Japan to Seek Larger Role in East Europe : Foreign aid: The prime minister says Poland and Hungary will get loans of $500 million.

Japanese Prime Minister Toshiki Kaifu declared Tuesday that Japan should play an economic and political role in East Europe.

Kaifu, referring to a $1-billion Japanese aid program for Poland and Hungary, told a meeting at the German-Japanese Center, “We are ready positively to support the democratization of Eastern Europe and help them bring about a new order.”

He said the move toward reform in East Europe “affects not only European affairs but also the basic structure of the current international order.”

Kaifu said he is “convinced that Japan, as a leading member of the industrialized democracies, is expected to play a major role not only economically but also politically.”

He said that Japan’s aid to Poland and Hungary will take the form of a $500-million loan for each country from the Japanese Export-Import Bank.

In addition, he said, Japan will provide $350 million to guarantee Japanese companies’ investments in Poland and will double the guarantee for trade with Hungary to $400 million.

Japan, he said, should also strengthen its ties to West European nations--the main purpose of his 11-day trip.

During a visit to the Berlin Wall, Kaifu said: “It is as if a spring breeze blew through this wall, from the West and from the East. Now it has become a good wall.”

Meanwhile, a West Berlin prosecutor freed an East German Communist official, Alexander Schalck-Golodkowski, who is wanted for alleged fraud in East Germany.

The prosecutor, Dietrich Schultz, said he has rejected an East German request for extradition because there are insufficient grounds to open legal proceedings against Schalck-Golodkowski in the West.

Schalck-Golodkowski, who was in charge of foreign currency dealings in the ousted Communist regime, has been accused in East Berlin of embezzling funds he controlled as head of an organization exporting arms. He fled to the West when the regime collapsed in December and gave himself up to authorities in West Berlin.

He offered to return about $35 million that had been deposited in Swiss banks to finance hard-currency sales outside of East Germany.

In another development in East Berlin, authorities announced that restrictions on foreign reporters will be lifted. In the future, they said, foreign reporters will be able to contact anyone they choose.

Under the old rules, reporters needed official permission to talk with government officials, or even casual citizens. But this rule had not been observed since the start of the street demonstrations that led to the fall of the Communist regime of Erich Honecker.