the launch of the Marshall Plan, June 1947

• May 1947 – as Under-Secretary of State for Economic Affairs, Clayton returned from a fact-finding tour of Western Europe 
• He concluded that a failure to revive the economies of European states would damage the USA economically 
• He predicted the loss of markets for American goods and the consequent unemployment in the USA
• He emphasised a sense of urgency in ensuring that these outcomes didn’t happen
• His analysis was alarmist and it exaggerated the economic importance of Europe to the USA, but did illustrate the USA’s rising concern about the nature of its long-term relationship with Europe 
• Kennan’s Policy Planning Staff (PPS) group stated that it didn’t regard communist activities in Western Europe as the basic problem there
• PPS’s real issue was the profound impact of WW2 upon the economic, political and social structure of Europe 
• The focus of US aid to Europe, should be upon the restoration of Europe’s economic strength rather than on combating communism 
• 5 June 1947 – George Marshall unveiled his plan, known officially as the European Recovery Program (ERP)
• Over the next 5 years, the Marshall Plan provided $13.5 billion to 16 countries in Europe 
• This came not only in the form of money but also through goods
• A condition of receiving the aid was that some of it had to be spent on importing goods from the USA
• Recipients were also required to share economic info with the USA
• The plan was part of an American economic strategy to benefit the American economy by helping in Europe’s economic reconstruction 
• It was also aimed at promoting European unity
• A stable European bloc would be created which would reinforce Truman’s idea of containment 
• The American vision for Europe rested in the creation of a single European market 
• Historians have argued that the Marshall Plan contributed significantly to the creation of the European Coal and Steel Community and to the existence of the European Economic Community from 1957
• Not inspired as a strategy to prevent Soviet military intervention into Western Europe
• Recognised the risk that continued post-war economic stagnation could lead to communist regimes being democratically elected into office by despairing populations 
• The USA was convinced that this would then result in such regimes falling under the influence of the Soviet Union 
• The MP was designed to reverse this trend 
• USA was very worried about political and economic stability in Europe, particularly in France and Italy
• The French Communist Party had 1.7 million members in 1947
• Continuing economic crisis could lead to growing support for the movement, and this could result in the USSR having an opening for influence in Western Europe
• To achieve stability, the MP was offered to all European states, including the USSR
• Soviets thought MP = example of US economic imperialism 
• Threat that US influence might start to spread into EE and undermine their sphere of influence and security
• By 1947 – Czechoslovakia and Hungary were not yet fully under comm control and there were still comm-dominated coalition govs with some interest in receiving Marshall Aid
• Resulted in these states committing themselves to a restoration of market economies with those of the western European member states of the Organisation of European Economic Cooperation, the organisation responsible for allocating Marshall Aid.
• Brought under economic influence of the stronger Western capitalist economies 
• July 1947 – the Soviet Union walked out of the Paris Peace Conference 
• Sept 1947 – JS established Cominform 
• Czechoslovakia and those EE states expressed an interest in Marshall Aid were ordered by Stalin to reverse their decisions
• The logic of the USSR’s position was inescapable 
• Greater tightening of Soviet control over EE was necessary
• If the Marshall Plan was part of a US strategy to undermine the Soviet sphere of influence in EE and move these states closer to Western democracy by integrating their economies with the rest of Western Europe, it clearly failed
• The MP simply accelerated the division of Europe and further undermined the possibility of international relations being based on some degree of co-operation and consensus between the 2 superpowers