The Marshall Plan, otherwise known as the Economic Cooperation Act of 1948, has been hailed as one of the great successes of modern transatlantic relations and is the cornerstone upon which much of the post-war cooperation and dialog with Europe rests. The focus of the Marshall Plan was to remove trade barriers, to modernize the European economy and industry and to help Europe prosper in the wake of the second world war.
The United States and specifically regions in the middle of the country, often referred to as the rustbelt, are still suffering from the great recession of 2008. Whole communities reliant upon manufacturing and blue collar jobs have been upended and have watched in dismay as factories close and once well-paying jobs have disappeared leaving both economic and political turmoil in their wake.
These communities can draw parallels to post-war Europe. While undoubtedly less dramatic than the physical and economic ruin brought about by the second world war, the middle of the country nevertheless suffers from the same kinds of ills as post-war Europe. The loss of production capacity, manufacturing and the security of a stable income were issues that plagued post-war Europe and are the exact same ones that affect the U.S. today. This moment of European distress was key to the creation of the Marshall Plan.
Today the main opposition, or at the very least those with the most apathy toward transatlantic relations in the United States, come not from the prosperous coasts but from the economically deprived American heartland. It is the middle of the country that has disengaged from Europe and it is the middle of the country that has turned inward in response to the economic plight these communities face. As such, politicians representing these communities have lost focus on Europe, or worse yet, have blamed free trade and globalism for the problems their constituents face which further undermines transatlantic relations. Of course, it should go without saying, that challenges to the transatlantic relationship exist on both sides of the Atlantic. Still, a major roadblock and arguably the biggest threat that faces the transatlantic relationship, comes from the U.S. side and the alarming new anti-free trade and isolationist rhetoric from elected politicians.
As transatlantics, we must take a page from the history books. It is time to turn the focus of the transatlantic dialog towards jobs and economics, towards rebuilding and modernizing, towards prosperity and cooperation. This time however, the focus is not on rebuilding a war-torn Europe but is on reinvigorating an economically plighted American heartland. It is time for Europe’s Marshall Plan.
The term ‘Europe’s Marshall Plan’ is not meant to suggest that Europe put together an economic aid package to the tune of hundreds of billions of dollars, but what it is meant to suggest is turning the focus of the transatlantic dialog towards the central pillars that made the Marshall Plan such a success in the first place. The pillars of the Marshall Plan, such as the removal of trade barriers, the modernization of industry and specifically a focus on manufacturing, are all things in which Europe is primed to help the U.S. achieve. The top 50 German companies, representing some of the most advanced manufacturing companies in the world, employ over 700,000 people in the U.S. alone with many of those jobs in regions and industries most affected by the great recession. Furthermore, European countries made up seven of the top ten countries for U.S. foreign direct investment in 2014. Their combined investments contributed significantly more than half of all the foreign direct investments that the U.S. received that year. Both employment and investment are key issues critical to revitalizing the American heartland and are essential to controlling the narrative around transatlantic relations.
We must now focus on a middle-out policy to bring the topic of the transatlantic relationship to those areas within the U.S. which have been overlooked and left out of the debate and do so in a favorable light. We need to focus the attention of American policy makers who represent the most economically depressed regions of the U.S. on the positive role that Europe can play in rebuilding and revitalizing the American heartland. We need these policy makers to understand the benefit that foreign and especially European direct investment can have and to bring them into the fight as allies, not as opponents, to transatlantic relations. For guidance, we need only look to the past successes of the Marshall Plan and the principles upon which it was established. If we can successfully do that, not only can we replicate the economic successes with a new European Marshall Plan, but we can also replicate and continue the far reaching political and social benefits that have underpinned the transatlantic relationship for the past 70 years.
Hi Gregory, thanks for your article and your important reference to the Marshall Plan as a successful element of Transatlantic Relations! I have a question of understanding: You write that we should set up a new plan but state that this shouldn’t be a huge economic package but more a change of focus to the pillars of the former Marshall Plan, in particular by reminding politicians of the Marshall Plan, and the importance of Free Trade and investment. How, do you think, can we credibly do that, in a different way than Europe already tries to do it? Will convincing politicians be enough to convince citizens as well? Thanks for your reply!
Hi Marie,
Very good question! I think in general that European countries tend to focus their attention on relatively liberal areas of the country as they tend to be more metropolitan (and thus more interesting to visit and have more economic impact) and these places are more sympathetic to the message Europeans are trying to promote. However I think a focus on the politicians in the more rural and conservative areas can be a very effective way to reach the citizens there and engage them in the dialog as these communities are typically cut out of the conversation. Further, politicians in economically depressed areas (where jobs are of the utmost concern) would be more than willing to promote European investments in their districts and could be ideal partners in combating protectionism and anti-transatlantic attitudes.
Hi Gregory,
I really enjoyed reading your article as it was very informative. Could you name reasons why German companies are currently investing in the areas of the American Rustbelt? And how American policy makers could increase the attractivity of these areas as I suppose they are lacking skilled personnel and an up-to-date infrastructure?
Regards,
Mathias
Hi Mathias,
German companies want access to the US market and can get cost savings from building in the markets they are targeting (e.g. BMW’s largest factory is in South Carolina and German companies in the Detroit region employ more workers than any other foreign country) . The rust belt is a natural target for German industrial companies I feel because the infrastructure and workforce is largely there. Still I think this could be improved and American policy makers can make it easier by cutting the “red tape” and or offering incentives to bring in investment (e.g. Panasonic partnering with Tesla in Nevada to create the gigafactory). However transatlantics who want to promote this can help this along by acting as match makers to get the conversation started.
Hi Gregory,
I do as well concur with the great force of Marshall Plan and enjoyed reading your reference to it. I have a question regarding one of the points you mentioned: ‘We need to focus the attention of American policy makers who represent the most economically depressed regions of the U.S. on the positive role that Europe can play in rebuilding and revitalizing the American heartland’. How do you envision this to be achieved? How do you propose the shift in focus is made? Do you have in mind something along the tenants of putting a pressure on the policy makers? If so under what pretenses? Could you clarify or expand on your thought?
Hi Petra,
Great question and thank you for commenting. I think that the way to implement this policy is to focus on the common ground and what is mutually beneficial. This will happen naturally but organizations like this can facilitate finding German companies looking to expand in the U.S. and work on the policy and connect them with the policy makers in the U.S. target regions. There is a win-win here where policy makers will be looking for easy jobs and to score some political points and German companies will be looking for an entry point to the U.S. market. Once the relationship is facilitated the partnership is naturally stronger and politicians who used to complain about jobs going overseas will have to change their tune or risk losing the foreign investment and support of the new companies in their district. In this way the biggest critics can be turned into allies.
Gregory,
Since the 2009 recession, Germany has established itself as a strong presence in the “automation alley” of Detroit. While there is often a “buy American” sentiment, many foreign car parts are actually manufactured by American employees, working for foreign companies that have affiliates in the US. In addition, to winning the support of politicians and providing jobs, how do you propose a grassroots campaign that would welcome such plan from the “ground up?”
Great perspective! Thanks for sharing.
Brandy
Hi Brandy,
Thanks for the comment and great points! I think that the support from the ground up is great I think that the most effective way to organize this would be more of a “middle out” where the focus is on the middle tier politicians and policy makers who will bring in businesses and create jobs for the population base. It is my impression that the general public or those at the grassroots level, especially those in the middle of the country, do not have much contact to Europe and do not really have a strong opinion outside of jobs. As such targeting the middle tier politicians can change the perception of the general public towards Europe and can force policy changes at the highest level as the support base for transatlantic issues shifts. Further I see this a being the most efficient way of changing the dialog as targeting a limited number of middle tier politicians is much easier than engaging, educating and then motivating a grassroots kind of organization. Would love to hear your thoughts on this though!
Gregory,
Thanks for your response. I would counter that I do think that middle American does have knowledge of Europe and Germany in particular. This could be more of a genealogical connection (positive, but historical) or recent events on the news regarding the Trump/Merkel relationship (less positive). The challenge is to move beyond any negative media rhetoric and demonstrate how such a plan could overcome this and produce jobs. That will definitely create a positive rhetoric.
Best,
Brandy
Hi Gregory,
I think your proposal might go a long way in helping to reframe the way Europe and also free trade are perceived. You mentioned, that the top 50 German companies already employ over 700.000 people in the US. As far as I followed the development, foreign investment (not only from Europe) helped to revive some areas of the South. Did this have some of the positive effects, you hope to achieve in the Rust Belt? Are for example senators and congressmen from these states more open minded towards free trade? What about the population?
cheers
Justus
Hi Gregory, hi Justus,
I was interested in the same aspect Justus brought up, namely whether positive repercussions of German companies situated in the Rustbelt are already visible. Also, Gregory, you stated that biggest hinderance to transatlantic relations comes from the US side. How then do you see the US embrace these German investments and companies in a narrative that commends transatlantic ties?
Hi Christin and Justus,
Thank you for your input and great questions, I hope to hit everything you both brought up in one response. First I think that foreign investment and especially the kind that brings jobs force politicians to be more moderate about direct investments from those countries. For example, while Trey Gowdy the congressman from South Carolina district that BMW’s largest factory is located, is extremely conservative and he has still supported pro growth and investment measures and has publically thanked (via his facebook page) BMW for expanding the plant in his district. I think examples like this show that even the most conservative politicians can embrace these investments and support the transatlantic narrative as a result.
Hi Gregory,
thanks for the information! The case of Trey Gowdy sounds promising. Your plan could be an important cornerstone of a new transatlantic partnership.
Cheers
Justus
Hi Gregory,
Thanks for your article. I fully support all of your points. While political pundits and the media focused on large cities on both coasts of the United States, they ignored the region that led to Donald J. Trump’s victory on November 8, 2016. That is why I also think it is right about time to focus the states that were considered „flyover states“ for the last years. An example could the dissociation of economic and social development in eastern Germany from that in the former Bundesländer. The United States as well as Germany forms a multitude of regions which are different in many regards, and I think that the best way of exploring this is by touring cities that could not be more different. Only more study trips or guided tours give people the opportunity to see famous metropolitan urban areas and to see different approaches to reinventing cities and overcoming structural issues.
Greetings
Tim
Hi Tim,
My thoughts exactly. It has been my overwhelming impression from living in both a rural areas, and several major metropolitan areas in the U.S. that people living in urban areas largely support transatlantic relations and do not need to be convinced of the benefit. Further when European delegations only tour these regions they are in a large part preaching to the choir. However my experience from the more rural regions of the country is that those people would be open to the idea but have largely been left out of the debate. As such your proposal for more trips to these kinds of places I feel would go along way in helping transatlantic relations.
Hi Gregory,
As someone from the Midwest (Wisconsin) and familiar with rural-America, I appreciated your emphasis on reaching the rustbelt and those who feel left-behind in today’s current political scene. In order for your idea to work though, I see economic betterment on those communities as a first priority. Only after those areas have increased economically, do I think the people there would be open to education or propaganda regarding transatlantic relations.
Additionally, do you see propping up these areas, specifically Detroit and the auto manufacturing, as a step backwards? While I would like to see these areas again, I can’t help but think that the industrial revolution has passed for a reason. What other European investments could economically better these areas besides industrial routes?
Kind regards,
Lindsey
Hi Lindsey,
I think you make a great point and I would agree that there are a lot of negative aspects of industry that are not desirable. That being said I think that manufacturing is still a vital industry in the US from both a strategic standpoint as well as economic one so I would not necessarily see putting resources and especially attracting FDI as a step backwards. As to your first point about economic betterment being a precursor to susceptibility to education or propaganda, the point I was really trying to drive home with the article is that both can be accomplished simultaneously. The idea being that FDI would both economically better these communities and would serve as an incentive to being open to the transatlantic ideas. The core assumption is that people who work for and are benefitted by a foreign company investing in their community (e.g. BMW) generally will not also be opposed to greater transatlantic relations as the viewpoints are inconsistent. That being said I could be wrong on that point and I would be very interested to hear your take on that.
Hi Greg, great article — what are the levers in European policy-making to marshal this kind of investment into rural America? Would it be some sort of policy bank or countries directing their multinational companies toward transatlantic investment?
Hi Sagatom,
Thanks for commenting. To answer your question, this kind of investment already takes place on a massive scale. The idea would be to take the mechanisms that are already in place and supercharge them. To accomplish this, I think it could be achieved as you suggested, by countries directing their multinationals towards this (e.g. trade delegations following political ones), having policy banks devote more resources towards this, as well as organizations like this one creating policy and pushing for these kinds of investments.
Hi Gregory,
I cannot add more to the discussion than saying that I really liked reading your article!
Thanks for sharing this innovative idea!