How should a Marshall plan for Ukraine work? | Barry Eichengreen

The west should help rebuild after the Russian invasion – and it can learn lessons from the 1940s

  • Russia-Ukraine war: latest updates

Talking up a Marshall plan for Ukraine is a popular sport nowadays. The game starts by tossing out a figure for the cost of reconstructing Ukraine from the ravages of the Russian invasion – $250bn (£203m) or $500bn or $1tn, depending on assumptions about how much is destroyed, the cost of caring for refugees, and so forth. The overall cost of the postwar Marshall plan is then compared with US GDP in 1948, when the program started. This typically leads to the conclusion that the cost of Ukrainian reconstruction relative to the size of the donor countries will be in the same ballpark as the Marshall plan.

These kinds of comparisons are not, in fact, the best use of Marshall plan history. It is impossible to put a number on the cost of reconstruction as long as there remains uncertainty about the duration of the war and how much territory will be controlled by Ukraine’s legitimate government. Just because the US was prepared to provide postwar Europe with nearly 5% of its 1948 GDP, spread over four years, tells us nothing about whether this is the right level of support for Ukraine.

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