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

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The end of Czechoslovakia is a tragedy that could foretell many others. The division of the country and its assets will likely turn out to be far more painful economically then expected, thus setting the stage for the next round of ethnic conflict in east-central Europe. Meciar is already blaming Slovakia's economic problems on its large Hungarian minority and tempting Hungary to intervene by his threats of ethnic discrimination.

The lesson: whether democracy favors reactionary nationalism or progressive pluralism depends largely on the economy. Citizens of the new democracies of Eastern Europe, whose incomes are about five times lower than in the EC, are living through a period of real depression that would test even West European democracies. As the dissolution of Czechoslovakia (and the election of communists in Lithuania and Romania) has shown, parties wait in the wings, ready to exploit economic suffering by promising to slo w the reforms which cause it. When that fails, such parties are inevitably thrown back to nationalism and to the search for scapegoats.

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.

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