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West rethinking about help
LONDON. Aug 22 : The Western leaders who were adamant and unanimous in seeking Mikhail Gorbachev's return to power face new decisions about how to help the Soviet Union along the path of reform, report Agencies.
Prime Minister John Major said Thursday that "circumstances have changed now” In the Soviet Union and that "we will want to look again" at the question of aid.
However, Major said in an interview with BBC radio that what is "most needed is assistance on how to do things'
directors of me European Bank for Reconstruction and Development was to meet later Thursday to consider what action it should take.
"A board meeting has been specially convened to discuss the situation In the Soviet Union and.what Lhc bank is going to do," said bank spokeswoman Laurence Blow.
The bank, whose aim is to help Eastern European countries develop democratic market economics, currently restricts lending to the Soviet Union to the amount the coun try contributes to the bank. European Bank President Jacques Attali for several months has been lobbying the banks 39 member countries to ease that restriction.
Following the coup, the EC had frozen some 480 million dollars In technical assistance, and credit guarantees worth about 600 million dollars for the Soviets to buy food. Only 300 million dollars In human!-
tartan aid had been left intact.
However the West as a whole remained unsure about a massive new injection of aid lo bolster the Soviet reform process.
"We must rethink our technical assistance and try and reorientate it towards the republics," an EC official said in Brussels.
As Western aid severed by the 60-hour coup began to come back on stream, Britain unfroze its 83 million dollar "know-how"fund .which provides technical assistance lo Soviet businesses and economists. . _ _
Japan resumed a package that included a 100 million dollar loan to buy food and 250 million dollars in trade insurPresident George Bush, who had frozen indirect US aid to the Soviet Union, Including 900 million dollars in farm credit guarantees, said a day earlier he was weighing the possibility of direct aid lo the Soviet Union.
Turning to the longer view, an EC official in Brussels said, 'We must rethink our technical assistance and try to reorientate it towards the republics — give it the republic touch".
He noted the Baltic republics were unwilling to loin in the current EC technical aid programmes because they were linked with Moscow central authority, and aid could be more efficient if it were directed directly to the republics.
An EC diplomat said : "The tendency is towards stepping up aid, but it must be targeted so as to be useful. We cannot Er money into a black hole.
the dust must settle before any decision can be expected. The determining factor will be decentralisation to the republics.”
He added there is a risk that, now the coup is all over, that we forget about Eastern Europe. There arc still important sources of instability In Europe, particularly possible dislocation tn the Soviet Union. It remains in our inler-
ests that instability docs not spread to them."
Germany, Gorbachev's biggest financial provider, seized the political climate of intense relief to lobby for Western assistance.
Chancellor Helmut Kohl will press his allies to back a three-point plan, his Chief of Staff, Rudolf Selters, said in Bonn.
But It was also clear that Britain and the United States remained somewhat skeptical about promising massive volumes of aid al this point.
British Prime Minister John Major denied that the' G-7 had failed Gorbachev when he had appealed for money.
What the Soviet Union most needs, he said, is "not just cash but assistance in how to do things, how to establish private enterprises, how to set up a stock cxchan^:, how lo operate a markets." he said.
Similarly, a senior official in the Bush administration said the "cutTcnt prevailing view" was that more economic aid depends on the pace of reforms in the Soviet Union.
"Now this crisis and its resolution may accelerate the pace of reform there, and that would cause us and the other members of the G-7 to respond," the official was quoted Thursday by the Washington Post as saying.
Italy's Budget Minister Paolo Cirino Pominclno Wednesday, said: "We ought to try with every means to help the Soviet economy to transform itself as rapidly as possible into a market economy."
The argument about which comes first — aid or reform — preoccupied leaders of the big Industrial democracies Just a month ago in London at the Group of Seven summit. Gorbachev returned home with promises of support and advice, and associate status in the International Monetary Fund, but no large-scale financial assistance.
Gorbachev now returns to Moscow beholden to his frequent rival, Russian Republic President Boris Yeltsin, and the radical forces he leads. But Gorbachev may also now fee) no need to compromise with the Communist Party hardliners who resisted his polices of perestroika and glasnost.
"Gorbachev has no reason now to be compromise-prone, as he used to be, because the whole horde of hard-liners just disappears. They will be removed from power, thousands and thousands of people," said Boris Fyodorov, a former Yeltsin aide.
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