Postwar Europe
Planning the peace
International planning for peace after World War II took place on a world scale. Within five years, in an extraordinary burst of energy and imagination, statesmen endowed the world with almost all its existing network of global institutions: the United Nations (UN), the Food and Agriculture Organization (FAO), the International Monetary Fund (the IMF), the International Bank for Reconstruction and Development (the IBRD, or World Bank), the United Nations Educational, Scientific, and Cultural Organization (UNESCO), the United Nations International Children’s Emergency Fund (UNICEF), the International Court of Justice, the General Agreement on Tariffs and Trade (GATT), the International Refugee Organization (IRO), the World Health Organization (WHO), the United Nations Relief and Works Agency (UNRWA), and the International Confederation of Free Trade Unions (ICFTU). Some of these, especially the UN, were to reveal limitations. But they embodied serious efforts to replace outdated national and bilateral diplomacy with permanent multilateral institutions.
Domestically, many people’s first instinct after World War II was to return to normal: to restore law and order after the euphoric anarchy of liberation; to repatriate prisoners and demobilize soldiers; to reopen the bombed Teatro alla Scala, Milan, and have Arturo Toscanini conduct there again; and to bring back long dresses with Christian Dior’s “New Look.” At the same time, however, there was deep eagerness for change. Even more than World War I, World War II had been a democratic war, fought against dictatorship as much as against aggression. Like many wars, it had brought forth military and other leaders from the rank and file. For many the aim was to inaugurate a new and more just society within nation-states that were pledged to work together for peace. “From Resistance to Revolution” was the masthead slogan of Combat, the left-wing French Resistance newspaper founded in 1941 but after the war edited as a Paris daily by the novelist Albert Camus. The words could well have been endorsed by others, especially the radical Action Party in Italy and many socialists there and elsewhere.
No less innovative, if less radical, were the Christian Democrat parties springing up or being revived: the Christian Democrats in Italy, the Christian Democratic Union in Germany, the Dutch People’s Movement in the Netherlands, the Popular Republican Movement in France. At that time, most such Roman Catholic parties had a more left-of-center tone than was later the case.
Britain had no Christian Democrat party, and its Labour Party had less in common with continental socialist ideology than with nonconformism and the trade union movement. Yet the British people shared the general impatience for change, as they showed when they voted in large numbers for Labour in the 1945 general election, roundly defeating the Conservatives under Winston Churchill, who had led the country so memorably during the war.
In its election manifesto, the Labour Party proposed a program of nationalization of the Bank of England, of fuel and power, of iron and steel, and of inland waterways. It endorsed the Education Act already steered through by the moderate Conservative R.A. Butler. It proposed a national health service and a social security system, and it called for physical controls to allocate raw materials, limit food prices, provide new homes, and direct the location of industry.
Similar reforms were envisaged throughout western Europe. They embraced more equality, fairer shares, and better social conditions—full employment, higher wages, fairer taxes, more trade union rights, antitrust provisions, government-funded social security, and (where necessary) land reform. Such measures also implied far more central control of the economy.
“Planning” was now a common objective. In Italy it was the responsibility of the Institute of Industrial Reconstruction. In Britain the government maintained the machinery of statutory controls that it had used in wartime. In Germany the banks played a major role in forecasting, steering, and assisting investment. But in France it was the extraordinary Jean Monnet who made planning a concerted national effort rather than a set of directives from above.
Between the wars Monnet had been deputy secretary-general of the League of Nations, a private banker, and a negotiator for the French government. In the United States during World War II he had helped to spur Roosevelt’s Victory Program of aircraft for the Allies. Subsequently, in Algiers, he had helped to reconcile General Charles de Gaulle with his American-backed rival General Henri Giraud. It was to de Gaulle, who shortly became premier of France, that Monnet proposed a planning commissariat, attached only to the prime minister’s office and bringing together for the first time in France industrialists, labor unions, and senior civil servants to discuss production targets, supplies, bottlenecks, and urgent action in key sectors of the economy. Revolutionary at the time, the plan was highly successful and was soon imitated elsewhere.
National planning alone, however, could not solve Europe’s problems. Joint action was needed, as was help from the United States. In 1947, two years after the end of the war, many Europeans were still leading a Spartan existence. Everywhere, food continued to be rationed. Dimmed lights, brownouts, and power cuts were still common. A hard winter and waves of strikes added to the general misery. Underlying it was the stark fact that the countries of Europe were in serious financial trouble.
They had long been living on handouts. By October 1945 the United States had advanced some $46 billion in nonrepayable “lend-lease” loans. When the war ended, so did lend-lease—to be replaced by huge stopgap loans on ordinary terms. Britain received $3.75 billion, but only on condition that it make sterling freely convertible. As soon as it did, there was a run on the pound. The entire loan, it was reckoned, would have melted away in two and a half months if Britain had not suspended convertibility. As it was, a third of the credit was wiped out by price increases in the United States.
Britain, in fact, was overextended. In 1946 it had spent $60 million to help feed the German people, and it still had one and a half million troops trying to police the globe. Already, on February 21, 1947, Britain had warned the United States that it would soon have to cancel economic and military aid to Greece and Turkey. It was this message that triggered a rescue operation for the whole of western Europe.
The United States to the rescue
Greece and Turkey, in the Cold War conditions of 1947, were strategically vital and highly vulnerable Western outposts on the southern flank of the U.S.S.R. and its satellite states. Turkey was especially exposed. In Greece, the mainly communist National Liberation Front (EAM) had failed in its violent bid for power, but guerrilla units were still fighting in the Pindus Mountains and the Peloponnese, and the Greek economy was near collapse.
The news that Britain was to pull out of the Balkans horrified Washington. Dean Acheson, the under secretary of state, called the British messages “shockers.” With George Marshall, the secretary of state, he lost no time in tackling the problem. After conferring with them, President Harry S. Truman called in the Congressional leaders—and managed to win to his cause the influential Republican senator Arthur H. Vandenberg, theretofore a notorious isolationist. With his support secured, Acheson felt able to quote to the British ambassador the motto of the Seabees: “We do the difficult at once; the impossible takes a little longer.”
On March 12, 1947, less than three weeks after Britain’s plea for help, Truman announced to Congress what came to be called the Truman Doctrine: U.S. support for free peoples against armed subjugation, primarily through economic and financial aid. By May 22 he had been empowered to sign the Greek-Turkish Aid Act.
Reports from Europe, however, showed that other countries were equally in need of American help. On June 5, 1947, Marshall gave a 10-minute commencement address at Harvard University and thereby launched the Marshall Plan. This and the Truman Doctrine, Truman remarked later, were “two halves of the same walnut.” Marshall told his audience,
Europe’s requirements for the next three or four years of foreign food and other essential products are so much greater than her present ability to pay that she must have substantial additional help.
Without it, the economic, social, and political outcome could be “very grave.”
Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences to the economy of the United States should be apparent to all. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace.
Marshall added three conditions. First, aid must be systematic, not piecemeal. Second, the countries of Europe must work out their needs and plans together. Third, public opinion must endorse the policy.
Hearing the news of Marshall’s speech and a commentary by a specially briefed British journalist, British foreign secretary Ernest Bevin “grabbed the proposals,” as he said later, “with both hands.” With French foreign minister Georges Bidault, he invited their colleague from the U.S.S.R., Vyacheslav Mikhaylovich Molotov, to join in a collective response to the Marshall offer. Molotov refused, attacking the plan as a violation of sovereignty. Later the U.S.S.R. prevented Czechoslovakia from taking it up.
So it was that the Marshall Plan was confined to western Europe. On July 12, 1947, the representatives of 16 nations met in Paris: Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, and the United Kingdom. Four days later they set up a temporary Committee of European Economic Co-operation under Sir Oliver Franks. By the third week in September it had produced a draft four-year recovery plan, which was subsequently much revised. Under powerful U.S. pressure, the Europeans reluctantly agreed to establish a permanent body in place of the temporary committee. It was finally inaugurated as the Organisation for European Economic Co-operation (OEEC) on April 16, 1948.
By then the U.S. Congress had approved the European Recovery Program, and Truman had appointed Paul Hoffman to administer it. Within two weeks of his appointment, the freighter John H. Quick sailed for Europe from Galveston, Texas, with 9,000 tons of wheat. It was the first of many, carrying every kind of commodity from spiced ham to tractors, from powdered eggs to machine tools. Within Europe, Marshall aid made possible some spectacular projects. They ranged from land reclamation in Italy and the Netherlands to a dam in Austria harnessing water power from melting glaciers. In all, the European Recovery Program brought Europe grants and credits totaling $13.15 billion—5 percent of the national income of the United States. At the same time, private relief parcels amounted to over $500 million—more than $3.00, on average, from every American man, woman, and child.
The United States’ timely generosity saved Europe from imminent economic ruin and laid firm foundations for later economic growth. By 1950 trade within western Europe had recovered to its prewar volume, two years ahead of expectations; and by 1951 European industrial output was 43 percent greater than before the war. U.S. insistence on a coordinated approach to recovery supplied the incentive and the institutions for permanent mutual consultations; in the process, the OEEC gradually reduced the quantitative and monetary barriers that had hamstrung intra-European trade. It failed, however, to remove tariffs. U.S. pressure for a European customs union eventually came to nothing; although willing to consult and cooperate, Europeans were not yet ready for economic integration, still less political union.
This made difficult a relationship of equals between European countries and the United States. But, short of that, the Marshall Plan did lead to much closer transatlantic ties. Under W. Averell Harriman, its Paris-based chief representative, U.S. experts worked throughout Europe. “They swooped down here,” said one German businessman, “like birds on a field.” By 1952 the U.S. embassy in Paris was responsible for 2,500 U.S. officials, plus 5,000 family members. Within a decade, 40,000 private American businessmen had settled in Europe, working for 3,000 American companies, whose European investments had quadrupled in that time.
War and peace had brought Europeans and Americans closer together than at any time since the mass migrations from the Old World to the New. Their mutual relations were complex and ambivalent: a blend of European gratitude, envy, and slight resentment combined with American impatience, fascination, and missionary zeal. As time went on, some Europeans complained of “Americanization”; what this often meant was merely that innovations had reached the United States first. But, for all their differences, Americans and western Europeans had one great common commitment—to a free and democratic way of life, which in eastern Europe had been progressively suppressed.
