The years immediately following the end of World War II were devastating for Europe. The economy was in ruins; there was great political instability and widespread personal suffering. This was the state of affairs when General of the Army George Catlett Marshall became U.S. Secretary of State in early 1947. At a March 1947 conference of foreign ministers, Marshall met with Joseph Stalin and realized that Russia was not interested in providing aid to Europe. He could see that Europe's only hope was through assistance from the United States. He strongly believed that it was in the best interest of the United States to help Europe rebuild and to achieve economic stability in the region.
In the following months, Marshall and others drafted a plan that would be acceptable to the European and American people. These ideas resulted in his famous speech given as the commencement address at Harvard, June 5, 1947. Marshall stated that without help, Europe faced grave "economic, social, and political deterioration." A key element of his proposal was that the initiative for reconstruction had to come from the participating countries.
The Harvard speech resulted in the development of the European Recovery Program of 1948. This program established the Economic Cooperation Administration, which provided more than 13.3 billion dollars to participating Western European countries. The plan's achievements include:
- The GNP in Europe rose 32.5 percent, from 119 billion dollars in 1947 to 159 billion dollars in 1951.
- Industrial production increased 40 percent from prewar levels; agricultural output 11percent.
- By 1953 European trade volume increased 40 percent.
The Marshall Plan achieved its objective of increasing productivity, stimulating economic growth, and promoting trade. It improved living standards and strengthened the economic, social, and political structures in participating countries. It strengthened political stability in the region and contributed greatly to containing the spread of communism.
Aid provided by the Marshall Plan officially ended on Dec. 31, 1951. However, the Marshall Plan and its self-help principles laid the foundation for the continuance of foreign aid as a key element of U.S. foreign policy. The Marshall Plan created a new spirit of cooperation, mutual help, and support between Western Europe and the United States. It enabled the establishment of a strong and enduring NATO alliance. Given these remarkable results, it is considered one of the most successful foreign policy initiatives in U.S. history.
The legacy, the goals, and the ideals of the Marshall Plan continue through the defense education efforts of the George C. Marshall European Center for Security Studies. The center's mission is to create a more stable security environment by advancing democratic defense institutions and relationships; promoting active, peaceful security cooperation; and enhancing enduring partnerships among the nations of North America, Europe and Eurasia.