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Was Russia wise to turn down Marshall Plan?

04/06/07 - MOSCOW. (Alexander Volkov, professor of history, for RIA Novosti) –

U.S.Secretary of State George C. Marshall unveiled his plan for the post-war
revival of Europe at Harvard University on June 5, 1947.

Immediately dubbed the Marshall Plan, it stipulated huge aid to European
countries on the condition that they elaborated a common program of economic
reconstruction. Sixteen countries met in Paris soon afterwards to accept the
plan.

The invitation had also been sent to Soviet Union’s Foreign Minister
Vyacheslav Molotov, who came to Paris with a group of 80 experts. However,
the Kremlin eventually rejected the plan, arguing that it could detract from
the country’s sovereignty. Was it a wise decision?

We can look for the answer in the history of the countries that accepted the
plan. Fighting against economic odds, they badly needed American assistance.
A special commission under the U.S. President reported that industrial
production in West European countries slumped below the pre-war level and
coal production was critically low. They could meet less than half of their
needs for grain, cotton, non-ferrous metals, and food, and had no money to
import the other half.

The West European industries were lying in ruins or needed to be converted
to civilian production, and its market and financial systems were
disorganized. In short, Western Europe faced an economic paralysis and
famine.

The participants in the Paris meeting signed a convention on the
establishment of the Organization for European Economic Cooperation, whose
goal was to draft a joint reconstruction program for Europe. U.S. Congress
approved the Marshall Plan, which was effective from April 1948 through
December 1951.

American aid came in many forms, beginning with basic necessities vital for
preventing famine and creating normal living conditions. Every spring funds
were set aside for food, fuel and clothes for Europe. Since these
allocations could not be repaid, they were provided in the form of
subsidies, not loans. The United States also supplied industrial equipment,
mainly on the loans extended by the International Bank, as well as raw
materials, agricultural machinery, industrial goods, spare parts, and other
items. Those supplies were subsidized against the guarantees of the American
government through the Export-Import Bank of the United States.

Aggregate aid provided in the four years amounted to $17 billion, 60% of it
channeled into Britain, France, Italy and West Germany. It is worth noting
that the Marshall Plan stipulated the improvement of economic relations
within the boundaries of each recipient and between them. They were obliged
to take measures to facilitate the movement of goods and services, to
approve cooperation projects aimed at restoring the most efficient companies
and stimulating production growth, and to strengthen their currencies.

West Germany held the pride of place in the Marshall Plan. Its government
received from the Untied States nearly as much money as Britain and France
taken together. With the war over, West Germany turned from an enemy into a
partner and the outpost in the fight against “Soviet Communism.” The plan’s
keynote was resistance to the spreading Soviet influence in Europe and even
to the possibility of aggression. It was believed that Europe, weakened by
the war and subsequent crisis, would not have been able to fight the threat
of Communism without American assistance.

Many Western experts now say that the post-war experience of Western Europe
is extremely instructive in terms of economic and financial revival and the
development of cooperation and a strategy of industrial growth, which
created prerequisites for a technological breakthrough. They note that
European countries also maintained their independence and eventually became
strong rivals of the United States.

It is true that the Marshall Plan was highly instrumental for Europe’s
economical revival and growth. Did the Kremlin act unwisely to reject it?

In my opinion, it could not accept the plan because it implied a revision of
the fundamental ideological, economic and other principles of the Soviet
Union’s existence. The plan stipulated conditions and limitations that would
have stripped the Soviet Union of its identity, such as the requirement
preventing the nationalization of the industries, the preferential choice of
private property and private capital, as well as free access to American
goods. Most importantly, the Marshall Plan provided for the right of the
United States to monitor and control the use of its financial aid.

I am not referring to cooperation, beneficial or not to the country and its
people, but to the fact that the ruling Communist Party and the majority of
Soviet people were not ready to take such a revolutionary (or
counterrevolutionary?) decision.

As for problems which European countries encountered in their relations with
the overseas donor, they can be described in two ways, as a glass half full
or half empty.

Europe has not become an appendage of the United States, but American troops
settled comfortably there in the late 1940s and Europe became economically
dependent on the U.S., whose possibilities to pressurize its Old World
partners grew manifold.

However, I believe that despite the drawbacks of the Marshall Plan and
resulting losses, Europe will celebrate the 60th anniversary of the project
with a grateful heart, for the plan was the lifebuoy that rescued it from
the turbulent seas threatening to engulf the continent.

The opinions expressed in this article are the author’s and do not
necessarily represent those of RIA Novosti. -0-