Exactly 75 years ago, the foundation stone of the transatlantic relationship was laid. After the Marshall Plan was signed into law by President Harry S. Truman, the US would go on to send billions of dollars in economic assistance to help rebuild Western Europe after the Second World War, laying the groundwork for a mutually beneficial North Atlantic alliance that offered Europe several decades of economic prosperity and military security. America, the President claimed, would be \u201cthe first great nation to feed and support the conquered\u201d.
Today, Truman\u2019s world no longer exists. Indeed, the contrast between the Marshall Plan and America\u2019s approach to Europe today couldn\u2019t be more jarring. The Marshall Plan may still be regarded as one of the pillars of America\u2019s post-war mythology, but under Biden, America is pursuing an isolationist economic policy and a ham-fisted foreign policy that both run counter to Europe\u2019s vital interests. Moreover, the actual impact of the Marshall Plan is also worth reassessing.
In spite of the largesse and generosity usually associated with the European Recovery Program, as it was officially called, between 1948 and 1951 the funds actually only amounted to about 3% of the combined GDP of the recipient countries, accounting for a direct increase in GDP growth of less than 0.5%. Some authors have credited the Marshall Plan with having a much larger indirect effect on the recovery, through the promotion of a macroeconomic environment conducive to growth, but such analyses are largely speculative. Overall, its contribution to Europe\u2019s recovery was relatively modest. Much of the money also flowed back to the US in the form of purchases of American goods and services, including oil, while many of the materials and equipment used to rebuild Europe were supplied by American companies, creating jobs and profits for American businesses.
Regardless of the actual economic impact of the Marshall Plan, there is no doubt that it was a resounding political success for America \u2014 to the extent that it secured US geopolitical influence and control over Western Europe. Part of the logic was that more prosperous societies would be less amenable to communist and Soviet influence \u2014 though, as we have seen, it\u2019s questionable whether the programme had much of an impact on economic and social gains during the post-war boom.
An arguably more important channel through which the Marshall Plan consolidated US influence was through the funds it channelled to those European centre-right parties which stood to gain from being integrated into the nascent American empire. This included covert CIA funds to ensure their electoral success \u2014 especially in Italy and France \u2014 at the expense of communist rivals. As the historian Sallie Pisani shows in her book The CIA and the Marshall Plan, under the guise of the Marshall Plan, the US used \u201cmassive foreign aid and non-military covert operations to reshape war-torn Europe in the image of the US\u201d.
Just as crucially, the Marshall Plan was also a key catalyst for the formation of Nato, through which the US exerted its military control over Western Europe \u2014 in addition to dozens of military bases, especially in the defeated nations, many of which still exist today. The Marshall Plan also played an important role in fostering European integration, by creating new intergovernmental institutions to administer and coordinate the programme. These included the OEEC, the precursor to the OECD, and most importantly the Schuman Plan, which led to the European Coal and Steel Community, then the European Economic Community and ultimately the European Union. The Americans also played a crucial role in promoting, also financially, the cause of European federalism through the American Committee on United Europe (ACUE), founded in 1948, whose first chairman was the former head of the Office of Strategic Services (OSS) William Joseph Donovan. The vice-chairman was Allen Welsh Dulles, who would later become the head of the CIA.
Taken as a whole, then, the Marshall Plan appears to embody a form of \u201cbenevolent imperialism\u201d, through which the US gained control over Western Europe and cemented its position as a global superpower, while also fostering, for much of the post-war period, economic prosperity and \u2014 at least until the end of the Soviet Union \u2014 military security on the continent. Europe clearly benefited from the spoils of empire, even if in a subordinate position.
Today, however, this no longer seems true. In economic terms, over the past six months, Europe has seen a massive fall in industrial output while governments have been forced to foot an \u20ac800 billion energy bill as a result of their decision to follow the US strategy in Ukraine. Riots have broken out in France and there is no reason to think they won\u2019t spread. A European-wide poll taken in October last year showed that a majority of voters in Europe\u2019s four largest countries expected social unrest and public protests in the coming months due to rising living costs. Meanwhile, senior EU officials have accused the US of profiting from the war \u2014 and from Europe\u2019s hardship. Not only is it reaping the benefits of Europe\u2019s switch to American natural gas, but it is also the main beneficiary of Europe\u2019s rearmament.
Moreover, anger has also been mounting in Europe over America\u2019s Inflation Reduction Act, a $369-billion package of subsidies and tax breaks enacted by the Biden Administration to boost American manufacturing (under the guise of the \u201cgreen shift\u201d). One may call it a Marshall Plan of sorts \u2014 but one that is directed at America, not Europe. Indeed, from a European perspective, the bill constitutes a protectionist measure that encourages companies to shift investments from Europe and incentivises customers to \u201cBuy American\u201d, dealing a serious blow to Europe\u2019s already struggling industry. The president of Imperial College London recently said that the IRA represents an \u201cexistential threat\u201d to European economies. Even Chancellor Jeremy Hunt, not known for being critical of American policies, last week criticised Biden\u2019s \u201cmassively distortive\u201d investment plan.
Such concerns might seem hyperbolic, but they highlight the cognitive dissonance of most members of the European establishment. On the one hand, they are constantly forced to repeat public platitudes about Western unity and resolve; on the other, they are slowly beginning to realise that America is playing its own game, and it doesn\u2019t include Europe, which is no longer seen as a strategic ally anymore but as a competitor and a rival.
In security terms, things aren\u2019t looking much better for Europe, which is looking more vulnerable today than it has been for decades. As the possibility of a direct Nato-Russia confrontation becomes more likely, what used to be a security umbrella today looks more like a big flashing target. From America\u2019s perspective, however, the conflict has been an opportunity to reassert its waning hegemony over Europe, first and foremost by revamping and expanding Nato, which was going through an existential crisis prior to the conflict. Indeed, from America\u2019s perspective, this was likely a desired outcome. Driving a wedge between Europe (and Germany in particular) and Russia, and preventing the rise of a Eurasian geopolitical reality, has always been an American geopolitical imperative. No wonder some thought the US was behind the bombing of the Nord Stream pipeline, which severed Russian-German relations.
In this context, why should Europe remain anchored to the US? Especially when we consider the radical geopolitical realignment that is underway. As I noted recently, the conflict in Ukraine has accelerated the rise of a new international order in which American dominance is losing its attraction. US actions in Ukraine have driven together its two greatest adversaries, Russia and China, whom along with India, Saudi Arabia, Turkey, Brazil, South Africa and dozens of other countries comprising most of the world\u2019s population are giving rise to the world\u2019s largest and most dynamic trading bloc \u2014 and the US is not part of it. In only the past few days, two important events gave further impetus to this trend: Brazil and China reached a deal to trade using their own currencies rather than the US dollar, while China\u2019s national oil company CNOOC and France\u2019s TotalEnergies completed China\u2019s first LNG trade settled in yuan. All of which points to the increasing isolation of the US from the rest of the world, and a dramatic reduction in its influence and ability to extract resources which it can then distribute to its protectorate states.
In other words, the America of the Marshall Plan is gone \u2014 and in its place, China hopes that its Belt and Road Initiative (BRI) will become the new economic engine of the post-Western bloc. Many in the West are suspicious of the BRI, but this has not stopped 147 countries \u2014 including 18 EU states \u2014 from signing up to its promise of connecting Asia with the rest of the world through infrastructure, investments and trade.
Should we be surprised? Our age of uncertainty is the perfect stage for a new Marshall Plan. And while Truman\u2019s world may no longer exist, that doesn\u2019t mean China can\u2019t recreate it.<\/p>\n\n\n\n