Rebuilding Europe: Western Europe, America, And Postwar Reconstruction 0582022444, 9780582022447

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Ellwood

REBUILDING EUROPE

The Postwar World General Editors: A.J. Nicholls and Martin S. Alexander As distance puts events into perspective, and as evidence accumulates, it begins to be possible to form an objective historical view of our recent past. The Postwar World is an ambitious new series providing a scholarly but readable account of the way our world has been shaped in the crowded years since the Second World War. Some volumes will deal with regions, or even single nations, others with important themes; all will be written by expert historians drawing on the latest scholarship as well as their own research and judgements. The series should be particularly welcome to students, but it is designed also for the general reader with an interest in contemporary history.

Decolonization in Africa J.D. Hargreaves The Community of Europe: A History of European Integration since 1945 Derek W. Urwin Northern Ireland since 1945 Sabine Wichert A History of Social Democracy in Postwar Europe Stephen Padgett and William E. Paterson 'The Special Relationship': A Political History of Anglo-American Relations since 1945 CJ. Bartlett Rebuilding Europe: Reconstruction D. W. Ellwood

Western

Europe,

America

and

Postwar

Rebuilding Europe Western Europe, America and Postwar Reconstruction

David W. Ellwood

~ ~~o~~~~n~~~up NEW YORK AND LONDON

First published 1992 by Longman Group Limited Published 2013 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA

Routledge is an imprint of the Taylor & Francis Group, an informa business

© David Ellwood,

1992

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notices Knowledge and best practice in this field are constantly changing. As new research and experience broaden our understanding, changes in research methods, professional practices, or medical treatment may become necessary. Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility. To the fullest extent of the law, neither the Publisher nor the authors, contributors, or editors, assume any liability for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions, or ideas contained in the material herein. ISBN 13: 978-0-582-02244-7 (pbkJ

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data Ellwood, David W. Rebuilding Europe: Western Europe, America, and postwar reconstruction, 1945-1955/ D.W. Ellwood. p. cm.- (Postwar world) ) and Includes bibliographical references (p. index. ISBN 0-582-02245-2 (csd) - ISBN 0-582-02244-4 (ppr) I. Reconstruction (1939-1951) 2. Europe-Foreign relations-United States. 3. United States-Foreign relations-Europe. 4. Europe-Politics and government-I 945-5. Europe-Economic conditions-1945- I. Title. II. Series. D825.E45 1992 9147007 940.55-dc20

eIP

Contents

List of Tables List of Abbreviations Editorial Foreword Acknowledgements

Vlll

IX Xl Xlli

Introduction Chapter One. The Lessons of Last Time Looking the disaster in the face Renewing democracy After nationalism The revolt against laissez-faire Building the American century Commitments to the future Chapter Two. The Realities of Survival 1945-47 The collapse of Europe? The necessities of life Work and want The return to legality Chapter Three. Managing the Shift to Peace Reconversion and the uses of adversity Occupying Germany The search for stability Chapter Four. The Reinvention of American Power How the American view evolved

3 3

5 10 13 19

24 29 29

32 36 39

46 46 50

55 60 60 v

Rebuilding Europe Aid plans, loans and the Cold War To the 'Truman Doctrine' Views of Europe in spring 1947 Chapter Five. The Road to the Marshall Plan The immediate background The birth of the Plan The responses in Europe The purposes of the Plan The first design The Marshall Plan as historical monument The effects of the Cold War on the Marshall Plan Chapter Six. Interdependence and Defence: the Start of the Cold War A new kind of conflict Towards confrontation The military in America and Western Europe: strategic visions and capabilities Chapter Seven. The Road to Containment Defence and economics in Southern Europe Defending Germany The dwindling of the ideal of European unity

62 67 72 79 79 82 86 88 89 91 95

98 98 100 lO4 112 112 118 125

Chapter Eight. Interdependence and Economics: the Limits of Reform 131 Betting on the future 131 Attempting to fulfil the promises 136 Building the Welfare State 138 143 So far and no further: planning and nationalisation The promises in crisis 148 Chapter Nine. Filling the Dollar Gap: the Evolution of the Marshall Plan American pressure steps up The European Payments Union Building confidence: the message of the Marshall Plan Political failure, economic success? A framework for interdependence VI

154 154 159 161 166 168

Contents

Chapter Ten. From Korea to Recovery The 1950 emergency The crisis of the Marshall Plan Guns and butter in the Korean phase: six country studies

175 176 179 182

Chapter Eleven. Hoping for Prosperity 1953-54 The future emerges: 1953 The United Nations analysis of postwar recovery The continuing role of US aid 1954 - a new kind of boom

205 205 210 213 216

Chapter Twelve. Expecting Growth 1955-61 Realisations Americanisation and the politics of growth The outcome of European reconstruction

222 222 226 232

Thb~

2~

Bibliography Guide to Further Reading Index

247 258 266

Vll

List of Tables

1 2 3 4 5 6

Expenditures as percentage ofGDP Highest year for defence expenditure 1949-60 Private cars in use in major West European countries Indices of industrial production in Western Europe 1948-51 Average annual rate of growth of output 1913-59 Volume indices of GNP at market prices

Vill

244 245 245 245 246 246

List of Abbreviations

CDL CDU CEEC CGIL CIA CRS ECA ECE ECSC EDC EEC EPU ERP FAO IMF ITO MRP NA NATO NSC OECD OEEC PCF PCI RPF RG UNRRA WEU

Comite de Liberation Christian Democrat Union Committee on European Economic Cooperation Confederazion generale italiana dellavoro Central Intelligence Agency Compagnie republicaines de securite European Cooperation Administration (Washington) (UN) Economic Commission for Europe European Coal and Steel Community European Defence Community European Economic Community European Payments Union European Recovery Programme (= Marshall Plan) Food and Agriculture Organization International Monetary Fund International Trade Organisation Movement Republicain Populaire National Archives (Washington) North Atlantic Treaty Organisation National Security Council Organisation for Economic Cooperation and Development Organisation for European Economic Cooperation Partie comuniste fran