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Causes
- The British government, who had been training and equipping the Greek army against Greek communists since the end of the war, announced it could not afford to continue funding the Greek forces.
- This worried Truman, who feared that if Greece became communist, so too would the Middle East.
- Truman asked the US Congress for help, announcing that it would now be the USA's policy to use military and economic means to stop countries from falling to communism. This became known as the TRUMAN DOCTRINE.
- Congress released $400 million, which provided enough support to end the communist threat in Greece.
- Truman, who believed communism spread more easily in poorer countries, sent Secretary of State George Marshall on a tour or Europe in April 1947.
- Marshall saw that many countries were in danger of economic collapse and a communist takeover.
- He then proposed an investment of $13.3 billion into Europe over a four year period. The money was offered to all countries so long as they opened their markets to Western goods and made their economic records available for inspection. This became known as the MARSHALL PLAN.
- The Marshall Plan was introduced for two reasons: to prevent the spread of communism, and to enable more countries to trade with the USA.
- Congress initially rejected the Marshall Plan, but approved it on 31 March 1948 following events in Czechoslovakia.
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Effects
- 16 countries, particularly Britain and the Allied parts of Germany, benefited from the Marshall Plan, which was overseen by the Organisation for European Economic Co-Operation
- Stalin described the Marshall Plan as 'dollar diplomacy', arguing that the USA was using its investment to gain influence over countries by controlling their economies.
- Stalin rejected the offer of finance and made sure all the countries he controlled did the same through the establishment of the Communist Information Bureau (Cominform) in 1947, which aimed to ensure communist nations worked together more effectively, and the Council for Mutual Economic Assistance (Comecon) in 1949, which was a Soviet version of the Marshall Plan which encouraged economic co-operation among Iron Curtain States. This strengthened the USSR's grip over the Iron Curtain countries.
- The USA was able to indicate its intent to remain involved in European affairs
- The economies of many European economies recovered rapidly
- The US economy developed rapidly
- Political and economic divisions between East and West were deepened.
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