Does Europe need a Marshall plan?

James Hoge claims that Europe needs a Marshall Plan but all Obama has to offer is talk. But what did the Marshall plan do for Greece?
 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, 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.

For Obama to prevail in the presidential election in November, he needs the euro zone crisis to be contained. If it isn’t, a deep European recession could dash the slight upturn in the US economy, thus undermining his chances in what is shaping up to be a very close race.
The frustration for Obama is that there is little he can do to affect the outcome of Europe’s sovereign debt and banking crisis. He cannot launch another Marshall Plan, as President Harry Truman did in 1948 when Europe was in post-war crisis. There are no funds for bailouts or political will for such largesse. Nor can he offset the drag of a failing Europe with additional large stimulus. Most of what he can do is a series of job-creation incentives that promise modest results in the short term. The US contribution is pretty much pep talks from Treasury Secretary Timothy Geithner. Thus Europe is critical to Obama’s prospects but it is on its own in crafting solutions.
If Obama loses the election, his Republican successor will come into office after a divisive campaign, characterized by constant maligning of European approaches to societal challenges. “European socialism” is the pejorative label attached to Obama’s management by Mitt Romney, the former Governor of Massachusetts. As the likely Republican candidate, Romney is championing private sector and local government responses over federal funding in healthcare, education, research and development. The result would be a smaller federal government except for the military. Romney and other Republican leaders are vowing to reinstate many of Obama’s cuts in Pentagon funding. And they are pledging whatever it takes to deny Iran achieving nuclear weapons capability.
At this stage, hostilities with Iran are not a given under a Romney or an Obama administration. In somewhat different degrees, either president will oversee a diminished American military presence on the continent and in surrounding seas. The premise is that Europe, despite the current economic downturn, has the wherewithal to provide its own defense. But if Western Europe is a “zone of peace”, the same cannot safely be said about peripheral areas to the south and east. A diminished American presence and drastically reduced European defense budgets are not without risks.
Furthermore, in a much publicized “pivot”, the Obama administration is shifting attention and resources to Asia in belated recognition that China and its neighbours embody the great economic and security challenges of the future. These shifts are the most prominent evidence of a general re-ordering of US global policy to reflect America’s relative decline in power and its costly, unsatisfactory interventions in Iraq and Afghanistan.
On the way out is hegemonic initiative. In its place, is a new prominence given to multilateral responses. Favoured will be actions in concert with other major countries and coalitions of the willing. Where possible, responsibility for dealing with problems will be delegated to regional organisations. Some regional alliances are voluntary. Others are in effect imposed by dominant powers. Few regional arrangements are strong and therefore effective in conflict resolution. Where they do work, the focus is local. They are not prepared to take on global challenges of transnational crime, cyber vulnerability and climate change.
If US contributions to European efforts are modest in the short term, the same should not be true in the longer term. Renewal of the US economy is key to sustaining the West’s influence and competitiveness. And spurring GDP growth must succeed fiscal reform as the priority goal in the future. A joint drive, highlighted by an EU-US free trade agreement, could do much to stimulate jobs and new sources of growth. Enhanced productivity should be targeted in four areas – energy, infrastructure, healthcare, and education. Needed are better practices and incentives and more research and development. Working together, the EU and the US can best meet the challenges and prospects of China and other emerging powers.
But first, the traumas of the euro zone crisis must be dealt with, and 2012 is shaping up to be a tough year. It will be marked by major country elections, ratings downgrades and $1 trillion of sovereign bond auctions. Within the EU, political responses to the crisis have been belated, partial and subject to increasing pressures from skeptical markets. Economic stagnation is to be feared. If it occurs, the appeal of democracy and a rules-based international system would be seriously undermined.
 Sources;
James Hoge is the Chairman of Human Rights Watch and the former Editor of Foreign Affairs
The Marshall plan in Greece. Wikipedia