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