618Chapter 31
Berlin was in rubble, and forty percent of all German
housing was damaged or destroyed. Much of the sur-
viving productive capacity of Germany was dismantled
and shipped to Russia. European transportation had
collapsed amidst bombed out ports, rails, roads, and
bridges. In Holland, 60 percent of the transportation
network was destroyed, industrial output amounted to
only 25 percent of the 1939 level, and thousands of
acres of farmland lay flooded. As millions of war
refugees spread across the continent, tuberculosis and
malnutrition stalked displaced persons everywhere.
The primary characteristic of postwar Europe was
the austere existence of the survivors. The European
production of bread grains in 1945 stood at 50 percent
of the prewar level. Food was rationed in most of Eu-
rope; bread was rationed in Britain although it had not
been rationed during the war. The wheat crop in
France for 1945 totaled 4.2 million tons, compared
with 9.8 million tons in the last year of peace (1938)
(see table 31.1). The United Nations estimated that
100 million people were receiving fifteen hundred calo-
ries or fewer per day. Governments tried to control
prices, but scarcity caused inflation. Between 1945 and
1949, prices tripled in Belgium and quintupled in
France. Hungary suffered perhaps the worst inflation in
world history, and the national currency was printed in
100 trillion pengo notes. Blackmarkets selling food,
fuel, and clothing flourished. Simultaneously, military
demobilization created widespread unemployment.
The recovery of Europe in the late 1940s and
early 1950s relied upon planned economies and for-
eign aid. Jean Monnet, a distinguished French econo-
mist and civil servant, became the father of European
mixed economics that relied upon state planning, such
as his Monnet Plan of 1947. UN agencies such as the
World Bank and the United Nations’ International
Children’s Emergency Fund (UNICEF) channeled as-
sistance to Europe, but the United States played the
greatest role. In June 1947 Secretary of State George
C. Marshall proposed a program of American aid to
Europe. Between 1948 and 1952 the Marshall Plan
sent $13 billion to Europe, with Britain ($3.2 billion),
France ($2.7 billion), and Germany and Italy ($1.4 bil-
lion each) receiving the most. The USSR rejected aid.
During 1948 West European industrial production
reached 80 percent of its 1938 level in most countries
(60 percent in Holland and West Germany). European
economies showed signs of recovery but shortages,
unemployment, and austerity continued in the early
1950s. By 1957, however, Prime Minister Harold
MacMillan of Britain could say that “most of our peo-
ple have never had it so good.”Eastern Europe and the Origins
of the Cold War, 1945–49
The Red Army occupied vast regions of central and
eastern Europe in 1945. Russia had survived its third in-
vasion from the west in modern times, outlasting Hitler
just as it had survived Napoleon and the kaiser. The So-
viet war effort had taken two or three times as many
lives (as many as twenty million to twenty-five million
people in the largest estimates) as British, French, Ger-
man, and American deaths combined. Stalin, who ruled
the USSR until his death in 1953, concluded that he
must exploit the vacuum in Europe to guarantee Russian
security.
The summit conferences at Moscow, Yalta, and
Potsdam gave the Soviet Union a strong position in
Eastern Europe. Churchill had recognized Romania and
Bulgaria as falling in the Soviet “sphere of influence,”
and the USSR had been conceded the occupation of
the eastern one-third of Germany. In Yugoslavia, man-
aged elections of 1945 (in which all opposition parties
abstained) gave 90 percent of the vote and the presi-
dency to the hero of the resistance (and prewar secre-Millions of metric tons of
Country Wheat Sugar beets Milk
France
1938 9.8 8.0 13.8
194 54.2 4. 5 7.9
Italy
1938 8.2 3.3 n.a.
194 54.2 0.4 n.a.
Poland
1938 2.2 3.2 10.3
194 50.8 3. 5 2.8
Russia
1938 40.8 16.7 29.0
194 513.4 5. 5 26.4
Source: B. R. Mitchell,European Historical Statistics, 1750–1970(Lon-
don: Macmillan, 1975), passim.
n.a. Not available.TABLE 31.1Food Production in Postwar Europe