Editing Marshall Plan (section)

==Initial post-war events==

===Slow recovery===
Most of Europe's economies were recovering slowly, as unemployment and food shortages led to strikes and unrest in several nations. Agricultural production was 83% of 1938 levels, industrial production was 88%, and exports 59%.{{sfn|Hogan|1987|p=[{{Google books|wVp0UsB1ITIC|pg=PA30|plainurl=yes}} 30]}} Exceptions were the United Kingdom, the Netherlands and France, where by the end of 1947 production had already been restored to pre-war levels before the Marshall Plan. Italy and Belgium would follow by the end of 1948.{{sfnm|van Zanden|1998|1p=|Klemann|1997|2p=3–40}}

In Germany in 1945–46 housing and food conditions were bad, as the disruption of transport, markets, and finances slowed a return to normality. In the West, the bombing had destroyed 5,000,000 houses and apartments, and 12,000,000 refugees from the east had crowded in.{{sfn|Raff|1988|p=335}}
The split of Germany into zones also interrupted food supplies within the country, leading to a drop from 80% self-sufficiency in food production for all of pre-war Germany to 50% in the western zones at pre-war production levels.{{sfn|Brown|1947|p=33}}
On top of that reduction, the food production in the western zones was 30% below pre-war levels in 1946–48.{{sfn|Brown|1947|p=65}}

The drop in food production across Europe can also be attributed to a drought that killed a major portion of the wheat crop while a severe winter destroyed most of the wheat crop the following year (see also [[Soviet famine of 1946–1947]], [[Winter of 1946–47 in the United Kingdom]]). This caused most Europeans to rely on a 1,500-calorie-per-day diet or less.{{sfn|Schaff|2009|p=1}}

Industrial production fell more than half and reached pre-war levels at the end of 1949.{{sfn|Milward |1984 |pp=356, 436}} While Germany struggled to recover from the destruction of the War, the recovery effort began in June 1948, moving on from emergency relief. The [[Deutsche Mark#Economics of 1948 currency reform|currency reform in 1948]] was headed by the military government and helped Germany to restore stability by encouraging production. The reform revalued old currency and deposits and introduced a new currency. Taxes were also reduced and Germany prepared to remove economic barriers.{{sfn|Price|1955|p=264}}

During the first three years of occupation of Germany, the Allied occupational authorities vigorously pursued a [[Allied plans for German industry after World War II|military disarmament program in Germany]], partly by removal of equipment but mainly through an import embargo on raw materials, part of the [[Morgenthau Plan]] approved by President [[Franklin D. Roosevelt]].{{sfn|Balabkins|1964|p=207}} Historian Nicholas Balabkins concluded that "as long as German industrial capacity was kept idle the economic recovery of Europe was delayed."{{sfn|Balabkins|1964|p=209}} By July 1947, Washington realized that economic recovery in Europe could not go forward without the reconstruction of the German industrial base, deciding that an "orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."{{sfn|Pas de Pagaille!|1947}} In addition, the strength of Moscow-controlled communist parties in France and Italy worried Washington.{{sfn|Gaddis|1997}}

In the view of the State Department under President [[Presidency of Harry S. Truman|Harry S Truman]], the United States needed to adopt a definite position on the world scene or fear losing credibility. The emerging doctrine of [[containment]] (as opposed to [[rollback]]) argued that the United States needed to substantially aid non-communist countries to stop the spread of Soviet influence. There was also some hope that the Eastern Bloc nations would join the plan, and thus be pulled out of the emerging Soviet bloc, but that did not happen.<ref>{{cite web |title=History of the Marshall Plan |url=https://history.state.gov/departmenthistory/short-history/truman |publisher=Office of the Historian |access-date=5 June 2024}}</ref>

[[File:Bundesarchiv Bild 183-B0527-0001-753, Krefeld, Hungerwinter, Demonstration.jpg|thumb|upright=1.15|The [[Food in occupied Germany|hunger-winter]] of 1947, thousands protest in West Germany against the disastrous food situation (March 31, 1947). The sign says: ''We want coal, we want bread'']]

====Need to rebuild Germany====
In January 1947, Truman appointed retired General [[George Marshall]] as Secretary of State. In July 1947 Marshall scrapped [[JCS 1067|Joint Chiefs of Staff Directive 1067]], which was based on the [[Morgenthau Plan]] which had decreed "take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy." The new plan JCS 1779 stated that "an orderly and prosperous Europe requires the economic contributions of a stable and productive Germany."{{sfn|Beschloss|2003|p=277}} The restrictions placed on German heavy industry production were partly ameliorated; permitted steel production levels were raised from 25% of pre-war capacity to a new limit placed at 50% of pre-war capacity.{{sfn|Pas de Pagaille!|1947}}

With a [[Greek Civil War#Confrontation: 1944|communist, although non-Soviet, insurgency]] threatening Greece, and Britain financially unable to continue its aid, the President announced his [[Truman Doctrine]] on March 12, 1947, "to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures", with an aid request for consideration and decision, concerning Greece and Turkey. [[Herbert Hoover]] noted that "The whole economy of Europe is interlinked with the German economy through the exchange of raw materials and manufactured goods. The productivity of Europe cannot be restored without the restoration of Germany as a contributor to that productivity."{{sfn|Wala|1995 |pp=104–05}} [[The President's Economic Mission to Germany and Austria|Hoover's report]] led to a realization in Washington that a new policy was needed; "almost any action would be an improvement on current policy."{{sfn|Hogan|1987|pp=34–35}} In Washington, the Joint Chiefs declared that the "complete revival of German industry, particularly coal mining" was now of "primary importance" to American security.{{sfn|Beschloss|2003|p=277}}

The United States was already spending a great deal to help Europe recover. Over $14 billion was spent or loaned during the postwar period through the end of 1947 and is not counted as part of the Marshall Plan. Much of this aid was designed to restore infrastructure and help refugees. Britain, for example, received an emergency loan of $3.75 billion.{{Sfn|U.S. Statistical Abstract|1949|p=[http://www2.census.gov/prod2/statcomp/documents/1949-12.pdf 846]}}

The [[United Nations]] also launched a series of humanitarian and relief efforts almost wholly funded by the United States. These efforts had important effects, but they lacked any central organization and planning, and failed to meet many of Europe's more fundamental needs.{{sfn|Judt|2001|p=4}} Already in 1943, the United Nations Relief and Rehabilitation Administration (UNRRA) was founded to provide relief to areas liberated from Germany. UNRRA provided billions of dollars of rehabilitation aid and helped about 8 million refugees. It ceased the operation of [[displaced persons camp]]s in Europe in 1947; many of its functions were transferred to several UN agencies.{{sfn|UNRRA||p=317}}{{sfn|Fifield|2015|p=69}}