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The Marshall Plan: One way to deal with the coronavirus crisis

Giovanni Sale, SJ - La Civiltà Cattolica - Tue, Jun 2nd 2020

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Once the Second World War ended in Europe with victory for the Allies, the crisis in relations between the new superpowers – the United States and the Soviet Union, who had fought together to defeat Nazism – began as early as April 1945. The reason was the establishment of a communist government in Poland, which led the Americans to accuse the USSR of violating the joint commitments made shortly before in Yalta, where “The Big Three” – the heads of the governments of the United States, the Soviet Union and the United Kingdom – had divided the world into areas of influence.

The beginning of the Cold War

The crisis became more acute and dangerous for the global strategic equilibrium in the spring of 1946 when the Soviet army, contrary to the agreements made, did not “demilitarize” by March the North-Iranian occupation zone, under the pretext of providing military aid to a group of guerrillas fighting against the central power. The British army withdrew from the other part in accordance with the established terms.

Stalin did not want to liberate the area for economic reasons; he wanted to secure access to Middle East oil, which the United States would under no circumstances allow. Therefore, when the Shah resorted to the United Nations to obtain from the international assembly a declaration against the Russian “invaders,” the U.S. government supported this request. Despite the protests by the Soviet representative, Andrei Gromyko – who left the room theatrically as a sign of protest – Stalin chose, in May 1946, to withdraw the Soviet military forces from Iran.

The firm U.S. response to the events in Iran meant that Washington was watching with concern the Soviet expansionist tactics in both the Middle East and the Eastern Mediterranean, which were strategically important for the control of Europe. In fact, Stalin intended to take over from the United Kingdom – which, for internal political reasons, had expressed its intention to “liberate” that zone of influence – its dominant role in the Mediterranean.[1]

Already in February 1946, George Kennan, Chargé d’Affaires at U.S. Embassy in Moscow, had written to the U.S. State Department a detailed memo – which went down in history as “the long telegram” – warning his government not to be too benevolent or overly favorable toward Soviet demands in international politics. He stressed the need for “a long-term, patient but firm and vigilant containment of Russian expansionist tendencies.”[2] Stalin, he said, was intent on expanding Soviet influence over most of Western Europe and believed that it was not possible to pursue in the long term a political alliance with the imperialist powers, first and foremost the United States.

The term “containment,” suggested by Kennan, was soon adopted by members of the Truman Administration to indicate the main objective of American policy in its relations with the Soviet Union. It was mainly, in fact, United States government officials and the chief political advisers who suggested to President Truman that he should move to curb Soviet expansionism. According to Clark Clifford, White House Counsel, compromises and concessions were considered by the Soviets to be signs of political weakness. It was therefore necessary to respond firmly and resist – even with force, if necessary – the ambitious Stalinist project of communist domination of the world, as well as the efforts made by the Soviet Union immediately after the end of the war to politically isolate the United States.[3]

According to political observers sent by the U.S. Administration to Europe, in order to effectively combat communism in the countries most exposed to Soviet infiltration, it was necessary to support the economic recovery, i.e. limit unemployment, keep inflation under control, restore confidence in entrepreneurs, and this could only be achieved by means of U.S. dollars. Otherwise, the scarcity of food, the increase in unemployment and inflation –factors which could well have resulted in, the collapse of national economies – would have delivered many countries, including Italy, into the hands of the Communists.[4]

A necessary economic intervention

Given the dramatic situation of the European countries that had been destroyed in every sense by the war, the U.S. leadership realized that it was necessary to intervene economically to help the allies. On February 21, 1947, President Truman presented himself to Congress, which was for the most part Republican and had recently criticized the president’s economic policy, which it considered not austere enough, to ask for a supplement to the aid of the United Nations Relief and Rehabilitation Administration (UNRRA) of 350 million dollars, to be allocated to Europe, aid that was exceptionally granted.

On the same day the British Foreign Office informed the State Department that as of March 31, the British government would definitively withdraw from Greece and Turkey, suspending all forms of economic and military aid hitherto provided to these countries. The specter of communist expansion in the Mediterranean came to loom threateningly in the minds of the U.S. Administration, which feared Soviet interference in the long-running civil war in Greece; earlier only British intervention had staved off a pro-Bolshevik coup in Athens.

This development made the allocation of new funds to European countries threatened by Communism even more urgent. This persuaded Truman to face a second time a Congress reluctant to grant new funding to help countries far away from the United States and without receiving any economic advantage. On that occasion (February 25) the case of the “interventionist cause” was easier and more convincing for the president. The game-changer in the appeal launched by the Administration was the strong reminder of the danger in which the countries of Eastern Europe, already subjected for some time to Soviet pressure, would find themselves when the British withdrew. “We and only we,” said Undersecretary Dean Acheson in his heated defense, “are capable of interrupting the game of the Soviets.”[5]

Congress realized for the first time the seriousness of the international situation and was more willing to meet the president’s proposals. He, in turn, was able to play the anti-communist card well, proposing a sort of political truce between Democrats – that is, his party – and Republicans. The whole country had to feel united in the fight against the new enemy of the United States, the Soviet Union, and form a “bipartisan” front of intervention, mobilized in defense of American interests in the West.

President Truman’s speech to Congress on March 12 was a great success and became known as the Truman Doctrine. It was perceived as a sort of political manifesto of a new course in international politics. According to the president, at that moment almost every nation had to decide between alternative ways of life, a choice that was not always free. There was, on the one hand, a system of life based on democracy, characterized by representative institutions that guaranteed the private and civil liberties of citizens; on the other, there was a system of life “based upon the will of a minority forcibly imposed upon the majority. It relies upon terror and oppression, a controlled press and radio, fixed elections, and the suppression of personal freedoms. It must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.”[6]

Congress was convinced by the president’s words and agreed to his request to allocate $400 million – a relatively small sum – to “save” Greece and Turkey from Communism. This evolution in an interventionist attitude of the United States Congress took place in parallel with the negative trend of the Moscow Conference of Foreign Ministers of the four victorious allies, which was attended by the American Secretary of State Marshall and which ended on April 25 with nothing agreed on the delicate question of the new structure to be imposed on Germany because of the excessive Soviet demands.

State Department officials, meanwhile, observed with great concern the political activities of the Communist parties in Europe – especially in France and Italy – fearing that a total economic collapse was imminent, which would be followed by political chaos and social revolution.[7]

In April 1947 Secretary of State Marshall returned from a visit to Europe with an unhappy diagnosis: “The patient is sinking while the doctors deliberate.” A massive program of external financial aid was needed to stimulate economic recovery and thus alleviate the serious situation, so as to prevent communist “contagion” in several European countries.

To counter Stalin’s aims for Germany and much of Eastern Europe, Marshall proposed to his government it support the “cause of Germany” at all costs, helping it to become one of the Western democracies. Otherwise, Marshall declared, the United States would be playing into the hands of the Soviet Union, which aimed to isolate that country and subjugate it politically. “Without a resumption of German production,” Kennan said, “there can be no resumption of the European economy.”[8]

Thus, in a short time the Administration prepared a program of economic interventions in Europe, focused on the “recovery” of Germany and the economic strengthening of all Western European countries. According to the Truman Administration, this was the only recipe capable of blocking the expansion of communism within European democracies. It was the first nucleus of what would later be called the Marshall Intervention Plan, which was first publicly announced in an informal speech given by the Secretary of State on June 5 at Harvard University. On that occasion he declared: “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace.”

The necessary funding for the aid program was estimated at around $14 billion, and would have required the approval of a Congress that, although converted to the cause of the fight against international communism, was oriented in a more financially conservative direction. In order to overcome the fears of Congress concerning such massive funding, U.S. public opinion was also mobilized through targeted press campaigns, highlighting the gravity of Europe’s economic difficulties and the serious danger this posed to the stability of democratic governments across that continent. Calculated appeals were also directed to highlight the national economic interest, arguing that U.S. exports would benefit greatly from Europe’s economic recovery and win new markets. Members of Congress, concerned about the cost of the intervention, were given assurances that the government would monitor the implementation of the intervention program and demand full cooperation and transparency in investment from the recipient countries.

Although the financial aid was intended to halt the advance of Communism in Europe and give oxygen to democratic governments, Marshall pointed out, at least at first, that it was open to all European countries, even those subject to Communist regimes. “Our policy,” he said, “is directed not against any country or doctrine but against hunger, poverty, desperation and chaos.”[9]

In June 1947 a meeting was held in Paris between representatives of the United States and those of the countries that would benefit from the program. The Soviet representation headed by Molotov considered the Marshall Plan as an alternative to German reparations, but when they discovered in Paris that the U.S. government, in exchange for financial aid, was demanding that the beneficiaries provide information on their economies and ensure that U.S. officials had control over investments, they abandoned the Conference, accusing the United States of violating the sovereignty of individual states and of wanting to use the aid to subjugate Europe economically. The Soviet Union also forced those states over which it had political influence to refuse American “imperialist” aid.

The Plan was approved by Congress only in 1948, (in the interim the communists staged a coup in Czechoslovakia), and aid commenced in the spring of that year. The vote to make the Marshall Plan operational was tantamount to putting into practice the principles of the Truman Doctrine: “We must be prepared,” said the president, “to pay the price of peace, our only alternative is to pay the terrible cost of war.”[10] In reality, the war between the two superpowers for world domination had already begun, a war that would be fought for over 50 years, not with traditional weapons of war, but through the most sophisticated weapons of politics: diplomacy, deterrence and the atomic threat.

This new way of conducting war in peacetime has been defined by historians as the “Cold War.”[11] In fact, this conflict between the two superpowers that in 1945, together with France and the UK, had won the war is not yet over and continues in other scenarios, with the same aims of domination. This time, however, they must confront other great emerging powers, such as China and India, which aspire to rival them in the political and economic struggle – at least for the moment – for world domination.

Europe gets back on track economically

The European Recovery Program – the formal name of the Marshall Plan – after long debate,  was approved on April 3, 1948, while some European countries, including Italy, were preparing for their first democratic parliamentary elections after the war. The substantial American aid certainly contributed to the re-establishment of democratic systems in Europe and to the reconstruction of countries that were practically bankrupt. The economy in the most important states – Germany, France and Italy – began to recover, and within a few years common institutions were created to guarantee the circulation of raw materials, such as steel and coal. In this way the U.S. secured new allies in the fight against the threat of communism.

The Marshall Plan distributed to the various Western countries about 13.2 billion dollars (equal to 1.1 percent of the American GDP and 2.7 percent of the 16 receiving countries),[12] an enormous figure for the time, even for the richest and most advanced economy on the planet. Italy, the fourth largest beneficiary of American aid, received about 1.2 billion dollars. The Marshall Plan worked; the continent got back on track economically and, little by little, entered a period of prosperity and modernity, and experienced new forms of cooperation between the states. Thus was born the European Community, which later became the European Union, with the manifest aim of guaranteeing a future of peace and cooperation between states – not only in economic matters – in order to face together serious common emergencies.

A Marshall Plan for the coronavirus emergency?

The current coronavirus pandemic is certainly one of these serious common emergencies, not least because the virus knows no geographical barriers and has affected all countries indiscriminately.

The former president of the European Central Bank, Mario Draghi, published an article in the Financial Times on March 25, 2020, under the title, “We face a war against coronavirus and must mobilize accordingly.”[13] The title sums up well the central point of the issue, which is to support the need for an “expansive approach” to tackle the serious economic setbacks caused by the Covid-19 emergency.

Meanwhile, some time before, the EU had suspended the Stability Pact so as to allow the various member countries to cope with the economic impact of this serious health emergency. But this measure, although necessary and timely, appears completely insufficient. Draghi – who usually appears to be a supporter of the stability of public accounts – believes that the contingent situation requires the European States to face this exceptional emergency together, as if we were at war. To ensure social peace and the future of the EU, we must protect the population from job losses, realizing that “protecting employment and productive capacity at a time of dramatic income loss requires immediate liquidity support.”

On March 25, the president of the European Council, Charles Michel, announced that governments were preparing an “economic stimulus strategy similar to the Marshall Plan, aimed at mobilizing EU funds under the European budget.”[14] A letter sent to Michel by seven European leaders – including Emmanuel Macron, Giuseppe Conte, Pedro Sánchez and António Costa – called for “unprecedented resources” and “similarly bold fiscal policy decisions,” including “a common debt instrument issued by an EU institution.”[15]

The issue of Eurobonds, which would have the strength of the entire European economy behind them, has been mentioned here. Such a decision, if shared, would show that the countries of the euro are mutually reinforcing each other and, united, would certainly be stronger. But Germany – which has also allocated 1,100 billion euros to deal with coronavirus – Austria and other northern European countries have opposed this solidarity policy and any common debt instrument. Chancellor Merkel has made it known that on this front “nothing has changed”[16] and that, in order to cope with the emergency, she is in favor of using the European Stability Mechanism (ESM).[17]

José Ángel Gurría Treviño, Secretary General of the Organization for Economic Cooperation and Development (OECD), said in an interview with Corriere della Sera that we are all at “war” against a virus that has immediately globalized and is affecting all the countries of the world. In relation to the economic plan, as well as the health plan, he said that “we need something with the ambition of a Marshall Plan and the vision of the New Deal: policies that have the maximum impact on sectors of the economy where we risk losing hundreds of thousands, or millions, of jobs. In the space of a few days there can be an explosion in unemployment. The economic consequences of the lockdown must be fought with the utmost force.”[18]

On April 2, the European Commission approved a job protection plan, the so-called “SURE” (Support mitigating Unemployment Risks in Emergency), an anti-firing insurance instrument to be made available to member nations. It is a loan of up to 100 billion for the social “shock absorbers” in the countries most affected by Covid-19. The president of the Commission, Ursula von der Leyen, said that the EU budget for the next seven years should be a real Marshall Plan to cope with the crisis. Only in this way will it be possible to restart the economy in all the countries of the Union. Commenting on “SURE”, she stressed that its aim is to keep people at work and to allow businesses to stay in business. She added: “We are joining forces to save lives and protect livelihoods.”[19]

In politics, especially in recent times, the application of a “new Marshall Plan” has often been called for in order to deal with various global critical issues, such as climate problems, Africa, and now the coronavirus. It must be remembered, however, that the aforementioned Marshall Plan is not a simple course of action to be applied – almost automatically – when certain conditions are present, but a very precise historical intervention, which, as we have seen, was the result of very contextualized political choices, and which at that time – that is, immediately after the end of the Second World War – responded primarily to the interests of the United States and also to those of the European countries that benefited from it.

We are convinced that today only a massive “European Marshall Plan” – this time desired and financed by the EU – could help all the countries of the Union to overcome the serious health and financial emergency of Covid-19, the end of which, unfortunately, has not yet been reached and which is endangering the lives of many people, especially the elderly. This measure could prevent the economic collapse (and recession) in most countries and save democracy – severely tested in recent years by the return of old ideologies and old nationalisms – and the future of the European Union itself.[20]

This is what Pope Francis said in the Urbi et Orbi Easter Message, inviting Europe to give concrete proof of solidarity: “After the Second World War, this continent was able to rise again thanks to a concrete spirit of solidarity […]. It is more urgent than ever, especially in the present circumstances, that these rivalries do not regain force, but that all recognize themselves as part of a single family and support one another.” Today, the pope continued, “the European Union is presently facing an epochal challenge, on which will depend not only its own future but that of the whole world.”[21]


DOI:  La Civiltà Cattolica, En. Ed. Vol. 4, no. 06 art. 2, 0620: 10.32009/22072446.0620.2

[1].    See J. Smith, La guerra fredda 1945-1991, Bologna, il Mulino, 2000, 24-26.

[2].    G. F. Kennan, Memoirs 1925-1950, London, Hutchinson, 1968, 359.

[3].    Cf. A. Krock, Memoirs: sixty years on the firing line, New York, Funk & Wagnalls, 1968, 477.

[4].    See G. F. Kennan, Memoirs 1925-1950, op. cit., 357.

[5].    D. Acheson, Present at the Creation. My Years in the State Department, New York, Norton and Company, 1969, 214.

[6].    L. J. Halle, The Cold War as History, London, Chatto and Windus, 1967, 120.

[7].    See J. Smith, La guerra fredda 1945-1991, op. cit., 28.

[8].    W. Lafeber, America, Russia, and the Cold War, 1945-1975, New York, Wiley, 1976, 35.

[9] .    J. Smith, La guerra fredda 1945-1991, op. cit., 27.

[10].   D. Yergin, Shattered Peace: The Origins of the Cold War and the National Security State, London, André Deutsch, 1978, 321.

[11].   The fight against international communism undertaken by the Truman Administration was the main reason for the approval of the National Security Act in July 1947. The primary objective of this Act was to improve the flow of information and advice to the president through the creation of the National Security Council, with consultative functions in foreign policy, and the Central Intelligence Agency (CIA), with the task of collecting and interpreting information from abroad, as well as organizing “covert operations” in international circles to protect U.S. interests. In addition to these important reforms aimed at the security of the state, the national defense system was also reorganized, centralizing in a single place – the Pentagon, which is situated a short distance from Washington – all the offices responsible for the defense of the nation.

[12].   See M. Campus, “The mythology of the Marshall Plan”, in Il Sole 24 Ore, April 12, 2020.

[13].   Cf. “Draghi: we face a war against coronavirus and must mobilize accordingly” in www.ft.com/content/c6d2de3a-6ec5-11ea-89df-41bea055720b

[14].   I. Caizzi, “Draghi: ‘Siamo in guerra, agiamo insieme’”, in Corriere della Sera, March 26, 2020.

[15].   Ibid.

[16].   The EU promises that the Stability Pact will come back into force once the health emergency is over. But as has been pointed out, “at that point the German rules will seem even more absurd, because the debt will have exceeded the limits everywhere” (E. Bonse, “Addio patty di stabilità”, in Internazionale, March 27, 2020, 17).

[17].   It is a fund of 410 billion euros to be lent to the Member States that need it, but it ties them to very heavy conditions. EU leaders are now discussing how and under what conditions to help countries in difficulty with this fund for coronavirus. In a press conference on April 10, the President of the Italian Council of Ministers, Giuseppe Conte, declared once again that the main battle to be waged is that of a “fund to be financed with Eurobonds.” He said that greater “firepower” is needed to fight the health emergency, and that the fund must be available immediately (see C. Lopapa, “Conte boccia ancora il Mes. Lottiamo per gli Eurobond, non firmo accordi inadeguati. E attacca Salvini e Meloni”, in la Repubblica, April 10, 2020). In an interview published in Corriere della Sera, the president of the EU Parliament, David Sassoli, also intervened on the issue, saying that it is not convenient to reject the new ESM a priori. Responding to some insinuations of the Italian opposition, he explained that the “Greek-style” State-Saving Fund (i.e. the famous “troika” one) no longer exists: “It has been suspended.” The European Parliament has put in place a State-Saving Fund to which the countries concerned have free access, “without additional conditions and at rates close to zero.” Furthermore, Sassoli asked the Heads of State and Government to be courageous and to launch rapidly a Reconstruction Fund capable of going to the market with the Recovery Bonds. “To get out of the crisis,” he said, “we need more than 1,500 billion” (A. D’Argenio, “Sassoli: ‘Il nuovo Mes non va respinto a priori. È un Fondo salva-Salute per ospedali e ricerca’”, in la Repubblica, April 10, 2020).

[18].   F. Fubini, “Coronavirus, Gurría (Ocse): ‘Questa è l’ora delle scelte. Subito un Piano Marshall e la svolta degli eurobond’”, in Corriere della Sera, March 25, 2020.

[19].   I. Caizzi, “Ue, sì all’assicurazione anti-licenziamento”, ibid., April 3, 2020, 15.

[20].   Recently, Germany has made some very interesting proposals for solidarity. On April 21, Chancellor Merkel, on the eve of the European Council, asked the Bundestag for the rapid approval of the 500 billion new rapid aid package decided by the Eurogroup. The following day, the 27 European leaders approved an aid package of 540 billion (EMS-EIB-SURE), which will be operational from June 1, and instructed the European Commission to work in detail on the creation of a Recovery Fund with the multiannual budget as a guarantee. A fund, said Charles Michel who authorized its enforceability, “large enough to cope with the scale of the crisis and aimed at the sectors and geographical areas of Europe most affected.” The Italian Prime Minister, Giuseppe Conte, said: “Italy is in the front row asking for it, and I must say the truth, that our initiative with the letter signed by the other 8 countries was very important, because such an instrument was absolutely unthinkable until now. It is a new instrument that will add to those already launched, which will make the European response, we hope, much more solid, much more coordinated, much more effective” (in www.linkiesta.it/2020/04/coronabond-mes-bei-sure-recovery-consiglio-europeo-conte).

[21].   Francis, Urbi et Orbi Message, Easter 2020, in w2.vatican.va

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