increased by
35%, some of which has been attributed to the Marshall
Plan aid.

The Soviet Union refused the aid because Stalin be-

lieved that economic integration with the West would
allow Eastern Bloc countries to escape Soviet control.

In response, the Soviet Union created the Molotov Plan,

later expanded into the COMECON, a system of bilat-
 eral trade agreements and an economic alliance be-
tween socialist countries in the Eastern Bloc.

KEY TERMS

Molotov Plan
The system created by the Soviet Union in 1947 to pro-
vide aid to rebuild the countries in Eastern Europe that
were politically and economically aligned to the Soviet
Union.
National Security Act of 1947
A bill that brought about a major restructuring of the
United States government’s military and intelligence
agencies following World War; it established the Na-
tional Security Council, a central place of coordination
for national security policy in the executive branch, and
the Central Intelligence Agency (CIA), the U.S.’s rst
peacetime intelligence agency
Marshall Plan
An American initiative to aid Western Europe in which
the United States gave more than $12 billion in eco-
nomic support to help rebuild Western European econ-
omies after the end of World War II.

Overview

In early 1947, Britain, France, and the United States unsuccessfully

attempted to reach an agreement with the Soviet Union for an
economically self-su cient Germany, including a detailed accounting of
the industrial plants, goods, and infrastructure already removed by the
Soviets. In June 1947, in accordance with the Truman Doctrine, the
United States enacted the Marshall Plan, a pledge of economic
assistance for all European countries willing to participate, including the
Soviet Union.
The plan’s aim was to rebuild the democratic and economic systems of
Europe and counter perceived threats to Europe’s balance of power,
such as communist parties seizing control through revolutions or
elections. The plan also stated that European prosperity was contingent
upon German economic recovery. One month later, Truman signed the
National Security Act of 1947, creating a uni ed Department of Defense,
the Central Intelligence Agency (CIA), and the National Security Council
(NSC). These would become the main bureaucracies for U.S. policy in
the Cold War.

Stalin believed that economic integration with the West would allow
Eastern Bloc countries to escape Soviet control, and that the U.S. was
trying to buy a pro-U.S. realignment of Europe. Stalin therefore
prevented Eastern Bloc nations from receiving Marshall Plan aid. The
Soviet Union’s alternative to the Marshall plan, purported to involve
Soviet subsidies and trade with central and eastern Europe, became
known as the Molotov Plan (later institutionalized in January 1949 as the
COMECON). Stalin was also fearful of a reconstituted Germany; his
vision of a post-war Germany did not include the ability to rearm or pose
any kind of threat to the Soviet Union.

In early 1948, following reports of strengthening “reactionary elements”,

Soviet operatives executed a coup d’état in Czechoslovakia, the only
Eastern Bloc state that the Soviets had permitted to retain democratic
structures. The public brutality of the coup shocked Western powers and
set in a motion a brief scare that swept away the last vestiges of
opposition to the Marshall Plan in the United States Congress.

The twin policies of the Truman Doctrine and the Marshall Plan led to
billions in economic and military aid for Western Europe, Greece, and
Turkey. With U.S. assistance, the Greek military won its civil war. Under
the leadership of Alcide De Gasperi the Italian Christian Democrats
defeated the powerful Communist-Socialist alliance in the elections of
1948. At the same time, there was increased intelligence and espionage
activity, Eastern Bloc defections, and diplomatic expulsions.

Marshall Plan
The Marshall Plan (o cially the European Recovery Program, ERP) was
an American initiative to aid Western Europe, in which the United States
gave over $12 billion (approximately $120 billion in value as of June
2016) in economic support to help rebuild Western European economies
after the end of World War II. The plan was in operation for four years
beginning April 8, 1948. The goals of the United States were to rebuild
war-devastated regions, remove trade barriers, modernize industry,
make Europe prosperous again, and prevent the spread of communism.
The Marshall Plan required a lessening of interstate barriers, saw a
decrease in regulations, and encouraged an increase in productivity,
labor union membership, and the adoption of modern business
procedures.

The Marshall Plan aid was divided among the participant states on a per
capita basis. A larger amount was given to the major industrial powers,
as the prevailing opinion was that their resuscitation was essential for
general European revival. Somewhat more aid per capita was also
directed towards the Allied nations, with less for those that had been
part of the Axis or remained neutral. The largest recipient of Marshall
Plan money was the United Kingdom (receiving about 26% of the total),
followed by France (18%) and West Germany (11%). Some 18 European
countries received Plan bene ts. Although o ered participation, the
Soviet Union refused Plan bene ts and blocked bene ts to Eastern Bloc
countries such as East Germany and Poland.

The years 1948 to 1952 saw the fastest period of growth in European
history. Industrial production increased by 35%. Agricultural production
substantially surpassed pre-war levels. The poverty and starvation of the
immediate postwar years disappeared, and Western Europe embarked
upon an unprecedented two decades of growth during which standards
of living increased dramatically. There is some debate among historians
over how much this should be credited to the Marshall Plan. Most reject
the idea that it alone miraculously revived Europe, as evidence shows
that a general recovery was already underway. Most believe that the
Marshall Plan sped this recovery but did not initiate it. Many argue that
the structural adjustments that it forced were of great importance.

The political e ects of the Marshall Plan may have been just as important
as the economic ones. Marshall Plan aid allowed the nations of Western
Europe to relax austerity measures and rationing, reducing discontent
and bringing political stability. The communist in uence on Western
Europe was greatly reduced, and throughout the region communist
parties faded in popularity in the years after the Marshall Plan.

Marshall Plan: One of a number of posters created

to promote the Marshall Plan in Europe. Note the
pivotal position of the American ag.

Molotov Plan

The Molotov Plan was the system created by the Soviet Union in 1947 to
provide aid to rebuild the countries in Eastern Europe that were
politically and economically aligned with the Soviet Union. It can be seen
as the USSR’s version of the Marshall Plan, which for political reasons
the Eastern European countries would not be able to join without leaving
the Soviet sphere of in uence. Soviet foreign minister Vyacheslav
Molotov rejected the Marshall Plan (1947), proposing the Molotov Plan –
the Soviet-sponsored economic grouping which was eventually
expanded to become the COMECON. The Molotov plan was symbolic of
the Soviet Union’s refusal to accept aid from the Marshall Plan or allow
any of their satellite states to do so because of their belief that the Plan
was an attempt to weaken Soviet interest in their satellite states through
the conditions imposed and by making bene ciary countries
economically dependent on the United States.

The plan was a system of bilateral trade agreements that established

COMECON to create an economic alliance of socialist countries. This aid
allowed countries in Europe to stop relying on American aid, and
therefore allowed Molotov Plan states to reorganize their trade to the
USSR instead. The plan was in some ways contradictory, however,
because at the same time the Soviets were giving aid to Eastern bloc
countries, they were demanding that countries who were members of
the Axis powers pay reparations to the USSR.

Attributions

The Marshall Plan and Molotov Plan

“Marshall Plan.” https://en.wikipedia.org/wiki/Marshall_Plan.

Wikipedia CC BY-SA 3.0.

“Cold War.”
https://en.wikipedia.org/wiki/Cold_War#Containment_and
_the_Truman_Doctrine. Wikipedia CC BY-SA 3.0.

“Molotov Plan.” https://en.wikipedia.org/wiki/Molotov_Plan.

Wikipedia CC BY-SA 3.0.

“Marshall_Plan_poster.JPG.”
https://en.wikipedia.org/wiki/Marshall_Plan#/media/File:M
arshall_Plan_poster.JPG. Wikipedia CC BY-SA 3.0.

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