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

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WHEN the European Community's internal market was formally completed on the first day of the new year, yet another state in Eastern Europe fell apart. The death of Czechoslovakia is the latest signal that the EC, preoccupied with its own domestic policy, is badly botching its relations with the East. War in the Balkans has shown us the EC's military impotence. But the dissolution of Czechoslovakia is evidence of another problem: Even when the EC's economic power gives it the opportunity to make a real di fference, it chooses not to.

A common view within the EC is that primitive nationalism made the end of Czechoslovakia inevitable, and that there was little the Community could have done. The disaster has only reinforced the common prejudice that the EC's Eastern neighbors are still far from "Europe." On the contrary, Czechoslovakia has split not because its citizens are so different from those of the EC countries, but because they are so similar: They believe in democracy and vote on economics. Economic problems, exacerbated by EC p rotectionism, are the root cause of the dissolution of Czechoslovakia.

The EC seems not to appreciate that its extremely protectionist trade policy favored instability in Czechoslovakia. Czechoslovakia, like Poland and Hungary, signed "association agreements" with the EC in December of 1991. The agreements lay the heaviest tariffs on agriculture, steel, and textiles - the goods in which the Eastern countries enjoy a comparative advantage. In Slovakia, for example, the association agreement choked off the possibility of increased agricultural trade to the West just as Easter n trade links were broken and Slovakia's heavy industry lost its guaranteed markets.

The ensuing depression opened the way for the election of Vladimir Meciar, a communist-turned-nationalist and the man most responsible for the breakup of Czechoslovakia, as Slovakia's prime minister. Mr. Meciar ran primarily on economic issues, and exit polls showed that he won most of his votes by his promise to stand up to Prague and slow reform. By contributing to the country's economic woes, the EC must share some of the blame for the end of a federation that has been democratic for the entirety of i ts independent history.

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