Transfers small, debt relief big: the Marshall Plan and postwar Germany

The Marshall Plan, of mythic stature in common discourse, means many things to many people. It is invoked whenever a large international assistance program is called for, most recently in the context of Southern Europe. But the historical Marshall Plan was actually rather small, as the detractors of a Marshall Plan for Southern Europe have been quick to point out. This paper revives the argument that assistance to Europe under the Marshall Plan was only its outer shell. Its core was a much wider political agenda. Informed by US policy failures in Europe after World War I, it aimed to reconstitute Germany as an export-led economy driving European reconstruction, and to shelter Germany from inherited debts and reparation demands to the largest extent possible. As an assistance program the Marshall Plan was small. As a debt relief program, it was big.