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Last Updated: Thursday, 6 January 2005, 17:51 GMT
Marshall Plan: Reconstructing Europe
George Marshall
George Marshall proposed the plan in a speech at Harvard University
The Marshall Plan was the programme of funding given to Western Europe by the United States between April 1948 and December 1951.

Named after its architect, US Secretary of State George Marshall, it was officially called the European Recovery Programme (ERP).

The US ploughed US$13bn into Western Europe in less than four years - about US$100bn in today's money.

The aid was needed as Western Europe's recovery from the 1939-1945 war had been slower than expected.

The US, under President Harry Truman, had initially been reluctant to help fund the re-building of the continent - particularly Germany.

But in 1947 the containment of global communism became the stated goal of US foreign policy.

Total GNP increased by 32%
Agricultural production rose 11% compared to pre-war levels
Industrial output exceeded 1938 by 40%

Source: Oxford Reference Online

The US felt that a strong Western Europe would be a buffer to the power of the Soviet Union.

The Soviets, however, still wanted reparations from Germany and refused to agree to the Marshall Plan.

They kept control of East Germany and strengthened their grip on the rest of Eastern Europe.

The lines that divided Europe for almost half a century were set in place by the Marshall Plan.

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