Light at the end of the pipeline

At the moment there is a total impasse between the President of the United States and the governments of his primary allies in Europe over that pipeline which is to carry natural gas from Siberia to Western Europe.

The President is determined to do his utmost to stop or delay the building of the line, or failing that to penalize the companies in Western Europe which are defying his program of sanctions. Some of those companies have already been hurt by the sanctions.

The British, French, West German, and Italian governments are just as determined as is the President on going ahead with the building of the line. They want the business for their companies. They have ordered those companies to defy the sanctions. They are going ahead.

Diplomats who are caught in the squeeze between the President and the governments on the other side of the Atlantic have given up serious thought of bridging the existing gap. The President will not budge. The European governments have their own prestige on the line.

Anti-Americanism is chronic in all West European countries. It rises and falls with the times and circumstances. It can always be stirred up by some demagogue. It has never been totally dissolved. It has been roused by the appearance of attempted coercion from Washington involved in the pipeline affair. No West European government would dare to give in to the President on this matter.

So how do we in the Western alliance find a way out of this impasse? Most agree that such a way out must be found. It is damaging the alliance, and hence it is damaging the interests of all its members.

The quest is on, therefore, for a new program of some sort which will satisfy the President's desire for economic pressure on the Soviet Union and at the same time recognize the determination of the West European countries to trade with the Soviets as much as is compatible with the long-term best interests of the alliance.

It sounds easy enough in theory. It may be difficult in practice. However, the Soviet experts in the West European countries tend already to agree with State Department experts that the Western countries have been unwisely lax about trade with the Soviets and with their clients in Eastern Europe. The size of the Polish debt to Western bankers is the classic example of making things too easy for the communist governments.

The London Economist, which is close in its thinking to the British Treasury and Foreign Office, has launched a proposal which ought to make sense to all NATO governments and which, if put into practice, should satisfy President Reagan in Washington.

It calls for a long-term policy of trading with the Soviets only on what amounts to a cash basis. It proposes an end to subsidized exports, an end to subsidized loans, and an updated list of high technology items which are not to be sold at all.

And why not?

Poland is in effect bankrupt. The Western banks are unlikely to get back most of the money they have for too long been loaning to the Poles. They will certainly not get all of the interest they were supposed under contract to get from those loans.

Now that there has been an abrupt cut-off on more soft loans to Poland the Poles are actually back on a net export basis. With no new easy loans to finance imports they are tightening their belts and importing only what they can pay for with exports.

The Polish experience should be a warning and a lesson. There is no long-term profit for any Western country in subsidizing exports and loans to the Soviets. There could be long-term gain from a firm policy of selling for cash, and only then items which, under an old Eisenhower rule, ''they can't shoot back at us.''

If the West Europeans could find their way to accept such a long-term policy and police their own banks and their own corporations and withhold easy credit terms - the Soviets would find themselves with some shortages, particularly in the consumer goods line. This could cause them to have to trim back on their own investments at home. It might even cause them to cut back a little on their military program.

Such a program would put more pressure on Moscow than President Reagan's sanctions which don't work because the allies refuse to go along. He could well afford to give up the pipeline sanctions in return for a general alliance policy of trade on a cash basis only. Relief from the present strain on the alliance is down that line.

You've read  of  free articles. Subscribe to continue.
QR Code to Light at the end of the pipeline
Read this article in
https://www.csmonitor.com/1982/1019/101922.html
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe