Bonn Boosts New Commonwealth
Concerned about migration and loans, Germany aims to stabilize economies to the east
BONN is watching events in the new Commonwealth of Independent States with more scrutiny than perhaps any other West European capital.There are still 233,000 Soviet Army troops on German soil. Because Germany loaned the most to the former Soviet Union, it also stands to lose the most if the newly independent republics fail to pay. The economy of eastern Germany, suffering from the collapse of trade with the former superpower, awaits a resumption of commercial ties. And because of their sheer proximity to the commonwealth republics, Germans worry that they will be the first to be hit by a wave of immigrants if the economy of the commonwealth grows much worse - as experience in Central and Eastern Europe shows it is sure to do. Germans will miss Mikhail Gorbachev. It was Mr. Gorbachev, after all, who allowed Germany's reunification. Within minutes of Gorbachev's resignation, German Chancellor Helmut Kohl issued a statement resonating with gratitude. "The decisive contributions of Mikhail Gorbachev to German unity, and to the new beginning in relations between our peoples, remain unforgettable. We Germans - and I personally - owe him a great debt," Mr. Kohl said. "Without Mikhail Gorbachev, it would have been impossible to overc ome the East-West conflict." But the Germans cannot hold on to the past. So far, they have officially recognized Russia and the Ukraine as independent states and expect to recognize the other republics soon. In November, Russian President Boris Yeltsin visited Bonn, and Kohl is expected to return the visit soon. Helping the new commonwealth achieve economic and social stability is the Germans' highest priority. "Our chief concern is in the economic field - that the new organization of republics be a positive step to speed up economic reform and initiate economic recovery," says a senior government official here. One of the factors behind this concern, he admits, is the threat of mass migration from the east. For example, nearly 2 million Volga Germans, whom Stalin forceably relocated to the central and east Asian parts of the Soviet Union, are automatically eligible for German citizenship simply because they are ethnic Germans. Bonn fears these Germans will flood the country if their economic and cultural situation does not improve. With considerable assistance from Bonn, Mr. Yeltsin is trying to reestablish an autonomous homeland for the Volga Germans, says the government official. On the subject of economic aid to the new commonwealth, the Germans say they have reached their limit and are pushing hard for a coordinated, international effort. When Germany takes over the chairmanship of the Group of Seven leading industrial countries in January, Bonn will put forward proposals dealing with new national currencies and with foreign debt in the commonwealth, as well as ways to help the republics export natural resources such as oil and gas. Foreign Minister Hans-Dietrich Genscher is intent on quickly linking the new republics to European institutions such as NATO, the European Community, the Council of Europe, and the Conference for Security and Cooperation in Europe. As an official in the Foreign Ministry says, "In order to stabilize the situation, we have to ... draw them into the network." Meanwhile, two more widely acknowledged German concerns - Soviet Army troops on German soil and the risk of republics defaulting on German loans to the Soviet Union - are seen here as manageable problems. Soviet troop withdrawals have been proceeding as planned, and in some areas have been ahead of schedule. Yeltsin has already approved the withdrawal plan for 1992. German officials, for now, express confidence that the withdrawal will continue as foreseen. Although Germans have loaned more to Moscow than any other country, "there is not too much concern that the banking system will be affected," says Commerzbank economist Peter Pietsch. German banks are stuck with about 8 billion to 10 billion deutsche marks ($5.3 billion to $6.6 billion) in loans which are not insured by the German government. But the burden is manageable for individual banks, because this sum is distributed throughout the banking system, explains Mr. Pietsch. Also, he says, German banks are showing strong earnings and should be able to shoulder the losses. More worrisome to Pietsch are the 36 billion deutsche marks ($24 billion) in loans which the government has insured. If these loans are not repaid, the federal government will have to take the loss, and it is already strapped with a 100 billion mark ($66 billion) annual bill for east German reconstruction. But Pietsch is convinced that this worst-case scenario is unlikely. Moscow is still paying the interest on its loans, even if it has deferred principal payments for 90 days. So far, he says, "all the republics have said they are willing to repay." This could change, of course, as the economic conditions worsen. Even so, he says, the commonwealth republics are "rich in energy and raw materials. They should be able to meet their payments."