Germany Pushes Western Aid to the Soviet Union Says Allies Should Offer Gorbachev More Than Technical Assistance

By Amy Kaslow, writer of The Christian Science Monitor | The Christian Science Monitor, July 16, 1991 | Go to article overview

Germany Pushes Western Aid to the Soviet Union Says Allies Should Offer Gorbachev More Than Technical Assistance


Amy Kaslow, writer of The Christian Science Monitor, The Christian Science Monitor


AS leaders of the world's seven major industrialized nations (G-7) meet in London this week, Germany is agitating for outright Western financial assistance to beleaguered Soviet leader Mikahail Gorbachev.

But Chancellor Helmut Kohl is unlikely to find much support from his colleagues.

In particular, the postions of the United States, Britain, and Japan have been been to provide Moscow only with technical assistance and entree to the International Monetary Fund (IMF) as a special associate member.

President Bush is joined by British Prime Minister John Major and Japanese Prime Minister Toshiki Kaifu in strongly opposing financial aid.

Germany is apparently irked that it has assumed the greatest responsibility for assisting the Soviets.

"We do a lot for the Soviet Union - and not only on behalf of Germany, but also for the US, the UK, and Japan," says Christian Kastrop, a spokesman for Germany's Finance Ministry. From 1989 through the foreseeable future, Mr. Kastrop says, Bonn's assistance to the Soviet Union will total as much as $30 billion - in the form of grants, loans, and guarantees.

"We can do no more without international cooperation," Kastrop says.

It is unlikely that Bonn can continue to dole out billions to Moscow without domestic backlash. Its 1991 budget will run more than a $35 billion deficit due to the rising costs of German reunification and aid to Moscow.

Bonn is financing the removal of 370,000 Red Army troops and their families from eastern Germany. Housing shortages and unemployment in the Soviet Union have exacerbated an already difficult transition for the soldiers.

Under "special conditions" Bonn has subsidized Soviet purchases of eastern German goods.

According to Wolker Frenzen, spokesman for Germany's Ministry of Economics, by year's end, Germany will expend almost $5 billion in insurance for eastern German exports to the Soviet Union. Moscow has already defaulted on some payments.

Mr. Kohl has also worked to stem the flow of 2.5 million ethnic Germans in the Soviet Union into Germany by helping set up educational, social, and health services for them in the Soviet Union.

All this is set against the backdrop of deepening economic problems at home.

Kohl has already reneged on an earlier campaign promise not to raise taxes in order to pay for reunification. Bonn has raised the average German's tax payments to 45 percent of annual income. …

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