Greece The Marshall Plan in Greece
Source: The Library of Congress Country Studies
In 1949, the Greek Ministry of Welfare listed 1,617,132 persons as indigent; destitute, despondent, and directionless, they looked to Athens for assistance. Another 80,000 to 100,000 had fled their homeland voluntarily or been resettled forcibly in various parts of the communist world; the largest such settlement was at Tashkent in Soviet Central Asia. The German occupation and the Civil War had left the countryside devastated, the economic infrastructure largely rubble, and the government broke. The most pressing need, then, was the material reconstruction of the country, which required continuation of the large-scale United States aid commitment. In the early days of the Cold War, the West gave priority to reinvigorating Greece because of its strategic location. In a bipolar world, Greece's international orientation was preordained.
As part of the European Recovery Program (commonly called the Marshall Plan), an American Mission of Aid to Greece (AMAG) was established to assist and oversee the nation's economic recovery. Millions of United States dollars poured into Greece. As part of the agreement between Greece and the United States, members of the AMAG were given wide-ranging supervisory powers that quickly led to the formation of parallel administrations--one Greek and one American. Greece had become, for all intents and purposes, a client to the United States.
Initially the bulk of foreign aid went into military expenditures; thus, while other parts of Europe were rebuilding their civilian industrial infrastructures, Greece was forging a military apparatus whose sole function was to contain communist expansion. With the cessation of the Civil War in 1949, the focus of aid spending shifted to civilian priorities. The national currency, the drachma (for the value of the drachma--see Glossary), required stabilization because bouts of hyperinflation during the war years had rendered it valueless. Faith had be restored in the monetary system. Exports had to be revived. And, of course, the core of Greek agriculture and industry required rebuilding. Greece (especially Athens) came to resemble a giant work site with building construction everywhere; new roads were built and old ones refurbished; and hydroelectric stations were built to power new industry. In 1953 the drachma was devalued in order to make Greek products more competitive. Other measures were taken as well to attract foreign capital to Greece. These policies ushered in a new phase of growth in the early 1950s. However, massive dependence on foreign aid came at the price of foreign dependence in international relations.
Data as of December 1994
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