In the immediate period after V.E Day there was a realization by all sides of the conflict that the Versailles Peace Treaty of 1919 had itself been one of the main catalysts to the Second World War. This meant that a new approach would need to be taken to reconstruct Europe and it would need to do so with a broader view of Europe as a whole. The Second World War inflicted appalling loses on resources, infrastructure, and, above all human lives. The war cost anything up to fifty million lives and displaced millions more. However although conditions were anything but propitious for economic growth a dramatic transformation took place over the next '30 glorious years'.

Both Eastern and Western Europe's economies were massively distorted by the demands of war; normal production ground to a halt and trade decreased further weakening Europe's position in the world economy. The subsequent result of the unprecedented destruction was starvation and inflation together with a legacy of conflict that left Europeans mentally and emotionally exhausted. The fact that the war was the first to be directly targeted at civilians, both through ethnic genocide and war

Derek Urwin; A Political History of Western Europe Since 1945 5th edition (Longman, 1997)

The West was also experiencing political stability, better labour relations and, by utilising the new attitudes in economy management, ensuring low unemployment. These factors all contributed vastly to the boom. Externally the protection that Western Europe was experiencing from the U.S.A helped growth. The Bretton Woods system that ensured exchange rate stability across the Atlantic until the 1960's was one part of this.

Social elements also affected the economies of Western states. The 'baby-boom' of the war years produced a younger and better-educated work force, who also reflected the impact of the new welfare provisions that had been constructed. As demographics changed the population was also modernised in other ways. Urbanisation began at a greater level to compliment the new industries that were developing. Also women, who had entered the work place during the war, meant that the work force was diversifying as well as specialising. Family structures were therefore changing, with the 'nuclear family' being more mobile and functional. All of these factors helped ensure that the population was becoming more affluent and adapted to the new economy. This population was also becoming more at ease with buying consumer products as the burdens of the thirties and forties gave way to a more positive looking future. More money was also being spent in new industries such as tourism and leisure. This new wealth also meant that class structures were being eroded as a new economically independent middle class emerged.

The other crucial benefit that the western states had over the communist east was the financial help they received from the U.S.A through Marshal Aid. Between 1947 and 1952 $23 billion was made available to Europe, this hard currency enabled Western economies to ensure their recovery by buying the goods they needed to reconstruct and modernise. So, while in 1946 West European production was only 8% of the world's total, by 1950 it accounted for almost 20%.

Anthony Sutcliff; An Economic and Social History of Western Europe since 1945 (Longman, 1996).

In the east, where the starting situation was far worse than

Some common words found in the essay are:
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