Soviet Bloc States Establish Council for Mutual Economic Assistance Summary

  • Last updated on November 10, 2022

The communist states replied to the U.S. Marshall Plan by establishing the Council for Mutual Economic Assistance, which Soviet leader Joseph Stalin saw as a means of enforcing Soviet-style economic development in Eastern Europe to counter Western influence. The agency became more active after Stalin’s death but ceased to exist when the Soviet Union itself collapsed.

Summary of Event

On January 25, 1949, the Moscow Joint Communiqué was issued by Soviet leader Joseph Stalin, as well as the heads of state of Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. This document announced the founding of the Council for Mutual Economic Assistance (Comecon, or CMEA). It represented the Soviet rejection of the United States’ Marshall Plan Marshall Plan Foreign aid, U.S.;Marshall Plan as the framework for postwar reconstruction, while simultaneously laying the groundwork for a centralized system of diplomatic, economic, and military alliances in Eastern Europe designed to serve Soviet strategic interests. The so-called Molotov Plan, meant as an alternative to the Marshall Plan, marked the de facto division of Europe into two separate and mutually hostile blocs, Cold War;advent a condition that was to last until the dissolution of the Soviet Union in 1991. [kw]Soviet Bloc States Establish Council for Mutual Economic Assistance (Jan. 25, 1949) [kw]States Establish Council for Mutual Economic Assistance, Soviet Bloc (Jan. 25, 1949) [kw]Council for Mutual Economic Assistance, Soviet Bloc States Establish (Jan. 25, 1949) [kw]Economic Assistance, Soviet Bloc States Establish Council for Mutual (Jan. 25, 1949) Economic policy;Soviet Union Council for Mutual Economic Assistance Economic systems;communism Communism;Eastern Europe Soviet Union;and Eastern Europe[Eastern Europe] Moscow Joint Communiqué Economic policy;Soviet Union Council for Mutual Economic Assistance Economic systems;communism Communism;Eastern Europe Soviet Union;and Eastern Europe[Eastern Europe] Moscow Joint Communiqué [g]Europe;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [g]Soviet Union;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [g]Bulgaria;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [g]Czechoslovakia;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [g]Hungary;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [g]Poland;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [g]Romania;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [c]Cold War;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [c]Economics;Jan. 25, 1949: Soviet Bloc States EstablishCouncil for Mutual Economic Assistance[02850] [c]Trade and commerce;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] [c]Diplomacy and international relations;Jan. 25, 1949: Soviet Bloc States Establish Council for Mutual Economic Assistance[02850] Stalin, Joseph [p]Stalin, Joseph;ColdWar Truman, Harry S. [p]Truman, Harry S.;Cold War Kennan, George F. Marshall, George C. [p]Marshall, George C.;European Recovery Program Molotov, Vyacheslav Mikhailovich

From the very earliest stages of World War II, the Allied Powers were forced to paper over numerous conflicts of interest among the coalition’s partners. World War II (1939-1945)[World War 02];Soviet-Western relations[Soviet Western relations] Soviet-Western relations[Soviet Western relations];World War II[World War 02] The Atlantic Charter (1941) was originally intended to establish an Anglo-American alliance against both Germany and the Soviet Union—in spite of the fact that the United States had yet to enter the war, while the Soviet Union had already entered on the side of the British and was fighting for its very existence against Germany.

The Red Army faced the full fury of the Wehrmacht (German army), losing millions of soldiers while inflicting three-fourths of all the casualties suffered by Germany during the war. Meanwhile, despite numerous urgent requests from Stalin to open a second front in Europe, the United States and Great Britain made no moves to comply until 1944. By this time, the Red Army had already destroyed the Wehrmacht as a fighting force on the eastern front and was rapidly rolling back the remainder, occupying vast areas of eastern Europe in its drive to the German homeland.

Planning for the end of the war and the postwar recovery had begun in earnest by 1943. World War II (1939-1945)[World War 02];reconstruction The planning process was dominated by the British and Americans, with no serious consideration of Soviet views or interests. The Soviets were resentful, and Stalin was increasingly determined to do whatever was required to guarantee the security of the Soviet Union in the postwar period. In the wake of Germany’s invasion of his country, Stalin’s vision of a stable and secure postwar order focused on the creation of a buffer zone of friendly states. Such a zone would close off the Polish corridor and eliminate Germany and any other potential invaders as military threats, albeit at the potential expense of the buffer states themselves. It would also establish an international peacetime sphere of influence within which Soviet hegemony would be unchallenged.

This approach was consistent with the outcomes of previous great power conflicts; furthermore, it comported handily with the plans of Great Britain and France for the reestablishment of their own colonial empires. However, the American plan was for a postwar order based on open markets in a system of intergovernmental organizations (IGOs) that would maintain the collective security of all nations. This plan was incompatible with the perceived needs of the Soviet Union. The United Nations (in which the Soviet Union had veto power) was the only international institution in which the Soviets regularly participated.

The United States saw the major challenges of the postwar period to be the reconstruction of Europe and Asia, the restoration of a stable world economy, the establishment of an effective system of collective security, and limiting the influence of the Soviet Union in world affairs. The “Truman Doctrine” Truman Doctrine (1947) refers to the speech (March 12, 1947) in which U.S. president Harry S. Truman declared it to be the duty of the United States to support any resistance to what might be considered an expansion of “communist influences” anywhere on the globe. This represented an embrace of the strategic doctrine of “containment,” first articulated by George F. Kennan in 1946, and it was a foundational moment in the Cold War between capitalist and communist nations.

Kennan’s work provided the theoretical rationale for the Truman Doctrine; he was also one of the chief authors of the Marshall Plan Marshall Plan Foreign aid, U.S.;Marshall Plan (named for then-secretary of state George C. Marshall). The plan was the economic counterpart to the Truman Doctrine. It was designed to support Western European nations in the task of material reconstruction and was based on the premise that prosperous nations were less vulnerable to communist influences. The Marshall Plan arose out of a series of negotiations among sixteen Western European nations regarding an acceptable mechanism for distributing and managing American financial contributions to the rebuilding effort.

Under the plan, aid was conditional on the recipient’s willingness to disclose all economic information to the United States, accept a fixed exchange rate for its currency, eliminate trade barriers, and adopt a number of other structural reforms. With those restrictions, Marshall Plan aid was available to all European nations, including the Soviet Union and its satellites. The Soviets sent Vyacheslav Mikhailovich Molotov, Stalin’s minister of foreign affairs, to the Paris Meetings (June, 1946) to explore the terms for obtaining economic assistance, and he left after only a few days, declaring that the U.S. plan was an imposition on national sovereignty, because it required the disclosure of financial information that the Soviets deemed too sensitive to reveal to the world’s capitalist powers. Moreover, the plan seemed to Molotov to be designed rapidly to rebuild Germany in order to aid in the U.S. containment strategy by reconstituting the German threat to the Soviet Union. Consequently, Moscow forbade all of its Eastern European satellite nations from receiving Marshall Plan aid.

Upon Molotov’s return to Moscow in July of 1947, Stalin announced the Soviet response to the Marshall Plan: The Molotov Plan would be a program of in-kind aid and technical assistance, administered through a series of bilateral agreements between the Soviet Union and the nations under its influence. Stalin intended to use Soviet economic and military advantages to impose Iron Curtain Eastern Europe, domination by Soviet Union of Soviet Union;and Eastern Europe[Eastern Europe] what he called the “socialist international division of labor” upon Eastern Europe. This division of labor essentially consisted of the provision of raw materials and energy resources to Eastern European countries by the Soviet Union, which would receive finished goods from the satellite nations in return. The agreements negotiated along these lines were designed to redirect trade flows, increase the degree of economic dependency of the subject states upon the Soviet Union, and create a mechanism for the extraction of reparations.

The Moscow Joint Communiqué of January, 1949, established Comecon as the institutional framework for the coordination of numerous national economic plans. The stated purpose of the organization was to coordinate economic planning and share technology among member nations. Members were all entitled to “sovereign equality,” meaning “one-nation, one vote” in all decision-making processes. Each member was allowed to declare an “interest” in any matter under consideration; all participation was voluntary. The dominance of the Soviet economy in the region, however, gave the Soviets a disproportionate say in collective decisions. Nevertheless, they were unable to prevent countries from opting out of the organization, meaning that Comecon never obtained formal supranational authority.

The structure and proximate goals of Comecon evolved over the years to reflect the varying foci of Soviet security strategy. This approach to economic integration suffered from a variety of technical defects as regarded purely economic criteria for efficiency. It persisted, because Comecon served extremely well as an instrument for the advancement of the Soviet Union’s fundamental strategic objectives: maintaining and extending the nation’s political dominance within its sphere, using client states to finance Soviet reconstruction, maintaining the buffer zone of pliable regimes, and cultivating a group of dependent allied nations to bolster Soviet influence on the United Nations. Comecon was finally declared defunct with the dissolution of the Soviet Union on June 28, 1991.

Significance

The formation of Comecon served to crystallize the existing and emerging Cold War lines of division between the United States and the Soviet Union, and it accelerated the growth of tension in the superpower rivalry. It also froze Germany’s political structure, forcing the nation to remain partitioned for another four decades. Comecon served as an adjunct to the process of creating a system of communist military alliances known as the Warsaw Pact, and it did much to shape the relatively favorable image the Soviets enjoyed among the less developed nations within its sphere. It probably carried within it the seeds of its own destruction, however, since the satellite nations received relatively favorable terms on the resources they received from the Soviets for most of the period. This implicit subsidy to the Soviets’ client states turned out to be a measure that the Soviet economy could ill afford in the long run. Economic policy;Soviet Union Council for Mutual Economic Assistance Economic systems;communism Communism;Eastern Europe Soviet Union;and Eastern Europe[Eastern Europe] Moscow Joint Communiqué

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Berger, Helge, and Albrecht Ritschl. “Germany and the Political Economy of the Marshall Plan, 1947-1952: A Re-Revisionist View.” In Europe’s Postwar Recovery, edited by Barry Eichengreen. New York: Cambridge University Press, 1995. Argues that the linkage of several issue areas through the conditionality of Marshall Plan aid served a wider purpose than simply assisting in postwar rebuilding: It was also intended to foster a much tighter degree of European economic integration than was actually achieved.
  • citation-type="booksimple"

    xlink:type="simple">Gaddis, John Lewis. We Now Know: Rethinking Cold War History. New York: Oxford University Press, 1997. Addresses the question as to whether the Cold War was inevitable; his answer is in the affirmative.
  • citation-type="booksimple"

    xlink:type="simple">Judt, Tony. Postwar: A History of Europe Since 1945. New York: Penguin Press, 2005. Provides a very thorough look at the economic histories of Eastern European countries.
  • citation-type="booksimple"

    xlink:type="simple">Riasanovsky, Nicholas V., and Mark Steinberg. A History of Russia. 7th ed. New York: Oxford University Press, 2005. Excellent overview of the roots of the Cold War conflict; includes chapters on the transition into capitalism at the end of the twentieth century.

Soviets Take Control of Eastern Europe

Truman Doctrine

Communists Seize Power in Czechoslovakia

Marshall Plan Provides Aid to Europe

Germany Splits into Two Republics

Western European Union Is Established

Warsaw Pact Is Signed

Soviets Crush Hungarian Uprising

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