Editing Marshall Plan (section)

==Implementation==
[[File:Marshall plan page 1.jpg|thumb|First page of the Marshall Plan]]

According to Armin Grünbacher:
{{blockquote|The U.S. government did not give money directly to the participating countries so that they could buy whatever they thought they needed. Instead the U.S. delivered the goods and provided services, mainly transatlantic shipping, to the participating governments, which then sold the commodities to businesses and individuals who had to pay the dollar value of the goods in local currency ("counterparts") into so-called ERP Special Accounts that were set up at the country's central bank. This way of operation held three advantages: the provision of U.S. goods to Europe without European dollar payments helped to narrow the [[dollar gap]] that strangled European reconstruction; the accumulated funds could be used for investments in long-term reconstruction (as happened in France and Germany) or for paying off a government's war debts (as in Great Britain); and the payments of the goods in local currencies helped to limit inflation by taking these funds temporarily out of circulation while they were held in the Special Accounts.{{sfn|Grünbacher |2012}}}}

The ECA's official [[mission statement]] was to give a boost to the European economy: to promote European production, to bolster European currency, and to facilitate international trade, especially with the United States, whose economic interest required Europe to become wealthy enough to import US goods. Another unofficial goal of ECA (and of the Marshall Plan) was the containment of growing Soviet influence in Europe, evident especially in the growing strength of [[communist party|communist parties]] in France, and Italy.

The Marshall Plan money was transferred to the governments of the European nations. The funds were jointly administered by the local governments and the ECA. Each European capital had an ECA envoy, generally a prominent American businessman who would advise on the process. The cooperative allocation of funds was encouraged, and panels of government, business and labor leaders were convened to examine the economy and see where aid was needed. The recipient nations were represented collectively by the [[Organisation for Economic Co-operation and Development]] (OECD), headed by British statesman [[Oliver Franks]].{{sfn|Clayton|1963}}

The Marshall Plan aid was mostly used for goods from the United States. The European nations had all but exhausted their [[foreign-exchange reserves]] during the war, and the Marshall Plan aid represented almost their sole means of importing goods from abroad. At the start of the plan, these imports were mainly much-needed staples such as food and fuel, but later the purchases turned toward reconstruction needs as was originally intended. In the latter years, under pressure from the United States Congress and with the outbreak of the [[Korean War]], an increasing amount of the aid was spent on rebuilding the militaries of Western Europe. Of the some $13 billion allotted by mid-1951, $3.4 billion had been spent on imports of raw materials and semi-manufactured products; $3.2 billion on food, feed, and fertilizer; $1.9 billion on machines, vehicles and equipment; and $1.6 billion on fuel.{{sfn|Hogan|1987|p=415}}

Also established were [[counterpart fund]]s, which used Marshall Plan aid to establish funds in the local currency. According to ECA rules, recipients had to invest 60% of these funds in industry. This was prominent in Germany where these government-administered funds played a crucial role in lending money to private enterprises which would spend the money rebuilding. These funds played a central role in the reindustrialization of Germany. In 1949–50, for instance, 40% of the investment in the German coal industry was by these funds.{{sfn|Crafts|Toniolo|1996|p=464}}

The companies were obligated to repay the loans to the government, and the money would then be lent out to another group of businesses. This process has continued to this day in the guise of the state-owned [[KfW]] bank, (Kreditanstalt für Wiederaufbau, meaning Reconstruction Credit Institute). The Special Fund, then supervised by the Federal Economics Ministry, was worth over DM 10 billion in 1971. In 1997 it was worth DM 23 billion. Through the revolving loan system, the Fund had by the end of 1995 made low-interest loans to German citizens amounting to around DM 140 billion. The other 40% of the counterpart funds were used to pay down the debt, stabilize the currency, or invest in non-industrial projects. France made the most extensive use of counterpart funds, using them to reduce the budget deficit. In France, and most other countries, the counterpart fund money was absorbed into general government revenues, and not recycled as in Germany.{{sfn|Harries|Underwood|1998}}

The Netherlands received US aid for economic recovery in the Netherlands Indies. However, in January 1949, the American government suspended this aid in response to the Dutch efforts to restore colonial rule in Indonesia during the [[Indonesian National Revolution]], and it implicitly threatened to suspend Marshall aid to the Netherlands if the Dutch government continued to oppose the independence of [[Indonesia]].{{sfn|Van der Eng|1988|pp=335–52}}

At the time the United States was a significant oil producing nation—one of the goals of the Marshall Plan was for Europe to use oil in place of coal, but the Europeans wanted to buy crude oil and use the Marshall Plan funds to build refineries instead. However, when independent American oil companies complained, the ECA denied funds for European refinery construction.{{sfn|Pelletiere|2001|loc=ch. 3}}

===Technical Assistance Program===
[[File:Marshallplanhilfe.gif|thumb|Construction in West Berlin with the help of the Marshall Plan after 1948. The plaque reads: "Emergency Program Berlin – with the help of the Marshall Plan"]]
[[File:MarshallDonkey.jpg|thumb|US aid to Greece under the Marshall Plan]]

A high priority was increasing industrial productivity in Europe, which proved one of the more successful aspects of the Marshall Plan.{{sfn|Fossat|2018|pages=582–600}} The US [[Bureau of Labor Statistics]] (BLS) contributed heavily to the success of the Technical Assistance Program. The United States Congress passed a law on June 7, 1940, that allowed the BLS to "make continuing studies of labor productivity"{{sfn|Wasser|Dolfman|2005|p=44}} and appropriated funds for the creation of a Productivity and Technological Development Division. The BLS could then use its expertise in the field of productive efficiency to implement a productivity drive in each Western European country receiving Marshall Plan aid. Counterpart funds were used to finance large-scale tours of American industry. France, for example, sent 500 missions with 4700 businessmen and experts to tour American factories, farms, stores, and offices. They were especially impressed with the prosperity of American workers, and how they could purchase an inexpensive new automobile for nine months work, compared to 30 months in France.{{sfn|Kuisel|1993|pp=70–102}}

By implementing technological literature surveys and organized plant visits, American economists, statisticians, and engineers were able to educate European manufacturers in statistical measurement. The goal of the statistical and technical assistance from the Americans was to increase productive efficiency of European manufacturers in all industries.

To conduct this analysis, the BLS performed two types of productivity calculations. First, they used existing data to calculate how much a worker produces per hour of work—the average output rate. Second, they compared the existing output rates in a particular country to output rates in other nations. By performing these calculations across all industries, the BLS was able to identify the strengths and weaknesses of each country's manufacturing and industrial production. From that, the BLS could recommend technologies (especially statistical) that each individual nation could implement. Often, these technologies came from the United States; by the time the Technical Assistance Program began, the United States used statistical technologies "more than a generation ahead of what [the Europeans] were using".{{sfn|Wasser|Dolfman|2005|p=44}}

The BLS used these statistical technologies to create Factory Performance Reports for Western European nations. The American government sent hundreds of technical advisers to Europe to observe workers in the field. This on-site analysis made the Factory Performance Reports especially helpful to the manufacturers. In addition, the Technical Assistance Program funded 24,000 European engineers, leaders, and industrialists to visit America and tour America's factories, mines, and manufacturing plants.{{sfn|Johnson|2002|p=2}} This way, the European visitors would be able to return to their home countries and implement the technologies used in the United States. The analyses in the Factory Performance Reports and the "hands-on" experience had by the European productivity teams effectively identified productivity deficiencies in European industries; from there, it became clearer how to make European production more effective.

Before the Technical Assistance Program even went into effect, [[United States Secretary of Labor]] [[Maurice J. Tobin|Maurice Tobin]] expressed his confidence in American productivity and technology to both American and European economic leaders. He urged that the United States play a large role in improving European productive efficiency by providing four recommendations for the program's administrators:
# That BLS productivity personnel should serve on American-European councils for productivity;
# that productivity targets (based on American productivity standards) can and should be implemented to increase productivity;
# that there should be a general exchange and publication of information; and
# that the "technical abstract" service should be the central source of information.{{sfn|Wasser|Dolfman|2005|p=44}}

The effects of the Technical Assistance Program were not limited to improvements in productive efficiency. While the thousands of European leaders took their work/study trips to the United States, they were able to observe a number of aspects of American society as well. The Europeans could watch local, state, and federal governments work together with citizens in a pluralist society. They observed a democratic society with open universities and civic societies in addition to more advanced factories and manufacturing plants. The Technical Assistance Program allowed Europeans to bring home many types of American ideas.{{sfn|Johnson|2002|p=2}}

Another important aspect of the Technical Assistance Program was its low cost. While $19.4 billion was allocated for capital costs in the Marshall Plan, the Technical Assistance Program only required $300 million. Only one-third of that $300 million cost was paid by the United States.{{sfn|Wasser|Dolfman|2005|p=49}}

===United Kingdom===
The economy was precarious during the age of austerity, as wartime restrictions and rationing continued, and the wartime bombing damage was slowly being rebuilt at great cost.<ref> David Kynaston, ''Austerity Britain, 1945–1951'' (2008)</ref> The Treasury depended heavily on American money, especially [[Anglo-American loan|the 1946 loan of $3.75 billion]] at a low 2% interest rate.{{Sfn|U.S. Statistical Abstract|1949|p=[http://www2.census.gov/prod2/statcomp/documents/1949-12.pdf 846]}}  Even more helpful was the gift of $2.694 billion in Marshall Plan funds in 1948-1951. Canada also provided gifts and $1.25 billion in loans.<ref>Derek H. Aldcroft, ''The British Economy: Volume 1 The Years of Turmoil, 1920-1951'' (1986) pp.206, 209. [https://archive.org/details/isbn_0710801149 online].</ref><ref>Michael J. Hogan, ''The Marshall Plan: America, Britain and the Reconstruction of Western Europe, 1947-1952'' (Cambridge Up, 1987), pp. 29, 31, 48, 82–84.</ref><ref>Kenneth O. Morgan, ''Labour in Power, 1945-1951'' (1984) pp.270–272, 366.</ref><ref>Norman Moss, ''Picking up the Reins: America, Britain and the Postwar World''(Duckworth, 2008) pp.131–151.</ref>  The Marshall money was a gift but carried requirements that Britain balance its budget, control tariffs, improve management, and maintain adequate currency reserves. The [[Attlee ministry|British Labour government]] under Prime Minister [[Clement Attlee]] was an enthusiastic participant.{{sfn|Newton|1984}}{{sfn|Pelling|1988}}

The American goals for the Marshall plan were to help rebuild the postwar British economy, help modernize the economy, and minimize trade barriers. When the Soviet Union refused to participate or allow its satellites to participate, the Marshall plan became an element of the emerging Cold War.{{sfn|Cromwell|1982}}

There were political tensions between the two nations regarding Marshall plan requirements.{{sfn|Maier|1990}} London was dubious about Washington's emphasis on European economic integration as the solution to postwar recovery. Integration with Europe at this point would mean cutting close ties to the emerging Commonwealth. London tried to convince Washington that American economic aid, especially to the sterling currency area, was necessary to solve the dollar shortage. British economists argued that their position was validated by 1950 as European industrial production exceeded prewar levels. Washington demanded convertibility of sterling currency on 15 July 1947, which produced a severe financial crisis for Britain. Convertibility was suspended on 20 August 1947. However, by 1950, American rearmament and heavy spending on the Korean War and Cold War finally ended the dollar shortage.{{sfn|Newton|1984}} The balance of payment problems that troubled the postwar government was caused less by economic decline and more by political overreach, according to Jim Tomlinson.{{sfn|Tomlinson|2009}}

According to economic historians N.F.R. Crafts and Nicholas Woodward, the Marshall Plan money had a powerful multiplier effect. In 1948-1949 free imports from the United States amounted to 2.4 percent of British GNP. However, they calculate that the multiplier effects increased the 1949 GNP by 10% to 20%.<ref>N.F.R. Crafts and Nicholas  Woodward, ''The British Economy since 1945'' (Clarendon Press, 1991) pp.172–173.</ref>

===West Germany and Austria===
[[File:DBP 1960 344 George C. Marshall.jpg|thumb|upright|1960 West German stamp honoring George Marshall]]
The Marshall Plan was implemented in West Germany (1948–1950), as a way to modernize business procedures and utilize the best practices. As a major prerequisite for delivery of aid, the [[Currency Reform of 1948]] was implemented on June 20. The Marshall Plan made it possible for West Germany to return quickly to its traditional pattern of industrial production with a strong export sector. Without the plan, agriculture would have played a larger role in the recovery period, which itself would have been longer.{{sfn|Hardach|1987}}{{sfn|Knapp|Stolper|Hudson|1981}}{{sfn|Major|1996}} With respect to Austria, Günter Bischof has noted that "the Austrian economy, injected with an overabundance of European Recovery Program funds, produced "miracle" growth figures that matched and at times surpassed the German ones."{{sfn|Bischof|2020|pp=38–72}}

Marshall aid in general and the counterpart funds in particular had a significant impact in Cold-War propaganda and economic matters in Western Europe, which most likely contributed to the declining appeal of domestic communist parties.{{sfn|Grünbacher |2012}}