There is a perception that the presence of Allied forces in Germany and the Marshall Plan was crucial in the successful rebuilding of Germany. Also, I've heard from informal discussions with friends that reduced spending on military allowed West Germany to spend more of its budget on nation building. I want to know if the facts align with the above assertions.
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Possible duplicate of What were the post World War 2 effects on Germany?– Martin SchröderCommented Oct 3, 2016 at 1:46
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1@user14394 Instead of writing to maximum length comments, how about writing an answer we can up- or down-vote on?– CGCampbellCommented Oct 3, 2016 at 21:34
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2OP: whose perception? Heard from whom? Are your friends historians, or otherwise knowledgeable experts in related fields, or just gossipers? There are books, rather large ones, written on this.– CGCampbellCommented Oct 3, 2016 at 21:37
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1 Answer
American involvement in West Germany was very important in a number of ways. Firstly, America provided a security umbrella to the fledgling West German state. Between 1950 and 2000 the US deployed (cumulatively) about 11 million soldiers in Germany, in the 1950s this was over 3 million cumulatively. Germany was very much the centre of the European theatre during the cold war, and so received the bulk of US deployments.
West Germany however was hardly pacifist during the cold war, and by the time the USSR fell apart they had assembled a fleet of 2,300 Leopard 2 MBTs, 90% of which were sold or scrapped thereafter. Comparatively today the USA has about 8,100 Abrams MBTs.
Additionally the Allied occupation conducted extensive de-Nazification efforts to expunge Nazism from Germany, thus changing German culture.
The Marshal plan provided a non-trivial gift to West Germany of $1.4bln... which adjusted for inflation is worth $14bln in today's money. But the Marshal plan wasn't the only economic perk received. In 1953 the London Conference saw a significant agreement on debt forgiveness for West Germany, which spurred greater economic growth in combination with the Marshal plan. To quote "The Economic Consequences of the 1953 London Debt Agreement":
In 1953 the Western Allied powers implemented a radical debt-relief plan that would, in due course, eliminate half of West Germany’s external debt and create a series of favourable debt repayment conditions. The London Debt Agreement (LDA) correlated with West Germany experiencing the highest rate of economic growth recorded in Europe in the 1950s and 1960s... We find evidence that debt relief in the LDA spurred economic growth in three main ways: creating fiscal space for public investment; lowering costs of borrowing; and stabilising inflation. Using difference-in-differences regression models comparing pre- and post-LDA years, we find that the LDA was associated with a substantial rise in real per capita social expenditure, in health, education, housing, and economic development, this rise being significantly over and above changes in other types of spending that include military expenditure... Finally, the German currency, the deutschmark, introduced in 1948, had been highly volatile until 1953, after which time we find it largely stabilised.