OMRI DAILY DIGEST
No. 180, 15 September 1995

HUNGARY FEELS INCREASINGLY ENDANGERED BY BOSNIAN CONFLICT. The
possibility of a military conflict involving Hungary has slightly
increased because the situation in the former Yugoslavia is still full
of question marks, Hungarian Foreign Minister Laszlo Kovacs said to
Hungarian newspapers on 14 September. He noted that while the chances of
settling the neighboring conflict have improved, Hungary "is more
endangered than before." Since the Croatian occupation of Krajina,
tension has increased along Hungary's borders, with the recent flood of
Krajina refugees upsetting the delicate balance of ethnic Hungarians in
Serbia's northern province of Vojvodina. -- Zsofia Szilagyi, OMRI, Inc.

ROMANIAN PRESIDENT WANTS TO BREAK HUNGARIAN IMPASSE. Ion Iliescu told a
Reuters correspondent on 14 September that he wanted to take the lead
with a "definitive step" toward rapprochement with Hungary. He added
that Hungarian Prime Minister Gyula Horn was receptive but gave no
details. Iliescu was speaking before a meeting with leaders of all
parliamentary parties that was aimed at enlisting support for his ideas.
Romanian TV reported that Iliescu presented three sets of documents
about to be sent to Budapest, one of which was a "code of conduct" for
dealing with the problem of national minorities. Iliescu last month
called for a "historic reconciliation" between Romania and Hungary. --
Michael Shafir, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave


(Elnezest az esetleges kisbetukert, de az eredeti szoveg csupa
nagybetuvel volt irva, amit at kellett cserelnem.)

Buchwald Amy

*****************************************************************

date=9/14/95
type=background report
number=5-31117
title=East Euro Trade
byline= Barry Wood
dateline= Prague
content=
voiced at:

Intro:  Prime ministers of seven Central and Eastern European
countries met this past Monday in the Czech Republic to consider
ways to rebuild and eventually expand trade links within the
region.  V-o-A's Barry Wood reports that the Brno summit marks an
important evolution in cooperative relations within
post-communist Eastern Europe.

Text:  The starting point for examining intra-regional East
European trade is a recognition that it is today very much
smaller than it was during the communist period.

Under the old socialist division of labor certain countries had
been assigned responsibility for producing a specific item for
the entire eastern bloc.  Good examples were Ikarus city buses
from Hungary -- which had the entire eastern market.  Likewise in
trams C-K-D from Prague was essentially a monopoly producer for
all socialist countries.

When the Soviet dominated Comecon trading system collapsed at the
end of 1991, trade relations among the former socialist countries
also collapsed.  Trade volumes within the group were never
particularly high, but they fell in many cases by 50 to 75
percent.  Where Comecon trade was essentially barter, after 1992
regional trade was conducted on commercial terms, meaning that
payments had to be made in hard currency.

Given that all of the post-communist countries were deep in a
transformation recession, there was little hard currency
available for imports.  What money was available was used to
import western alternatives to the shoddy eastern goods that few
consumers wanted.

Each of the transforming economies sought to recast their trade
to the west.  That process has accelerated to such an extent that
throughout the region Germany and the European Union have
replaced Russia and the east bloc as principal trading partners.

It is in this context that the Central European Free Trade
Agreement (CEFTA) was launched at the end of the 1992.  Cefta has
become the economic anchor for what are sometimes called the
Visegrad Countries.  Visegrad is the name of a town in Hungary
where the presidents of Czechoslovakia, Hungary and Poland met in
February 1991.  At that time the three countries were
contemplating joint efforts to win entry into the European Union.

The Visegrad group expanded to four countries when Czechoslovakia
split apart.  Now Cefta has added Slovenia.  Bulgaria and Romania
as well as the Three Baltic Countries want to join.  The
qualifications for entry are membership in the World Trade
Organization, bi-lateral trade accords with each Cefta member,
and an association agreement with the European Union.

At the Brno summit Polish prime minister Jozef Oleksy said that
previous regional arrangements like Comecon may have been
carelessly discarded.  He complained that regional trade
currently comprises a mere five percent of Polish imports and
exports.  The Czech trade minister agreed that now that the
recession is over in the Cefta countries there is an opportunity
to rebuild regional trade.  For now, experts say trade expansion
will occur mainly among the fastest reforming countries.  At the
top of that list is Poland and the Czech Republic and trade
between these former partners increased by 50 percent in 1994.
Similar increases are expected this year.  (Signed)

neb/bdw/cf

14-Sep-95 12:13 pm edt (1613 utc)
nnnn

source: Voice of America