U.S. Military Assistance to Europe, NATO’s Military Build Up, and the Start of Intra-European Economic Cooperation, 1947-1955

Abstract

This contribution pinpoints the interconnectedness between Nato's military buildup at the start of the Atlantic Alliance under the umbrella of U.S. military assistance to Europe, the revamping of a few manufacturing sectors that it fostered across Western Europe, and the early steps in the making of intra-European economic integration through cooperation in military productions. After an introduction, section two cast light on the early U.S. bilateral military assistance programs to western European nations prior to the founding of the Atlantic Alliance. This early U.S. military assistance was based on the transfer of military spare parts, end-items and machine tools and took place without entailing the foundation of full production capacity across Europe. Section three makes sense of the transition from U.S. bilateral assistance to the multilateral structure of NATO’s coordinated production programs, which since 1950 combined military rearmament defence target with domestic economic expansion in each NATO’s member states, close industrial and trade cooperation among them, and continued targeting of dollar gap in Europe through a system of coordinated productions placed by NATO and paid for in U.S. dollars based on a principle of financial burden-sharing among the member nations. Section four pinpoints the evolution of this multilateral procurements system, the OSP programs, through the case study of ammunition contracts and NATO’s infrastructure programs, which served as a flywheel to introduce higher technical content in both high capital intensive and low technological content European firms. After shedding light on the influence of Cold War confrontation on the placing of OSP contracts by the mid-1950s and the ill-functioning of multilateral productions (section five), the article rounds off by stressing how the OSP programs were on the whole successful in combining trade integration, financial stability and technological drift under the umbrella of orders placed and rewarded either by NATO or the Pentagon.