European Economic Transitions Essay Research Paper Economic

European Economic Transitions Essay, Research Paper

Economic Transitions for the European States After 1945

The greatest challenge for Germany after World War II was economics. Nothing remained of Germany except rubble and graves. It was impossible for the Germans go get food and clean drinking water. It was even more impossible for the Germans to find paying jobs. In addition to this Germany also had on its hands four million refugees and prisoners to feed that it did not have in 1939. In 1939 Germany could only produce 70 to 85 percent of its food now it had another four million to feed. The Soviet Union occupied most of Germany s prime agricultural land and not much of the food produced went to Germany.

After the war German industry was limited to what and how much of certain goods could be produced. German factories were dismantled for payment in war reparations. In the east, industries were nationalized and utilities were socialized. The Soviets sucked the life out of East Germany by setting up so-called joint stock companies, which enabled the Communists to control production and sales of goods produced.

In 1948, a currency reform and the money given to them by the Marshall Plan saved West Germany. This helped lay a basis for West German economy.

After World War II the major economic concern of the Communist Russian government was industrial development. If Marxism-Leninism was supposed to succeed at anything in the great competition with the west, it was in its ability to provide a different path to modernity than the capitalist system. This required heavy investment by the Soviet government. Under Stalin s leadership new industrial town popped up all throughout the country. For the first time the communists felt that they could keep up with the west. But by 1980, as a result of the drastic measures that the Soviets used to accelerate their industrial growth, the Soviet Union s gross national product had dropped to one percent.

Nationalization was the key issue in England s economic development after World War II. Because there was a need for more housing, social security, improved health measures, and full employment there was a growing demand for public ownership on a national basis. As a result of the Labour party coming to power in England after World War II; they set forth in nationalizing the Bank of England, the overseas cable and wireless services, civil aviation, the operation of coal mines, the rail roads, road haulage, canals, docks, and the electrical supply and gas works.

Britain also had a crisis in foreign trade. After World War II Britain was unable to remove the controls it had put in place during the war and in turn had to extend them. Clothes were still rationed until 1949 and food rationing did not completely end until 1954. This was made necessary because of the excess of imports over exports, which had come because of the need to replace wartime losses and machinery. British industries made a rapid recovery and the shipping fleet was enlarged through an active building program. This was all made possible by the loans that Britain received through the Marshall Plan. Even though there was an increase in exports there was still an unfavorable balance of trade. This forced Britain to cut back in military commitments and expenditures.

In the months immediately following World War II, France suffered majorly from shortages of food and coal which was needed for heat and factory production. Both the Soviets and the U.S. were supplying French needs but it was the U.S. who France turned to for help. The French people received aid through the Marshall plan. However, money, coal, and grain alone would not be enough to bring France back to life. There was so much reconstruction required and the need for scarce capital, labor, and resources. Therefore at the beginning of 1947, France adopted the Monnet Plan. This was a set of guidelines and goals set for the French industries. The six industries that this plan included were coal, power, steel, cement, agricultural machinery, and transportation. To accomplish these goals huge amounts of raw materials and machinery were needed to be imported. By 1947-1948 production in French industry as a whole exceeded pre war levels and continued to expand.

Even before World War II Italy was considered a have not country. World War II just made Italy s situation worse. Italy possesses too few of the raw materials which was unable to offset the expanding population. After World War II Italy discovered that she possessed rich deposits of methane gas and some oil deposits. But this alone was not enough to keep Italy s head above the water. Grants and loans from the U.S. in the form of the Marshall Plan did much to improve the Italians position. Italian expansion occurred in the years between 1958 and 1962. Even after this expansion in foreign trade, Italy s imports exceeded their exports and Italy had to start relying on tourists to offset these expenses.

After World War II Austria required international loans for its survival. The United Nations relief agency provided a lot of its relief and the U.S. provided more with gifts. The cost of the occupying forces was a heavy drain on the Austrian budget. Because Austria was so closely linked with Germany that it had problems getting parts for its machinery and they were not able to establish trade with southeastern Europe. The Marshall Plan helped the Austrian government build roads, dams, and heavy industry. They bought back their oil fields and the Danube Shipping Company. After this Austria s economy flourished.

In conclusion, after World War II practically all of Europe was devastated. All of the European countries had one thing on their mind and that was to get their economy jump started so they could start providing for themselves. The Marshall Plan was a major help to the European countries in reaching this goal.