Monnet Plan
Faced with the challenge of reconstruction after World War II, France implemented the Modernization and Re-equipment Plan, which was designed to spur economic recovery.
[4]: 240 In pursuit of its objectives, the Plan set production and other targets for 1950 according to the resources that were then expected to be available, starting with six crucial sectors: coal mining, steel, electricity, rail transport, cement, and farm machinery.
For example, the Electricity Commission had 22 members, including six heads of firms, three trade unionists, two white-collar workers, five experts, and four civil servants.
[4]: 261 This was important because, for example, the Manpower Commission’s proposals were adopted, which allowed the longer, forty-eight-hour week to eventually become the norm.
[4]: 245 Yergin and Stanislaw argue that this was a brilliant administrative coup and succeeded in insulating the planning function from the vagaries of French politics.
[4]: 241 [2]: 282 However, the group was "probably the most creative team in Paris" [5]: 153 and included many who would go on to other roles in the French and European government or administration, including future French Prime Minister Felix Gaillard; Robert Marjolin, later one of the founders of the European Common Market; Etienne Hirsch; Pierre Uri; and Paul Delouvrier.
[5]: 161 As the economy’s output was already low, to limit consumption cuts, France aimed to secure loans to finance capital and equipment imports.
[2]: 279 On May 28, 1946 an agreement was reached with the U.S. government for approximately $1 billion worth of new funding, plus the prospect of a $500 million loan from the World Bank (IBRD).
[4]: 257–258, 260 [5]: 161 The Monnet Plan had called for short term austerity measures, but it had promised a rapid rise in consumption.
[4]: 264 The grim postwar situation in Europe was observed by U.S. policymakers, and on June 5, 1947 Secretary of State George Marshall said that "Europe’s requirements for the next three or four years of foreign food and other essential products – principally from America – are so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of a very grave character.
[4]: 248–249 [5]: 157 Although not all of the stated goals were met, Yergin and Stanislaw argue that what the Plan did, at a crucial period, “was provide the discipline, direction, vision, confidence, and hope for a nation that otherwise might have remained in a deep and dangerous malaise.” And it set France on the road to an economic miracle in the 1950s.
[8]: 1 This was viewed as a force for peace in Europe, since "The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible.
