Jean Monnet - The Monnet Plan

The Monnet Plan

Following World War II France was in severe need of reconstruction. To rebuild, France was completely dependent on coal from Germany's main remaining coal-mining areas, the Ruhr area and the Saar area. (The German coal fields in Upper Silesia had been handed over for "Polish administration" by the Allies in 1945, see Oder-Neisse line.)

In 1945 Monnet proposed the Monnet Plan, also known as the theory of l’engrenage, not to be confused with Schuman plan, to take control of the remaining coal-producing German areas and redirect the production away from German industry and into French industry instead, permanently weakening Germany and raising the French economy considerably above its pre-war levels. The plan was adopted by Charles de Gaulle in early 1946.

In 1946 Monnet successfully negotiated the Blum–Byrnes agreement with the United States. The U.S. forgave France $2.8 billion in debts (mostly World War I loans), and gave an additional low-interest loan of $650 million. In turn France allowed American films in its cinemas.

In 1947 France, with U.S. support, removed the Saar from Germany and turned it into the Saar protectorate, nominally politically independent and under complete French economic control. The area returned to German political administration in 1957 (economic reunification would take many years longer), but France retained the right to mine from its coal mines until 1981 (see The Europeanization of the Saarland).

The Ruhr Agreement was imposed on the Germans as a condition for permitting them to establish the Federal Republic of Germany (see also the International Authority for the Ruhr (IAR)). The IAR controlled production levels, pricing, and to where the output was to be sold, thus ensuring that France received a large portion of the Ruhr coal production at low prices.

With the 1951 German agreement to join the European Coal and Steel Community (the "Schuman Plan") the ongoing Allied dismantling of German industry was finally stopped and some of the restrictions placed on German industrial output were lifted (see The British foreign ministers' 1949 letter to Schuman).

With the entry into force of the ECSC in 1952 the last civilian production limitations placed on German industry were lifted, and the role of the IAR was taken over by the ECSC (see The industrial plans for Germany).