U.S. OKs $200 Million in Aid to Poland

Times Staff Writer

Responding to Poland’s pledge of major economic reform, the Bush Administration Wednesday promised a $200-million grant to the new government in Warsaw, bringing the total U.S. aid package to $427 million.

The grant is intended to bring the Polish government, led by a non-Communist Cabinet, closer to the $1 billion it seeks from the West to help stabilize its seriously damaged economy.

The grant is contingent on Poland’s reaching an agreement with the International Monetary Fund on a specific plan to restructure its economy as the nation places a greater emphasis on private enterprise and a free-market system.

White House Press Secretary Marlin Fitzwater, announcing the new funding, also said that President Bush has invited Polish President Wojciech Jaruzelski, a Communist general, and Prime Minister Tadeusz Mazowiecki, who formed the new, Solidarity-led government, to visit the United States.

The White House announcement came one day after the 12 members of the European Community agreed to contribute more than $300 million to Poland. The Common Market and U.S. commitments are part of $660 million pledged so far by 24 of the world’s richest nations.


Bush has come under increasing congressional pressure over the last two months to provide more U.S. assistance for Poland as the government there, led by key figures in the Solidarity trade union, tries to maneuver the shaky economy through the winter.

Food Aid Doubled

On Sept. 14, Bush nearly doubled the amount of food aid offered to Poland by the United States, adding $50 million to a previous offer of $58 million offered during fiscal 1989 and 1990. In addition, the Administration is supporting a $119-million, three-year package of economic aid.

“The dramatic changes in Poland over the past two months have lent new urgency to our efforts,” Fitzwater said in a written statement.

But the President’s plan pales in comparison to that urged by congressional Democrats. House Speaker Thomas S. Foley (D-Wash.) and Senate Majority Leader George J. Mitchell (D-Me.) have proposed $887 million in economic aid, $125 million in food assistance and trade and investment incentives for Poland and Hungary, which is also undergoing a dramatic liberalization of its economy and political life.

“There is no disagreement that both Poland and Hungary need, and will have, strong U.S. support,” Fitzwater said. “There is no disagreement that the U.S. needs to play a leading role in developing a concerted Western approach to Poland’s economic recovery. The question is how best to achieve our goal.

“We believe, as do our Western economic partners, that Poland can best go forward by reforming its economy and becoming credit-worthy again by reaching early agreement with the IMF on an economic reform plan,” he said.

Fitzwater added that the Administration is “willing to negotiate with Congress on the amounts and the nature of the package. Obviously, we proposed an amount that we feel is realistic in terms of the need as well as our ability to pay. . . . But the numbers are all negotiable.”

Robert D. Blackwill, a National Security Council staff member, said that the Polish government presented its request for the funding last week and pegged it to a series of steps planned there. The reforms include stabilizing its currency, dramatically reducing government subsidies to a variety of industries and agriculture and seeking $700 million from the International Monetary Fund, in addition to the $1 billion it is seeking from wealthy Western nations.

“It is very bold and tough,” he said of the Polish plan. “It has the classic measures of trying to right an economy.”

Specific plans for spending the $200 million have not been drawn up. However, an Administration delegation made up of experts in finance, agriculture, industry, business, transportation, communications and labor will be sent to Poland to offer advice, Fitzwater said.