24 Nations Plan More Aid to Poland, Hungary

The world’s richest nations Tuesday appeared ready to commit themselves to at least an additional $650 million in emergency aid to ease economic turmoil in Poland and Hungary.

While the figure represents a major increase in assistance so far pledged by mainly Western democracies to help the two beleaguered East Bloc nations, it falls far short of the two countries’ own request for aid.

Tuesday’s meeting of 24 donor nations came amid a growing sense of urgency in the West that more must be done to help both countries if new leaderships there are to succeed in the struggle to restructure economies crippled by four decades of Communist rule in oppressive central planning.

Tuesday’s proposal officially was described as “one instrument among many” in the rescue effort.

Western financial institutions, including the World Bank and the International Monetary Fund, are working on a separate package to stabilize Poland’s volatile currency and refinance part of its $39 billion in foreign debt.

That could require loans and credits of more than $2 billion, according to those familiar with the Polish economy.

5 Specific Areas

The plan unveiled Tuesday was developed by the European Community’s Executive Commission in its role as the coordinator of Western aid to both countries. It proposed channeling aid into five specific areas:

-- Reviving inefficient agricultural sectors.

-- Encouraging Western investment in both countries.

-- Promoting vocational and management training.

-- Cleaning up the environment.

-- Easing quotas, tariffs and other trade barriers to provide Polish and Hungarian goods with greater access to Western markets.

Under terms of the plan, half the $650 million would come from the 12 European Community countries and half from the 12 other nations represented, including the United States and Japan.

It does not include an estimated $400 million in emergency food and other aid already committed by the donor countries.

The positive reception given to the plan eased concern among senior European Community officials who had recently questioned openly whether the political will existed to put together a major aid package.

In a joint statement read to the group at the opening of Tuesday’s session, EC Commission President Jacques Delors and Vice President Frans Andriessen urged swift action at a “crucial moment in the process of political reform and economic liberalization in Poland and Hungary.”

The pivotal role of coordinating Western aid to Poland and Hungary was given to the commission at last July’s seven-nation summit in Paris. Coupled with the near-universal participation of other West European countries in a drive to help an East Bloc neighbor, it marks a major departure in the post-World War II era.

Lesser Superpower Role

For the first time since the war, neither the Soviet Union nor the United States are playing leading roles in a major development across Europe’s East-West divide.

The European countries collectively constitute the largest donor, while community officials will have an active advisory role in both countries as they move toward free-market economies.

Ralph Johnson, deputy assistant secretary of state for European affairs, who represented the United States at the meeting, reportedly did not commit the Bush Administration beyond the $219 million already pledged.

In a hastily prepared memorandum outlining its foreign aid requirements, issued here late Monday, the Polish government estimated that restructuring its agricultural sector--only one of eight major priorities listed--would require $550 million.

Other priorities, such as foreign investment, food and medical supplies, carried no dollar estimates but clearly require major outlays.

A more leisurely written Hungarian document submitted to the group last month called for improved market access for Hungarian goods in the West and significant transfers of capital and technology. But it provided no cost projections.