The real benefits were psychological. Indeed, one might almost say that the Marshall Plan helped Europeans feel better about themselves. It helped them break decisively with a legacy of chauvinism, depression and authoritarian solutions. It made co-ordinated economic policy-making seem normal rather than unusual. It made the beggar-your-neighbour trade and monetary practices of the thirties seem first imprudent, then unnecessary and finally absurd.
None of this would have been possible had the Marshall Plan been presented as a blueprint for the ‘Americanization’ of Europe. On the contrary, post-war Europeans were so aware of their humiliating dependence upon American aid and protection that any insensitive pressure from that quarter would certainly have been politically counter-productive. By allowing European governments to pursue policies that had emerged from domestic compromises and experiences, and by avoiding a one-size-fits-all approach to recovery programmes, Washington actually had to forego some of its hopes for western European integration, at least in the short term.
For the ERP was not parachuted into a vacuum. Western Europe was able to benefit from American help because it was a long-established region of private property, market economics and, except in recent years, stable polities. But for just this reason, western Europe had to make its own decisions and would ultimately insist on doing so. As the British diplomat Oliver Franks put it: ‘The Marshall Plan was about putting American dollars in the hands of Europeans to buy the tools of recovery.’ The rest—convertible currencies, good labour relations, balanced budgets and liberalized trade—would depend on Europeans themselves.
The obvious comparison, however, was not between American visions and European practices but between 1945 and 1918. In more respects than we now recall, the two post-war eras were uncannily alike. In the 1920s Americans were already encouraging Europeans to adopt US production techniques and labour relations. In the 1920s many American observers saw Europe’s salvation in economic integration and capital investment. And in the 1920s Europeans, too, looked across the Atlantic for guidance about their own future and for practical aid in the present.
But the big difference was that after World War One the US gave only loans, not grants; and these were nearly always supplied through the private capital market. As a result they carried a price tag and were usually short-term. When they were called in at the onset of the Depression, the effect was disastrous. The contrast in this respect is striking—after initial stumbles in 1945-47, American policymakers went to some lengths to correct the mistakes of the previous post-war era. The Marshall Plan is significant not just for what it did but for what it was careful to avoid.
There was one European problem, however, that the European Recovery Plan could neither solve nor avoid, yet everything else depended upon its resolution. This was the German Question. Without German recovery French planning would come to nought: France was to use Marshall counterpart funds to build huge new steel mills in Lorraine, for example, but without German coal these would be useless. Marshall credits with which to buy German coal were all very well; but what if there
The logic of the Marshall Plan required the lifting of all restrictions upon (West) German production and output, so that the country might once again make its crucial contribution to the European economy. Indeed, Secretary of State Marshall made clear from the outset that his Plan meant an end to French hopes of war reparations from Germany—the point, after all, was to develop and integrate Germany, not make of it a dependent pariah. But in order to avoid a tragic re-run of the events of the 1920s—in which frustrated efforts to extract war reparations from a prostrate Germany had led, as it seemed in retrospect, directly to French insecurity, German resentment and the rise of Hitler—it was clear to the Americans and their friends that the Marshall Plan would only work as part of a broader political settlement in which French and Germans alike could see real and lasting advantage. There was no mystery to this—a post-war settlement in Germany was the key to Europe’s future, and this was as obvious in Moscow as it was in Paris, London or Washington. But the shape such a settlement should take was an altogether more contentious matter.
IV. The Impossible Settlement
‘Those who were not alive at the time may find it difficult to appreciate the extent to which European politics in the post-war years were governed by the fear of a German revival and directed to making sure that this never happened again’.
‘Make no mistake, all the Balkans, except Greece, are going to be Bolshevised, and there is nothing I can do to prevent it. There is nothing I can do for Poland, either’.
‘Reminded me of the Renaissance despots—no principles, any methods, but no flowery language—always Yes or No, though you could only count on him if it was No’.
‘In the space of five years we have acquired a formidable inferiority complex’.
‘Nobody in the world can understand what Europeans feel about the Germans until one talks to Belgians, Frenchmen or Russians. To them the only good Germans are dead Germans.’ The author of these words, written to his diary in 1945, was Saul K. Padover, the observer with the American armies whom we met in Chapter Three. His observation should be borne in mind in any account of the post-war division of Europe. The point of the Second World War in Europe was to defeat Germany, and almost all other considerations were set aside so long as the fighting continued.
The Allies’ chief wartime concern had been to keep one another in the war. The Americans and British worried incessantly that Stalin might make a separate peace with Hitler, especially once the Soviet Union had recovered territory lost after June 1941. Stalin, for his part, saw the delay in establishing a Second (Western) Front as a ploy by the Western Allies to bleed Russia dry before coming forward to benefit from her sacrifices. Both parties could look to pre-war appeasement and pacts as evidence of the other’s unreliability; they were bound together only by a common enemy.
This mutual unease illuminates the wartime accords and understandings reached by the three major Allied governments. At Casablanca, in January 1943, it was agreed that the war in Europe could only end with an unconditional German surrender. At Teheran, eleven months later, the ‘Big Three’ (Stalin, Roosevelt and Churchill) agreed in principle upon a post-war dismantling of Germany, a return to the so-called ‘Curzon Line’[21] between Poland and the USSR, recognition of Tito’s authority in Yugoslavia and Soviet access to the Baltic at the former East Prussian port of Konigsberg.
The obvious beneficiary of these agreements was Stalin, but then since the Red Army played by far the most important role in the struggle with Hitler, this made sense. For the same reason, when Churchill sat down with Stalin in Moscow in October 1944 and initialed the notorious ‘percentages agreement’, he was merely conceding to the Soviet dictator ground that the latter was already sure to seize. In this agreement, scribbled in haste by Churchill and passed across a table to Stalin who ‘took his blue pencil and made a large tick upon it’, Britain and the USSR agreed to exercise control over post-war Yugoslavia and Hungary on a 50:50 basis; Romania
