Postwar: A History of Europe Since 1945

by Tony Judt

German coal was a vital resource for French steel manufacturers. But until its political future was resolved Germany’s economy—for all its restored potential—remained frozen, effectively blocking the economic recovery of the rest of the continent. The second problem concerned not Germany but the USA, though the two were connected. In 1938, 44 percent of Britain’s machinery imports by value came from the USA, 25 percent from Germany. In 1947 the figures were 65 percent and 3 percent respectively. The situation was similar in other European countries. This sharply increased demand for American goods was, ironically, an indication of an upswing in European economic activity—but to buy American products or materials required American dollars. Europeans had nothing to sell to the rest of the world; but without hard currency they could not buy food to stop millions from starving, nor could they import the raw materials and machinery needed to move forward their own production. The dollar crisis was serious. In 1947 the UK, whose national debt had increased fourfold since 1939, was buying nearly half its total imports from the USA and fast running out of cash. France, the world’s largest importer of coal, was running an annual payments deficit with the US of $2,049 million.