Another Marshall Plan?

Forty years ago the United States committed itself to a $12-billion program to finance the reconstruction and integration of Western Europe’s war-devastated economies. That effort, first publicly proposed by Secretary of State George C. Marshall, achieved spectacular successes.

Now the prosperous Western Europeans, joined by Japan, the United States and other major industrial nations, are lining up to help as Poland and Hungary embark on an unprecedented political transformation. The recognized need to prevent threatened economic instability from eroding these reform efforts gives a special urgency to the outside aid program.

The Marshall Plan succeeded in no small part because Western Europe already possessed the political and economic culture--including a large pool of talented technicians and officials--to make it work. Poland and Hungary lack many of those advantages. Four decades of state-controlled Marxist economies have in the main produced only wide-scale inefficiencies, distortions, shortages and massive international debt. Many of the basic institutions that are needed to support the shift to free-market economies are weak or nonexistent. Poland, for example, lacks even a single commercial bank to make loans to newly hatched small businesses or to finance private home construction.

The donor nations are proposing $648 million in new commitments to Poland and Hungary next year, on top of the $271 million in food aid already announced. Proposed help runs the spectrum from pesticides, medicines, farm machinery and environmental cleanup to improved market access for Polish and Hungarian goods and training in capitalist management. The initial U.S. contribution, announced earlier by President Bush, is for $219 million in economic and food aid. Democrats have been critical, saying more should be done. In an address yesterday to the International Monetary Fund, which can be expected to play an important role in the economic restructuring in Eastern Europe, Bush agreed “we must do more.” He has yet, however, to commit his Administration in any more practical terms.

The direction of international help that is required now and in the years ahead nonetheless has been set, and the readiness to show generosity seems clear. The new political leaders in Poland and the emerging and changing leaders in Hungary have said in so many words that their countries are abandoning communism and intend to move swiftly toward free-market economies and more democratic institutions. All this represents a truly historic turning point in the history of Europe and the postwar world. The need for outside help to speed this process along is compelling. The encouraging news is that there is a clear willingness to provide that help.