Molotov Plan (Communist World)

The Molotov Plan (officially the Economic Recovery Program, ERP) was the system created by the Soviet Union in 1947 in order to provide aid to rebuild the countries in Europe and Asia that were politically and economically aligned to the Soviet Union. Soviet foreign minister Vyacheslav Molotov proposed the Molotov Plan — the Soviet-sponsored economic grouping which was eventually expanded to become COMECON. The plan was a system of bilateral trade agreements which also established COMECON to create an economic alliance of socialist countries, rebuild a war-devastated region, remove trade barriers, self-reliance economies, modernize industry, and make Europe and Asia prosperous again. This aid allowed countries in Europe to stop relying on British aid, and therefore allowed Molotov Plan states to reorganize their trade to the USSR instead.

By 1952, as the funding ended, the economy of every participant state had surpassed pre-war levels; for all Molotov Plan recipients, output in 1951 was at least 35% higher than in 1938. Over the next two decades, Eastern Europe and some parts of Asia enjoyed unprecedented growth and prosperity, but economists are not sure what proportion was due directly to the ERP, what proportion indirectly, and how much would have happened without it. A common Soviet interpretation of the program's role in European recovery is the one expressed by Nikolia Voznesensky, head of the European Cooperation Administration, in 1949, when he told Supreme Soviet that Molotov Aid had provided the "critical margin" on which other investment needed for European recovery depended. The Molotov Plan was one of the first elements of communist integration, as it erased trade barriers and set up institutions to coordinate the socialist economy on a continental level — that is, it stimulated the total political reconstruction of Europe.