Bush Sees Hungary’s Chief, Announces Boost in Funds : East Europe: The region will be able to seek another $5 billion in IMF loans. Budapest will open Los Angeles consulate.

President Bush announced a $5-billion increase in International Monetary Fund lending to Eastern Europe on Thursday as he welcomed to the White House Hungary’s first democratically elected prime minister in four decades.

Jozsef Antall, the latest in a series of new Eastern European democratic leaders to visit Washington, also was told by Bush that Hungary will be allowed to open a long-sought consulate in Los Angeles.

During the Cold War, U.S. counterespionage officials blocked most attempts by Eastern European nations to open diplomatic offices on the West Coast. Over the last several months, however, those barriers have fallen. The Administration announced in March, for example, that Poland will be allowed to open a Los Angeles consulate.

The new $5 billion in IMF loans will be designed to ease the “loss of export markets and rising energy costs” resulting from the Persian Gulf crisis, Bush said, adding that “Hungary and the other new democracies of Central Europe are paying a high price for resolutely supporting the United Nations sanctions against Iraq.”

Technically, Bush’s statement is merely a suggestion to the IMF, a multinational body that sets its own policies. But U.S. influence with the IMF means that its approval is almost assured.

Bush also said that he will ask the World Bank to speed up energy-related aid projects to the region, drawing on $9 billion already designated for Central and Eastern Europe.

One by one, as their nations shake off Communist rule, the newly elected leaders of Eastern Europe have trouped to Washington to receive Bush’s praise and congratulations. With each one, however, the degree of excitement in the capital has dropped precipitously.

Polish leader Lech Walesa, the first of the new Eastern European leaders to visit, was treated to an emotional hero’s welcome and an address before a joint session of Congress.

Czechoslovak leader Vaclav Havel, who came to Washington this past winter, got the joint session but far less public adulation. An tall, the third to arrive, got a greeting at the White House on a rainy fall day.

Antall, an academic and writer active in the anti-Communist opposition when Bush visited Eastern Europe in 1988, is in the United States seeking to boost trade and investment in his country. Hungary was the first Eastern European nation to begin liberalizing its economy, and it has made substantial progress. So far this year, Hungary has run a $300-million surplus in its international trade, reflecting its ability to export products to the West.

But economic reform efforts have been hampered by Hungary’s $20-billion debt, giving the country the highest per-capita indebtedness of any nation in the region.

BACKGROUND

By punching the first big hole in the Iron Curtain, Hungary played a watershed role in last year’s events that ended communism’s grip on Europe’s East Bloc and ultimately paved the way for such historic moments as this month’s reunification of Germany. After hundreds of East German tourists took refuge in the West German embassies in Budapest and other East Bloc capitals, the Hungarian government opened its frontier. More than 13,000 East German citizens had poured westward through that gap by the end of September, 1989.