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Lessons Learned From the History of the Marshall Plan about the Importance of the USA In The Process Of European Integration Essay

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Updated: May 3rd, 2019

The World War II left an unprecedented destruction of untold magnitude in the whole of Europe. All the countries, including those who did not directly engage in the war found themselves reeling under the weight of destruction and devastation. Many of the countries economies were on their knees on the brink of collapse, agriculture being the most affected.

The food situation in Europe was pathetic with almost near starvation of citizens experienced in 1947. The infrastructure, especially roads and railways in a majority of Eastern European countries had been severely destroyed through air strikes.

Although the warring armies did not destroy a big part of Western Europe, it is people in villages and small towns who found themselves isolated from the rest of civilization as roads railways and bridges had been destroyed while important see ports had been blown off.

Many merchant ships had been sunk thus international trade between Europe and other parts of the world had been brought to an almost grinding halt. The war bill dug deep holes into the coffers of the governments involved in the war. These governments therefore had no funds to facilitate after war recovery efforts.

Due to this dire need, help was needed to reconstruct Europe, not just for economic purpose but also to avoid a repetition of such a destructive again. The Marshall Plan, originally called European Recovery Program, ERP, was then born. This plan was named after The US secretary of State at that time, George Catlett Marshall, who was also credited with helping Sir Winston Churchill win The Second World War.

The plan was destined to make Europe a self-reliant continent. It pumped in excess of $ 13 billion into helping Europe’s recovery efforts. Some of these funds were to be used in modernizing Europe’s industries. Suffice to say most of the countries exceeded the developments targets by the end of the plan in 1952. This paper will explain the important lessons learnt from thee role America played in reconstruction of Europe.

The US played a key role in convincing a reluctant Britain to make sufficient national sacrifices for the sake of the federation. After the war, Britain found herself not in position to be the big brother of Europe. Germany, which was solely blamed for the war could not be encouraged to play the leading role. American noted that the Dutch could not agree under any circumstances to a French leadership.

This only left Britain as the only credible leader in Europe. Secondly, the idea of having a Britain less European federation was totally out of question. Britain had with her several barriers that prevented her from joining the federation. Firstly, her commonwealth ties were a big barrier for her to join the European federation. She had a lot of oversees commitments especially in committing armies to protect her colonies.

Britain internal commercial and political policies also scared her from joining the federation. She felt that should she be compelled to join, then her economy would be affected because of the financial burden that comes with it (United States Department of State 619). Due to these realizations there was the need to help Britain in first understanding the importance of her membership in the federation.

Secondly, there was need to assist Britain’s big brother role in Europe by lightening her international commitments (United States Department of State 618). Britain eventually softened her stand and agreed thus America scored highly in integrating an important partner whose involvement would give the plan much boost.

There were enormous ideological, political, social and economic differences in Europe. These differences were the primary reason of the Second World War. In forming the all-inclusive federation these differences could not be swept under the carpet. There needed to be a mediator who would make countries come to the negotiation table and structure a workable federation that would benefit all. The US State Department easily took this responsibility.

It played the mediator role of convincing all countries involved especially Britain on coming to an agreement with other countries it (United States Department of State 617). This mediation was planned to make the necessary agreements in the political, economical and military integration of Europe. The US had to develop a working policy that would decide up to what extent the international military organization NATO was to be involved in conflicts affecting member states.

Even though military integration was paramount, the political and economic integration were very important. All political matters were to be solved gradually with time, to give the American the necessary time to think through this delicate matter.

America initiated political reforms successfully replaced European totalitarian regimes with more liberal and democratic governments. In the meantime there was need to agree on the economic front regarding, the harmonization of the economies of member states and create a stable relationship between their currencies (629).

In this front, therefore the US played a very important role not only in helping with policy formulation but also with mediating between differing member states. It underlines the US credentials in effective foreign policy making and its commitment to helping foreign government establish democratic forms of governments as a way of economic and political prosperity (Eliot and Pier 51).

Trade in Europe before and immediately after the World War II was conducted on bilateral basis. Countries traded on allocated quotas where each country only imported what it could finance. These quotas created within themselves very rigid trade system in Europe. Such a trading system was not conducive for growth that Europe needed and American wanted.

The US proposed a trading pattern that allowed only up to 40% of trade conducted on quota basis, which would within the shortest time possible be whittled down to zero. To facilitate this, the US proposed a trade payment plan based on a payment method that would ensure that any deficit that arose from currency imbalance between trading countries be settled from an aid fund. Britain was again vehemently opposed to this kind of plan.

It suggested that that she be allowed to run a quota based trade with its individual partners at her own discretion. America feared two things in Britain’s proposed plan.

Britain world risk economic isolation and this kind of trading model would limit the free trade America was looking forward to (United States Department of State 646, 647). America eventually convinced Britain to agree to quota less trade tariffs, which were the basis of the economic boom that soon followed.

America did not just play the diplomat in the conflict that the post World War II Europe found itself in. It recognized that for Europe to recover there were enormous amounts of money need to fund the recovery efforts. Suffice to say that not all European countries were able to fund this unimaginable rebuilding work especially in forking out the billions of dollars that were needed from their severely depleted coffers.

In 1948, the US congress passed a bill that allowed the US treasury to fund this recovery effort to a tune of $ 13 billion for the 4-year period the plan was to be implemented. This was just about 2% of the US GNP, but still a substantial amount by any standard. The funding was a form of cooperation between Europe and America. It created a kind of economic partnership that would benefit not only Europe but also America.

Under this program, America would provide technical and professional help to Europe. The plan also required the involvement of the American private sector that would make significant investment in business and trade. Europe on its part would allow for an overhaul of trading policies, extend loans from the fund to local businesses and create a single vibrant market by abolishing quotas thus creating hindered free trade (Eliot and Pier 6).

America saw this as an excellent opportunity to open a new market for its trade goods. This was after the realization of the fact that America was the only country to survive the war with its industries and economy intact. The most valuable lesson learned from this humongous funding is that while Europe’s recovery efforts were the primary motivation, America stood to gain substantially.

By sending expatriates to Europe, America was creating a system that would be friendly to American ideas such as free trade, a unitary economic bloc and harmonized currencies. It also underlines the need to collaborate foreign aid with economic and political recovery for troubled countries.

The marshal plan had several elements. To begin with, it had a rigid period under which all objectives were to be achieved. It was a program established to run from 1947 to 1952 from when the US would pull out of the program (National Archives & Records Administration para 1). The United States congress also allocated the plan a fixed cost amounting to $ 13 billion.

These funds were only released after careful review by the congress to see that they have been utilized carefully (Rice para 7). It meant that the plan was not a welfare fund but rather enterprise development fund, whose aim was to give loans to private business for entrepreneurial developments.

To make this possible the US made it known to the Europeans that the efforts to rebuild Europe lay in the hands of European countries and not America. Europeans had to make the necessary sacrifices to make it work. The US was only playing a facilitator role (Rice para 2). Importantly, America’s vision was to create a self-reliant continent that did not need any external effort after the US had pulled out.

The US facilitator role was aimed at encouraging Europe to take up its problem. This was a challenge Europe did take amidst greater challenges. This stance by America underlined its commitment to ensuring that Europe stood on its own feet, thus reducing the worlds over dependence on America.

Solving the problems of the aftermath of the World War II required new approaches. Prior to the plan, the United States had spent over 5 billion dollars in humanitarian and relief assistance in Europe. It had given in excess of over one billion dollars to the Unite Nations for relief purposes, one billion to feed hungry citizens in Germany and extended three and half billion dollars to Britain.

Despite these colossal amounts, Europe was in still tatters. Roads were in despairs, railways needed to be rebuilt, airports and seaports needed urgent repair and most importantly, the people’s mindsets and attitudes needed to be reeducated. Marshall Planners realized that any solution that would eventually unshackle Europe from the threshold of desperation needed to see the problem from a larger picture.

The problem could not be approached from a piecemeal perspective that involved isolating and solving small problems independently. There needed to be an all-encompassing solution that touched on every aspect of European societies. The launching pad form this grand solution was to make all European countries start talking to each other. When they eventually did, the plan took shape and positive effects are felt up to date (Johnson 1).

The Marshall plan is the enormous economic aid in history by a single country to an external l body. Its effects were much more than precedent. America’s key role in helping to not only form it and implement it but also to fund is commendable. From playing the big brother to the diplomat, the US was unfazed by the challenge of forming the federation.

Some of the lessons learned are very important to not only to Europe but also to entire world at that time. Not only does aid need to be incorporated with political reforms but also any effort to help troubled nation need not be piece meal. Lastly political was paramount in the success of the plan.

Works Cited

Eliot Sorel, and Pier, Carlo. The Marshall Plan: Lessons Learned for the 21st Century. OECD. Jan 2011. Web.

Johnson, Gordon. Lessons for Today from the Marshall Plan.” . 2002. Web.

Rice, Susan. . New York Times. Published: October 2003. Web.

United States Department of State. . 1950. Web.

U.S National Archives & Records Administration. . 2011. Web.

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