The Ultimate Panacea? For East Europe It’s Brussels : Europe: The troubled Eastern Bloc countries look to the European Community and 1992 to rebuild their economies and bolster their democracies.

Will Europe manage it this time? Will World War II and the Cold War finally lead to a Europe at peace with itself and the world? The new Europe has a new flag, and it is everywhere in Brussels: 12 yellow stars on a field of deep blue on public buildings, on license plates, on T shirts. The bustling office buildings of this ancient city are filled with a new breed of Eurocrats: officials putting together one after another of the directives that, by the end of 1992, are expected to make one common market out of the European Community’s 12 member nations.

Brussels hasn’t always been this peaceful. Three centuries ago the armies of Louis XIV blasted much of the city into rubble. Only 50 years ago Adolf Hitler’s Panzers smashed across the Belgian frontier, knocking out the defenses within hours and beginning five years of occupation that older Belgians still remember with bitterness.

That Germany, 50 years after the blitz, is on the march is only one of Europe’s fears and perhaps not the most alarming. Europe is trying to believe that the Germans learned something in the 20th Century: to remain firmly committed to the prosperous paths of peace rather than the costly and destructive process of nationalist self assertion. That the EC exists at all today is a tribute to the new German leaders who emerged after the war. Germany has long been the most loyal and generous member of the European Community and its representatives today are busy assuring its neighbors that, in Chancellor Helmut Kohl’s words, the new superstate wants “a European Germany, not a German Europe.”

But Germany is the center of Europe, not its frontier, and from the lands beyond come warnings of new storms ahead. Travelers returning from the East, including officials of various Western governments as well as prominent private citizens with great experience in Eastern Europe, speak of disintegration, chaos and possibly war. The old institutions and authorities of the East have broken down, but it is not clear whether they will be replaced by anything better in the long run. The economic problems of the East, according to these observers, are far deeper and more critical than the West yet understands. Some expect to see real hunger in Poland, possibly next winter; experienced observers not given to hyperbole speak openly of civil war in Yugoslavia breaking out.

The full extent of Eastern Europe’s problems are only beginning to appear. In the first flush of revolutionary enthusiasm, these nations hoped that the consequences of throwing off the communist yoke would be rapid economic improvements and generous Western aid. Now disillusionment is setting in on both fronts. The formerly communist societies of the East are not ready for market economies. Reports from Western intelligence and financial institutions speak of three to five years of recession and worse in the reforming economies, followed by upturns in the mid-’90s.

Problems are serious and structural, and unlikely to fade away. Transportation is a shambles; communication a disaster. Some Eastern countries are virtually cut off from the outside with only a handful of phone lines. Factories have outdated equipment and cannot be managed profitably in a capitalist economy.

The market successes in Eastern Europe have been small scale: Poland is one vast flea market but bazaars don’t make countries rich. If they did, Istanbul would be the financial center of the world.

The rapidity with which farmers, restaurateurs and others have moved to take advantage of new openings testifies to the entrepreneurial spirit of Eastern Europe. But there is a long way between a flea market and a modern competitive industrial and electronic economy. Almost nobody in the East knows how to project a cash flow or depreciate an asset. No one knows how to market a brand, float a stock issue or set a price in a competitive environment.

The aid from the West is falling short of expectations, and the Eastern countries are proving unable to use much of what is offered. Perhaps misled by Western anti-communist rhetoric, Eastern Europeans believed the proclamations from places like Brussels and Washington about undying solidarity with those trapped behind the Iron Curtain. It turns out solidarity came more from the heart than the pocketbook. Increasing frustration characterizes the dealings of East Europeans with their Western counterparts as request after request for assistance goes unanswered.

Meanwhile Western donors are almost equally frustrated. The East is so disorganized, its economy so chaotic and the pool of trained managers able to function in a capitalist setting so small, that private and public aid agencies are often unable to find viable projects to fund.

Generally speaking, the more people know about Eastern Europe today, the more pessimistic they are. “Skepticism, pessimism, alienation.” That is how one of the West’s most knowledgeable observers characterized the situation in Bulgaria. “It’s hard to project a country, much less a trend,” said a Western diplomat familiar with conditions in Yugoslavia.

Talks with experts from East and West elicit comments like this about every country in the bloc. Chaos and fear in Romania; confusion and doubt in Hungary; strife and urgency in Poland; the harsh realities of 1990 are sweeping aside the promise of 1989.

The worst stories come out of the Soviet Union, where travelers returning from districts off the beaten path tell of living conditions reminiscent of the slums of Cairo and of political conditions like those of late Ceausescu Romania. In parts of the Soviet Union, citizens tell foreigners that they admire what the Romanians did to Ceausescu and his unpopular wife, and that such measures might not be amiss in the Soviet Union. From czarism to anarchism, the Soviet peoples are resurrecting old ideologies in the wake of the communist collapse. It gets harder and harder to see how the country will emerge from its current condition without shedding torrents of blood.

The uncertainty in the Soviet Union isn’t just bad news for the Soviets. It is almost impossible to imagine how Eastern Europe can prosper if the Soviet Union sinks into anarchy. The Soviet Union is the most important trading partner for all of Eastern Europe. Without its markets and its raw materials the outlook for the former satellites would be even bleaker. Furthermore, Western investors will be reluctant to commit large sums of money to Eastern Europe as long as the Soviet picture is unclear.

There is one subject, though, that Soviets and Eastern Europeans remain optimistic about: Brussels. Membership in the European Community is the way to solve their problems. Brussels will rebuild economies and safeguard democracies.

This is a lot of faith to put in Belgian-based bureaucrats who spend most of their time doing things like standardizing sugar beet quotas, but Eastern Europeans have always been noted for faith. In Brussels, meanwhile, the bureaucrats go on fine tuning the mechanisms of economic cooperation, but the road to European union is rocky and long. Nobody knows when or if the star-spangled banner of Brussels will stand for something more than a pious wish or how many stars it will ultimately have. But to think that Western Europe can enjoy peace and prosperity while the Eastern half of the Continent writhes in agony and misery is to open the door to new dictators and new threats--”Hitlersky,” as one, only half facetious diplomat put it, more dangerous and more violent than anything Europe has faced in its long and bloody history.