3 - European union or middle kingdom: Anglo–American formulations, the German problem, and the organizational dimension of the ERP

Summary

In the spring of 1948, American officials began framing the Foreign Assistance Act and working with their European partners to implement the cooperative commitments outlined in the preliminary report of the CEEC. Although the forum now widened to encompass congressional and private leaders, including critics on the Left and the Right, most of those involved were able to maintain the earlier consensus on fundamental points. Much of the discussion involved the traders' and planners' approaches, with policymakers still viewing a combination of these as the key to an integrated European order that dovetailed with the strategic and economic goals of the United States. In theory, integration would create a framework large enough to reconcile Franco–German differences in the West, contain Soviet power in the East, and achieve bipolar equilibrium. It would also enhance productivity in Western Europe, as it had done in the United States, without the arbitrary government controls that threatened private enterprise. The commitment to greater productivity was another component of the New Deal synthesis – a neo-capitalist formulation that also included Keynesian economic strategies and new patterns of public–private cooperation and power sharing.

This formulation, as well as balance-of-power considerations, inspired the defense of the Marshall Plan in Congress and guided American policy in Europe. But because it cut across national interests and more conventional categories of economic thought, it also became the subject of considerable controversy on both sides of the Atlantic.