No. 6 - Italy and the Political Economy of Cooperation: the Marshall Plan and the European Payments Union

Following the Second World War the Marshall Plan backed the creation of the Organization for European Economic Cooperation, which led in 1950 to the European Payments Union. Thanks to well-engineered rules, the Union fulfilled its mandate, achieving currency convertibility and trade liberalization in Europe in only eight years. This paper examines the orientations of Italian policy-makers in that early period of European cooperation. Various historical sources, including some newly released official documents, show that in those years Italy's leaders aimed at closer European cooperation and integration. They viewed cooperation as the way to institute a fair, non-discriminatory set of rules that would attenuate differences among countries; whenever possible, however, they also sought to further domestic purposes and maintain a reasonable degree of independence. Relations with the United States were particularly intense in those years, reflecting Italy's need for economic assistance and political support and the central role of the US at the early stage of European cooperation. Italy was ready to accept US hegemony as long as it guaranteed a fair payoff from cooperation