There Goes the Bloc

By Jill Smolowe

Can it really be just ten months since Hungary took its first tentative step toward democracy by passing a law to permit the formation of independent political parties? Last week Hungary's largest opposition party named a candidate for November's presidential election -- and he stands a good chance of winning.

Have only four months passed since Solidarity forces rejected an invitation from Poland's Communist leader to join a coalition government? Last week in Warsaw, Soviet Foreign Minister Eduard Shevardnadze conferred with Prime Minister Tadeusz Mazowiecki, a longtime Solidarity activist and the first non- Communist to head a Soviet satellite.

And wasn't it just two weeks ago that East German President Egon Krenz said he would not include opposition groups in a national dialogue? Last week a member of the East German Politburo met with the largest reform group to hear its ideas.

As an ideological earthquake rocks the Soviet empire, fracturing the social, political and economic arrangements that have guided East bloc relations since 1945, the first impulse is to check its force on the Richter scale. But the next task, the part where the debris must be cleared away and planners must construct something new, has not been addressed. No one -- not Mikhail Gorbachev, not George Bush, not any of the bloc's reform-minded leaders -- has presented a blueprint for the future of the Continent as a whole. Will Gorbachev's "common European house" mean political as well as economic integration with the West? Will the Warsaw Pact remain intact? Will the two Germanys reunify? "Before you start taking an old structure down," says Karel Doudera, a Czech expert on German affairs, "it is not a bad idea to have in hand the materials for the new one. But in this case, we don't."

< Once unified by Moscow's tight grip, the countries of Eastern Europe are breaking free unevenly. Poland and Hungary lead the way, East Germany is groping to catch up, and Czechoslovakia, Bulgaria and Rumania remain far behind. As the participants -- even Gorbachev -- improvise from one day to the next, old alliances are being strained. "Almost overnight," says Adam Bromke of the Polish Academy of Sciences, "all the rivalries and tensions in the bloc that Communist orthodoxy had papered over for decades burst into the open."

Shevardnadze spoke approvingly last week of the political upheavals in Eastern Europe, maintaining that each country has "absolute freedom of choice." But what if ethnic or nationalist rivalries erupt? Suppose Soviet and East European notions of reform become incompatible? What if, for instance, Hungary or Poland should choose to withdraw from the Warsaw Pact? "We keep thinking that Hungary, Poland and East Germany have hit the threshold of Soviet forbearance," says David Ratford, a Soviet and East European expert in the British Foreign Office. "We are at a loss to explain how the threshold has been moved time and time again."

The answer is that significant reform is in the interests of the Soviet Union. It frees Moscow from expensive policing operations and could head off, in Eastern Europe, the sort of protests that plague many of the Soviet republics. East Europeans are far less concerned about a Moscow-initiated crackdown than about a heavy-handed backlash from within the bloc. So is Mikhail Gorbachev. If Czechoslovakia were to launch an anti-opposition campaign, warns Bromke, "it would undermine Gorbachev's prestige at home and in the bloc and make it more difficult for him internationally."

Perhaps Gorbachev is hoping that the East Europeans will show him the way out of his own domestic morass. If so, he may be disappointed. The key ingredients for change in the Communist world are already well identified, the recipe lifted from a Western cookbook for democracy. Separate Party from State. Add opposition parties and free elections to State. Briskly mix in press, speech and travel freedoms. Top with rights to assemble, strike and form labor unions. Bake in oven turned to Free Enterprise setting. Then hope that the inevitable spillover of chaos -- including the inevitable hard economic times -- doesn't cause the Democracy Souffle to fall.

The problem, of course, is that there is no fail-safe recipe for democracy. While Hungary and Poland have successfully evicted the old chefs from the kitchen, they are having a hard time settling on who will help concoct a different mix. After years of popular revolt, the Poles have installed a Solidarity-led government, but that new leadership is brushing up against its own lack of experience. Within the Sejm, Solidarity is having problems enforcing party discipline. Out in the provinces, the government is having an even tougher time persuading Communist officials to relinquish their privileges, let alone their posts.

Moreover, the reformers must work with ingredients that have grown stale. Every East European nation faces to some extent a similar litany of consumer complaints: food and fuel shortages, inadequate salaries that are declining in purchasing power, massive budget deficits. It presumes a lot to think that East Europeans will sit quietly through the price hikes, plant closings, job layoffs and other austerity measures ahead. "It's a race against time," says Dominique Moisi, deputy director of the French Institute for International Relations. "Can the democratization of politics beat the Third-Worldization of their economies?"

As each country sets about easing central economic controls, new tensions appear. Since the 1950s, the Moscow-based Council for Mutual Economic Assistance, known as Comecon, has brokered the bulk of East bloc trade. Comecon encourages individual countries to specialize in the manufacture of specific goods and sets production goals to meet the bloc's needs and those of other members, including Cuba and Viet Nam. Since all trade is accounted for in rubles, Comecon has built a wall around itself that promotes inefficiency and the production of shoddy goods.

Hungary and Poland, which are eager to wed their fortunes to the prosperous economies of the West, have begun to explore bilateral trade arrangements. Budapest, in particular, nurtures hopes of eventually joining the European Community. That remains years away, but a halfway step might be membership in the European Free Trade Association, which has special tariff agreements with the European Community. Such moves would come at the expense of traditional Comecon commitments. Given the glue that binds Eastern Europe -- including everything from heavily subsidized Soviet energy supplies and raw materials to inefficient plants unable to compete in world markets -- the dissolution of Comecon is certain to be a slow, clumsy affair.

- Prime Minister Mazowiecki has no plans to withdraw Poland from the Warsaw Pact, and an alliance declaration in July forbade the use of pact troops in the affairs of member nations. Still, Poland plans to push for further bilateral assurances. The Soviets are pressing NATO for a mutual phasing out of the Eastern and Western military alliances, but Moscow is certain to reject individual initiatives by pact members. As Soviet spokesman Gennadi Gerasimov said last week, "We may witness a change of government in Warsaw or Budapest, but international obligations do not necessarily go away with a change of government."

Any discussion of disintegrating military alliances leads to the question of German reunification. And that prospect will probably keep the Poles firmly tethered to the Warsaw Pact. Polish mistrust of the Germans cuts deep, dating back to the 13th century. Logic dictates that Poland, repeatedly divided during the 18th and 19th centuries, should sympathize with the Germanys' desire to reunite. But the thought of 78 million Germans under one flag next door is enough to give even the most zealous reformer pause. "We already detect a growth of German assertiveness," warns a leading Polish economist. Says Bromke: "The Warsaw Pact is perhaps the best guarantee of Poland's territorial integrity."

Though the U.S. and the Soviet Union might prefer to ignore the issue, Europeans are more visibly concerned. "The whole question," warns Bromke, "could conceivably slip out of everyone's hands but the Germans'." Czechoslovakia's Doudera puts the problem in even starker terms. "All of Germany's neighbors have got to be against reunification," he says. "Once East and West Germany have been unified, what is to stop the Germans from wanting to get back all their old lands in the east, from Pomerania to Silesia and Sudetenland?"

East Berlin, of course, wants no part of any reunification dialogue. For East Germany, reunification means political obliteration. Only West Germans talk eagerly about the prospect of regaining through peace what they lost through war. For many of them, the question is no longer if reunification can happen; the question is how soon. The vision is for a new Europe that extends to the Soviet border and beyond -- with a united Germany in the middle of the emerging entity. Says Chancellor Helmut Kohl: "If the Germans say, 'We belong together,' then no matter how long it may take, in the end they will achieve the unity and freedom of Germany."

Toward that end, West Germany is promoting economic integration between the two halves of Europe. Some 3,000 Soviet managers are currently receiving West German business training. Moreover, West Germany is already the major European Community trading partner of Poland, Czechoslovakia and Hungary. Bonn has encouraged Hungarian reforms by extending an aid package of $526 million, and next week, when Kohl visits Warsaw, he is expected to announce relief on $1.3 billion in old debt and a new line of credit that could reach as high as $1.5 billion. East Germany, which already enjoys substantial subsidies from Bonn, can expect a similar payoff in exchange for political reforms. Last week Kohl spoke by phone with Krenz for the first time since the East German President assumed his new post. The conversation was an encouraging sign that the strains between the two countries over the westward flight of East German refugees might be easing.

The nations of Western Europe, which are pushing toward their own economic integration in 1992, are certain to put a restraining leash on West Germany's bolder visions. Jacques Delors, president of the European Commission, says delicately, "We have been afraid that West Germany would be tempted by a destiny other than the construction of Europe." Bonn stands to benefit enormously from Western Europe's economic integration -- and to lose much if it overplays the reunification card. Warns Kurt Biedenkopf, a member of the West German Bundestag: "A German economy would be part of a European economy, and in view of the distribution of responsibilities within the European Community, German economic power cannot be used for national purposes."

The current pace of change in Eastern Europe, coupled with a global impulse toward interdependence, suggests that economic integration between East and West is inevitable. It is easy to imagine the formation of pan-European institutions. As those efforts gain strength, a gradual demilitarization might follow. "The Warsaw Pact will put more emphasis on political coordination and less on defense and military issues," predicts a U.S. State Department official.

Such cooperation assumes that the East European experiment will not suffer a sudden reversal, exploding in crackdowns, nationalist upsurges or anarchy. A return to the old orthodoxies and iron-fisted Soviet control might follow, but in the present climate, that is all but impossible to imagine. It is easier to envision the emergence of army-backed dictatorships. Eastern Europe might then revert to the fractious and divided region it has been throughout most of its history.

If that prognosis seems too pessimistic, given the links that have bound the East bloc for the past 40 years, a misplaced optimism guides the scenarios that envision Western-style capitalist democracies taking root in the ashes of the Soviet empire. Indeed, it is not at all clear that that is what East Europeans long for; East German opposition leaders, for instance, have stated that they will not betray their socialist ideals. What they and others seem to be calling for is a more humane and compassionate system. "The reversal of the form of socialism that has prevailed so far in Eastern Europe might actually facilitate the rebirth of socialism in a different, more enlightened and efficient form," says a Polish economist.

As far as relations with Moscow go, Gorbachev pointed a way last week when, during his visit to Helsinki, he said, "For me, Soviet-Finnish relations are a model for relations between a big country and a little one." Such words from the leader of a superpower that lays claim to a comprehensive nuclear arsenal and a conventional armed force of hemispheric power may seem facile. But in these heady days of change, it no longer seems farfetched to imagine an Eastern Europe where Soviet domination is softened to benign influence -- and where the West has as much influence over the region's economic life as Moscow does.

CHART: NOT AVAILABLE

CREDIT: TIME Chart by Joe Lertola

CAPTION: AN EXTRAORDINARY YEAR

With reporting by John Borrell/Prague and James O. Jackson/Bonn, with other bureaus