By the end of World War II much of Europe was devastated. A large portion of the 60 million deaths among World War II casualties were residents of Europe. Sustained aerial bombardment had badly damaged most major cities, and industrial facilities especially hard-hit. Many of the continent’s greatest cities, including Warsaw, London and Berlin, laid in ruins. The region’s economic structure was ruined, and millions were homeless.
In 1947, Democratic U.S. President Harry Truman initiated the Marshall Plan (aka the European Recovery Program – ERP) to address each of the obstacles to post-war recovery. The plan looked to the future, and did not focus on the destruction caused by the war. Much more important were efforts to modernize European industrial and business practices using high-efficiency American models, reduce artificial trade barriers, and instill a sense of hope and self-reliance.
Former U.S. President Hoover noted that, “The whole economy of Europe is interlinked with German economy through the exchange of raw materials and manufactured goods. The productivity of Europe cannot be restored without the restoration of Germany as a contributor to that productivity.” In Washington, the Joint Chiefs declared that the “complete revival of Germany industry, particularly coal mining” was now of “primary importance” to American security.
The United States was already spending a great deal to help Europe recover. Over $14 billion was spent or loaned during the postwar period through the end of 1947. Much of this aid was designed to restore infrastructure and help refugees. Britain, for example, received an emergency loan of $3.75 billion.
Even while the Marshall Plan was being implemented, the dismantling of German industry continued, largely supported by the Brits and the French, taking Germany back to a standard of life known at the height of the Great Depression in 1932. In 1951 West Germany agreed to join the European Coal and Steel Community (ECSC) the following year. This meant that some of the economic restrictions on production capacity and on actual production that were imposed by the International Authority for the Ruhr were lifted, and that its role was taken over by the ECSC. The ECSC created the foundation for the modern-day developments of the European Union.
Since the Treaty of Rome in 1958 the European Union is committed to regional integration and has grown in size through the accession of new member states. The addition of policy areas to its remit and the implementation of new institutions has increased the political sovereignty. The Treaty of Maastricht in 1993 established the European Union with its current name. A monetary union, the eurozone, has been established since the inception in 1999 and is made of sixteen member states.
Germans know that basis for the post-war “Wirtschaftswunder (Economic Miracle)” was only possible after the liberation from Adolf Hitler’s Nazi Regime by the Allied forces, the subsequent gradual reduction of industrial production and trade barriers and finally allowing Germany to become a full sovereign member of the European Union. The actual Wirschaftswunder was driven by guest workers from Italy, Turkey and Greece (!).
Admittedly the tone of the German Government towards the Euro has changed recently and became more direct. That’s because Angela Merkel is the first German Chancellor who was born in 1954, well after the second World War ended. However, she learned under the leadership of Helmut Kohl (16 years Germany’s chancellor) who was, along with Francois Mitterand one of the main architects of the Maastricht Treaty which created the European Union.
With the European DNA deeply embedded into Germany’s culture as a substitute for national pride, a failure of Europe and/or the Euro would be seen as a failure of Germany. Again.
Germany will go very, very far, politically and on a monetary basis, to protect the European Union and the Euro, no doubt. The Euro faces a storm right now, but it’s by no means the end of the currency.
*post fueled by Wikipedia*
