U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955

Simone Selva

doi:doi:10.11648/j.ijefm.20231101.11

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U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955

Simone Selva

Published in International Journal of Economics, Finance and Management Sciences (Volume 11, Issue 1)

Received: 14 October 2022 Accepted: 8 November 2022 Published: 10 January 2023

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Abstract

This contribution pinpoints the interconnectedness between Nato's military buildup at the start of the Atlantic Alliance under the umbrella of U.S. military assistance to Europe, the revamping of a few manufacturing sectors that it fostered across Western Europe, and the early steps in the making of intra-European economic integration through cooperation in military productions. After an introduction, section two cast light on the early U.S. bilateral military assistance programs to western European nations prior to the founding of the Atlantic Alliance. This early U.S. military assistance was based on the transfer of military spare parts, end-items and machine tools and took place without entailing the foundation of full production capacity across Europe. Section three makes sense of the transition from U.S. bilateral assistance to the multilateral structure of NATO’s coordinated production programs, which since 1950 combined military rearmament defence target with domestic economic expansion in each NATO’s member states, close industrial and trade cooperation among them, and continued targeting of dollar gap in Europe through a system of coordinated productions placed by NATO and paid for in U.S. dollars based on a principle of financial burden-sharing among the member nations. Section four pinpoints the evolution of this multilateral procurements system, the OSP programs, through the case study of ammunition contracts and NATO’s infrastructure programs, which served as a flywheel to introduce higher technical content in both high capital intensive and low technological content European firms. After shedding light on the influence of Cold War confrontation on the placing of OSP contracts by the mid-1950s and the ill-functioning of multilateral productions (section five), the article rounds off by stressing how the OSP programs were on the whole successful in combining trade integration, financial stability and technological drift under the umbrella of orders placed and rewarded either by NATO or the Pentagon.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 11, Issue 1)
DOI	10.11648/j.ijefm.20231101.11
Page(s)	1-13
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

NATO’s Rearmament Programs, European Industrial Cooperation, Off-Shore Procurement Programs, European Trade and Payments System, European Manufacturing Industry, NATO’s Financial Burden Sharing

References

[1]	The Committee of Three, Report of the Committee of Three, available at https://www.nato.int/archives/committee_of_three/CT.pdf; United Nations Historical Archive, New York City (UNA), Department of Political Affairs, Department of Security Council Affairs (1946-1951), Subject Files-Armaments Control and Enforcement Measures Section, fold. Memoranda to Assistant Secretary-General 1948-1952.
[2]	Francis A. Beer, Integration and Disintegration in NATO. Processes of Alliance Cohesion and Prospects for the Atlantic Community. Columbus: Ohio State University Press, 1969, pp. 145-149; Phillip Taylor, Weapons Standardization in NATO: Collaborative Security or Economic Competition?, International Organization, Vol. 36, n. 1 (1982), p. 99-100.
[3]	Lawrence S. Kaplan, The United States and NATO. The Formative Years. Lexington: The University of Kentucky Press, 2015, p. 66.
[4]	Harry S. Truman, “Final Draft of President Truman’s Third Quarterly Report on Greek-Turkish Aid”, 12 May 1948, in Harry S. Truman Presidential Library, Independence, MO (HTPL), Truman Doctrine Study Collection, fold. 1.
[5]	Herbert Levy. The Remarkable life of FDR’s Secretary of the Treasury. New York: Skyhorse Publishing, 2010, chapter 8; Jeffry Frieden, Global Capitalism. Its Fall and Rise in the Twentieth Century. London-New York: Norton & Company, 2006, p. 263.
[6]	U.S. Department of State, Office of the Historian, The Origins of NATO. Washington DC: Bureau of Public Affairs, 1999, pp. 2-3.
[7]	Dionysios Chourchoulis, The Southern Flank of NATO 1951-1959. Military Strategy or Political Stabilization. New York-London: Lexington Books, 2015, pp. 159-168.
[8]	IBRD, Statement of Mr. Black to the Randall Commission, 21 October 1953, in Historical Archive of the Central Bank of Italy, Rome (ASBI), Carte Caffè, pratt., n. 53, fold. 3.
[9]	Harry S. Truman, Special Message to the Congress on the Need for a Military Aid Program, 25 July 1949, in Public Papers of the Presidents of the United States. Harry S. Truman. 1949, Volume 5, Washington: Government Printing Office, 1964, pp. 395-399; Hearings before the Committee on Foreign Relations and the Committed on Armed Services, United States Senate, eighty-first Congress, Second Session on the Mutual defence Assistance Program 1950. Washington, Government Printing Office, 1950.
[10]	United Nations Relief and Rehabilitation Administration, (UNRRA), Survey of Italy’s Economy. 1947; for an overview of the reconstruction of foreign trade in the western European countries from 1945 though to the founding go the European Payments Union at the beginning of the new decade see Bank for International Settlements, Twenty first Annual Report, 1 April 1950-31st March 1951, available at https://www.bis.org/publ/arpdf/archive/ar1951_en.pdf.
[11]	the year 1949, when both NATO was founded and the Federal Republic of Germany established, is widely considered in the literature a watershed in the German and Western approach to the reorganization of a German national military and the country’s participation to the rearmament programs unde the umbrella of NATO. On this and the widespread skepticism before the 1949 see, among the most recent works, James S. Corum, Rearming Germany. Leiden-Boston: Brill, 2011, particularly Introduction and James S. Corum, Adenauer, Amt Blank, and the Founding of the Bundeswehr 1950-1956, ivi, pp. 29-54, and Adam Seipp, A Reasonable Yes. The Social Democrats and West German Rearmament 1945-1956, ivi, pp. 55-72.
[12]	Department of State, Memorandum for Mr. James S. Lay, Jr, Executive Secretary, National Security Council, “Second Progress Report on NSC 82 “United States Position Regarding the Strengthening the Defence of Europe and the Nature of Germany’s contribution Thereto”, 3 April 1951, in National Archives and Records Administration, Archive II, College Park, MD (henceforth NARA), Records of the Department of State (RG59).
[13]	“Off the Record Statement in regard to size and duration of MSP programs for Europe”, 28 September 1952, in Declassified Documents and Reference System ( henceforth DDRS).
[14]	Dwight D. Eisenhower Library, Abilene Kansas, Papers of Richard M. Bissell, Correspondence Series 1931-1994, b. 2, fold. January 1951-December 1951.
[15]	NAC Minutes, Minutes of Meeting n. 190, 13 March 1952, in NARA, Records of the Department of the Treasury (henceforth RG56), NAC Papers, NAC Minutes, b. 2.
[16]	NATO Information Service, Facts about the North Atlantic Treaty Organization. Paris, 1965, p 26.
[17]	see Mutual Security Agency, Fiscal Year 1954 Title 1 (Europe) Defence Support Program, 30 October 1952, and other abundant material in NARA, RG59, Records of the Office of Special Assistant for Mutual Security Coordination, Office of the Undersecretary 1952-59, b. 25.
[18]	North Atlantic Council, Ministerial Communique. Final Communique. Paris, 15th-18th December 1952, document available at https://www.nato.int/docu/comm/49-95/c521218a.htm
[19]	North Atlantic Council, Resolutions. Implementation of Article 2 of the North Atlantic Treaty, Paris, 15th-18th December 1952, document available at https://www.nato.int/docu/comm/49-95/c521218a.htm
[20]	“Big Purchases in Europe by ECA”, Financial Times, 8 October 1948, p. 5.
[21]	NAC Minutes of Meetings, n. 160, 2 August 1950,, in NARA, RG56, NAC Papers, NAC Minutes, b. 2 (9 February 1950-28 December 1950). On the engineering of the ERP counterpart funds see C. Spagnolo, La Stabilizzazione incompiuta. Rome: Carocci, 2001.
[22]	“Transport in Europe”, The Financial Times, 26 November 1951, p. 5.
[23]	“U.S. Approves Off-Shore Aircraft Purchases”, The Financial Times, 10 July 1952, p. 1.
[24]	“NATO Scheme for £357 Million Arms”, Daily Telegraph, 26 September 1953, p. 1.
[25]	“a £300 million for NATO ammunition”, in The Times, 26 September 1953.
[26]	NATO Information Service, Facts about the North Atlantic Treaty Organization, Paris 1965, pp. 135-136.
[27]	Office of the Director for Mutual Security, “The Mutual Security Program”, undated (1953), in NARA.
[28]	NATO Information Service, Facts about the North Atlantic Treaty Organization, Paris 1965, pp. 68-69.
[29]	Office of the Secretary of Defence, Department of Defence Report to National Security Council on Status of Military Assistance Programs as of 30 June 1955. Section I. Area and Country Report, 1 October 1955, in NARA, Records of the Office of the Secretary of Defence (RG330).
[30]	US Mutual Security Agency, First Report to Congress on the Mutual Security Program. Washington DC: US Government Printing Office, 1951.
[31]	Office of Secretary of Defence, Department of Defence Report to National Security Council “Status of Military Assistance Programs as of 30 June 1956”, 15 September 1956, in NARA, Records of the National Security Council (RG273).
[32]	“Dollar Bargain in Tanks. U.S. Approves Off Shore Contract”, in The Times, 19 December 1952, p. 6.
[33]	“Ammunition Contracts for Britain”, The Times, 24 June 1953, p. 3.
[34]	Office of the Director for Mutual Security, “The Mutual Security Program” in Dwight D. Eisenhower Presidential Library, Abilene Kansas, papers of Harold Stassen 1953-1957, b. 1.
[35]	Robert Yost (Department of State, Bureau of Far Eastern Affairs) to M. Paralman, Office Memorandum “Legislative Changes Proposed by House Committee on Foreign Affairs”, 11 June 1954, in US Declassified Documents Online, http://tinyurl.galegroup.com/tinyurl/8xBsY0. Accessed 1 Feb. 2019.
[36]	“Foreign Aid Bill Approved. Authorization cut by 500 Million”, The Times, 4 August 1954.
[37]	“Aim of US Aid Programme”, The Times, 7 May 1953, p. 6.
[38]	“£ 300 million for NATO Ammunitions”, The Times, 26 September 1953, p. 6.
[39]	“Denmark’s Progress in the Air”, The Economist, 28 May 1955, p. 780.
[40]	“Off-Shore Dollars”, The Economist, 9 October 1954, p. 151.
[41]	“NATO Machinery Cumbersome. U.S. Senators’ Criticism”, The Times, 31 May 1954, p. 5.
[42]	See for instance S. Selva, Supra national Integration and Domestic Economic Growth. Frankfurt: Peter Lang, 2012.
[43]	“Borletti. Britain’s Strategic Reserves. A Survey”, in The Economist, 29 April 1972, p. 23.
[44]	“NATO Machinery Cumbersome. US Senators Criticism”, 31 May 1954, The Times, p. 5.
[45]	U.S. Department of State to U.S. Department of Defence, “Mutual Security Objectives Plan”, p. 6, in NARA, Central Files, I-16249/60, fold. MSOP-1961.

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Simone Selva. (2023). U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955. International Journal of Economics, Finance and Management Sciences, 11(1), 1-13. https://doi.org/10.11648/j.ijefm.20231101.11

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Simone Selva. U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955. Int. J. Econ. Finance Manag. Sci. 2023, 11(1), 1-13. doi: 10.11648/j.ijefm.20231101.11

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Simone Selva. U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955. Int J Econ Finance Manag Sci. 2023;11(1):1-13. doi: 10.11648/j.ijefm.20231101.11

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@article{10.11648/j.ijefm.20231101.11,
  author = {Simone Selva},
  title = {U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {11},
  number = {1},
  pages = {1-13},
  doi = {10.11648/j.ijefm.20231101.11},
  url = {https://doi.org/10.11648/j.ijefm.20231101.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20231101.11},
  abstract = {This contribution pinpoints the interconnectedness between Nato's military buildup at the start of the Atlantic Alliance under the umbrella of U.S. military assistance to Europe, the revamping of a few manufacturing sectors that it fostered across Western Europe, and the early steps in the making of intra-European economic integration through cooperation in military productions. After an introduction, section two cast light on the early U.S. bilateral military assistance programs to western European nations prior to the founding of the Atlantic Alliance. This early U.S. military assistance was based on the transfer of military spare parts, end-items and machine tools and took place without entailing the foundation of full production capacity across Europe. Section three makes sense of the transition from U.S. bilateral assistance to the multilateral structure of NATO’s coordinated production programs, which since 1950 combined military rearmament defence target with domestic economic expansion in each NATO’s member states, close industrial and trade cooperation among them, and continued targeting of dollar gap in Europe through a system of coordinated productions placed by NATO and paid for in U.S. dollars based on a principle of financial burden-sharing among the member nations. Section four pinpoints the evolution of this multilateral procurements system, the OSP programs, through the case study of ammunition contracts and NATO’s infrastructure programs, which served as a flywheel to introduce higher technical content in both high capital intensive and low technological content European firms. After shedding light on the influence of Cold War confrontation on the placing of OSP contracts by the mid-1950s and the ill-functioning of multilateral productions (section five), the article rounds off by stressing how the OSP programs were on the whole successful in combining trade integration, financial stability and technological drift under the umbrella of orders placed and rewarded either by NATO or the Pentagon.},
 year = {2023}
}

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Simone Selva

Department of Humanities and Social Science, University of Naples L’Orientale, Naples, Italy

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Simone Selva. (2023). U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955. International Journal of Economics, Finance and Management Sciences, 11(1), 1-13. https://doi.org/10.11648/j.ijefm.20231101.11

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Simone Selva. U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955. Int. J. Econ. Finance Manag. Sci. 2023, 11(1), 1-13. doi: 10.11648/j.ijefm.20231101.11

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AMA Style

Simone Selva. U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955. Int J Econ Finance Manag Sci. 2023;11(1):1-13. doi: 10.11648/j.ijefm.20231101.11

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@article{10.11648/j.ijefm.20231101.11,
  author = {Simone Selva},
  title = {U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {11},
  number = {1},
  pages = {1-13},
  doi = {10.11648/j.ijefm.20231101.11},
  url = {https://doi.org/10.11648/j.ijefm.20231101.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20231101.11},
  abstract = {This contribution pinpoints the interconnectedness between Nato's military buildup at the start of the Atlantic Alliance under the umbrella of U.S. military assistance to Europe, the revamping of a few manufacturing sectors that it fostered across Western Europe, and the early steps in the making of intra-European economic integration through cooperation in military productions. After an introduction, section two cast light on the early U.S. bilateral military assistance programs to western European nations prior to the founding of the Atlantic Alliance. This early U.S. military assistance was based on the transfer of military spare parts, end-items and machine tools and took place without entailing the foundation of full production capacity across Europe. Section three makes sense of the transition from U.S. bilateral assistance to the multilateral structure of NATO’s coordinated production programs, which since 1950 combined military rearmament defence target with domestic economic expansion in each NATO’s member states, close industrial and trade cooperation among them, and continued targeting of dollar gap in Europe through a system of coordinated productions placed by NATO and paid for in U.S. dollars based on a principle of financial burden-sharing among the member nations. Section four pinpoints the evolution of this multilateral procurements system, the OSP programs, through the case study of ammunition contracts and NATO’s infrastructure programs, which served as a flywheel to introduce higher technical content in both high capital intensive and low technological content European firms. After shedding light on the influence of Cold War confrontation on the placing of OSP contracts by the mid-1950s and the ill-functioning of multilateral productions (section five), the article rounds off by stressing how the OSP programs were on the whole successful in combining trade integration, financial stability and technological drift under the umbrella of orders placed and rewarded either by NATO or the Pentagon.},
 year = {2023}
}

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TY  - JOUR
T1  - U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955
AU  - Simone Selva
Y1  - 2023/01/10
PY  - 2023
N1  - https://doi.org/10.11648/j.ijefm.20231101.11
DO  - 10.11648/j.ijefm.20231101.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 1
EP  - 13
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20231101.11
AB  - This contribution pinpoints the interconnectedness between Nato's military buildup at the start of the Atlantic Alliance under the umbrella of U.S. military assistance to Europe, the revamping of a few manufacturing sectors that it fostered across Western Europe, and the early steps in the making of intra-European economic integration through cooperation in military productions. After an introduction, section two cast light on the early U.S. bilateral military assistance programs to western European nations prior to the founding of the Atlantic Alliance. This early U.S. military assistance was based on the transfer of military spare parts, end-items and machine tools and took place without entailing the foundation of full production capacity across Europe. Section three makes sense of the transition from U.S. bilateral assistance to the multilateral structure of NATO’s coordinated production programs, which since 1950 combined military rearmament defence target with domestic economic expansion in each NATO’s member states, close industrial and trade cooperation among them, and continued targeting of dollar gap in Europe through a system of coordinated productions placed by NATO and paid for in U.S. dollars based on a principle of financial burden-sharing among the member nations. Section four pinpoints the evolution of this multilateral procurements system, the OSP programs, through the case study of ammunition contracts and NATO’s infrastructure programs, which served as a flywheel to introduce higher technical content in both high capital intensive and low technological content European firms. After shedding light on the influence of Cold War confrontation on the placing of OSP contracts by the mid-1950s and the ill-functioning of multilateral productions (section five), the article rounds off by stressing how the OSP programs were on the whole successful in combining trade integration, financial stability and technological drift under the umbrella of orders placed and rewarded either by NATO or the Pentagon.
VL  - 11
IS  - 1
ER  -

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