Western Europe's Economic Might Is Key To Stability in the East

Preventive medicine is always easiest. The best tonic for the region's fragile democracies is a measure of economic prosperity, which depends upon the opening of EC markets. According to a comparison with League of Nations data, trade last year between Poland, Czechoslovakia, Hungary and Western Europe is now at only one-fifth of 1928 levels. There is great potential in the East for much higher export earnings, which can be turned into the investment needed to make reform work.

But 1928 is a warning as well. After the Great Depression began the following year, West Europeans protected their agriculture, helping lead the East to economic ruin and dependence upon Nazi Germany. This time round the East is suffering its depression alone, and the rich West is once again manning the protectionist walls. Loans are little more than a salve to the conscience if the EC refuses to buy the goods they finance.

The EC should offer to renegotiate the association agreements on the basis of substantially freer trade, especially in the admittedly touchy areas of agriculture, textiles, and steel, all aimed at halting the politics of bitterness in the East, not least in the new Slovakia. Such a move would renew the idea of a return to Europe, an idea which serves as a goal for the region's reformers. The example of the EC's prosperity is the light at the end of the tunnel for citizens who must bear the pain of reform . Such a change in EC policy, then, would not only ease this pain, it would restore the EC as an example of free markets.

Freer trade is also in the direct interest of the EC itself. On the economic side, freer trade with Poland, Hungary, Slovakia, and the Czech Republic will supply cheaper goods to the EC, enrich a new market of 60 million consumers, and prevent the East from becoming a long-term aid burden.

Politically, freer trade would help resolve one of the most divisive issues among EC members: whether the Community should be "deepened" (by moving closer to political union) or "broadened" (by admitting new members). The protectionist association agreements worsen this conflict by encouraging the East Europeans to press for full membership before they are ready, because membership has become the only path to the free trade they need. Freer trade would thus delay Eastern demands for membership, and foste r the prosperity that will make these countries more suitable applicants in the long run. That would give the EC time to deepen, and a real chance to broaden as well.

Whether the new democracies in Eastern Europe will be a problem or a opportunity depends largely on the approach the EC chooses. It is time for the EC to set aside its passivity and use its economic power to help the East Europeans help themselves.

Page: 1 | 2