As America turns inward, the enormously ambitious program once described as the “most enligthened self-interest in history” has a positive impact still today
In times when transactional politics is dominating international relations and Washington seems to have abandoned global – political and moral – leadership, it is worthy to recall an era when the U.S. came to the rescue of its erstwhile enemies in Europe.
True, it was not done solely out of humanitarian reasons. The advent of the Cold War gave a strong argument to those in the administration who advocated strong transatlantic relations.
And, in the spirit of enlightened self interest, the vast yet devastated European economies offered ample export opportunities.
Thus there were good political and economic reasons to re-engage in Europe, this time to build peace.
But how to finance it? It was this question that the United States answered, and did so decisively.
On a per capita basis, Austria ranked in the top three nations receiving Marshall aid.
By launching the Marshall Plan, the USA supported European reconstruction after the Second World War; it was the largest economic aid program ever. Within the framework of the Marshall Plan – officially known as the “European Recovery Program” (ERP) – every American citizen contributed on average 80 US dollars toward European recovery. At the time this amounted to about two weeks’ pay for a skilled worker.
The Austrian Federal Republic and its population profited enormously from the ERP – Austrians received more per capita Marshall aid than most of the other participating nations. The United States poured more than $13 billion into postwar Western Europe between 1948 and 1952 – of which approximately $1 billion were transferred to Austria during these four years. On a per capita basis, Austria ranked in the top three nations receiving Marshall aid.
The rationale behind the Marshall plan can be summarized thus: “Helping those who help themselves.” The simple but ingenious idea was not only to provide help, but also to help create a capital market. The United States put the Marshall Plan resources at the disposal of the Austrian government, which, in turn, was expected to make a large part available as credits to the Austrian economy. The Austrian economy was thusly provided with the necessary investment funds to restart its economy and solve its huge monetary problems. Austria also obtained urgently needed raw materials and capital goods from the U.S. The credits extended through the so-called Marshall Plan “counterpart funds” were then repaid in Austrian currency. These counterpart funds distributed through the Office of the Federal Chancellery created an investment bank of sorts.
In 1962 the U.S. government transferred the assets of the counterpart funds to the Austrian government itself, which created the “ERP Fund.” Austria’s industrial recovery, its rail network and hydroelectric power plants, roads and bridges, agriculture and tourism, and a public housing program, were financed in large part by ERP counterpart funds.
The Marshall Plan is considered one of history’s most fruitful democratic state building initatives.
The most important legacy of the Marshall Plan is that even today, the ERP Fund makes the capital assets from the Marshall Plan available for investment in the Austrian economy. It attest to the program’s success, that the capital generated by the initial grants of the Marshall Plan are still at work in the Austrian economy, supporting investments in many economic sectors. The ERP Fund is now part and parcel of the “Austria Wirtschaftsservice.” It pumps approximately €600 million of investments annually into Austrian companies to fund innovation and modernization projects. The total assets of the ERP Fund amount to approximately €3 billion. Next to the ERP Fund, the Austrian Marshall Plan Foundation is another legacy of the Marshall Plan still at work in Austria.
The Austrian Government and the ERP Fund created the Austrian Marshall Plan Foundation on the occasion of the fiftieth anniversary of the European Recovery Program in 1997/1998, whose activities extend across Austria and the United States. The aim of the MP Foundation is the transfer of knowledge between the U.S. and Austria. The Foundation seeks to enrich the mutual understanding between the U.S. and Europe/Austria, ever more important in times of strong nationalistic countercurrents on both shores of the Atlantic.
The Foundation is proud of its mission to generate and disseminate distinguished scholarship through individual and collective efforts by scholars and students in Austria and the U.S. alike.
The Marshall Plan is considered one of the most successful political democratic state building initiatives in history. In contrast to the high reparations demanded of the defeated powers after World War I, American Marshall aid was characterized by generosity and political wisdom. George C. Marshall has to be credited with establishing an economic aid program that still creates positive impacts today.
The Marshall Plan continues to impact Austria both with the ERP Fund and the Austrian Marshall Plan Foundation. At the core of the Marshall philosophy lies transnational cooperation, arguably the most important contribution to the European integration project.
Without General Marshall, Europe would not have been as successful in building the European Union. The global impact is equally impressive. The Paris-based OECD – the Organisation for Economic Cooperation and Development – a direct outcome of the Marshall Plan, for one example, has successfully managed to project the notion of economic cooperation onto a global scale. No small achievement of an idea and the generosity of a people.
In 1953, George C. Marshall received the Nobel Prize for Peace. Rarely has a statesman deserved this honor so much as this outstanding representative of the post-war United States.
The book The Marshall Plan – since 1947 by Günther Bischof and Hans Petschar was published in June 2017 to commemorate the 70th anniversary of the plan. Metropole Editor in Chief Dardis McNamee has reviewed this magisterial volume in our May 2018 issue.
The picture shown in this article is courtesy of the Österreichische Nationalbibliothek / Austrian National Library, for which we would like to express our gratitude.