14 May 1992 - 16 May 1992

Central and Eastern Europe, with Special Reference to Economic and Political Relations with the West

Chair: Dr Zbigniew Brzezinski

For this conference, with Dr Zbigniew Brzezinski in the chair, we welcomed no fewer than eleven participants from the five countries of the region. The tone was such that the conference could be described as addressing together common problems, as heirs to a common civilisation.

We began with short descriptions of the situation in Central and Eastern Europe (CEE). While each country had its own specific characteristics, some common strands emerged. Thus, in Poland, the electoral law was seen as a major problem, encouraging the formation of numerous small political parties, many distinguishable only by personality, not policy. The same tendency was apparent elsewhere, but in the Czech & Slovak Federal Republic (ČSFR), for example, the requirement of a minimum percentage vote (as in the German electoral law), had greatly thinned the 40 competing parties. If the electoral law was wrong, it was difficult to change. The law was not in any case the prime cause of voter apathy. Political institutions could not be imposed from outside but had to be created by each country for itself. The West however, while avoiding arrogance, should offer encouragement, advice and training on mechanisms and tools. Exchanges, for example, for parliamentarians in the Council of Europe and the IPU, were of great value.

Lustration, the pursuit of those tainted by their Communist past, provoked much discussion. Different countries had adopted different approaches, some for example, sealing the secret police files but providing for release in the case of candidates for particular offices. Some on the Western side distinguished between crimes committed by individuals who should be prosecuted (even if barred under the normal statute of limitations) and the prosecution of whole classes which should be avoided; while on the Eastern side others maintained that the rule of law was such an important element in their new democracies that, setting emotion aside, the law must be observed (though perhaps that did not preclude dismissal). The only conclusion must be that this is an area which must be left to the countries involved: as the Waldheim case has shown, the past can return to haunt the present.

The principal debate centred on the economic reform programmes and the impact, both economic and political, on the populations. It was disconcerting that economic theory indicated that there was enough waste in a distorted economy for its reform to produce benefits for all; and yet current advice was that the process was inevitably painful and that populations must simply tighten their belts until reform worked its way through. This produced a situation in which Western advisers were advocating levels of austerity which Western politicians and electorates would not tolerate, and an economic liberalism which none practised at home. Those who had risked their lives in bringing about the revolution needed hope and a better standard of living. Unemployment, which was unevenly spread, might be mitigated by social payments; but the CEE countries were being told to cut government expenditure, and until the tax system was reformed, did not have the money. The danger was that by pursuing the free market in its purest form, not found anywhere in the West, populations might turn from their fragile democracies to some authoritarian regime, although in none of the countries discussed, where the populations were showing incredible fortitude, was the event or, particularly, the man, in sight.

Debate over governmental intervention and non-intervention, it was suggested, was unrealistic. Much industry would remain state-owned for some years: what was needed was practical advice from entrepreneurs, marketers and managers of state-owned industries in the West, e.g. in Italy or France, rather than from theoretical consultants (of whom, though our participants were too polite to say it, there may be too many). The need was to find ways to reduce unemployment without sacrificing macro-economic objectives. There might be a case for accepting some enterprise which might, ideally, be seen as dubious, or for giving temporary protection to young industries. Over-regulation could stifle. The first priority however in reform of the economy was the banking system.

There was discussion of the conversion of defence industries: in a closed economy it would be cheaper to shut them while continuing to pay the employees, but in an exporting market, that option was not open. It was a problem the West had not solved.

Private investment from the West was important: for that, there had to be a welcoming attitude which was not apparent in all CEE, a stable investment regime, and encouragement, e.g. through insurance, from Western governments.

Above all, access to Western markets was crucial.

The Polish currency stabilisation fund had worked well, and similar funds were required in greater or lesser degree in all CEE countries, although at least one voice questioned the wisdom of fixing exchange rates too early. (Romania, it was remarked, where the problem was perhaps the most difficult, was not a debtor but a creditor, principally to Iraq.)

Poland, Hungary and the ČSFR had association agreements with the European Community and looked forward to full membership. No date, it was suggested, was necessary, provided that the EC established criteria on the basis that membership would automatically follow when those criteria were met. What was necessary was a firm commitment to which the three could work. Romania and Bulgaria were throughout treated as falling in a different category.

EC membership became linked in discussion with the question of security and membership of NATO. While the meeting saw no immediate threat of aggression of the type that NATO had been formed to meet, in the longer term, it could not be excluded that internal conflict or expansionist regimes in the Ukraine or Russia might pose a threat to CEE, for which only membership of NATO was the answer. There were still Russian troops in Poland and Kaliningrad and an army of 140,000 Russians cut off from Russia in Trans-Dniestria. But membership of NATO might, some suggested, provoke precisely the Russian suspicion and hostility it was designed to ward off, so the situation needed care. Meanwhile there was a potential for trans-national conflict, arising from borders dating from the two world wars and the position of minorities - 2m Hungarians, for example, in the middle of Romania, or the Hungarian or Albanian minorities in Serbia. Drug trafficking and terrorism were seen as other potential threats but of a different order; and migration, whether for economic reasons (which economic recovery would resolve) or in flight from war, was a disturbing element throughout Europe.

The conference did not seem to reach any clear conclusions: NATO’s unchanged role had been recently re-affirmed, and the Alliance had not yet worked out a concept to up-date it. Some persuasive role for NATO was needed if the US was to remain engaged. However, the Alliance did not seem apt for the sort of intervention in internecine conflicts which the situation might require. Yugoslavia was a dreadful warning of the dangers of resurgent nationalism. Firmer diplomatic action at an earlier stage might have headed off the crisis. The CSCE had no powers of enforcement even though the unanimity rule had been modified (and should be further loosened). While forces of NATO members might be called upon, either independently or where appropriate through the WEU, all governments needed clear legal authority to act. That could only come from the UN Security Council, the sole authority with legal power to order enforcement measures (though how far that power extended in internal disputes was debatable). The point was made that, for the foreseeable future, US satellite surveillance and airlift would be irreplaceable, though that might one day change. Whether governments would be prepared to commit forces to peace-making, with all the costs in blood and money, as opposed to peace-keeping, was questionable. Pre-emptive diplomatic action, backed perhaps by pre-emptive deployment of peace-keeping forces, was preferable: but the readiness and ability of governments and of the Security Council to act fast enough, in advance of a crisis, was doubtful. Funding UN operations caused delay - a standing fund was needed, and all members must pay their UN dues. Perhaps the best immediate course was to hold fast to two principles: 1. no change of borders by force; 2. respect for minority rights (perhaps under the surveillance of a CSCE ombudsman). In the longer run, regional cooperation, of which the cooperation agreement between Hungary, Poland and the ČSFR might be an embryo, in the economic, political and security fields, the one leading on to the other, might be the best way forward, provided it worked to complement, not distract from, membership of the EC and/or NATO. (Most saw membership of these two bodies as closely linked.)

What kind of forces did the CEE countries require? They would not be able to cope with the potential long-term threat (for which NATO membership would be required) and should aim for small, professional forces, well integrated into society (to reduce the risk of military take-over), equipped to deal with low-intensity conflict. Compatibility with NATO forces should be the aim.

The conference concluded with a ringing call: membership of the European Community for Poland, Hungary and the ČSFR should come as soon as possible, together with membership of NATO: it was a common interest of both the West and the CEE countries to promote stability, to avoid border and ethnic conflicts, and to create prosperity, thus establishing a valuable trading partnership. The CEE countries had started an experiment which none could afford to see fail; it was an historical and moral imperative for the West, which shared a common history and culture with them, to help them through their difficult transition.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: Dr Zbigniew Brzezinski
Political Science Educator; Author


Sir Antony Acland GCMG GCVO
Provost of Eton College

Mr Christopher Cviic
Editor, The World Today, Royal Institute of International Affairs; Leader Writer and Correspondent on East European affairs The Economist

Sir David Gillmore KCMG
Permanent Under-Secretary of State, Foreign and Commonwealth Office, and Head, HM Diplomatic Service

Mr Nik Gowing
Diplomatic Editor, Independent Television News (ITN) Channel 4 News and The World this Week

Mr Christopher Hulse OBE
Foreign and Commonwealth Office: Head, Central European Department

Dr Zbigniew Pelczynski
Oxford University Lecturer in Politics; Official Fellow and member of Governing Body, Pembroke College, Oxford; Consultant, EC/PHAKE programme to reform central government and public administration in Poland

Sir Michael Quinlan GCB
Director-designate, The Ditchley Foundation; Permanent Under-Secretary of State, Ministry of Defence (1988-April 1992)

Mr Andrew Taussig
Controller, European Services, BBC World Service, London

Mr Neil Thornton
Under Secretary and Head, European Division, Department of Trade and Industry (DTI), responsible for DTI’s relations with European Community and bilateral relations with members of EC, the European Free Trade Association, Central and Eastern Europe and countries of former Soviet Union

Mr Anthony E Vicars-Miles
Head of CIS, Central and East Europe Division, Shell International Petroleum Company Limited

Mr Vladimir Philipov
Ambassador to Lisbon

Mr David Wright
Assistant Deputy Minister for Europe, Department of External Affairs and International Trade, Ottawa

Mr Jiří Brabec
First Deputy Minister, Federal Ministry of Foreign Trade, Prague

Mr Jaromír Príbyl
Minister-Counsellor, Embassy of the Czech & Slovak Federal Republic, Londo

Mr Jan Urban
Visiting Research Fellow, Emmanuel College, Cambridge

Dr Jiří Valenta
Director, Institute of International Relations and adviser to Minister of Foreign Affairs

Mr John Flemming FBA
Chief Economist, European Bank for Reconstruction and Development

Mr Donald M McCutchan
Executive Director for Canada and Morocco, European Bank for Reconstruction and Development

Ms Joan Pearce
Head, Unit for Eastern Europe, Directorate-General for Economic and Financial Affairs, Commission of the European Communities

Professor Jacques Sapir
Consultant, Ministry of Research and Technology, Paris

Mme Anita Tiraspolsky
Research Fellow in the economies of the former Soviet Union and Eastern Europe, Institut Français de Relations Internationales

Herr Dr Michael Libal
Head of Department, South-Eastern Europe, Auswärtiges Amt, Bonn

Dr Jochen Thies
Chief Editor, Europa-Archiv

Professor Dr Norbert Walter
Chief Economist, Deutsche Bank

Mr Viktor Orban
Founder and Head, FIDESZ Parliamentary Group and member, FIDESZ Praesidium; elected FIDESZ MP, Pest County

Dr Ferenc Rabár
Director, Christian Democrat Political Academy

Sr Gaetano Zucconi
Ministry of Foreign Affairs, Rome: Director General for Economic Affairs (in charge of coordination of assistance to central and eastern European countries)

Mr Jan Krzysztof Bielecki
Chairman, Liberal Democratic Caucus, Polish Parliament

Dr Zdzislaw Najder
Head, Prime Minister Olszewski’s Advisory Council

Dr Tadeusz Szumowski
Counsellor, Embassy of the Republic of Poland, London

Dr Eugen Dijmarescu
A National Salvation Front (NSF) MP, Bucharest; Director, Institute of World Economy, Bucharest

Ambassador Robert L Barry
Special Adviser for East European Assistance to Deputy Secretary of State

The Hon John R Davis
US Ambassador to Romania

Professor Robert Eisner
William R Kenan Professor of Economics, North-western University

The Hon Richard N Gardner
Henry L Moses Chair of Law and International Organisation, Columbia University; Of Counsel, Coudert Brothers

Mr Thomas L Hughes
President Emeritus, Carnegie Endowment for International Peace

The Hon Philip M Kaiser
Senior Consultant SRI International; Retired Diplomat

Dr F Stephen Larrabee
Senior Staff member, International Policy Department, RAND, Santa Monica

The Hon William H Luers
President, Metropolitan Museum of Art, New York

Mr David E McKinney
Senior Vice President, IBM

Mr Andrew Nagorski
Newsweek: Bureau chief, Warsaw

Dr Rudy Oswald
Director of Economic Research, AFL-CIO

Mr John Roper
Director, Western European Union Institute for Security Studies, Paris