How Europe became an American vassal

Every news piece from Europe is about their inability to grow, the answer is hidden in history

Oct 17, 2025

What gives money value?

The need to pay for certain things only through that tender.

Say, I invite you to my private island and you graciously accept my invitation. Once you arrive there, to your dismay, you find out that instead of a guest, I treat you as a servant. You need to undertake work around the property to earn a currency that I issue called Vivek’s Coupons. You need the coupons to pay for the food whose supply I control. Also, the boat that you need to take to get off the island has to be paid for as well, with the same Coupons.

If I had invited 4 people, you would probably start trading for goods and services using the coupons. Suddenly, Vivek’s Coupon has become a currency.

In the case of any government, by accepting taxes only in its currency, it makes it necessary for a person to earn that currency. The other way to make a currency really valuable is to issue debt in the currency.

For the longest time, I thought the Dollar Supremacy was the result of the Bretton Woods agreement and the subsequent agreement with Saudi Arabia for dollar-denominated oil trade. Turns out it was the Marshall Plan which provided the dollar with its supremacy.

America had become the production powerhouse of the world by the end of the Second World War. In the aftermath of the World Wars, the capacity to produce still existed, but with Europe lying in tatters and with the rest of the world barely beginning to get over the colonial hangover, no nation could buy all the stuff that the US could produce.

The population of the US in 1950 was 154 million, and there was only so much that those people could consume. The growth fuelled by the War Economy was gone.

George C Marshall, the US Secretary of State at the time, introduced the European Recovery Program, also known as the Marshall Plan. Over 4 years, from 1948 - 1952, a total of $13 billion was given to 14 countries in Grants and Loans. This equates to about $175 billion in today’s money.

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Source: Wikipedia

Grants were essentially goods produced in the US that were exported to Europe free of cost. The grants kept the US economy chugging along smoothly with a captive market available across the Atlantic.

Loans had to be gradually repaid. If you have to repay loans in US dollars, you need to earn US dollars. This implied that many of the Western European nations had to build a US-centric economy.

FRANCE PREPAYS BIG DEBT TO U.S.; Most of $293,400,000 Is for Marshall Plan Loan-- $112,500,000 Gold Bought FRANCE PREPAYS BIG DEBT TO U.S.

Source: New York Times Archives, 1962

Germany paid back a billion dollars to the US by 1966. Britain was the last to clear all the World War debt, which it did in 2006.

The payments of $83.25m (£42.5m) to the US and US$22.7m (£11.6m) to Canada are the last of 50 instalments since 1950.
The amount paid back is nearly double that loaned in 1945 and 1946. “This week we finally honour in full our commitments to the US and Canada for the support they gave us 60 years ago,” said Treasury Minister Ed Balls.
Source: BBC

And like that, with a mere 1 billion in loans, half of the European continent was forced to earn the American currency to repay it. This, coupled with the ready use of the USSR as the boogeyman, thanks to the Cold War dynamics, resulted in ever greater alignment with the wishes of the US.

The Hangover

The European nations paid off the loan, and by the 1990s, the USSR had split. Despite this, Western Europeans have not shown the backbone to go against the Americans since the Marshall Plan. Despite the large number of protests against the genocide in Gaza, the governments have been reluctant to come forward and call it out. The only reason I can see is the American alignment with Israel.

The EU capitulated the moment Trump mentioned tariffs and signed an extremely one-sided agreement within a matter of weeks.

The EU has forgotten that there once was a time when each of those nations made decisions without the shadow of America hanging over them.

The result: A secular decline on the world stage.

Share of Global GDP - UK