Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.comment From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Europe's unfolding power struggle Date: Sun, 15 Nov 92 16:56:27 EST Message-ID: \SE B;COMMENTARY \HD Europe's unfolding power struggle \BY Curtis Hoxter It is widely agreed that the Western nations are presently so occupied with their immediate national and regional problems that dealing with the demands and reguirements of Eastern and Central Europe has secondary priority. Deep disappointment can be noted in these latter nations because when they overthrew the yoke of communism they expected more and got even less. Behind it all is a real revolution, the end of which is certainly not in sight. The termination of the Cold War, a thaw that engulfed all of Europe, has led to the end of the stability that highlighted the Europe from the end of the '40s to the '80s. Eventually, all the institutions that upheld that stability, for better or worse in terms of the value of the organizations and their contributions to the welfare of their countries, will likely disappear - from NATO to the Warsaw act, to the Western European Union, the CSCE, etc. What is termed as an "myopic attitude" has emerged since the collapse of the Berlin Wall, mainly because active balancing between East and West was no longer necessitated. This was indeed a situation accompanied by an acute feeling that a larger Germany was threatening the carefully constructed post-World War II West European unification. The aspirations of the Eastern-Central Europeans, as they propelled themselves much too fast from state-owned to free-market oriented economic-financial structures, were condemned to disappointment with the realization that the process was not all to the liking of the original, charter members of the European Community. Early indications have come forth with the realization that the key Eastern countries - Poland, Czechoslovakia, and Hungary - needed outlets to the West in order to survive in the new political and economic environment. Association arrangements with the E.C. were tendered, said to be specifically designed to expedite and pave the way for transition to E.C. membership, but not before the new century. Such targets were seen by the policy-makers to encourage economic-financial reforms and to cement democratic institutions. To meet what was eventually interpreted as economic convergence with the European Community, the Eastern Europeans claimed they needed to double their GNP by the end of this century; to accomplish this, the estimates came up to the requirement of $100 billion in investments annually over that period, mainly from the West. Instead of getting the capital inflows, the Eastern Europeans ran straight-on into the economic-financial decline of the Western European nations plus Japan and the United States, and, in addition, encountered the full impact of Community protectionism. Since farm products are Eastern Europe's key export earners - Poland's grain production is second only to France in Europe, its potato crop is equal to all of Europe put together, and Hungary is a most cost-efficient producer of meat - the Community has let it be known that it has no intention of letting the East Europeans sell cheaper agricultural items to its consumers. This was dramatically brought out by last year's French refusal to allow Hungary to export an extra 550 tons of beef into the Community in the first year of formal association. Another issue confronting the delicate East-West relationships is the fact that the Community, from the signing of the Treaty of Rome on, has insisted that closer economic-financial ties will sooner or later lead to growing political cooperation, avoiding even localized conflicts on the broader European continent. The approach was evidently made without the realization as to how complex the inter-European situation has turned out to be without the old common enemy - the Soviet Empire. On the other hand, in Eastern Europe, to cite an example, the political and economic issues are intertwined as is vividly shown by the recent emergence of conflicts in Yugoslavia, the internal political fights in Poland and Czechoslovakia and even the nationalistic backlash in Hungary and the various ethnic encounters throughout the area. All this has convinced the Eastern Europeans that the so-called Community - controlled evidently by the dirigiste French and supported by the politically subservient Germans - while calling itself European in actuality represents only the Western half of the Continent and appears to insist on maintaining that status quo. What will likely open up the situation is that an ultimate rejection or even alteration of the Maastricht Treaty may cause all kinds of troubles and situations for all of Europe since Germany cannot remain aloof from a possible economic and political collapse in Eastern Europe. In addition, France alone will not be able to compete with German economic power and influence in the region. It all could lead to an insulation of Western Europe from the still growing troubles of the East. Collapsing economies are visualized all over Eastern Europe, led by the newly emerged nations of the old Soviet Empire. But with the recent turmoil in the currency sector, the Western Europeans cannot do much more than to eventually settle down within the confines of the 12-nation grouping. Italy, Spain and Great Britain are fiscal and financial basket cases and will likely put resolution of the needs of Europe on the back-burner. A new power game, said a competent European observer the other day, is evidently emerging: Former communist nations, confined to a kind of buffer zone between a still decaying Soviet Empire and an inhospitable West, will have no choice (as Slovakia and the Yugoslav Federation nations also have not) but to bring together their own regional alliances and emphasize their own disputes and nationalistic endeavors. Whether the United States can stand apart and let Eastern Europe ultimately go to pot, as most observers expect, is a point of conjecture and a serious challenge to the next administration. Curtis J. Hoxter is an economic and public relations consultant in New York City. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM