eichengreen166_Scott PetersonGetty Images_ukraine destruction Scott Peterson/Getty Images

Shaping a Marshall Plan for Ukraine

The postwar Marshall Plan provided Europe with the finance not only to rebuild itself, but also to leapfrog a generation technologically. Ukraine’s reconstruction offers a similar opportunity, but only if the most relevant features of the Marshall Plan are fully appreciated.

BERKELEY – Talking up a Marshall Plan for Ukraine is a popular sport nowadays. The game starts by tossing out a figure for the cost of reconstructing Ukraine from the ravages of the Russian invasion – $250 billion, or $500 billion, or $1 trillion, depending on assumptions about how much is destroyed, the cost of caring for refugees, and so forth. The overall cost of the post-World War II Marshall Plan is then compared with US GDP in 1948, when the program started. This typically leads to the conclusion that the cost of Ukrainian reconstruction relative to the size of the donor countries will be in the same ballpark as the Marshall Plan.

These kinds of comparisons are not, in fact, the best use of Marshall Plan history. It is impossible to put a number on the cost of reconstruction as long as there remains uncertainty about the duration of the war and how much territory will be controlled by Ukraine’s legitimate government. Just because the United States was prepared to provide post-World War II Europe with nearly 5% of its 1948 GDP, spread over four years, tells us nothing about whether this is the right level of support for Ukraine.

Other aspects of this history are more relevant to Ukraine’s situation. It is revealing, for example, that Marshall Plan disbursals began even while there was still some fighting in Europe. Although the Greek Civil War continued through the summer of 1949, Greece received Marshall aid in 1948. In fact, Greece received $300 million already in 1947 under the auspices of the American Mission for Aid to Greece, whose structure provided the template for the Marshall Plan.

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