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Following World War II, US Secretary of State Gen. George Marshall developed a plan to aid the reconstruction of allied and occupied countries in Europe, passing as the Foreign Assistance Act in 1948. Although the law promised $5.3 billion in aid, the amount increased to $17 billion over four years of implementation. The plan was rejected by the Soviet Union and its satellites.
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In 1948 the Organisation for European Economic Co-operation (OEEC) was set up in Paris to help administer Marshall Plan. Starting operations in April under Secretary-General Robert Marjolin, the OEEC later provided the framework for negotiations on creating both the European Free Trade Area and the European Economic Community. In 1961 the OEEC would reform to become the Organisation for Economic Co-operation and Development (OECD).
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David Ben-Gurion, the Executive Head of the World Zionist Organization and the chairman of the Jewish Agency for Palestine, declared the establishment of the State of Israel. The declaration became effective upon the termination of the British Mandate over Palestine at midnight.
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In 1948 the Soviet Union blocked land and water access to Western-occupied West Berlin, in an attempt to pressure the Western Allies to withdraw the newly introduced Deutsche Mark from West Berlin and thereby roll back attempts to economically reintegrate Germany. In response, the Americans, British, and other Western nations organized airlifts to supply the 2 million inhabitants of West Berlin, eventually more than making up for the cargo that had previously been delivered by rail. Unwilling to intercept the flights for fear of provoking open conflict, the Soviets eventually lifted the blockade in May 1949.
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Yugoslavia’s relative independence from the Soviet Union was viewed with suspicion by Soviet General Secretary Josef Stalin and when, in 1948, the Yugoslav leader, Josip Tito, opted to develop his own form of socialism, Stalin responded by sternly rebuking him. In June Yugoslavia was expelled from the Cominform by the other communist countries of Europe and the following year Soviet and Hungarian forces began massing on the Yugoslav frontier. However, Tito was not intimidated and by 1953 was exploiting his position between the Eastern and Western blocs to receive aid money from both, initiating a “third way” that other countries interested in staying out of the Cold War would soon follow.
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