Ade Available to Infuse New I Nvest- Ment Into the Veins of Industry and Agriculture

Home , Peaceful Revolution

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Periodical 8/1990

THE

COMMUNITY A D ITS

EASTERN NEIGHBOURS

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EUROPEAN DOCUMENTATION **=-=* * :..* * ,!"

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A wind .of change is blowing through Central and Eastern Europe. Allian- ces and infrastructures which have been in place for the past 45 years have collapsed and are in the course of being replaced. Most Centralilnd East European countries wish to have close links with the European Community and eventually to join it.

This booklet explains what the European Community is doing to help its Eastern neighbou rs. Money has been made available to infuse new i nvest- ment into the veins of industry and agriculture. New infrastructures are being set up to give them better access to the markets of the West and to stabilize and improve their food supply. Particular attention is being paid to the protection and improvement of their environment.

The booklet concludes with thumb-nail sketches of the European Commu- nity's ' future partners' and a description of its relations with the Soviet Union.

ISBN 92-826-1835-8

OFFICE FOR OFFICIAL PUBLICATIONS Of) * OF THE EUROPEAN COMMUNITIES 11111111/111 II IIII! 111I1 * * * L-2985 Luxembourg 9 789282 618356 THE EUROPEAN COMMUNITY AND ITS EASTERN NEIGHBOURS

Manuscript cornpleted in October 1990 Cover: Prague, the Charles Bridge (Photo: Benelux Press) Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 1990

ISBN 92"826-1835-

Catalogue number: CB-59-90-160-EN-

(S) ECSC-EEC-EAEC, Brussels. Luxembourg, 1990 Reproduction is authorized, except for commercial purposes, provided the source is acknowledged.

Printed in the FR of Germany CONTENTS

A HISTORIC CHALLENGE

. THE PEACEFUL REVOLUTION (iJ . A COMMON HERITAGE (iJ . EC RELATIONS WITH EASTERN EUROPE ITJ

THE ROLE MODEl OF THE EC

. LEGITIMATE ASPIRATIONS (1QJ

. EFFECTIVE AND IMMEDIATE AID

. SPECIAL ASSOCIATION AGREEMENTS Free trade Economic and technical cooperation Financial assistance Political dialogue . A STIMULUS TO SELF-HELP lBJ . THE MULTILATERAL FRAMEWORK (ill ThePhare programme The European Bank for Reconstruction and Development

PROFILE OF FUTURE PARTNERS

UNKNOWN NEIGHBOURS (12J Poland Hungary Czechoslovakia Bulgaria Romania Yugoslavia THE EC'S RElATIONS WITH THE SOVIET UNION

FURTHER READING HISTORIC CHALLENGE

THE PEACEFUL the European Commission, has been at the REVOLUTION centre of combined western efforts to support the economic liberalization process in The peaceful revolution which swept Eastern Eastern Europe through the Phare pro- Europe in 1989 is probably the most signifi- gramme. cant event in global terms of the past 45 The Phare programme was set up by the years. It is happening on the very doorstep of seven-nation Western Economic Summit (the the European Community. It represents a so-called G-7) in July 1989. The initial aim challenge and an opportunity to which the was to coordinate Western aid to Hungary EC has given an immediate response. and Poland, the first East European countries The Community and its Member States to strike out on the reform road. In 1990 its thanks to shared traditions and background, scope was extended to cover the other coun- are uniquely placed to help their Eastern tries of Central and Eastern Europe. neighbours on their way back to democracy. But these developments are only a beginn- The Community, with more than 30 years of ing. The time when Europe was divided into experience in bringing small and medium- three distinct regional economic groups sized nations together in an economic unit the Community, EFTA and Comecon - also serves as a model for bringing market- now changing. The map is being. redrawn driven economic policies to the eastern part with the Community firmly atthe heart of the of the continent. new Europe. This Europe is set to emerge as Together, the revolution in Eastern Europe a new force .in the balance of world power and the EC's programme to complete its a fact already recognized by the United single market by 1993 are changing the States of America, Japan and the Soviet political and economic architecture of Union. Europe. Germany isheing united. A new set of relationships has been created between the Community and its European Free Trade Association (EFTA) partners as well as with its A COMMON HERITAGE neighbours in Central and Eastern Europe. Throughout the period of the cold war, and The emerging democracies in the East are despite the limited ability of Eastern Europe part of the new Europe just as they were part to import western products, EC firms did of mainstream Europe until their former more than their American or Japanese com- Communist rulers shut them off from their petitorsin maintaining commercial flows Western neighbours at the end of World War between East and West. Over the years, the II. Traditional contacts were lost, turning Community has kept a discreet but open- Eastern Europe into unknown territory for door attitude towards its Eastern neighbours two generations of EC citizens. who were part of Comecon, the Soviet-led Until then, culture and commerce inter- economic grouping. mingled freely. Mitteleuropa, which covered From modest roots, these contacts grew parts of what were to become both East and rapidly between 1988 and 1990 with the West, was not just a geographic notion. It vir- conclusion by the Community of trade and tually came to mean a way of life. cooperation agreements with East Germany, Czechoslovakia was among the most highly Hungary, Czechoslovakia, Poland, Bulgaria, industrialized countries of the whole the Soviet Union and Romania. At the same Europe in the 1930s with a standard of living time, the Community, and more especially that was comparable to that of Switzerland. The Eastern Europeans have played their part 1953, followed by dramatic (and sometimes in the great cultural, scientific, political and violent) events in Poland , Hungary and economic rnovements that have shaped the Czechoslovakia over the following 30 years history of Europe. and culminating in the almost bloodless The Renaissance and the Reformation tou- revolutions in one East European country ched the whole continent. Copernicus is one after another in 1989. of Europe s greatest scientists. East Euro- The movement, begun in Poland and peans played a crucial role in the defence of Hungary, accelerated during the year to Europe against outside invaders. They were reach Czechoslovakia East Germany, part of the power struggles and patterns of Bulgaria and finally Romania by year s end. alliances that marked much of Europe Each of the six countries has taken its own history. Eastern Europe houses part of the route towards pluralistic democracy and a continent' artistic and architectural market-driven economy. heritage. East Germany is now part of the Federal The desire of its peoples to return to the fun- Republ ic. The first free elections were held in damental principles of freedom and the other countries during the first half of democracy has always been present, rising 1990. Each of the East European countries is irrepressibly to the surface at regular inter- grappling with its own set of economic vals, starting with the East Berlin uprising in social , political and sometimes ethnic pro-

A COMMON RESPONSIBILITY

Each day in Central and Eastern Europe Europe, and with Yugoslavia in so far as change is asserting itself more strongly. they are committed to this path, closer Everywhere a powerful aspiration toward and more substantive relations based freedom, democracy, respect of human upon an intensification of political rights prosperity, social justice and dialogue and increased cooperation in peace is being expressed. . . The Corn- all areas: munity and its Member States are fully conscious of the common responsibility Extract from the Declaration on Central which devolves on them in this decisive and Eastern Europe by the European phase in the history of Europe. They are Council (of the Community s Heads of prepared to develop with the USSR and State or Government) the other countries of Central and Eastern Strasbourg, and December 1989.

blerns. Yugoslavia, with its own brand of neglect. Environmental pollution was out of communism, was never a part of Comecon. control. But it is going through the sarne revolu- tionary process as the others. The model to which the peoples of Eastern All the countries of Central and Eastern Europe aspired in terms of freedom and liv- Europe share commOn characteristics. Their ing standards was that of the European Com- economies were in a state of near collapse; munity. They saw how 12 countries of there had been virtually no investment in Western Europe had decided to form a fully plant and equipment in recent years; in- integrated market complemented by (IJ frastructure was suffering from similar monetary and , eventually, political union. Moreover, the single market project, by put- the EC internal market is achieved, many East ting Eastern Europe before the prospect of European countries even before 1989 had having to face a powerful and compact begun looking at ways to break out of the fur- economic bloc, probably helped make ther economic isolation they risked once the several communist regimes aware of the internal market becomes a reality. near-bankrupt state of their economies. Just The genesis of today s level of cooperation as the EFTA countries were concerned at los- goes back a long way. ing market share and competitiveness once

A COMMON HERITACE AND CULTURE

The European Council expressed its mitment to democracy, pluralism, the deep satisfaction at developments inCen- rule of law, full respect for human rights, tral and Eastern Europe. It applauds the and the principles of the market continuing process of change in these economy: countries with whose peoples we share a common heritage and culture. This process of change brings everdoser a Europe Extract from the conclusions of the which, having overcome the unnatural Presidency, meeting of the European divisions imposed on it by ideology and Council confrontation, stands united in its com" Dublin 28 April 1990.

EC RELATIONS WITH limited working relationship with Comecon EASTERN EUROPE but insisted that in parallel there should be trade agreements with any of its members Contacts between the Community and who wanted one. Eastern Europe began in the early 1970s but The Community resisted the Comecon ap- at Russian insistence, these were initially proach for several reasons. Comecon was channelled through Comecon. The Com- clearly seeking to reinforce its international muntiy made a first offer in 1974 to conclude legitimacy through creating formal links with a series of trade agreements with individual the EC Comecon countries and repeatedly restated But more importantly, the Community con- this willingness. sidered that Comecon did not have the struc- Only Romania responded and an agreement ture or authority to be an equal partner. The was signed in 1980, although limited accords organization was dominated by the Soviet on steel and textiles were signed with a Union. The degree of economic integration number of others. and shared decision-taking was more limited The main obstacle to normal trade relations than that in the Community. Comecon had between the Community and Eastern Europe no authority to negotiate on trade and other was Comecon s insistence that it deal with issues on behalf of its members. the Community on behalf of its members. Exploratory meetings did take place bet- The Community was prepared to establish a ween the European Commission and the (23 Comecon secretariat from 1978 onwards, but The declaration opened the way for the little progress was made. If formal contacts negotiation of the individual trade were restricted during this period, trade rela- agreements. These have been concluded tions were also limited. By 1986, exports with the Soviet Union and with all the East from the EC to Comecon still accounted for European countries. a mere 7% of the EC's external trade, the bulk of it with the Soviet Union. The first to sign an agreement was Hungary It was in 1986 after Mikhail Gorbachev came in September 1988 to be followed by to power that Comecon signalled its Czechoslovakia (December 1988), Poland readiness to accept the Community' s double (September 1989) the Soviet Union approach, agreeing to the principle of a (December 1989) and East Germany and framework agreement with the Community Bulgaria (both May 1990). The initial, limited but leaving trade matters to be negotiated by agreement with Czechoslovakia was up- its individual members. Thereafter the pace dated in May 1990. accelerated. The agreement between the Commun ity and Butthe rapid pace of events in Eastern Europe Comecon, signed in Luxembourg on 25 June has al.so forced the EC to develop additional 1988, took the form of a Joint Declaration new responses. These so-called first-genera- under which formal relations between the tion trade agreements are modest in- two were established. The two sides under- struments with which to meet the challenge took to cooperate in areas where they were of helping the emergence of democracy and competent and where there is a common in- a market economy in Poland and Hungary terest. and the rest of Eastern Europe.

(II RECENT DEVELOPMENTS IN EC-EAST EUROPEAN RELATIONS

Here is a brief summary of the most significant recent developments in relations between the Community and Eastern Europe: 1. June 1988: a delegation of Comecon countries signs a Joi'nt Declaration in Luxembourg with the EC agreeing on mutual recognition of the two organizations. 2. September 1988: a cooperation agreement is signed between the EC and Hungary. 3. December 1988: a trade agreement is signed with Czechoslovakia. 4. July 1989: the G-7 summit in Paris gives the EC the task of coordinating Western aid to Poland and Hungary. The so-called Group of 24 is created. 5. September 1989: the EC signs a trade and cooperation agreement with Poland. 6. November 1989: the EC Heads of Government hold a special Summit in Paris to discuss aid to Eastern Europe. On the eve of this summit, EC Foreign Ministers agree a common strategy for easing Comecon restrictions on high- technology exports to Eastern Europe. 7. December 1989: the EC Summit in Strasbourg agrees the creation of a Euro- pean Bank for Reconstruction and Development for loans to Eastern Europe. 8. December 1989: the Group of 24 meet in Brussels to define their aid programme for Poland and Hungary and to express willingness to help other East Europeans 'once the necessary pol itical and economic reforms' havebeen put in place. 9. December 1989: the EC and the Soviet Union sign a trade and economic cooperation agreement. 10. April 1990: a special EC Sum mit agrees arrangements for incorporating the German Democratic Republic into the Community. Community leaders also decide to offer a new type of association agreement to individual East Euro- pean countries. 11. May 1990: the German Democratic Republic and Bulgaria sign trade agreements with the Community. The 1988 agreement with Czechoslovakia which was limited in scope, is updated. 12. May 1990: the Group of 24 agree to extend the Phare programme to other Central and East European countries. 13. July 1990: the German Democratic Republic enters a monetary and social union with the Federal Republic. 14. October 1990: The two parts of Germany are united within the Federal Republic. (II THE ROLE MODEL OF THE

LEGITIMATE ASPIRATIONS diffic:ult for them to export to the Com- munity. Immediately after its victory at the polls in The Community is aware of the aspirations April 1990, Hungary s Democratic Forum and concerns of its Eastern neighbours. But which headed the winning c:oalition , said early membership of the Community is ex" that membership of the European Commun- eluded fora number of reasons, both ity would be the new government's principal political and economic:. For one thing, the foreign policy priority. Leaders of other Cen" countries of Eastern Europe need to con- tral and East European countries have made solidate their commitment to pluralist similar statements. democ:racy and to a market-driven economic The European Community is a magnet for system. East European reformers. This is principally In strictly technical terms, the economies of because of the Community's record of the countries of Central and Eastern Europe democracy and balanced economic: growth. are in no condition to withstand the shock of Their aspirations to belong to such an order free market competition. Despite their keen- are legitimate. But there is also a necessary ness to join the EC, even Czechoslovak element of self-interest. East European coun" leaders whose country is the most tries are .concerned lest the c:reation of the developed of the region - know they will post-1992 single market will make it more have to wait.

QQJ Prague: Czech youth in historical setting (photo: Marc Riboud, Magnum) Several years of deep-going reform and privatize their economies, although none of restructuring are clearly required first. the others has gone as far as the radical Another major reason for putting off reforms being implemented in Poland. membership is the Community's own deci- The Community has taken immediate action sion not to consider a further enlargement to support efforts to develop market-oriented until the single market process is completed. policies, to grant these countries better ac- This means that even current applications cess to Western markets, to provide financial already submitted by Austria, Turkey, Cyprus aid, to offertechnical assistance and training, and Malta will not be considered until after to facilitate foreign investment, and to help 1992. clean up the environment. The reorientation of trade towards hard-currency markets is a top priority for each of them, hitherto restricted by their Comecon EFFECTIVE AND IMMEDIATE commitments to doing a large part of their AID trade with each other. Central and Eastern Europe (including the Soviet Union) accOUnt In the light of these constraints, the Com- for only 6% of the Community's external munity has focused on short- and medium- trade. The comparable figure for the much term support for the reform processes which smalierEFTA countries is 25%. are under way. It has taken steps to open its East European countries are already taking markets to East European exports, and has steps to reduce their soft-currency trade with put in place a range of actions and program- Comecon. During 1990, the Community mes both on its own initiative and in replaced Comecon as Hungary s principal cooperation with other Western countries. trading partner, while Comecon s share in Many of these are already operational. Czechoslovakia s trade dropped from 60 to The Phare programme, which the Commis- 50% in the course of the year. To help its ac- sion is coordinating on behalf of the 24 cess to EC markets, Czechoslovakia an- donor countries, is the most wide-ranging. nounced that it would be manufacturing to The Community' project to conclude West European norms and standards by the special association agreements with in- end of 1992. dividual Central and East European coun- There has also been a structural imbalance in tries is the most ambitious. their trade with the Community. Their big- In each case, the Community has made the gest export items have been raw materials continuation or extension of its aid condi- fuels and basic products like steel and tional on the consolidation of democracy plastics. The main products imported from and progress towards a market economy by the Community have been products of con- the recipient country. siderably more added value: engineering The States of Central and Eastern Europe products and transport equipment followed have met the challenge. Democratic multi- by other manufactured goods and chemicals. party elections have been held in all of them Details of Community trade with individual except Yugoslavia (at least at federal level). East European countries are given on the The results of the votes have varied from table below. The Community has a trade country to country. All have begun im" surplus with Hungary and Bulgaria and a plementing programmes to liberalize and deficit with the others.

!ill COMMUNITY (EUR 12) TRADE WITH EAST EUROPEAN COUNTRIES, 1986-

(million fCU) Imports Exports Trade balance

1986 1987 1988 1986 1987 1988 1986 1987 1988

USSR 13 158 13 128 12 988 9874 9189 10113 3 284 3 939 2 875 GDR 1626 1 390 1400 1072 1086 1 264 554 304 136 Poland 2947 2907 3359 2388 2332 2755 559 575 -604 Czechoslovakia 2108 2055 2211 1 944 2078 2170 -164 -41 Hungary 1 888 1 996 2158 2450 2372 2354 562 376 196 Romania 2483 2429 2234 987 651 614 1 496 1 778 1 620 Bulgaria 549 517 461 1472 1453 1406 923 936 945 Albania 125 -60

Total 24 884 24478 24 883 20 252 19217 20743 -4 632 5 261 -4 140

Source: Eurostat. SPECIAL ASSOCIATION Free trade AGREEMENTS The aim of the agreements is to bring about the phased introduction of two-way free Although the first generation trade and trade. The step-by-step approach will take ac- cooperation agreements lift quotas and other count of the specific reforms under way quantitative restrictions on exports from the each country as they concern prices, sub- EC's East European partners, they do not con- sidies, taxation, monetary policy, currency tain any element of tariff preference to convertibility and its system of foreign trade. facilitate their access to the Community The aim of the reforms is to align their market. Nor do they provide for statutory national systems with the open system of financial aid. multilateral trade. and global competition. trade objective, Butthey can bebuilton. They are the starting In moving towards the free- and point for the second-generation of associa- the Community will reduce its tariff other import barriers more rapidly than part- tion agreements or ' European agreements' of a totally new kind. These agreements would ner countries. Associated countries would open their markets for Community goods ac- even go beyond the free-trade accords which the Community has forged with the in- cording to a flexible timetable and one which reflects their specific situation. dividual countries of EFTA. Once the economies of the associated coun- Although the Community has a first"genera- tries have succeeded in bringing themselves tion agreement with theSoviet Union, itdoes close to the level of the Community, negotia- not intend to include the USSR in the net- tions can begin on the free movement of per- work of association agreements. The size of sons, services and capital. Their economic the Soviet economy and its particular pro- legislation could also be harmonized with blems require a different cooperation that of the Community. framework. The association agreements are to consist of Economic .and technical cooperation four essential elements: This cooperation will reinforce the structural (i) free trade between the country concerned changes undertaken by the associated coun- and the European Community; tries, contributing to their integration into the (ii) industrial technical and scientific world trading system. Prime focus will be on cooperation; measures to facilitate technology transfer (iii) a pluriannual programme of financial and direct foreign investment. assistance; Actual cooperation projects will cover areas (iv) the.creation of a mechanism for political such as professional training, the environ" dialogue. ment, the modernization of agriculture and The agreements would constitute an end in of agri-industries, the renovation of industrial themselves. They are not a transitional phase structures, science and research , energy, on the road to membership of the Commun- mining, transport, tourism and other ser- ity; neither do they exclude the possibility of vices, telecommunications health and an 'associated' country applying subse- medical equipment, standards and norms. quently to join the EC Their implementation would be conditional Financial assistance on internal progress by the partner country The Community will offer a set amount of concerned in the area of the rule oflaw, the credits for each associated country to finance respect for human rights, the maintenance of cooperation and technical assistance. The a pluralist democracy and the degree of Community is already committed to spen- economic liberalization. ding ECU 2 billion in assistance to Central and East European countries in the 1990- countries in the area of export credits or ex- period. port insurance guarantees. The financing of projects which promote in- vestments in the private sector will benefit Political dialogue from a particular priority. Financial The association agreements will provide the assistance may take the form of subsidies institutional framework for a political (technical assistance, interest-rate rebates) or dialogue between the Community and each loans (European Investment Bank, the Euro- of its partners. It will enable views to be ex- pean Coal and Steel Community, Euratom) changed on urgent bilateral and multilateral or risk capital and other instruments. issues and thereby greatly facilitate informa- Community Member States should also in- tion flows. These exchanges will become in- crease their cooperation with associated creasingly important when new forms ofin-

Election of Miss Hungary: sex-appeal recognizes no frontiers (Photo: Leonard Freed, Magnum)

tegration and cooperation in Europe (5uch as A STIMULUS TO SELF-HELP the strengthening of the CSCE framework) are put in place. These association agreements will form the nucleus of the Community' s efforts in favour A Council of Association will be created for each agreement in which the Community partners will discuss and and individual The Conference on Security and Cooperation decide on issues of mutual interest. A struc- in Europe which brings together the countries ture will be created for cooperation between of Western and Eastern Europe (including the the European Parliament and the national Soviet Union) plus the United States of 03) parliament of each associated country. America and Canada. of the countries of Central and Eastern Europe. But they fit into a broader perspective. Farone thing, as Commission Vice-President Frans Andriessen has said: The European Community is willing to accept its co-responsibility for what is going on in these countries. But it should also be made dear that our assistance cannot fully replace the responsibilities to be assumed by the individual countries themselves. To put it another way: we can do no more than help them to help themselves: In addition, the touchstone for the negotiation and implementation of such agreements Bucharest: the novelty of parking meters (Photo: will be the degree of progress on political Martine Franck, Magnum) and economic liberalization achieved by the individual countries. Such considerations have already applied in the decisions .the Community has taken to accelerate the The Phare programme elimination of import quotas on Polish and The Phare programme was set up by the generation Hungarian goods in the first- Group of Seven (G-7) summit in Paris in July agreements with these countries and to up- date the very limited 1988 agreement with 1989. The summit charged the European Commission with coordinating assistance Czechoslovakia. from the Group of 24 Western industrialized To quote Mr Andriessen again: countries taking part in the programme. In the view of the European Cornmunity, This function enabled the Commission to there should be irreversible trends for real democracy and an opening to a market take on a new and important international economy in the particular country con- political role. For, besides coordinating cerned before an association agreement can Western aid , it has increasingly taken the be put into place: lead in framing Phare policy and strategy. The initial aims of Phare were to sustain the political and economic reform process in Poland and Hungary and in particular to strengthen the private sector. The priority areas identified by the Commis- sion, in consultation with the IMF, the World Bank and the OECD, are now the object of THE MULTILATERAL substantial programmes. These areas are FRAMEWORK agriculture and rural development, enterprise restructuring, banking and finance, in- The Community has taken a key role in coordinating the overall Western aid efforts for Central and Eastern Europe. These efforts are Europe at the crossroads: the EC in changing centred on the Phare programme and the political and economic environment; speech creation of a European Bank for Reconstruc- tion and delivered in Brussels June 1990. Development (EBRD). The initial The G-24 consists of the 12 EC countries plus success of the Phare initiative in support of Australia, Austria, Canada, Finland, Iceland, reform and restructuring in Poland and Japan, New Zealand, Norway, Sweden Hungary has led to its extension to the rest of Switzerland, Turkey and the United States of Central and Eastern Europe. America. vestrnent, the environment and professional Stabilization Fund and the Community' training and technical assistance. medium-term loan of USD 1 billion to In addition, the G-24 countries have taken Hungary. The stabilization fund has helped action to facilitate access to Western markets underpin Poland' radical reform pro- for Polish and Hungarian exports. They have gramme which might have otherwise proved removed quantitative restrictions on Polish too risky. This programme has reduced infla- and Hungarian products, extended rnost- tion, sttengthened the zloty and improved favoured nation status (where this was not already granted) and extended to them their the balance of payrnents. system of generalized preferences (SGP). The medium-term loan has helped maintain The Community and its G-24 partners have Hungary s access to international capital also provided financial safety nets for Poland markets and encouraged other institutions to and Hungary in the form of the Polish provide finance for economic restructuring. The Community has invited the other G- members to participate in the Tempus programme for student exchanges and in the European Foundation for Training. Tempus was formally established by the Community in May 1990. In May 1990 the Commission an- With funding ofECU 117 million , Tempus is nounced a set of projects for Poland a three~year programme whose main pur- and Hungary worth ECU 86.5 million pose is to finance academic exchanges to as part of its contribution to Phare pro- enable students and teachers from Eastern jects. More than half the amount will Europe to spend up to a year at an EC univer- go on environmental protection, a sity or in a company or administration. A sector where the Community has smaller number of teachers and students taken the lead in supporting major from EC universities would spend equivalent control efforts. time in Eastern Europe. Tempus also pro- motes exchanges between Eastern univer- The list of projects includes: sities and universities or private businesses in 1. Poland: Environmental protection the EC programme In May 1990, the Commission produced an 2. Hungary: Environmental protec" tion programme action plan to extend the operations of the Phare programme to cover Bulgaria 3. Poland/Hungary: Participation in Czechoslovakia, the German Democratic Regional Environment Budapest Republic (to the extent necessary prior to Centre unification), Romania and 4. Poland: Basic technical assistance German Yugoslavia. This proposal was subsequently for privatization programme adopted by the rest of the G-24. Romania 5. Hungary: Support for modernizing participation was temporarily withheld the financial system because of internal events there. 6. Poland/Hungary: Cooperation in the field of economics Priorities identified by fact-finding missions 7. Poland: Sectoral import programme sent to these countries by the Commission for animal feed and feed-additives were similarto those in Hungary and Poland: 8. Poland/Hungary: Technical assis- (i) improved access to Western markets; tance for implementing the Trans- (ij) stabilizing and improving food supply; European mobility programme for (iii) professional training; university studies (Tempus) (iv) environmental protection; (v) investment and economic restructuring. Specific emphasis varies from country to communications, agri-foodstuffs industry), country. The Commission s initial assess- improved access to markets. ment of national priorities for each country are as follows: Yugoslavia agriculture the environment (notably pollution of the Danube and Sava basins and of the Adriatic Bulgaria coast), agriculture and the agri-foodstuffs industry, investment, the environment, restructuring of the banking sector and the investment (transport and telecom- industrial sector munications), training (banking, management, taxation training (management, financial services systems) , scientific and technical), structural adjustment, including the social restructuring (chemical and light industries), aspects tourism improved access to markets. improved access to markets. The Commission also suggests that a more formal mechanism for a financial safety net Czechoslovakia be put in place for the five countries. industrial restructuring, Memoranda submitted by them to the G- the environment (pollution control , in- strongly suggest that requests for facilities , nuclear safety), dustrial waste like the Polish Stabilization Fund or the energy, medium-term loan for Hungary will be forth- training and youth exchange, coming. investment (transport and telecom. munications), Czechoslovakia has said it is seeking a large scientific and technical cooperation stand-by facility while Bulgaria and improved access to markets. Yugoslavia are seeking other forms of financial support. The Commission believes the time is ready for the G-24 to consider a German Democratic Republic general facility to which its members would food supplies (restructuring of slaughter- contribute. Individual reforming countries in houses, dairy sector and sugar production), Central and Eastern Europe could draw on the environment (water, air and industrial pollution protection of the cultural the facility as and when necessary. The G- would tailor the credits or loans to the needs heritage), investment (transport and telecom- and absorptive capacity of the beneficiary. munications), To ensure the soundness of restructuring training (management, higher education measures financed through the facility, scientific and technical), would be essential for the country concern" improved access to markets. ed to belong to the IMF and to accept Com- mitments as to the macroeconomic strategy it should follow. As can be seen from the Romania following table, the countries of Central and agriculture and food supply (research, pro- Eastern Europe are members, or have applied duction technology, joint ventures), for membership, of the International the environment Monetary Fund (lMF), the International Bank investment (transport, tourism, smaller enter- for Reconstruction and Development prises), (lBRD), i.e. the World Bank and the General training (management, banking, tourism Agreement on Tariffs and Trade (GAIT). EASTERN EUROPE' S MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANIZATIONS

IMF IBRD GATT

Poland Member Member Member

Hungary Member Member Member

Czechoslovakia Applied Applied Member

Bulgaria Applied Applied Applied

Romania, Member Member Member

Yugoslavia Member Member Member

The European Bank for Reconstruction share capital of ECU 10 billion. In all, there and Development are 42 members - 40 countries plus the The proposed facility would be additional to Community and the European Investment the specific project-related activities of the Bank. Thebank will play an important role in European Bank for Reconstruction and supporting productive investment in the Development (EBRD). The creation of the private sector and in related infrastructure. EBRD is the Community s main multilateral According to the first article of the EBRD' initiative for Central and Eastern Europe. It statutes was first proposed by President Franc;:ois Mit- the purpose of the Bank shall be to foster the terrand in a speech to the European Parlia- transition towards open market-oriented ment in September 1989 and endorsed at the economies and to promote private and en- EC's Strasbourg Summit in December of that trepreneurial initiative in the Central and year. East European countries committed to and It has been extended to the G-24 Phare net- applying the principles of multiparty work and beyond to include the Central and democracy, pluralism and market eco- East European countries and the Soviet nomics.' Union as well as other members of the IME The seat ofthe bank is London. Its President The Community and its Member States have is Jacques Attali , former adviser to President a majority stake in the EBRD which has a Franc;:ois Mitterrand.

COMMUNITY ATTITUDES TO CENTRAL AND EASTERN EUROPE

In a survey conducted in the 12 Member economic, political and monetary in- States in the spring of 1990, 70% of those tegration to enable it to participate more interviewed felt that the European Com- effectively in the construction of a wider munity should speed up the pace of democratic Europe.

Eurobarometer No June 1990 PROfilE Of fUTURE PARTNERS

UNKNOWN NEIGHBOURS The table shows that on a broad range of economic and social indicators, the coun- Following the bold decisions of the tries of Eastern Europe lag behind their authorities in Poland and Hungary to adopt Western neighbours. Others could be added far-reaching reform programmes... the entire to confirm the gap. international community has welcomed the Life expectancy in Central and Eastern extension of reform to other countries in Europe varies between 70 years (Romania Central and Eastern Europe. It is now up to and Hungary) and 72 years (Bulgaria). In the the industrialized countries to rise to the Community it ranges from a low of 73 years challenge posed by the courage and deter- in Portugal to 77 in France, Italy, Spain and mination of the peoples most directly con- the Netherlands. cerned: Romania, the poorest country of Eastern Despite geographic proximity, the EC's Europe, has a per capita GDP which is Eastern neighbours were relatively unknown scarcely one third of the DECO average. The before the revolutions of 1989. They were figures in the table should be considered perceived by public opinion in the EC as with some caution; they are regarded by monolithic satellites of Russia with little some Western economists as on the high separate identity of their own. side. Other estimates would actually mark Their rigid communist political structures and uniformly lower standards ofliving did little to stimulate Western interest in them. Their lack of hard currency made them poor markets for EC exports, while their own shoddy goods - with the slight exception of bottom-of-the-range cars like Skodas, Wart- burgs and Polski Fiats - made little inroads This quotation is from the conclusions of the on Community markets. European Commission s action plan of May 7990 for extending G-24 assistance to Bulgaria The table on the following page sets out Czechoslovakia, the German Democratic some basic indicators for the Comecon Republic, Romania and Yugoslavia, SEC(90) countries of Eastern Europe. 843 final.

Foreign debt Total (billion USD) Per capita (USD) Poland 40.4 1 078 Hungary 19. 1 873 Czechoslovakia 431 Bulgaria 1 056 Romania 1.0 Yugoslavia 17. 733 Sources: World Bank, IMF. rnJ

BASIC INDICATORS FOR EASTERN EUROPEAN COUNTRIES Indicators Soviet Bulgaria Czecho- German Hungary Poland Romania OECD Union slovakia Democratic Republic Population (million, 1988) 286.4 15. 16. 10. 38. 23. 824. GDP (billion USD, 1988) 1 590. 50. 118. 155.4 68. 207. 94. 12073. GDP per capita (USD) 5 552. 5 633. 7603. 9 361.0 6491. 5 453. 4 117. 14637. Annual groWth of GDP (%): 1981- 1986- 1.7 1.5 Living standards (1987): Cars per 1 000 inhabitants 50. 127. 182. 206. 153. 74. 11. 385. Telephones per 1 000 inhabitants 124. 248. 246. 233. 152. 122. 111. 542. Share of workforce in agriculture (%) 21. 19. 12. 10. 18.4 28. 28. Gross domestic invest- mentlGDP (%) 33. 32. 24. 29. 28. 36. 37. 20. Share of private enterprise in GDP (%) 14. 14. 70- Workers with secondary education (%) 27.3 29.4 33. 28. 61. Exports of goods as % of GDP (1988) 23. 19. 13.7 14. 6.4 11. 14.4 Exports of manufactured goods as share of exports to non-socialist countries 63. 59.3 72.4 77. 79. 63.4 50. 81. Change of share of OECD markets (% , 1978-89) 26. ~ 18. 44. 25. ~32. 46. Source: DECO. n.a. not available. down the dollar equivalent of the GDP countries. This is also evident from the table figures for most of these countries. on their debt position (see page 19). It is worth, therefore, looking more closely at But a closer examination of the figures show each in turn to give a brief political profile that far from being two-dimensional copies and assess their capacity to integrate more or of each other, there are considerable dif- less rapidly into the international market ferences in the situation of the individual economy system.

Wadowice, Poland: Pope john Paul /I visits his home town (Photo: Bruno Barber, Magnum)

Poland late 1988 to help solve the crisis. An agree- Poland was the first of the Central and ment was reached the following April Eastern European countries to embark on its legalize Solidarity once more and to hold 1989 revolution. The events of 1989 were multiparty elections. The diary of events in the follow-on to the concessions won by the 1989 is given below. Solidarity trade union in 1980. But the But paradoxically, Poland's election waS less liberalization movement was abruptly free than those subsequently held in other checked by the imposition of martial law by East European countries. Elections were for the Communist government in December of the 460-seat lower house and the 100-seat that year. senate or upper house. However, the manifest incapacity of the In the free elections for the senate, Solidarity government to cope with the economic and won 99 seats. In the lower house, Solidarity social situation led it to turn to Solidarity in was allowed to contest only 35% of the seats I?J) POLAND ~ EVENTS IN 1989

February 6: Round table discussions in- July 25: Solidarity invited into coalition volving the government, Solidarity and government. the Catholic Church August 7: Lech Walesa suggests Solidari-

April 7: Agreement on legalization of ty allies itself with two minor parties to Solidarity and elections. form government.

May 17: Catholic Church recognized. August 24: Tadeusz Mazowiecki becomes first non-communist Prime June 4: Solidarity wins overwhelming Minister in 40 years. victory in parliamentary elections (all 161 allotted seats in lower house and 99 September ..12: 24-member coalition out of 100 in Senate). government confirmed. Only four seats go to the Communitsts. July 19: General Wojciech Jaruzelski elected president.

all ofwhich it won. The target date fora new It has one of the highest levels of foreign debt constitution is May 1991. New, fully free of Central and Eastern Europe. This debt is elections would then follow. the biggest in absolute terms at USD 40.4 Poland is a member of the IMF, the World billion, while on a per capita basis itarnounts Bank and GATT. It has applied to join the to USD 1 078 ~ a figure surpassed only by Council of Europe. Hungary.

Gdansk, Poland: hotel waitresses taking break from work (Photo: Bruno Barber, MagnLim) Poland is the country of Central and Eastern to the Hungarian market. General Electric of Europe which is most dependent on Western the United States bought a controlling in- financial support. It waS first in line to obtain terest in the Tungsram lightbulb company. it: through the Phare programme and the Another American group, General Motors bilateral assistance from the Community, the has signed a deal with the Raba truck group. EC Member States, the other G-24 par- Budapest has a fledgling stock exchange. ticipants and the international financial in" At the political level, the Hungarian Com- stitutions. munist party took the lead in the reform pro" At the beginning of 1990, the zloty was cess, effectively programming its own made partly convertible as part of the in- demise. It abandoned its so-called leading troduction of a new economic reform pro- role in 1989 and began Round table discus- gramme. To support this, the Polish sions with opposition groups in September Stabilization Fund of USD 1 billion was set that year. up by Western governments to bolster foreign exchange reserves. As a result of these combined efforts by the Polish authorities and the international community, food supplies have improved, the external account is in surplus and inflation has fallen significantly. In addition to its first-generation trade agreement with the Community, Poland like Hungary and Czechoslovakia - has signed a cooperation agreement with EFT A. Besides investigating the possibilities of free trade the agreements cover trade promotion as well as economic, scientific, industrial and technical cooperation. Hungary Hungary has been the most persistent economic reformer of Eastern Europe. The Communist government which took over after the brutal repression of the 1956 uprising made a conscious choice to give priority to improving living standards. Its first major effort to open its economy dates from 1968. But this and subsequent ef~ forts have been frustrated partly because the reform measures were inadequate and partly Budapest, the Cathedral (Photo: Leonard Freed, because of external payments constraints. Magnum) Hungary has the highest per capita level of debt in Eastern Europe. At USD 1 873 for every man, woman and child it is nearly dou- These prepared a transition to elections in ble that of second-placed Poland. Marchi April 1990 for a single-chamber But the result of earlier liberalization efforts 386-seat parliament. The outcome of the meant that the post-1989 economic reform vote is given below. It led to the creation of process has been less turbulent in Hungary a coalition government led by Democratic than elsewhere in Eastern Europe. Foreign Forum with the support of the Smallholders investors already have a certain access Party and the Christian Democrats. To help Hungary continue to implementthe ELECTIONS IN HUNGARY, reform programme in the face ofa worsening MARCH/APRIL 7990 of its payments position in 1989, the Com- munity agreed to put together a five-year % of Seats loan of ECU 870 million (USD 1 billion). The vote payment of the first tranche of this loan was Democratic Forum conditional on agreement between Hungary (centre-right) 165 and the IMF on the precise terms of an IMF Free Democrats stand-by credit. These were agreed in March 1990 and the Community subsequently (centre-liberal) disbursed the first tranche of ECU 350 Independent million. Smallholders Hungary is a long-standing member of the (farmers) IMF, World Bank and GA n. In addition to Socialists (reformed its first-generation trade agreement with the Communists) Community, Hungary signed a cooperation Young Democrats agreement with EFT A in June 1990. Of the (centre-liberal) countries of Central and Eastern Europe Hungary is the one which has most clearly Christian Democrats expressed its intention to apply tojoin theEC Hungarian Socialists as soon as possible. Workers (unreformed Communists) Czechoslovakia Social Democrats Czechoslovakia is the industrially most-ad- vanced of the Community Eastern Other neighbours. It is also the one which had - in pre-Communist days the strongest democratic tradition. In the 1930s, the stan" dard of living ofits citizens was On a par with that of Switzerland. Czechoslovakia has a relatively low level of foreign debt (USD 6.9 billion). This will allow it access to international capital markets at relatively keen rates of interest. It has applied for membership of the IMF and the World Bank, although credits from this source will take some time to organize. Even more so than in Hungary, the Czechoslovak Communist party opted out of the reform process. After a series of popular demonstrations in November 1989 the party effectively handed over power to Civic Forum, although keeping some government portfolios until the elections of June 1990. Vaclav Havel , the most prominent figure in Civic Forum and a member of Charter 77, the Nadudva~ Hungary: trying out computer dissident group set up afterthe brutal repres- techniques at cooperative farm (Photo: Leonard Freed, Magnum) sion of the 1968 Prague Spring by Warsaw Pact troops, was elected President. Prague: Vive la liberte! (Photo: Ian Berry, Magnum)

Civic Forum, with its Slovak sister group, won a comfortable majority in the 1990 elec- ELECTIONS IN tions (see below). CZECHOSLOVAKIA, 1990 The elections were for a 150"seat lower house (101 from the Czech republic and 49 % of Seats from Slovakia) and a 150-seat upper house or vote House of the Nations (75 members from Civic Forum/Public each). The two houses must together write a against violence new constitution by 1992. (Czech/Slovak anti" Because of the harmonious way it has car" Communist alliance) ried through democratic: reforms, while Communists maintaining a high degree of political con- Christian Democrats sensus, and because of its industrial tradi- Moravian and tions, Czechoslovakia is considered to be Silesian Autonomists one of the countries of Central and Eastern Europe which is best placed to make the leap Slovak National Party to a market economy. Coalition of other It has a favourable geographic position , a minorities highly educated workforce and an infrastructure which, although neglected, is less devastated than in other countries of the region. It has viable firms in the automobile In terms of economic reforms the new engineering, glass and footwear sectors. Czechoslovak government has shown bold intentions but remains cautious in practice. therefore need to undertake major efforts to The reform programme provides for private reorient its economy to free market forces. enterprise and private property, the opening of the country to foreign investment, the Bulgaria s foreign debt at USD 1 056 per reduction of government subsidies and the capita is well above the level of dismantling of State planning. Czechoslovakia but below that of Poland and Hungary.

Bulgaria The poor state of the Bulgarian economy is a Bulgaria is one of the East European coun, major drawback to reform. The new govern- tries whose economy was most closely in. ment, elected in June 1990, has to contend tegrated with the Soviet Union and its with inefficiency, shortages and corruption Cornecon partners. More than 75% of its as well as an absence of rei iable statistics on foreign trade waS with Comecon. It will which to base reforms.

Sofia: a mass demonstration (Photo: F. Zecchin, Magnum)

Therefore, the reform process is likely to be wise Western partners will concentrate their slower in Bulgaria than in Poland, Hungary efforts on more fast-track candidates. and Czechoslovakia. This could lead to a gap widening between the pace of its integration Bulgaria is the only country where the into the free-market European economy and reformed Communist party ~ now called that of the others. Bulgaria will need actively the Bulgarian Socialist Party - emerged the to woo Western aid and investment; other- clear winner of the first free elections since degree of totalitarianism imposed by the ELECTIONS IN BULGARIA Ceausescu regime. JUNE 1990 The rebuilding of political and economic structures will take time and could lead to % of Seats considerable instability. Because of the vote totalitarian past, few individuals have any Bulgarian Socialist legitimacy or credibility to lead the country Party (formerly forward. These problems have certainly Communists) 211 visited the ruling National Salvation Front. Union of Demo- Although the Front won the country s first cratic Forces free election for 40 years in May 1990 (see (anti-Communist below), suspicion and doubt have lingered alliance) 144 about its commitment to democracy among Agrarian Union opposition groups. (farmers) Externally, Romania s trading partners and Movement for Rights potential suppliers of financial assistance and Freedom have also had problems in coming to terms (ethnic Turks) with the country s reform process. The Other signature of Romania s trade agreement with the Community, concluded in May 1990 was delayed because of the way the govern" ment handled post-election demonstrations. This was reminiscent of earlier problems over human rights in Romania which World War II (see below). These elections periodically marred the application of the took place in June 1990. 1980 EC-Romania cooperation agreement. This election-result is because theparty itself took the lead in the political reform process when it forced the resignation of Todor Zhivkov, the long-serving party leader, in November 1989. It is also due to the fact that ELECTIONS IN ROMANIA the opposition groups are less well organ- MAY 1990 ized than in other Central and East European countries. % of Seats vote Another reason is the country s relatively National Salvation weak political culture and the difference bet- Front (ex-and not-so- ween conservative rural areas, which sup- ex-Communists ported the reformed Communists, and the military officers urban population particularly in Sofia former dissidents) 233 who backed the Union of Democratic Forces. Democratic Hungarian Union Romania Liberals (centre-right) Events in Romania have confirmed predic- Greens tions that itwill be the country of Central and National Peasants most dif- Eastern Europe that wi II experience (farmers) ficulty in restoring democratic institutions and political and economic stability. No Others other country of the region experienced the ...

Bucharest: Quiet, please Action! (Photo: Dennis Stock, Magnum)

The one bright spot is the country s negligi- stage as a potential ' third way' between rigid" . ble foreign debt. It could have access to Iy-planned Communism and the market multilateral or bilateral credits at an early economy. Its refusal to become part of the date. It is a member of the IMF, the World Soviet economic or military sphere of in- Bank and GATT. But it is short of trained peo- fluence gave it a special relationship as a ple with the necessary skills to put a reform Communist State with the EC programme in place. Relations go back to 1970 when the first non" preferential trade agreement was signed. Yugoslavia This was upgraded to a special cooperation Yugoslavia is the only country of Central and agreement in 1980 under which Yugoslav Eastern Europe not to have held multiparty exports got preferential access to the Com- elections since the wave of political and munity market. Yugoslavia also qualified for loans from the European Investment Bank. economic reforms swept through the region. The main reason is that the reform process is Ifpolitical reform is proving difficult because handicapped by the difficult relations bet- of ethnic considerations, some economic ween the country s six constituent republics. reforms have been propelled forward by the The European Community and the West in depth of the country s economic crisis. general have traditionally treated Yugoslavia Severe internal difficulties coupled with as a case apart. Its particular brand of four-digit inflation in 1989 led to the in- economic self-management was seen at one troduction atthe start of 1990 of a wide-ranging economic reform programme, introduc" loans to Yugoslavia from ECU 550 million ing tight monetary and budget controls and (1986-90) to ECU 900 million for the five the convertibility of the dinar. years 1991-96 and for the negotiation of a The European Commission proposed a new Association agreement. three-level improvement in the Communi- ty' s supportfor Yugoslavia in a paper submit- Yugoslavia is thus the first country to be of- ted to the Council of Ministers in May 1990. fered this new type of agreement with the One of the ideas ~ the extension of the Community. Its terms go beyond free trade Ph are programme to cover Yugoslavia and to cover additional financial support, in- the rest of Central and Eastern Europe - has dustrial and technical cooperation , a already gone through. political dialogue and the possibility of The Commission s other two proposals are subsequent moves to free movement of peo- for the near-doubling of the amount of EIB ple, services and capital.

Zagreb: Square of the Republic (Photo: Ian Berry, Magnum)

1321 THE EC'S RELATIONS WITH THE SOVIET UNION

As a superpower, albeit a diminished one The Soviet Union has agreed to improve its the Soviet Union s relations with the Com- market' s transparency to ensure better ac- munity are developing differently from those cess for EC goods and has given guarantees of other East European countries. Because of on the repatriation of dividends and profits the sheer size of the Soviet economy, the generated by fi rms setup in the Soviet Union. Community has decided it cannot offer the The economic cooperation section of the USSR the same kind of special association agreement covers a wide range of sectors agreements proposed for the others. from standardization, energy and the en" Present trade relations between the Com- vironment to financial cooperation and munity and Moscow are based on the Trade farming. and Economic Cooperation Agreement The second major element in EC-Soviet rela- signed in December 1989 and which came tions is the Community' s efforts to prepare a into effect on 1 April 1990. Under its terms financial aid and structural support pro- each side grants the other most-favoured-na- gramme for the USSR. These were launched tion (MFN) status for their exports. The Com- at the Dublin Summitofthe European Coun" munity is committed to removing all quota cil on 26 June 1990. restrictions on its imports from the Soviet The programme is divided into two parts Union by 1995. short-term credits and medium-term struc-

Mr Shevardnadze, the Soviet Foreign Minister, visiting the European Parliament in December 1989 tural assistance. The Commission s leading tionalities problem and the need to create role was confirmed when its president, Mr more democratic and pluralist structures. All Jacques Delors, visited Moscow in July 1990. three issues are inextricably intertwined. The Community' s willingness to give finan- Moscow now faces secessionist pressures cial and other support for economic reform from most of its constituent republics. The in the Soviet Union is conditioned inter alia movement began in the small rebellious by a recognition of the central role played by Baltic States and spread rapidly to the presidentMikhail Gorbachev in allowingthe Muslim south and then to the biggest rest of Eastern Europe to free itself from republics, the Ukraine and the Russian Soviet and Communist dominance. Having Federation itself. created the division of Europe in the first place, the Russians have been instrumental The authorities are drafting a new constitu- in breaking down the barriers again. tion that will grant greater autonomy to the keeping most of At the same time, they have tried through republics in the hope of them within the current union. A new glasnost and perestroika to bring about a certain level of economic and political reforms economic reform programme was published at home. But in so doing, they have in September 1990. reawakened some powerful sleeping forces In the mean time, secessionists vie with and given birth to some new ones. federalists political conservatives with The process of economic reform radical reformers and economic innovators perestroika and the introduction of a with entrenched Communist-vested in- market-related economy is advancing slowly terests. It is against this background that the in the face of considerable resistance. Community' s task in seeking to help the Politically, the authorities are confronted economic and political liberalization of the with a double challenge: the huge na- Soviet Union should be seen.

CENTRAL AND EASTERN EUROPEAN PERCEPTIONS OF THE EUROPEAN COMMUNITY

The European Communi.ty has what had heard of the European Community. might be termed a mystical attraction and All the Czechs and Slovaks questioned is seen as an ideal by the people of Cen- claimed to have heard of it. tral and Eastern Europe. This is revealed More than a third of Soviet interviewees by opinion polls carried out were aware of President Mitterrand' s pro- Czechoslovakia, in Moscow and in the posal for a Pan-European Confederation European territory of the Soviet Union grouping all European States with more and by a survey conducted in Lithuania than one political party, free elections by Gallup UK and the Sociological freedom of speech and freedom of the laboratory of the University of Vilnius. media. All these surveys were conducted in 1990. Eurobarometer No June 1990 Three Muscovites in five, two Soviet citizens in four and 86% of East Germans FURTHER READING

EC-PUBLICATIONS

Action plan - Coordinated assistance from Report on economic and trade relations the Group of 24 to Bulgaria, Czechoslovakia, between the European Community and the GDR, Romania and Yugoslavia People s Republic of Poland, Brussels, EC, Commission, 1990, 7 pp. Luxembourg, EC, European Parliament (Doc SEC (90) 843 final) Committee on External Economic Relations Rapporteur: Eusebio Cano Pinto 1990, 32 pp. , (Doc EP (90) 1) Agreement between the EEC and the Report on the political aspects of the situation European Atomic Energy Community and the in Poland USSR on trade and commercial and economic Luxembourg, EC, European Parliament cooperation. Agreement in the form of an Political Affairs Committee, exchange of letters between the EEC and the Rapporteur: Gerd Walter, Testausschreibung USSR concerning ' 1990, 8 pp., (Doc EP (90) 22) Luxembourg, EC, Council, Commission 1990, 20 pp. Report on the significance of the agreement (OJ L 68, 15.3.1990) between the EEC and the GDR on trade and commercial and economic cooperation Luxembourg, EC, European Parliament Communication on the Community' Committee on External Economic Relations relations with the countries of Central and Rapporteur: Henry Chabert Eastern Europe - The role of telecommuni- 1990, 8 pp., (Doc EP (90) 57) cations The Community and German unification Brussels, EC, Commission, 1990, 18 pp. Brussels, EC, Commission, 1990, 12 pp., (Doc COM (90) 258 final) (Doc SEC (90) 751 final) The Community and German unification: D ' Economic transformation in Hungary and implications of the Staatsvertrag, Poland' Brussels, EC, Commission, 1990, 14 pp. European Economy, No (Doc SEC (90) 1138 final) 1990, 215 pp. The Community and the European Bank for Reconstruction and Development- Implications of recent changes in Central and Proposal for a Council decision on the Eastern Europe for the Community s relations conclusion of the articles of agreement with the countries concerned , Brussels, EC establishing a European Bank for Commission, 1990, 8 pp. Reconstruction and Development , EC (Doc SEC (90) 111 final) Brussels , Commission, 1990 (Doc COM (90) 190 final) The development of the Community' D ' Our European neighbours relations with the countries of Central and Vocational training, No Eastern Europe 1989, 64 pp. Brussels, EC, Commission, 1990, 11 pp. (Doc SEC (90) 196 final) Proposal for a Council decision establishing a The development of the Community' trans-European mobility scheme for university relations with the countries of Central and studies ' Tempus Eastern Europe, Brussels, EC, Commission, 1990, 18 pp. Brussels, Ec, Cornmission, 1990, 7 pp. (Doc COM (90) 16 final) (Doc SEC (90) 717 final) pp.

Three years to the completion of the Hopkin$on, Nicholas: internal market: a first assessment of its D ' The impact of Soviet reforms on Eastern impact Europe: economic and political change and Brussels, EC, Commission, 1990, 7 pp. the response of the West' (Doc SEC (90) 494 final) Wilton Park Conference No 328 31 October to 4 November 1988 Wilton Park Papers, Steyning, 1988, 30 pp.

Hummeluhr, Niels; M011er, j. 0rstmm: OTHER PUBLICATIONS EF og Uddannelse-en Handbog: EF og fJstel1ropa, Norden og EF Aganbegjan, Abel G., Ciocca, Pierluigi: Uddannelse, 1990, 23/03/04, s. 141-164 .Pere$trojka e ri$trutturazione produttiva esperienze e pro$pettive economiche in Joint ventures as a form of international Unione sovietica e in Italian economic cooperation, Atti del convegno italo-sovietico, Background document$ of the high-level 11 giugno 1988, Mulino, Bologna, 1989 seminar organized by the United Nations 344 pag. Centre on Tran$national Corporation in cooperation with the State Foreign Artisien, Patrick: Economic Commission and the State Yugoslavia to 1993 back from the brink? Committee on Science and Technology of Economist Intelligence Unit, London, 1989. the USSR in Mo$cow March 1988, UNO, 1988, 205 pp. Artner, Anna Maria; Babosik, Maria; Hamori jeno; Toeroek, Adam: Lyons, Paul K. Economic development of the EC and its D ' The new energy market$ of the Soviet impact on the EC-Hungarian relations Union and East Europe: Financial Times Facts and trends, Business Information London, 1990, 119 Thesis, Budapest University, 1986, 230 pp.

Assetto, Valerie j. D ' Money, incentives and efficiency in the The Soviet Bloc in the IMF and the IBRD Hungarian economic reform Eastern Westview Press, Boulder, 1988, 208 pp. European Economics, 1989, 28/01 , pp. 3- and 28/02, pp. 95-187. Bergson, Abram: Planning and performance in socialist Monkiewicz, jan: economies, the USSR and Eastern Europe International technology flows and the Unwin Hyman, Boston, 1989, 304 pp. technology gap: the experience of Eastern European socialist countries in Bieszki, Miroslaw; Rath, Herbert: international perspective D ' Foreign capital investment in Poland Campu$ Verlag, Frankfurt am Main, 1989 Emerging prospects for German-Polish joint 218 pp. ventures under the new law Management International Review, 1989 Myant, Martin: 29/04, pp. 45-67. The Czechoslovak economy 1948-88: the battle for economic reform, Bogomolov, Oleg: Cambridge University Press, Cambridge Socialisme et competitivite, les pays de 1989, 316 pp. /'Est dans /'economie mondiale, Presses de la Fondation nationale des Patterson, Perry: sciences politiques, Paris, 1989, 247 p. D ' Domestic economic reform in the Soviet Union and Eastern Europe: causes and Duverger, Maurice: interdependence Ie lievre liberal et la tortueeuropeenne, Yearbook of East-European Economics, Albin Michel, Paris, 1990, 245 p. 1989, 13/02, pp. 7-40. ITI1 Rollo, j. Trends, policies and prospects in trade The new Eastern Europe: Western among countries having different responses, economic and social systems Selected Pinter, London, 1990, 137 pp. studies, UNO, New York, 1984, 145 pp. Sodupe, Kepa: La visMn sovietica de la integracion Van Brabant, Jozef: europea: el caso de la CEE 1957- 1969, 0 ' Regional integration, economic reform and Servicio editorial de la Universidad del convertibility in Eastern Europe Pais Vasco, Bilbao, 1987, 387 p. Yearb()()k of East-European Economics, 13/01, pp. 44-81. The agricultural industry of the German Democratic Republic, Agra Europe, London, 1990, 32 pp.

IBJ European Communities ~ Commission

THE EUROPEAN COMMUNITY AND ITS EASTERN NEIGHBOURS

Luxembourg: Office for Official Publications of the European Communities 1990 ~ 34 pp. - 16. 2 x 22.9 cm

European Documentation series - 8/1990 ISBN 92-826-1835- Catalogue number: CB-59-90-160-EN-C

The booklet reviews relations between the European Community and the East European countries and explains what the Community is doing to help its Eastern neighbours.