European Integration. Mark Gilbert

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THE MARSHALL PLAN AND THE OEEC

      It was not until the end of 1947 that East-West relations broke down and the Cold War began. Yet throughout the first two years of peace, ideological competition with communism was an ever-present factor in the calculations of European statesmen. The fact that European (and American) leaders had to constantly remember in the postwar years was that for millions of Western Europeans, Soviet Russia was a model of economic modernization, not ruthless dictatorship, and in the event of economic failure in Western Europe, the USSR might exert an attraction for millions more.

After a decade and a half of economic depression and war, Europe’s voters wanted, above all else, work, welfare, and homes: the only question was which political system would provide these basic social needs. In the first postwar elections, the voters of Western Europe mostly opted for social democracy (in Britain, most dramatically) or Christian Democracy (in Italy [after the ideologically charged April 1948 elections], Germany [where Konrad Adenauer emerged as democratic Germany’s most important statesman], and Belgium [where the Christelijke Volspartij/Parti Social Chrétien took 42 percent of the vote in 1946]). In France, the Christian Democratic Mouvement Républicain Populaire (MRP) was an important component of the coalition of centrist parties that formed governments in the immediate postwar years, and the MRP controlled the foreign ministry between 1945 and 1953.²⁸ Yet the Communists emerged as the second party in France in the 1946 elections and, in April 1948, as the dominant party of the left in Italy, too. In both countries, they commanded key government ministries until May 1947, when they were maneuvered from power.²⁹ Tightly disciplined, with a huge mass membership and a powerful role in key trade unions, Communist parties were potent political rivals to the parties of the democratic mainstream.

      The provision of a higher standard of living was therefore a political imperative. But raising living standards required vast capital spending; the money could be raised in any or all of three ways: by diverting as much national income as possible to investment rather than consumption; by stimulating exports to bring in money from abroad; and by receiving foreign aid or investment. France, most famously, took the first course. The French five-year postwar modernization plan sought to direct capital investment into selected industries such as coal mining, steel, cement, and transport. Large segments of the French economy were taken into public ownership as the planners channeled national income toward the development of heavy industry. To a greater or lesser extent, the Netherlands, the Scandinavian countries, and Italy followed suit.

      Britain was constrained by circumstances to take a different approach. The Labour government’s spending plans for health and housing, in addition to its substantial military commitments in Germany, and the Middle and Far East, compelled it to reduce its investment in industry. In February 1947, the British government had to tell Washington that it no longer had the resources to maintain troops in Greece (where withdrawal might have led to a Communist seizure of power). This decision, which provoked the “Truman Doctrine,” a commitment to defend democracy from totalitarian subversion, also persuaded US policy makers that Europe was on the verge of economic collapse. The United States had given Britain hefty postwar loans in the expectation that Britain would soon be able to act as the chief economic motor for Western Europe. This illusion was now dispelled.

By the spring of 1947, Washington feared that Western Europe’s stuttering recovery was providing fertile soil for communist flowers to bloom. A memorandum from Will Clayton, undersecretary of economic affairs in the State Department, at the end of May 1947 stated baldly that Europe was “slowly starving” and on the brink of disintegration and social revolution.³⁰ Clayton’s memorandum was seemingly decisive in persuading US secretary of state George Marshall to make his famous Harvard speech on June 5, 1947, promising that America would fund a “program to put Europe on its feet economically.” For only a healthy economy, Marshall sustained, could “permit the emergence of political and social conditions in which free institutions can exist.”

      The British economic historian Alan Milward has convincingly shown that Clayton was being alarmist. In Milward’s view, the European economies’ dash for industrial growth had merely precipitated an entirely predictable balance-of-payments crisis with the United States. Europe did not have enough dollars to maintain the high levels of investment in industrialization and social services that its peoples were demanding.

      Unable to buy capital goods and manufactures from Germany, the traditional producer of engineering products, and with Britain slow to fill the gap that Germany had left, the European nations had turned to the United States for the ships, airplanes, tractors, machinery, industrial plants, and raw materials they needed to maintain their ambitious investment programs. Unfortunately, they had little to sell to the Americans in return. Most European exports to the United States were luxury goods. It takes a lot of olive oil, perfume, or whisky to buy a ship or an airplane. France’s deficit on merchandise trade with the United States increased from $649 million in 1946 to $956 million in 1947. The Netherlands’ deficit more than doubled from $187 million to $431 million. Italy’s more than tripled from $112 million in 1946 to $350 million in 1947. Britain, like France, had a $1 billion shortfall in 1947. Western Europe as a whole accumulated a deficit of $7 billion in the first two peacetime years.³¹

      European governments, in short, were living far beyond their means: “In both Britain and France policy seems to have gone ahead fatalistically based upon an unspoken, perhaps unutterable assumption that the United States would . . . have to lend or give the necessary sums of hard currency to make their postwar economic policies feasible.”³²

Marshall insisted in his Harvard address that the Europeans themselves should draw up a plan for economic recovery. Britain and France responded by calling a conference of foreign ministers in Paris in July 1947. Sixteen northern and western European states attended. The Soviet Union, to the relief of everybody but the satellite nations of Eastern Europe, which were compelled to follow the Soviet example, distanced itself from the Anglo-French initiative. The conference established the so-called CEEC (Committee on European Economic Cooperation) and entrusted it with the task of estimating the size of Europe’s economic needs for the period from 1948 to 1952, by when, the Americans insisted, Europe should be self-sufficient. Despite intense American pressure for something other than sixteen “shopping lists,” the CEEC’s initial report in August 1947 requested $29 billion in American aid by 1952. Michael Hogan, in his magisterial history of the Marshall Plan, states that this figure “stunned the Europeans as much as the Americans.”³³ Secretary of State Marshall had previously been reluctant to impose conditions upon the would-be recipients of aid. However, the giant CEEC request precipitated matters. American policy makers urged the governments of Western Europe to devote more resources to reviving production, even if this meant cutting back on cherished social programs; to liberalize trade by slashing tariffs and ending exchange controls; to move to a customs union as quickly as possible; and to establish a “continuing European organization” with sovereign powers over the direction of the European reconstruction effort.³⁴

      The European reaction to these prescriptions was unenthusiastic. British foreign secretary Ernest Bevin lamented the “unfortunate impression of high-handedness” left by the Americans’ approach.³⁵ The Europeans refused to abandon social programs or jeopardize employment levels. Led by Britain and France, they also refused to accept that the proposed supranational economic organization should have sovereign powers. On the other hand, they were obliged to accept a reduced aid package of just over $19 billion. Hogan comments: “Europeans . . . sought a recovery program that would limit the scope of collective action, meet their separate requirements and preserve the greatest degree of national self-sufficiency and autonomy. Americans, on the other hand, wanted to refashion Western Europe in the image of the United States.”³⁶ As an exasperated Senator J. William Fulbright bluntly argued in the spring of 1948, there was no easy way out of the “anarchic confusion” of nationalism in Europe. For European nations to give up “their ancient and cherished prejudices” would be hard. But the alternative—“subjugation by the Communist СКАЧАТЬ