JPRS-EER-90-025

28 FEBRUARY 1990

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East Europe

JPRS-EER-90-025 CONTENTS 28 FEBR UAR Y 1990

POLITICAL

ALBANIA

Decree on Allocation of Housing [GAZETA ZYR TARE Nov] .......................................................... I

Military Councils Set Up in District Courts [GAZETA ZYRTARE Nov] ......................................... 4

Change in Law on Pensions [GAZETA ZYR TARE Nov] .................................................................. 4

CZECHOSLOVAKIA

Democratic Forum of Communists Drafts Its Rules [RUDE PRA VO 10 Jan] ............................... 4

Bilak Implicated in Warsaw Pact Invasion [ZEMEDELSKE NOVINY 2 Jan] ................................ 6

Adamec Assesses CPCZ Extraordinary Congress [RUDE PRA VO 23 Dec] ...................................... 8

GERMAN DEMOCRATIC REPUBLIC

Early GDR Acceptance of Unification Detailed [Hamburg DER SPIEGEL 12 Feb] ...................... 9

HUNGARY

Basic Concepts of Future National Security Law Outlined [NEPSZABADSAG 12 Jan] ................. 11

Independent Social Democrats on Duna-Gate [NEPSZA VA 12 Jan] ............................................. 12

POLAND

POLITYKA Weekly News Roundup [POLITYKA 20 Jan] .............................................................. 12

Democracy Development Director on Assistance to Citizens Committees

[RZECZPOSPOLITA 21 Dec] ......................................................................................................... 14

Peasant Parties 'Rebirth,' 'Solidarity' Elect New Leadership [ZYCIE WARSZA WY 22-26 Dec] .... 15

ROMANIA

Decrees on Farm ing Sector, Private Enterprise .................................................................................. 16

'Free Initiative' in Small Units [ROMANIA LIBERA 6 Feb] ................................................ 16

Increased Pensions for Farmers [ROMANIA LIBERA 6 Feb] ................................................ 19

Land Incentives for Farmers [ADEVARUL 1 Feb] ............................................................... 20

Incentives for Farm Units [ADEVARUL 2 Feb] .................................................................... 21

Contract, Purchase Prices for Farm Products Increased [ADEVARUL 13 Feb] ............................. 23

Decision on Management of Economic Activity [ADEVARUL 10 Feb] ......................................... 24

Decree-Law on Early Retirements [ADEVARUL 9 Feb] ................................................................ 25

YUGOSLAVIA

Writer Deplores Policies of 'Yugoslav Ceausescu' [DANAS 26 Dec] ............................................. 26

ECONOMIC

INTRABLOC AFFAIRS

Central European Common Market Advocated [POLITYKA-EKSPORT-IMPORT 20 Jan] ........... 28

CZECHOSLOVAKIA

Prague Spring's Theorists on Prague Fall's Prospects [MLADA FRONTA 19 Jan] ........................ 29
JPRS-EER-90-025

28 FEBRUARY 1990 2

HUNGARY

Tardos Condones Nemeth Economic Policy [NEPSZABADSAG 3 Feb] ......................................... 31

Economist Envisions 25% Inflation in 1990 [FIG YELO 8 Feb] .................................................... 33

POLAND

Fate of Helicopter Industry Linked to West [R YNKI ZAGRANICZNE 18 Jan] ........................... 36

Balcerowicz: Economic Reform Demands Hard Choices [Hamburg DER SPIEGEL 29 Jan] ........ 37

Government Agricultural Policy, Relationship to Economic Policy Outlined

[RZECZPOSPOLITA 13 Dec] ......................................................................................................... 41

CEMA Supply, Payments System Blamed for Enterprises' Shortages

[RZECZPOSPOLITA 6 D ec] ........................................................................................................... 42

Agricultural Machinery Production Held Up by Steel Shortages [RZECZPOSPOLITA 6 Dec] ...... 42

Regional Press Column: Economic Reports [GAZETA BANKOWA 23-29 Oct, 20-26 Nov] ............ 43

Paradoxes Noted in Waste Paper Collection, Usage [ZYCIE WARSZA WY 6 Dec] ...................... 43

Small Breweries Proposed for Social, Economic Reasons [RZECZPOSPOLITA 6 Dec] ............... 44

FRG Westinghouse Offers Free Installation of Air Sampling Probes

[RZECZPOSPOLITA 21 Dec] ......................................................................................................... 44
JPRS-EER-90-025

28 February 1990 POLITICAL

ALBANIA -People's Heroes, Heroes of Socialist Labor, People's

Artists and Teachers, professors and doctors of sciDecree on Allocation of Housing ence, and professional writers.

90EB0175C Tirana GAZETA ZYRTARE in Albanian -The gravely ill, who are specified as such by instrucNov 89 pp 82-90 tion of the Ministry of Health.

[Ordinance No. 1, dated 7 July 1989, "On the Adminis- Article 4

tration of Requests for Housing and Its Allocation"]

Requests for accommodation are presented to the peo- [Text] In order to improve further the administration of ple's council of the city quarter, or to the people's council

requests for housing and of its allocation in the most of the city if the city is not divided into quarters. In

carefully studied manner possible, by proposal of the villages, requests for housing of agricultural enterprise

Ministry of Communal Economy, the Council of Minis- workers are presented to the people's council of the

ters promulgates this united village.

Ordinance A copy of the housing request is also presented to the

Article 1 work center and to units and divisions of the Ministry of

People's Defense and the Ministry of Internal Affairs.

A husband, a wife, and other adults in a family, who are

employed or on a pension have the right to request Article 5

housing. The people's council of the city quarter, the people's

Article 2 council of the united village, the people's council of the

city, where there is no executive committee, the execu- The standard housing area for each person, as a rule, is tive committee of the people's council of the city, and the

six square meters, but in no case may it be less than four executive committee of the people's council for the

square meters. Tirana zone study the request for accommodation, group

them according to the rank specified in Article 15 of this If the housing area standard is met, children under the ordinance, and present them to the respective higher

age of ten may live in a room with their parents. Other level executive committee of the people's council.

family members of different sexes who are not spouses,

beginning, as a rule, from the age of ten and older have The executive committees of the district people's counthe right to a separate room. cils examine the requests for accommodation and study

the housing needs of each city, the Tirana zones, quarter, The organ in charge of dividing up a family for housing work and production center, agricultural enterprise, and

purposes also decides, in cases where this is required, on military unit and division.

the division of the housing area. On the basis of this

decision, separate leases are drawn up for the rental of Article 6

the dwellings.

At the beginning of the year, the executive committees of

If a dwelling that is personal property is vacated by the people's councils of districts send the plan for allocation

tenant, it is given to the owner as a residence if he of apartments to the executive committees of people's

requests it, even if he has not presented a request earlier councils of cities, to people's committees of cities that do

to live in it, on the condition that he has a residence not have executive committees, to executive committees

permit for the place where the dwelling is located and the of people's councils for the Tirana zones to work centers

dwelling area has been vacated, so that a surplus is for which housing is planned, and to enterprises of the

thereby created. communal system. The executive committees of people's

councils of districts also plan apartments for the settleArticle 3 ment of persons assigned or transferred.

The following have the right to supplementary housing

area, consisting of separate rooms: Article 7

-Workers at the level of deputy minister and above. The executive committee of the people's council of the

cities, the people's council of cities where there is no -First secretaries of the party committees of the dis- executive committee, and the executive committee of

tricts and of the zones of Tirana; chairmen of execu- the people's council for the Tirana zones allocate the

tive committees of the people's councils of the district number of apartments to people's councils of city quarand of the zones of Tirana. ters.

-Commanders, commissars of divisions and those on The executive committee of the people's council of

the same level who are specified, according to the case, cities, the people's council of cities where there is no by order of the Ministry of People's Defense or the executive committee, and the Executive Committee of

Ministry of Internal Affairs. the People's Council of Tirana District have the right to
JPRS-EER-90-025

2 POLITICAL 28 February 1990

maintain a reserve of up to three percent of the number The proposal of the commission at the work center is

of apartments planned for allocation during the year sent one month before completion of the housing con-

(exclusive of apartments that are built with voluntary struction, according to the case, to the people's council of

contributions) in order to fulfill unforeseen needs. The the city quarter or to the people's council of the city, if

apartment reserve is allocated during the year, while the the city is not divided into quarters, where the person

unused portion is required to be allocated during the making the request lives. These councils make their

month of January of the following year. decision no later than fifteen days before housing is

handed over.

Article 8

The executive committee of the district people's council Article 12

has the right to take from among the apartments built If the appropriate organs of government observe that the

with voluntary contributions and with special funds as proposals of the housing allocation commission at the

many apartments as are equal to the average percent of work center are not just, they do not approve them and

demolitions at the city level, in order to free sites for return them for alteration. If the commission repeats the

construction, but not more than thirty percent, while same proposal and the appropriate organs of government

respecting their proportional division according to sto- again observer that it is not just, they do not accept it and

ries of apartment structures with one, two, and three decide by themselves on the persons who should be

rooms and a kitchen. In this percentage is also included accommodated by that work center.

the number of apartments that are taken up by shops and

structures on the ground floor. The apartment must be Article 13

used only to fulfill the needs of families whose housing If a worker who has presented a request for housing is

has been demolished. transferred to another work center in the same city, the

Citizens whose housing has been demolished to free sites seniority of his request is retained and, if he has made a

for construction may sign agreements with the people's contribution to the housing construction together with

councils of city quarters or with people's councils of the voluntary contribution of his former work center, he

cities, if the city is not divided into quarters, for accom- continues to work in it and is considered for accommomodations in housing that is constructed on those sites, dations along with all the other workers at that work

on the condition that during the time when the housing center.

is being constructed they resolve by themselves the

problem of their temporary accommodations. Article 14

Article 9 The organs and divisions of the Ministry of People's

Defense and the Ministry of Internal Affairs act

For housing built with voluntary contributions and for according to the regulations specified in this ordinance,

that constructed with special funds, a commission for with respect to housing that is planned and housing that

allocation is established in work centers. The commis- is vacated by tenants.

sion is composed of from five to seven people, chaired by

the official of the work center. If this latter person Article 15

himself presents a request for accommodations, the The priorities in fulfilling housing requests concern

commission is chaired by his deputy. Workers who have citizens who:

presented requests for housing may not participate on

the commission. 1. Do not have a dwelling area (who have been dispossessed or whose housing has been demolished; who live

Article 10 in housing that presents a danger of collapse; who are

After the completion of housing construction, the corn- assigned or transferred from one district to another or

mission on allocation of housing at the work center within a district, if they have been given the right of

verifies the list of names of workers who have presented housing in the new housing center; persons in orphanproper requests for housing, their family composition, ages who are being considered for the first time).

their health status, the condition of the dwelling where 2. Live in basements or in unhygienic houses.

they live, the contributions they have made toward the

housing construction, the date of their request, and their 3. Prove by means of a report from the forensic medicine

right to housing. commission that they suffer from a serious illness, as

provided for in the last paragraph of Article 3 of this

Article 11 ordinance.

After determining the workers who should receive 4. Have the temporary use of housing, in accordance

housing, the commission on housing allocation at the with a judicial decision on divorce, and will remain

work center compiles a list and posts it for fifteen days; without housing after the application of this decision, or

it reviews the comments of the collective, and makes are obliged by judicial decision to vacate housing

proposals to the appropriate organs of government, because of imperative need on the part of the owner.
JPRS-EER-90-025

28 February 1990 POLITICAL 3

5. Have a need for more space, remaining family is given another dwelling, according to

designated norms, if they accept it.

Article 16

Vacated housing in work centers remains at the disposal Article 19

of the people's council of the city quarter or of the After a month has passed from the last day when rent

people's council of the city, if the city is not divided into must be paid by the tenant of a dwelling, the communal

quarters, while areas that are vacated by the transfer of muterpaid byst tenantiof aodwelling the comua

workers outside the district remain at the disposal of enterprise must begin action to collect the debt.

executive committees of people's councils of districts. The document belonging to the enterprise, which certifies its credit claim on the tenant for payment of the The people's council of the city quarter or the people's dwelling rent, use of electrical energy and water, and the

council of the city, if the city is not divided into quarters, appropriate fees, telephone service, obligation for the make a decision regarding the housing that is being painting of common areas as well as payment for damvacated not later than ten days before the date of its pitn fcmo ra swl spyetfrdm vacateinot ages and fines due to damage and destruction of dwellvacating. ings, in accordance with the regulations for use and

Vacated areas in housing for soldiers in organs and maintenance of state housing, specified by the Ministry

divisions of the Ministry of People's Defense, and the of Communal Economy as executive title, is sent to the

Ministry of Internal Affairs, and housing workers at the accounting office of the work center or pension office of

"Enver Hoxha" University of Tirana remain at the the tenant. On the basis of this document, these offices

disposal of these organs for use by their workers. They are obliged to take appropriate action.

must make their proposals to the organs in charge of If the tenant cannot pay his debts, the communal enterhousing allocation not later than twenty days before the prise has the right to send this document for execution to

date when the housing is to be vacated, the work center of other members of the tenant's family

who are of legal age and who are also obliged by the Article 17 housing lease to realize the unfulfilled obligations.

Within ten days of taking over new housing and apartments that are vacated, the communal enterprises that Article 20

administer housing notify the organs in charge of

housing allocation, which-within ten days of that noti- If housing areas remain unallocated after the deadlines

fication-give authorizations for accommodation of cit- designated in Article 17 of this ordinance, due to the

izens and send a copy to the communal enterprises for fault of the communal enterprises that administer the

the purpose of concluding a contract. The authorization housing, the financial damages equal to the value of

contains the number and date of the decision, on the unpaid rents are charged to the workers responsible for

basis of which the housing has been allocated. The the situation at these enterprises, together with the

deadline for concluding the contract is ten days from the indemnity prescribed in accordance with the Labor

date of the issuance of the authorization. Code.

With the expiration of this deadline, the authorization If housing areas remain unallocated after the deadlines

becomes null and void. If the contract is not concluded designated by the provisions of this ordinance, due to the

within the limit of the deadline for justifiable reasons, fault of the organs or enterprises in authority, the comwhen the contract is concluded the communal enterprise munal enterprise is obliged to request from them the

that administers housing pays the tenant an amount sum of the unpaid rents for the financial damage caused.

equal to the value of the lease from the issuance date of

the authorization. Article 21

Article 18 Construction enterprises or communal enterprises that

administer housing are obliged to request that the appro- Citizens who do not accept designated housing from the priate local organs of government where the housing is

organ in authority, if that housing is in accordance with situated evict, by administer order, citizens who occupy

the norm and with health requirements, lose their housing areas without having signed a lease. The organs

ranking. Citizens who sell their housing as personal of government are obliged to issue this order on the basis

property are not given authorization for housing. of Article 289/Il of the Civil Code.

It is not permitted for one apartment to be used as

housing for two or more families. Article 22

If two families live together in a single apartment and The ordinance of the Council of Ministers, No. 2, dated

one of the families leaves, the housing area that is 23 March 1958, "On the Manner of Leasing Housing,"

vacated is given to the other family, if it belongs to them; and the order of the Council of Ministers, No. 8, dated

if it does not belong to them, the apartment comes into 12 July 1983, "On the Administration of Requests for

the possession of the appropriate organ and the Housing," are abrogated.
JPRS-EER-90-025

4 POLITICAL 28 February 1990

Article 23 Secretary, Sihat Tozaj

This ordinance goes into force immediately. Chairman, Ramiz Alia

Chairman of the Council of Ministers Change in Law on Pensions

Adil Carcani 90EBO175A Tirana GAZETA ZYRTARE in Albanian

Nov 89 p 78

Military Councils Set Up in District Courts [Decree Regarding an Addition to Law No. 4976, dated

90EBO175B Tirana GAZETA ZYRTARE in Albanian 29 June 1972, "On the Pensions of Members of AgriculNov 89 pp 79-80 tural Cooperatives"]

["Resolution on the Designation of District Courts [Text] On the basis of Article 78 of the Constitution,

Where Military Councils Are Established"] By proposal of the Council of Ministers,

[Text] On the basis of Article 78 of the Constitution and

Article 16 of the Decree, "On the Judicial Organization The Presidium of the People's Assembly of the People's

of the RPSSH [People's Socialist Republic of Albania]," Socialist Republic of Albania has resolved:

by proposal of the Supreme Court, Article 1

The Presidium of the People's Assembly of the People's In Law No. 4976, dated 29 June 1972, "On the Pensions

Socialist Republic of Albania has resolved: of Members of Agricultural Cooperatives," after Article

1. Military councils are established in the courts of 4 is added Article 4a with this content:

Tirana, Durres, Shkoder, Korce, Elbasan, Vlore, Fier, "A woman who is a member of an agricultural cooperaGjirokaster, Kukes, Mat, Berat, Diber, Sarande, and tive, who has given birth to and raised six or more

Tropoje districts, children until the age of eight, has the right to receive an

2. The military council in the Tirana District court old-age pension when she has reached the age of fifty and

extends its activities to Kruje District as well. has fifteen years of service at work."

3. The military council in Shkoder District court extends Article 2

its activities to Lezhe District as well.

This decree goes into force 15 days after publication in

4. The military council in Korce District court extends GAZETA ZYRTARE.

its activities to Pogradec and Kolonje Districts as well. Tirana, 13 November 1989

5. The military council in the Elbasan District court Decree No. 7339

extends its activities to Librazhd and Gramsh Districts

as well. For the Presidium of the People's Assembly of the

People's Socialist Republic of Albania

6. The military council in the Fier District Court extends

its activities to Lushnje District as well. Secretary, Sihat Tozaj

Chairman, Ramiz Alia

7. The military council in Gjirokaster District court

extends its activities to Tepelene and Permet Districts as CZECHOSLOVAKIA

well.

8. The military council in the Mat District court extends Democratic Forum of Communists Drafts Its

its activities to Mirdite District as well. Rules

9. The military council in the Berat District court 90ECO249A Prague RUDE PRA VO in Czech

extends its activities to Skrapar District as well. 10 Jan 90 p 8

10. The military council in the Tropoje District court [Text]

extends its activities to Puke District as well. Proposed DF(K) Organizational Statute

11. Resolution No. 193, dated 23 September 1968, is

abrogated. I. DF(K) Membership

This resolution goes into force immediately. 1. DF(K) [Democratic Forum of Communists] membership is open to CSSR citizens of age, and to foreign

Tirana, 13 November 1989 citizens who agree with the DF(K) program and support

Resolution No. 341 it materially by regular dues.

For the Presidium of the People's Assembly of the 2. Members participating in the movement's activities

People's Socialist Republic of Albania are active members.
JPRS-EER-90-025

28 February 1990 POLITICAL 5

3. In addition to active members there are contributing 3.3. The DF(K) national coordinating center is formed

members. Those agreeing with the program and materi- by joint deliberation of the provincial centers. During

ally supporting it are regarded as contributing members, deliberations no majority may be formed against DF(K) members from the Slovak Socialist Republic.

4. All members, active and contributing, enjoy an equal

status in the DF(K). 3.4. On its own initiative or when proposed by any

5. New members are admitted provincial center the national coordinating center con- to the DF(K) by any yokes a DF(K) national forum.

DF(K) base collective on the basis of a personal application. The base collective endeavors to assure that the 3.5. As needed, the provincial as well as national

DF(K) is not misused by citizens who behaved disrepu- coordinating centers form executive, consultative and

tably in the past and lack public trust. The base collective initiative groups.

develops high moral and political qualities of members

and insures correct democratic conduct. 3.6. The national and provincial coordinating centers

establish a National (provincial) program council of the

6. In its activity the DF(K) counts on sympathizing DF(K). Its members can be noted scientists, artists and

citizens. It will disseminate ideas among them, support other prominent personalities from all areas of social

their interests and counts on them in convoking demo- life. The program council will work in accordance with a

cratic forums. special statute approved by the DF(K) National and

provincial coordinating centers.

II. DF(K) Structure

1. Base Collectives III. DF(K) Rules of Conduct and Business

1.1. Base collectives come into being as democratic 1. Each member has an inalienable right to completely

forums of the left. free expression of his views during deliberations or

outside of them, and to retain these views also in case

1.2. Members join in base collectives wherever at least that the majority does not accept them. five members unite to do so. 2. The basic method of deliberative conduct is collec1.3. All matters of principal importance are dealt with tivity and striving to unite the opinions of all. The

by the base collective's forum, existence of different opinions joined by the program

and organizational statute belongs to the fundamentals 1.4. To coordinate its activity the base collective's of relations within the DF(K).

forum will establish a coordinating center. In numerically small collectives one or several spokesmen may 3. DF(K) base collectives, okres and provincial coordisubstitute for this center. nating centers may communicate among themselves

2. Okres Organizations freely, directly and informally.

2. 1. Okres organizations are formed by DF(K) base 4. Each coordinating center may delegate the carrying collectives in the okres a out of some activities to another coordinating center.

2.2. For coordinating joint activities and joint prob- 5. member Material dues, support donations of DF(K) from sympathizing activities derives citizens fromand

lems a DF(K) okres coordinating center is established as

an organ in which all base collectives in the okres are organizations, and potentially from its own economic

represented-by at least one representative each. activities.

2.3. Joint problems of principal importance are dealt 6. Dues scale. Based on total net income:

with and resolved by the DF(K) okres forum convoked • up to 1800 Kcs, membership dues of 1 Kcs;

by the okres coordinating center. • from 1801 to 2200 Kcs, dues of 2 Kcs;

2.4. As needed, okres coordination centers form exec- • from 2201 to 2600 Kcs, dues of 4 Kcs; • from 2601 to 2800 Kcs, dues of 10 Kcs;

utive, consultative and initiative groups. 0 from 2801 to 5000 Kcs, dues of net • from 2801 to 5000 Kcs, dues are one percent of net

3. Higher Coordinating Centers and the National Center income; • over 5000 Kcs, dues are 2 percent of net income.

3.1. In Bohemia, Moravia and Slovakia DF(K) provincial coordinating centers are established as represen- 7. The base collectives may in individual cases adjust

tative organs of okres organizations, each having at least dues down or up.

one representative. 8. Of the receipts from membership dues, ... percent of

3.2. On their own initiative or when proposed by any the total is retained by the base collectives, ... percent

okres coordinating center the provincial coordinating flows to the okres and ... percent to the provincial

centers convoke DF(K) provincial forums. coordinating centers.
JPRS-EER-90-025

6 POLITICAL 28 February 1990

9. The activity of the National Coordinating Center will Hungarian Socialist Workers Party on 20 August by one

be financed from the funds of the provincial coordi- of the members of the Hungarian delegation who had

nating centers. attended the Moscow meeting.

10. In addition to the coordinating centers on all levels [ZEMEDELSKE NOVINY] In other words, this is relithere will be established audit commissions to oversee able first-hand information. Could you try to summarize

financial management, reporting to forums on the cor- at least its most salient points?

responding levels.

[Bencik] Already during the meeting in Bratislava on 3

Prague, 3 January 1990 August 1968 V. Bilak, in his own name and on behalf of

his followers, addressed a letter to the CPSU leadership

Bilak Implicated in Warsaw Pact Invasion in which he informed that he personally and with him his

comrades who shared his views intended to break off 90ECO21J A Prague ZEMEDELSKE NOVINY in Czech with the then CPCZ leadership. To achieve their objec2 Jan 90 p 3tive they requested foreign aid, including military assistance. Specifically, they planned to address the meeting

[Interview with Dr. Antonin Bencik, historian, founding of the CPCZ CC Presidium on 20 August, to appeal to

member of the Obroda Club for Social Reconstruction the population and to call openly for a military intervenand member of the Czechoslovak Commission for Clar- tion. They informed that they were ready to seize control

ification of 21 August 1968, by Jan Subert: "Who of radio and television networks, and if everything

Invited Armed Intervention ?"; date and place not given; would go smoothly, they intended to elect immediately a

first two paragraphs are ZEMEDELSKE NOVINY new Presidium of the CPCZ CC and a new government.

introduction] As we know, this scenario was accepted by the Moscow

[Text] Relatively recently there still were some doubts leadership, but many of its scenes failed to be played that

about the actual existence of individuals who would act way.

against the will of our people and contrary to laws by [ZEMEDELSKE NOVINY] On the whole, for you, hisinviting foreign armies to our country to suppress the torians, this information was nothing new; it only conPrague Spring in 1968. It was only in the past two years firmed what you had already known from the written

that all confusion vanished on the basis of testimonies fimed ou ha ala d konrmhwit

from two completely unrelated sources. The shattering testimony of V. Bilak himself...

truth was revealed jointly by the Hungarian daily MAG- [Bencik] In 1968 RUDE PRAVO and the Slovak daily

YARORSZAG and by reminiscences which Vasil Bilak, PRAVDA began to publish V. Bilak's serialized memoirs

intoxicated by his victory as normalizer, entitled "The entitled "The Milestones of My Life." Their publication

Milestones of My Life." was suddenly stopped but the whole work appeared as

The contents of both above-mentioned sources are very samizdat and spread rapidly. Thus, much of what we had

well known to historians, politicians and journalists. The only suspected was fully revealed.

grassroots are considerably less acquainted with those In his recollections V. Bilak-in a sort of an ecstatic

materials. In view of the fact that those data are unusually relevant as well as interesting, we asked historian Dr. euphoria as a winner of the normalization policy-s

Antonin Bencik, member of the Czechoslovak Commis- impudently and self-assuredly describes his subversive

sion for an Analysis of the August events, and a founding machinations against the party and state leadership at member of the Obroda-Club for Socialist Reconstruc- that time. For example, he quite bluntly considers a coup tion, for an interview about this topic- d'etat which was to take place during the 14th CPSL Congress and part of which included the arrest of Dub-

[ZEMEDELSKE NOVINY] May we begin with the cek, Cernik and Svoboda. In conjunction with this plan

testimony of the Hungarian daily MAGYARORSZAG he names quite a few persons on whose aid in the

based on an interview with J. Kadar, the former secre- fulfillment of his plan he was counting: D. Kolder, A.

tary of the Central Committee of the Hungarian Socialist Indra, K. Hoffmann, J. Lenart, J. Fojtik, J. Korcak, A.

Workers Party? Why is it important for your search of Kapek, V. David, 0. Svestka, M. Jakes, M. Zavadil, J.

the truth about August 1968? Havlin, V. Salgovic, J. Janik, L. Pezlar, K. Boda and

others.

[Bencik] In the ninth through the eleventh installment of

an interview with J. Kadar the newspaper MAG- [ZEMEDELSKE NOVINY] So far we have discussed

YARORSZAG published in July 1989 data which for us only his subversive machinations and other such intenare very important because he deals there with events tions. Those who have not read "The Milestones of My

which took place before and during August 1968. The Life" may rightfully object that it often is a long way

interview presented facts about the meeting of the five from plans to deeds...

Warsaw Pact representatives held in Moscow on 16

August to discuss an immediate military intervention. [Bencik] As proof that V. Bilak's activities did not end

Relevant communications from that meeting were sub- with anything more than harmless meditations, we may

mitted to the Presidium of the Central Committee of the quote for instance this passage from "The Milestones of
JPRS-EER-90-025

28 February 1990 POLITICAL 7

My Life": "In a situation full of conflicts and contradic- debate began about the statement against the interventions, on the brink of a civil war, 9 September was tion. And again we are able to learn about Bilak's

approaching-the day when the 14th party congress was impressions and notions at that particular moment:

to begin. Due to great pressures from individuals dedicated to socialism a proposal was made that for any "We had not prepared any alternative actions... All we

eventuality a letter be drafted by which members of the needed was to call a couple of loyal and responsible

CPCZ CC and of the National Assembly request assis- officials in the apparatus of the CPCZ CC, quite a few of

tance from our allies. Every possibility had to be consid- whom were present in the building at that time, and to

ered." post them at the door to the meeting hall to prevent any

of the right-wingers from leaving... I was hoping that the

[ZEMEDELSKE NOVINY] ... and it may be relevant to presidium would not vote for such an appeal to the

note that the author of the memoirs frankly admits the Czechoslovak people. Unfortunately, Piller and Barbirek

existence of such a letter. were overcome by fear and would not vote with us.

Dubcek, Cernik, Kriegel, Smrkovsky, Spacek, Piler and

[Bencik] Indeed, and here again a direct quote may help: Barbirek voted in support of the proclamation; Bilak,

"As I have already mentioned," states the author in Kolder, Svestka and Rigo voted against. Others, for

another passage, "a written request for fraternal aid was instance, Jakes and Indra, did not have the right to

drafted for any eventuality. During the Bratislava vote."

meeting a request was handed to our Soviet comrades-a

letter by which certain members of the Presidium of the I should like to add that a few pages later this author

CPCZ CC and of the government asked the Soviet makes another statement in which he describes how he

leadership for help..." and his allies attended a conference at the Soviet

embassy and there they actually discussed the establishIt is true that Bilak does not specifically name the ment of a "revolutionary government of workers and

signatories of this request, but the co-authors and adher- farmers."

ents he repeatedly mentions are D. Kolder, A. Indra, K.

Hoffmann, J. Lenart, 0. Svestka, V. Salgovic, J. Fojtik, [ZEMEDELSKE NOVINY] In addition, it is very

M. Jakes, M. Zavadil, J. Janik, L. Pezlar and others, important to know that Bilak's pernicious role was far

from over when the invading armies arrived. As the

Another passage in the text focuses on the planning of a secretary of the CPCZ CC and later a member of the

joint strategy by Bilak, Kolder, Svestka and Rigo at the presidium he was a leading creator of the period of

meeting of the CPCZ CC Presidium on 20 August 1968, political, social and cultural darkness which followed.

with the following conclusion: on 20 August Bilak and

other initiates were aware that a military intervention [Bencik] As a matter of fact, in the last chapter of his own

would be launched in a few hours, and they took certain book Bilak himself predicted his further role as an active

steps to ensure its success. normalizer. Precisely that part perhaps best of all

expresses his euphoric satisfaction over the victorious

[ZEMEDELSKE NOVINY] Testimonies by Dubcek, defeat of the Prague Spring. He tells how he maneuvered

Cernik and Mlynar, all of whom had attended the Dubcek's dismissal and how he discussed suitable candramatic session of the CPCZ CC on 20 August, made it didates with Brezhnev. We can learn there about Husak's

known that the purpose of those steps was to guarantee secret meeting with Brezhnev in Mukachevo and also

political legitimacy for the intervention.., how the author's dream came true when Dubcek

resigned. And again we encounter there the names of his

[Bencik] At the given moment that was the most impor- loyal collaborators.

tant thing. Bilak and his closest allies intended to force

the presidium to adopt a proclamation welcoming the Among other things, V. Bilak proudly informs us: "For

intervention. However, within the first minutes of the three or four weeks our comrades from Prague and our

military attack, their plans began to crumble and Bilak contacts from various regions and districts would meet

was losing his self-assurance. After the launching of the in my office at the CPCZ CC. Here we assessed the

intervention was reported, Z. Mlynar, the secretary of situation and determined our further strategy. Comrades

the CPCZ CC, proposed a statement condemning the D. Kolder, K. Hoffmann, A. Indra, J. Lenart, 0. Svestka,

intervention, but the Bilak faction demanded a recess J. Fojtik, V. David, A. Kapek, J. Korcak, V. Novy, M.

because they expected the Soviets to seize the building in Zavadil, 0. Rytir and others worked most vigorously. Of

the meanwhile. great help to us was G. Husak who correctly controlled

the situation in Slovakia, which strongly influenced the

"Subconsciously I believed," says Bilak brazenly, "that a situation in the Czech lands."

major or a colonel of the Soviet army would enter the

meeting hall, salute and with an excited voice report that [ZEMEDELSKE NOVINY] On the basis of these and

upon the request and in accordance with the commit- other testimonies and facts, a group of historians, memment made at the Bratislava meeting they came to fulfill bers of the Obroda Club, proposed to general prosecutor their international duty." Nevertheless, at the end of the of the CSSR in August 1989 to initiate an investigation

recess the colonel was nowhere to be seen; a serious against V. Bilak for justified suspicion of high treason.
JPRS-EER-90-025

8 POLITICAL 28 February 1990

Adamec Assesses CPCZ Extraordinary Congress particular event may-and already do-differ. In this

90ECO212A Prague RUDE PRA VO in Czech case again it applies that you just cannot please every23 Dec 89 p I body, which, naturally, was not, and could not be, our

intention. The decisive fact is that our party has found in

[Interview with Prime Minister Ladislav Adamec by itself enough strength and courage to stop asserting any

Michal Podzimek: "Action Program to Life"; date and rights and prerogatives. It is not the proverbial virtue out

place not given; first paragraph is RUDE PRAVO intro- of necessity, but rather the party's own, voluntary,

duction] honest admission. In our opinion, the heretofore practice

not only violated the mission and purpose of socialism,

[Text] Friday afternoon, twelve hours after the conclu- which is social equality and justice, but it was a dissersion of the extraordinary party congress, we posed a few vice and a threat to the healthy organism of the party

questions to Comrade Ladislav Adamec. itself.

[RUDE PRAVO] In what way was the extraordinary [RUDE PRAVO] In addition, people are afraid that this

congress extraordinary? may be some kind of a stopgap tactic or even a devious

[Adamec] It was extraordinary in many respects. Already trap.

its convocation was the outcome of spontaneous [Adamec] Any fast, easy and ready ways out from any

demands from the grassroots. It had nothing in common critical situation are rarely available. We did not follow

with the self-exaltation at previous high-level meetings a cheap popular method of cursing our entire past and of

which were basically only formalities that never resolved heaping all blame on a few scapegoats. The whole

any problems. Its main purpose was to find a way out discussion at the congress was permeated with frank,

from a deep crisis. Unlike in the past, it was not harsh and occasionally merciless criticism, irrespective

beholden to the false notion of immutable policies; on of personalities, but in the interest of truth, justice, of the

the contrary, it unanimously demanded that we depart party's purification and of its future.

from our previous line. The change of cadres considerably differed from the past, because-with some excep- I should like to assure you that we did not deal only with

tions-new individuals, most of them unknown to our ourselves. We proceeded from the conviction that the

public, were elected. Furthermore, the social atmosphere party's crisis cannot be resolved if the crisis in our

in and outside the Congress Hall fundamentally differed society is not overcome.

from the past.

[RUDE PRAVO] What did the party members and the [RUDE PRAVO] In what sense?

grassroots expect from the congress? Were their hopes [Adamec] Above all, our fundamental political program

fulfilled or disappointed? aims to achieve political and economic stability and to

abolish all provisional policies as soon as possible; it [Adamec] The results of our discussions will be judged in endeavors to give our people greater political, social and

different ways. The Congress may not have satisfied legal security. In an honest competition with all our

everybody in every respect. This has to be expected; it partners, we intend to apply our ideas, proposals and the

cannot be otherwise when complex affairs are democrat- skills and experience of our party members, not to our

ically assessed. We have parted with many ideas and own but to public benefit.

with many individuals. One can already hear views that

words alone cannot be trusted; there are warnings against We want to be represented in governmental agencies and

relying merely on intentions and assurances. I can under- to share in the power of state and thus, to promote

stand genuine anxieties among honest people, whatever interests of our members and adherents. Nevertheless, it

their political views may be, and I do regard them as makes no sense to do nothing more than to defend state

fully justified. We do not judge actions by other political policies; should the circumstances warrant it, we must

forces in any other way-we do not trust anybody's oppose them in a competent manner.

words; we judge people by their deeds. The sooner we

can agree on that, the faster we shall reach a genuine [RUDE PRAVO] What kind of a party should the CPCZ

national understanding, and the stronger our democratic be?

system will become. [Adamec] Our program calls us to be a party for all

In the first place, expectations were focused on our members and not an organization which guarantees

attitude to our social crisis. We are aware of disputes some of its leaders a comfortable living. We are a party

about whether our party will be able to deal frankly, of all honest people and true patriots. We shall defend

openly and without evasions and secretiveness with its legitimate demands of every citizen-be he or she a

disastrous legacy of the past. The tenor of our debates, worker or a technician, a scientist or a farmer, a youth or

the adopted programmatic documents and the com- a retired person. We see ourselves as guarantors of

pletely new composition of elected cadres are proof of democratic rights and as consistent enforcers of social

our sincere efforts and honest approach to the closing of approaches to every individual. We are concerned in

the old and to the opening of a new chapter of our particular about our young people, women and other

activities. The views about this or that aspect of this groups of socially disadvantaged citizens. We are aware
JPRS-EER-90-025

28 February 1990 POLITICAL 9

of the unique significance of sciences and culture, and The Bonn government is startled: The pace of the

therefore, their representatives will always hold a place changes is making a muddle of all plans and is making

of honor in our ranks. We will not ignore injustice, even excessive demands on even the boldest fantasies. State

in individual cases. A true democracy knows no excep- Secretary of the Interior Hans Neusel said about the

tions-either it is, or it is not, democracy. We consider it chaotic situation, "We have enough problems for five

our party's task to be everywhere, for everybody, once years, and we're supposed to solve them in five weeks."

and always. One of the main tasks of the discussions at

the congress was to provide the necessary guarantees. Even the perennial beseechers of unity did not imagine

the fulfillment of their wishes like this: Reunification, as

[RUDE PRAVO] What is the party's primary concern at all participants in the last cabinet meeting came to

this moment, a few hours after the congress? realize, means takeover of a nearly bankrupt enter-

[Adamec] The congress is over; now is the time to put prise-that contrary, the is, citizens as Genscher of the stated, Federal "not Republic for free." will On have the

our abilities and our sincerity to test in translating our to make sacrifices of inestimable dimensions for the

action program into life. This program is not ours alone; liberation cofies o thestan d i mens.

it proceeds from the best ideas of other political parties liberation of their brothers and sisters.

and movements. It constitutes a foundation for our joint It is not just the social and financial challenges that

policy. We are convinced that it will be understood in concern the Bonn government. The lingering break up of

this manner and that it will contribute toward our the Soviet empire will reach a critical phase when the

national understanding. GDR extricates itself from Mikhail Gorbachev's realm

[RUDE PRAVO] Thank you for the interview. of authority at the East/West junction-the final

goodbye from the European post-war order.

GERMAN DEMOCRATIC REPUBLIC Will the Soviet Union endure this development as irrevocable? Will the United States, which tries to impede

Early GDR Acceptance of Unification Detailed every change in the political equilibrium just as the

90ENO315Z Hamburg DER SPIEGEL in German Eastern superpower does, approve of the new situation?

12 Feb 90 pp 16-20 Kohl and Genscher are looking for answers to questions

[Unattributed article: "We Are Going To Break Down in discussions with the U.S. foreign minister, James

Soon"; first paragraph is DER SPIEGEL introduction] Baker; the Polish foreign minister, Krzystof Skubiszewski, and European neighbors, and they are attempting

[Text] When will German unity be announced-this to clarify the nearly unstoppable course of history and to

year? Within a few months? The pace of decline in the dispel some worries-with some success.

GDR disturbs Bonn and is ruining all plans to merge the

two states in an ordered domestic policy and a safe- The CDU [Christian Democratic Union] chancellor and

guarded foreign policy fashion. "The train has his FDP [Free Democratic Party] vice chancellor had the

departed." Can it be stopped? most difficult mission to carry out during their surprise

visit to Moscow. Even if the official government line "The Republic is now in its 41st year," Hans-Dietrich until recently was that "reunification interferes with

Genscher ruminated in a discussion with Chancellor stability," the German emissaries had to convince

Helmut Kohl, "but such immense tasks have never had Mikhail Gorbachev of the contrary on the weekend:

to be solved." And when he thinks back to the political "Division is most dangerous."

quarreling of recent years-for example, over financing

hearing aids and eyeglass frames-then these problems Political bosses in Bonn, who otherwise believe they

are ranked as "nothing short of ludicrous" in view of the have solutions for everything, no longer determine the

approaching problems. course; they are being shoved. Minister of the ChancelWhat some incessantly implored-mostly on Sundays- lery Wolfgang Schaeuble wonders if a government can

and what others only saw far away or not at all has even still be formed. Schaeuble said, "I'm not so sure of

approached at a tempo no one expected. It is no longer anything."

the "whether" or even the "how," but only the "when" Horst Teltschik, chancellor advisor, suggested that Hans

of German unity that is at issue. Modrow could swear an oath of disclosure, perhaps offer

It seems certain since last week: German unity is coming the Bonn Government a takeover of his state as early as

prematurely-a case for the incubator, his visit on Tuesday [13 February], and recommend

integration with the Federal Republic to the People's

No sense of gratified satisfaction can be felt among the Chamber after his return to East Berlin.

officials of the fragmentary state in Bonn; no unbridled

joy has broken out. According to a participant, everyone With such a confirmation of membership the unified "was apprehensive" when Kohl gave a dramatic report fatherland so affectionately longed for by some would

about the "destruction" of the GDR and its visible end thus be born overnight, so to speak. Opposition, misgiv-

(see cover story, page 24) in the cabinet last Wednesday. ings, or even refusal-all this would be precluded by
JPRS-EER-90-025

10 POLITICAL 28 February 1990

Article 23 of the Law'. The confirmation of membership Last week, the same Genscher developed yet another

of the GDR Government or of individual Laender is new idea: The GDR and the Federal Republic should

valid alone. finalize an agreement which gives the Laender of the

GDR the chance to apply for accession pursuant to

The repercussion: Bundestag elections could hardly take Article 23 of the Law-the convenient annexation of the

place on 2 December 1990, the actually planned date. GDR into federal territory. This agreement should be

Instead, general German elections would be announced, coordinated with the four powers in order to supersede

Minister of Finance Theo Waigel, in a SPIEGEL inter- their rights of exception. view (see p. 20): "This possibility exists." The discussion mechanism among Social Democrats

Wolfgang Mischnick, head of the FDP group in the who felt conceptionally superior to the Bonn GovernBundestag, predicted: "The year 1990 is the year of ment for a long time also shows how quickly things

German unity, at least in the eyes of the people of the change in Germany. Did they not thoroughly consider

GDR, because they prefer unity today rather than everything for the orderly path to German unity in their

tomorrow." Bedlam has taken the place of orderly work Berlin declaration on 18 December? That declaration

in the Bonn Government head office and in the offices of covered everything from an "agreement partnership"

the ministries--even of the opposition. Problems cannot with the goal of "balancing living conditions in both

be thought out because actual conditions vary virtually German states," to a "confederation" as the "constitufrom day to day. Directives are outdated before they are tional structure achievable at this time," to a "federal

executed. state unity" in a unified Europe.

State Secretary in the Justice Ministry Klaus Kinkel had Top Social Democrats hammered out the details with

negotiated a law enforcement treaty with GDR col- great diligence, as did SPD [Social Democratic Party of

leagues for seven years. Questions of Berlin's status and Germany] Deputy Bundestag Chairman Horst Ehmke in

citizenship impeded an agreement. Berlin was no subject a "Problem Outline." Accordingly, the FRG and the

at all one week ago Thursday [1 February]--only citizen- GDR should found an association with the name

ship was. However, even the last obstacle was sur- "German Community," which leaves the international

mounted on the evening of the same day after Modrow's public law obligations and rights of both states in tact. It

Berlin Declaration in which he invoked the unified would be the community's task to formulate a "demofatherland. Kinkel realized: "Wherever you look, the cratic federal state of Germans" as part of a European

normative force of the tangible governs." peace structure and thus gradually institute a currency,

economic, and social union, including EC membership

CSU [Christian Social Union] Minister of Finance Wai- for the GDR.

gel, who only last week had rejected an impending

currency consolidation for apparently convincing rea- All of the SPD's plans fell by the wayside over the

sons, as did his FDP economic colleague, Helmut Hauss- weekend.

mann, agreed to this last week. Hausmann's Ministry Representatives of the SPD of the East kept their disannounced its Phase Plan-which has meanwhile tance a week ago Sunday [4 February] in the very first

become outdated--one day after the cabinet resolution. meeting of the joint committee of both sister parties,

Genscher had tried for a long time to "embed" reunifi- because the pressure for fast unification in the country is

cation in a European policy. Even at the end of last year, too strong. Dieter Schroeder, chief of the West Berlin

his planning staff had maintained that the rapproche- Senate Chancellery, who discussed the confederation ment of the two German states could "transpire without plans with experts from Bonn, said: "The train has

friction and risks only to the extent that European departed." And he petitioned for GDR citizens to vote

division is overcome." In plain language: only after the on joining the Federal Republic on 18 March: "That

dissolution or transformation of both military alliances, would be an orderly procedure."

There is no talk of that now. Now Genscher's diplomats Politicians report first hand how rapidly the eastern state

are considering whether GDR territory can be added to is crumbling: Fearing a collapse, GDR citizens are

NATO politically, but not militarily (see p. 22). exchanging their savings and are opening Deutsche mark

accounts in border communities. Others fear that no Last week, the NATO ambassador reported in a telegram trains will be traveling soon and that trash will accumufrom Brussels "that a chronological synchronization of late.

the German union with the defeat of the European

East-West division will not be possible." Many GDR citizens are trying to escape the impending

depreciation of their savings by purchasing material

Even the week before last, Genscher had suggested an assets-it's just that there aren't any on the market.

agreement between the two German states "on the way

to German unity in Europe. At the right time," citizens Instead of the moderate path to unity, quick accession is

should "have the possibility of expressing their opinion the big topic-even for the otherwise so reticent FDP

by electing a constituent assembly," as Article 146 of the minister of justice Hans Engelhard. He opined: "Our

Law provides.2 Law is well suited as a collective German constitution."
JPRS-EER-90-025

28 February 1990 POLITICAL 11

Most of his minister colleagues would prefer an orderly Kohl has already made a decision worthy of Solomon:

transition. They wonder whether GDR citizens who Berlin will be the future capital, Bonn will remain the

lived under a dictatorship for a long time can be sub- seat of government.

jected to a democratic constitution with all its ancillary

laws. Such problems would have to be carefully dis- Footnotes

cussed first in a constituent assembly; it would be time

for intensive negotiations with the four allied powers and 1. Article 23: "This Basic Law is applicable initially in

for discussions with neighboring countries. Some reas- the territory of the Laender of Baden, Bavaria, Bremen,

suring answers would be necessary for the GDR, too. Greater Berlin, Hamburg, Hesse, Lower Saxony, North

Farmers want to know whether the land they received in Rhine-Westphalia, Rhineland Palatinate, Schleswigthe land reform after 1945 will belong to their produc- Holstein, Wuertemberg-Baden, and Wuertembergtion cooperatives in the future. "If the old owners Hohenzollern. It is to become effective in other parts of

return," GDR CDU Chief Lothar de Maiziere warned, Germany after their accession."

"then there will be a deluge of farmers in the FRG." The

deputy prime minister also asked the Federal Govern- 2. Article 146: "This Basic Law loses its validity on the

ment to clarify that former firm owners, too, could assert day a constitution comes into force that has been

no claims on their old property from the West: "The decided upon by the German people in a free election."

economically weaker GDR citizen may not be the victim

again." HUNGARY

All experts agree: State unification alone will by no

means create the prosperity the people in the East wish.

At best, it has psychological affects-with the risk of Basic Concepts of Future National Security Law

false expectations and great disappointments. Outlined

25000609F Budapest NEPSZABADSAG in Hungarian

Transition periods of many years, such as with the union 12 Jan 90 p 4

of the Saarland, are necessary in order to administer the

incorporation technically and legally. [Article by Lajos Bodnar: "What Will the National

In the GDR, for example, the "right to work" is guaran- Security Law Say About Telephone Wiretapping?"]

teed by constitutional law. Can this constitutional pre- [Text] Duna-Gate, which erupted last week, has directed

cept be maintained under capitalist conditions? A Hungarian public attention to the deep-seated contradicworking mother raising a child alone who cannot work tion that will strain the relationship between the Hunwhen her child is ill can claim 90 percent of her salary for garian state security's practice based on secret, internal

six weeks. Can the GDR dispense with this achieve- directives on the one hand, and the constitutionally

ment? guaranteed political and civil rights on the other, for a

Even Bonn's Basic Law contains requirements that will long time to come. But it is unlikely that this political

be costly for a united Germany. scandal could have swollen to such unprecedented proportions had the public received timely information

All citizens of West Germany have a right to approxi- concerning the planned reorganization of the security

mately equitable fundamental and living conditions service. Such information would not only have calmed

from the state. The rich Laender are obligated to assist the lack of understanding and shock manifested by

the poorer ones by way of a redistribution of revenue- society in response to discovering the methods applied

billions would have to flow from the West to the East to by the secret service; an announcement like this would

comply with this precept of the Basic Law. also have moderated the security service, by exerting

pressure on them to change their work methods and to

"It cannot be expected that the problems will be solved abide by new requirements of legality.

by unification," according to Bundestag President Rita

Suessmuth. "However, one could buy time with de facto Although on the basis of brief references we have learned

unity in essential areas in order to approach the state that a concept paper concerning the protection of

question more creatively." national security and the organization of the security

service has been developed, they have treated the conThere is no time for this. Last Wednesday, Chancellor tents of this concept paper as a top government secretKohl appointed a cabinet committee for "Germany as a result of old reflexes. In light of the developments,

unity" that is supposed to plot the basic structure for the this excessive caution appears to be clearly damaging,

new integrated German formation. Ministers of finance even though it may be explained in part. After all, the

and the economy are preparing the currency and eco- concept paper itself makes reference to the fact that the

nomic reform, the minister of labor is taking care of the politically active public observes and searches with conunemployed and pensioners, Engelhard is pondering a stant suspicion when the "guardians of order" abuse

conformation of law, and associate Schaeuble is pon- their vested powers. In view of press reports on the

dering Land and local constitutions, administrative wiretapping scandal, this hunch of the persons in charge

organization, and service directives, was fully correct.
JPRS-EER-90-025

12 POLITICAL 28 February 1990

But what does the concept paper have to say about secret own purposes, without publicizing those purposes,

information gathering, the item the public is most inter- prompts us to urge actions which provide reassuring

ested in? About controls over the mail, telegraphic and guarantees. telex messages, and the telephone? (3) We expect sincere guarantees, not from political

The concept paper holds that security organs will con- organizations or from persons involved in this matter,

tinue to have authority to gather information and data. but from the government in its capacity as a proposed

The head of government, the president of the republic, body, and from Parliament, as a decisionmaking body.

Parliament, and, based on interstate agreements and

principles of mutuality, foreign authorities could be

informed of such activities by the minister who super- POLAND

vises the security service. The concept paper underscores

the fact that the secret service could not perform its tasks

in the absence of traditional means of information POLITYKA Weekly News Roundup

gathering. They recommend, however, that means 90EP0300A Warsaw POLITYKA in Polish

having a direct impact on constitutional rights should be No 3,20 Jan 89Pp 2

authorized by law as soon as possible. The concept paper

includes the opening of mail and telephone wiretapping [Excerpts]

in this category.

A majority of the states deal with this possibility in a National News

pretentious way, and do not govern such activities in

publicly available legal provisions. On the other hand, President Wojciech Jaruzelski, in a speech given during

the framers of the national security law endorsed the a meeting with the diplomatic corps, supported the

idea of developing an open regulatory framework. Helsinki II meeting at the highest level which Mikhail

Gorbachev has proposed. With time, building unity in

Accordingly, as compared to the present practice, the Europe could take shape as outlined by President Mitsecurity service may conduct wiretapping or open mail terand in "the genuine form of a European confederaonly in cases that are warranted, and only within a tight tion." W. Jaruzelski said that "perhaps the time is

category defined by law. coming for amending and enriching the Final Act of the

CSCE-even more, for raising it to the level of a treaty." The goal of the concept paper is to ensure that the future Archbishop Jozef Kowalczyk, the new dean of the dipsecurity service of the constitutional state will operate lomatic corps spoke in its name during the meeting.

within a legal framework, in strict harmony with the [passage omitted]

security policy of the government that prevails at a given

time. The future law must serve state security, the Toshiki Kaifu, premier of Japan, paid a short visit to

defense of constitutional order, and counterespionage in Poland. The Japanese government desires to support

this spirit. And today's practice must also evolve in this reforms in Poland with more than $250 million. Poland

spirit, although the creation the national security law will receive $150 for stabilizing its currency and $25

may be realistically expected to be the task of the new million for purchasing food.

parliament. At the Halemba mine, 11 miners died as a result of a

methane-gas explosion.

Independent Social Democrats on Duna-Gate A group of about 200 young people forced its way into

250006091 Budapest NEPSZA VA in Hungarian the Sejm building and then moved in the direction of the

12 Jan 90 p 5 PZPR Central Committee where it broke windows with

stones and broke open the doors with axes and set fire to

them. The participants said they are anarchists. The

[Text] The Independent Social Democratic Party is press spokesman for the Central Committee declared

obligated to issue a statement in response to the scandal that Poland is "threatened with lawlessness" and that we

that erupted in conjunction with the activities of the cannot build a state of law by tolerating lawlessness.

Internal Security Service of the Ministry of the Interior. Leszek Miller, secretary of the PZPR Central Com-

(1) We deeply condemn the persons who may be impli- mittee, wanted to make a short declaration on television

cated in this case. We request that they be held account- on the matter but his request was refused.

able. We trust that the investigation and the act of Deputies refused to finance the censorship office at the

holding to account will not be guided by the intent to levels requested, they also suspended spending 7.8 bilfind a culprit. lion zloty from the funds of the Chancellory of the

President for state decorations.

(2) Our concern about the fact that certain opposition

organizations had an opportunity to acquire secret ser- In the opinion of KURIER POLSKI, the style of the

vice documents, and to utilize such documents for their names for the heads of the administrative units proposed
JPRS-EER-90-025

28 February 1990 POLITICAL 13

by the Office of the Council of Ministers-is retrospec- The agricultural circles have presented a list of prices for

tive: wojt [head of a group of villages], burmistrz agricultural products which ensure profitable production

[mayor], starosta [head of a district], naczelnik [head], for 10 January 1990: rye, 82,600 zloty per quintal,

wojewoda [voivod]. wheat, 105,000 zloty, live hogs, meat and ham of the first

category, 9,750 zloty per kg; live cattle, 7,800 zloty; milk

Family supplements will increase beginning in January of the first class, 1,460 zloty per liter.

to 60,000 zloty. The National Museum of Warsaw has evaluated the

Farmers belonging to Solidarity of Individual Farmers price of art works for free: among the objects shown to

picketed the Sejm; among their signs: "Farmers demand the specialists was an unknown Rubens "Portrait of a

a voice in radio and television. End lying on television." Boy" of 1794. (ZYCIE LITERACKIE) [passage omitted]

Statistics for the clergy (as of 20 October 1989 according Mikolaj Kozakiewicz, marshal of the Sejm, during a to TYGODNIK POWSZECHNY): new priests ordained

press conference: The Sejm is working very hard; it has in 1981, 688; in 1989, 1,152; the total number of priests

held 17 sessions, which is nearly the average for a in 1981, 20,676, later there was annual growth to 24,678

two-year period during the previous Sejm. Elected as in 1989.

part of the compromise of the roundtable, and thus not

in a completely free manner, "it contains no crystallized Independent publishers have published an appeal

opposition within its ranks. The Convention of Seniors demanding, among other things, a complete end to

has adopted the principle of consensus in its work." This censorship, the creation of the foundations for legalizing

does not mean that there are no differences of opinion, the underground publications, a complete release of all

The marshal thinks that the new parliamentary elections cultural organizations from taxes, other than taxes on

will be moved up. As regards transmission of the delib- profits, and the complete return of the assets of undererations, M. Kozakiewicz thinks that "none of the mem- ground publishers taken by functionaries of the Ministry

bers of the Club of Seniors is delighted with the presence of Internal Affairs.

of television during the deliberations since the deputies

are speaking not to those present but to the nation, Lech Walesa in a declaration stated that "the situation in

especially to their voters." Perhaps a reduction in trans- Poland is becoming more complicated," "changes are

mission can be introduced this year. occurring at a rate that does not augur well for the ability

to introduce them efficiently and quickly," and in conNoted in the GAZETA WYBORCZA (11 January 1990): junction with this he asked the Sejm and government for

"The percentage of Polish families claiming that they "a decisive acceleration of the date for elections to the

cannot satisfy their needs for food-43." local self-governments." After a discussion with L.

Walesa, Premier T. Mazowiecki intends to present such

Barbara Piasecka-Johnson, says Zbigniew Lis, a Soli- a proposal to the Sejm and the President.

darity activist in an interview with a reporter for Gen. Gruba has resigned his position "in light of the

SZTANDAR MLODYCH, has set conditions "we trade slanderous comments" and the "lack of specific explaunionists cannot accept." As PAP reported on Tuesday, nations on the part of the proper central state organs" Mrs. Piasecka-Johnson finally broke off talks on a part- who know the truth about the events at the Wujek and

nership. Cz. Tolwinski, director of the shipyards, listed Manifest Lipcowy mines.

the reasons for rejecting the offer (resigning from strikes

for three years, releasing, during the initial stage, 3,500 Gornik Zabrze, the popular sports club, is reportedly

workers, etc.). bankrupt. The independent mines do not want to finance

the "dead souls" with fulltime positions. The steelworks in Krakow intends to release 1,500

individuals from work. The Krakow employment office Barbara Malak, a doctor of social psychology, formerly a

has only 15 job offers. Other large plants have also begun lecturer at Warsaw University, interned under martial

releasing workers. [passage omitted] law and later active in the underground, has been named

the new spokesperson for Solidarity.

Magazines disappear-new ones appear. The weekly

ARGUMENTY has published its last issue, the publica- Military service is to be reduced to 18 months in 1990.

tion of the lay movement is ceasing after 32 years. "The The Solidarity unit at the Nowa Huta Steelworks has

constantly rising costs for printing and paper in partic- demanded the director-deputy Boleslaw Szkutnik-be

ular finally got the better of us." A PO PROSTU has removed. The accusations: a lack of competence, secret

appeared; the editor in chief is Ryszard Turski, a sociol- financing of political and youth organizations. The other

ogist, who was editor in chief of the paper liquidated in unions oppose removal and demand a thorough investi1957. Each issue costs 1,200 zloty. The paper styles itself gation of the accusations.

"an independent weekly" in its masthead. In the first

issue: Bronislaw Geremek, Andrzej Szczypiorski, Stefan The Malopolska region of Solidarity has asked the minBratkowski, Andrzej Drawicz, Maciej Kozlowski. On the istry of internal affairs to remove Gen. Jerzy Gruba as

cover is a picture of Joanna Szczepkowska. head of the Krakow Voivodship Office of Internal
JPRS-EER-90-025

14 POLITICAL 28 February 1990

Affairs. He is accused of giving the order to fire on the election. At present, we in Solidarity do not have many

miners at the Wujek mine, "an aggressive attitude people who would be better than the current supervisors

toward the process of democratization," and "delaying at all the various levels. Moreover, we have noticed that

action in situations seriously threatening the public for the current ones are changing. Perhaps they are not

reasons not connected with his duties" (for example on changing, perhaps they were always this way, only they

13 December 1989, during the demonstration and in did not stick their necks out with their own views.

front of the Consulate of the USSR). [passage omitted] [NOWINY] Are these changes in views and attitudes

In Europe authentic?

[Passage omitted] The 12 countries of the EEC have [Kielek] I do not know. It is a fact that many hardagreed to the initial plans for a Bank for Reconstruction to-believe changes are visible. Some people today are so

and Development in Eastern Europe. The capital of $12 servile that it is embarrassing.

billion will consist of contributions by 35 participants.

The main task of the bank is to finance the development Democracy Development Director on Assistance to

of the private sector. Citizens Committees

The heads of the governments of the 10 CEMA member 90EP0282B Warsaw RZECZPOSPOLITA in Polish

countries have given themselves a 6-month period to 21 Dec 89p 3

complete fundamental changes in the operations of the [Interview with Krzysztof Herbst, director, Foundation

CEMA. for the Development of Local Democracy, by W. KrawcIt was announced in Brussels that until 1992 the EEC zyk: "Foundation for the Development of Local Democwill accept no new members. The rule includes the GDR. racy-Earning and Spending"; date and place not given;

first paragraph is RZECZPOSPOLITA introduction]

Premier Nikolay Ryzhkov on the CEMA: "Withdrawing

from the CEMA or breaking the contacts which have [Text] Five senators and deputies from OKP [Citizens

been developed within it would be a mistake for every Parliamentary Club] founded the Foundation for the

one of its members since integration among the CEMA Development of Local Democracy in an effort to aid the

states is a fact." "Thinking about withdrawing from the citizens committee movement, which currently is undercommunity and breaking all relations with it is tanta- taking activity in many spheres and which will stand for

mount to suicide." [passage omitted] local governmental elections in June 1990. "What sort of

financial help can the fund offer at this point?" I asked

Opinions Krzysztof Herbst, the director of the Foundation's

Office.

Tadeusz Fiszbach, deputy marshal of the S'ejm: [Herbst] None for a few more days, because the registra-

(Interviewed by Jacek Mach, GLOS WYBRZEZA 16-17 tion procedure has not been completed. Nevertheless, we

December 1989) have gathered some resources. They are invested in the

account of another institution and in our account of

iGLOS WYBRZEZA] If the congress offered you a place revenues, from which, however, we can not take the

in the leadership of the new party would you agree? money until we have registered. In total we have 25

[Fiszbach] I still remember the words of Adam Mick- thousand dollars, nearly 2.5 million zloties, as well as a

iewicz from my secondary school days in Kartuzy under gift in the form of a computer. Soon we will receive a few

my teachers Mrs. Baranowicz and Zukowska: "Whoever thousand dollars from England and the USA from funds

has entered a higher level has taken on a greater effort supporting reform in our country.

and so lowers himself if he does not reach higher still." [RZECZPOSPOLITA] Donors of zloties seem to be less

Regardless of the position I may hold, as in the past in generous.

Gdansk as first secretary of the Voivodship Committee [Herbst] On the contrary. Hundreds of institutions and

and today in the Sejm, I shall strive to serve the people. private persons want to contribute quite considerable

Eugeniusz Kielek, chairman of the board of the Sandom- sums, but until the account is created, which will take

ierz Region of Solidarity: place at the same time as the registration, we are dissuading them from that intention, because we do not

(Interviewed by Zenon Dubis, NOWINY 21 December want to gather money in an outside account and compli1989) cate the financial operations.

[Kielek] In Poland we must develop healthy rules for [RZECZPOSPOLITA] There are foundations, which

selecting people for leadership positions. The point is besides allocating money for a defined purpose, are also

better people must replace worse ones. No other change trying to make money by putting their capital to profitmakes sense. Professional competence must be the deci- able use, so that the continuation of the chosen task

sive criterium. It is impossible to change all the per- would not be dependent on an irregular income. Are you

sonnel from foreman to premier every four years after an trying to proceed in this way?
JPRS-EER-90-025

28 February 1990 POLITICAL 15

[Herbst] Many foundations operate differently: they Peasant Parties 'Rebirth,' 'Solidarity' Elect New

invest capital, and after a certain time, take the interest Leadership

to cover their expenses. In our case, however, the needs 90EP0282A Warsaw ZYCIE WARSZA WY in Polish

of the citizens movement are of an urgent character, and 22-26 Dec 89 p 2

it looks like the majority of the fund's resources will

immediately go to satisfy them. We have already finanedithel financed the p printing tof ngo of eati educational onythem.Wehal bro brochures res co [Article by Zdzislaw Zaryczny: "New Authorities, Old con- Polm"

taining elementary information about local government,

and soon ten to twenty more issues dedicated to these

themes will appear. None the less, we want to keep a [Text] The newly elected authorities of the currents of

financial reserve which will allow us to earn money. We the peasant movement that are at present the strongest,

have thought about founding a bank and a publishing the Polish Peasant Party "Rebirth" and NSZZ Indiventure among other things. vidual Farmers "Rural Solidarity," met in two different

points of Warsaw on the same day, 21 December. One

common denominator united the deliberating bodies

[RZECZPOSPOLITA] Every day you receive letters and despite all their differences on particular questionsphone calls from all over with requests for help and there were not so many after all. That was dissatisfaction

information. How on the basis of these do you evaluate with the government's agricultural policy, or rather the

the state of consciousness regarding local self- lack of a policy, as well as a certain disappointment at the

government in our society? Are favorable attitudes results of the Sejm's agricultural debate. Expression was

toward local self-government universal in Poland? given to these in the customary resolutions. Both organizations appointed new leaderships of their executive

apparatuses.

[Herbst] Many people lack deeper knowledge of what

local self-government is and how it is to work. To be And thus, the Chief Council of the Polish Peasant Party

sure, they know how to give aid and are ready to give it, "Rebirth", deliberating in the building on Grzybowska

but so far the joint independent undertaking of initia- Street, elected three deputy chairmen (the chairman is

tives is not going too well for them. This reform is Jozef Zych). They were well known and experienced

associated in society above all with freedom and free activists of the party: Aleksander Bentkowski, Dominik

elections. But more rarely we realize that at the same Ludwiczak, and Prof. Antoni Podraza. Janusz Dobrosz

time it has to do with a systemic solution of a rural and will be the Chief Council's secretary. A ten-person Chief

Ioften sensed a Executive Committee (the eleventh member is chairman cecoano assitue Dringns th talks, It aKazimierz Olesiak) was created. Prof. Stanislaw Dab- certain passivity, a willingness to take, but a resistance to rowski and Roman Jagielinski will be entrusted with the

investing capital and effort in nonindividual undertak- functions of deputy chairmen, and Janusz Piechocinski

ings. This behavior does not result--fortunately-from with those of treasurer. It should be emphasized that all

our national character, but was learned during the 45- the members of the compact leadership of the Chief

year reign of an imposed system. In a situation like that, Executive Committee will fulfill their duties collectively.

it is an easy barrier to overcome. Aspiring to reorganize the apparatus as it has existed up

until now, it was decided that an Executive Office of the

[RZECZPOSPOLITA] Where is the self-government Chief Executive Committee would be created. It will be

[RveCZen OL Whereopiis the sestan relgiov arnmen directed by a temporary secretary, who will also be part movement developing the best, and what regions are of the Chief Executive Committee (for the time being

characterized by the least citizen activity? vacant). However, two plenipotentiaries for economic

activities, Stanislaw Janiak and Stanislaw Mienkowski,

[Herbst] The best is in Silesia, chiefly in [the voivodships were appointed with the thought of filling the party

of] Katowice and Opole as well as in Wielkopolska; the coffers.

worst is in the northeastern and eastern voivodships. In

recent weeks, however, one can observe that simple At the same time, at Father Boguslaw Bijak's house in

forms of self-government are arising and spreading Wilanow the National Council of NSZZ Rural Solidarity rather quicklyf elected its own ten-person presidium, which along with

chairman Gabriel Janowski will direct the union's activities. Antoni Furtak, Zygmunt Hortmanowicz, and

This interview was conducted by W. Krawczyk Roman Wierzbicki-farmers without any great political experience, except for Furtak, who is a deputy [to the

Sejm] and an active member of the Agricultural Section

The phone number of the foundation's office in Warsaw of the OKP [Citizens Parliamentary Club]-became

is 28-73-85. The chairman of the administration is deputy chairmen. The decision to take nominations for

Senator Jerzy Regulski, government plenipotentiary for the positions of spokesman and director of the union

reforms of territorial self-government; the deputy office (Jacek Szymanderski resigned after Janowski won

chairman is Deputy Walerian Panko. the election) was postponed until the next session.
JPRS-EER-90-025

16 POLITICAL 28 February 1990

It is worth paying attention to what the leadership of CHAPTER II

Rural Solidarity is planning next. It is preparing itself

for, among other things, a meeting with Premier Tadeusz Free Initiative Economic Activities

Mazowiecki, which is set for 28 December. By the way,

Janowski assured the union membership's full support

for the reform program-"so that the government will Section I. Small Enterprises

not stumble over agriculture and the food economy as all

previous groups did, we are going to 'give it a swift kick' Article 4. Small enterprises may be established upon the

regarding these matters." An important bit of news was initiative of one or several persons associated for the

the new chairman's declaration of the apoliticalness of purpose.

NSZZ Rural Solidarity and at the same time of its

readiness to talk about the unification of the peasant Persons involved in one enterprise, alone or in associamovement with all its partners who express a similar tion, may not become involved in other enterprises.

will. The categories of activities for which small enterprises

may be established on the basis of free initiative will be

ROMANIA decided by the government.

Article 5. Workers will be employed in small enterprises

Decrees on Farming Sector, Private Enterprise on the basis of working contracts drawn up in accordance with the Labor Code. Salaries will be established

'Free Initiative' in Small Units by agreement between the sides.

90EB0267A Bucharest ROMANIA LIBERA in State and cooperative employees may be hired to work

Romanian 6 Feb 90 p 3 outside working hours at the respective units.

["Decree-Law on the Organization and Procedure of Retirees may cumulate salaries and pensions.

Economic Activities Based on Free Initiative"]

Employees of small enterprises will enjoy the same social

[Text] security rights as state employees. Contributions to

social security, additional pension, and income tax will

CHAPTER I be paid by the enterprise according to legal stipulations

General Regulations concerning state enterprises.

Article 1. With a view to better meeting consumer ji Article rd 6. Employees nosi of hi small rao enterprises ciiy are entitled to

requirements for goods and services, efficiently utilizing join trade unions in their area of activity.

raw materials and other resources-especially local Persons who are employed in both state units and small

resources-and improving manpower utilization, the enterprises may select whether to join the state enterfollowing may be organized on the basis of free initiative: prise trade union, or the trade union cited under paraa) small enterprises with at the most 20 employees; graph 1.

b) working associations; Similarly, employees may establish their own trade

union.

c) family associations; Article 7. Small enterprises and their personnel will have

d) services offered by individuals, the same rights and obligations as the state sector concerning professional training and labor protection. If the The activities listed under a-d may be organized only by employee works in his own specialty, length of service

Romanian residents. regulations in the respective area will be applied.

Article 2. The state guarantees the free organization and Rules for the exploitation of the enterprise assets, the

functioning of the production and services listed under amortization of its fixed assets, and the distribution of

Article 1. profits will be established by the organizers upon estabThe above activities may be organized on the basis of a lishment of the enterprise and may be amended only by

permit in keeping with the provisions of the present the organizers themselves.

decree. Article 8. The financial resources required by small

Article 3. Free initiative production and services may be enterprises will come from private sources, as well as organized only in accordance with legal provisions, bank loans granted on the basis of securities.

Law violations will be punished by monetary, civil, The size, terms, and conditions of loans and means of

administrative, legal, or penal steps, as the case may be, guaranteeing them will be decided by the Ministry of

against the person involved. Finance and the Romanian National Bank.
JPRS-EER-90-025

28 February 1990 POLITICAL 17

Means for establishing and running small enterprises Article 16. Small enterprises will be run on the basis of

may also be secured from abroad, but only on the basis of annual income and expenditure budgets approved by the

authorization legally issued by the Ministry of Foreign organizers. A notarized copy of the budget will be filed

Trade. with the local financial authorities.

The establishment or running of small enterprises may The enterprises will keep their own books; they are

be financed from abroad, in hard currency or lei, only obligated to publish half yearly balances in the MONIaccording to the conditions established by the Romanian TORUL OFICIAL, after they have been verified by the

Foreign Trade Bank. relevant financial bodies within 10 days.

Article 9. County mayoralties and of Bucharest Munici- The norms established by the Ministry of Finance will

pality may let available space in state-owned buildings, dictate regulations for income and expenditure budgets,

including surrounding land, to small enterprises, if the financial bookkeeping, commercial and fiscal operalatter do not have the necessary land to build on, if they tions, hiring and salaries, and the drafting of the halfdo not intend to build, or if they are in the course of yearly balance. outfitting buildings or plots they hold in any form. Article 17. Small enterprises will keep their funds in lei in

Facilities or plots may also be rented from private their own bank accounts. The Ministry of Finance and

owners. the National Bank will establish regulations for such

accounts and set limits for current accounts in lei. The

Privately owned or rental properties may be changed or said limits will be established by bank branches with the

outfitted for production or services only on the basis of agreement of the respective enterprise. authorization legally issued by City Hall. Funds in foreign currency will be kept only in open

Article 10. State or cooperative units that own available accounts with the Romanian Foreign Trade Bank, in the

machinery, equipment, and installations may sell or rent name of the enterprise.

them to small enterprises on the basis of contract, in

keeping with the norms established by the Ministry of Enterprises will receive 50 percent of amounts earned

National Economy and the Ministry of Finance. from export in lei, at the current rate of exchange, and

the remaining in the respective foreign currency.

Article 11. Small enterprises may procure spare parts for

their own equipment, tools, and accessories, raw and Article 18. Relations between enterprises and individother materials directly from manufacturers, individuals uals or firms, as well as with legal authorities will be

or firms, state or cooperative units, on the basis of determined by the person who established it or, in the

contract. The prices quoted in contracts will be the legal case of associations, by a person designated by the

ones, or should none be available, prices will be decided association. The person cited in paragraph I may give

by agreement between the sides, power of attorney to other persons. In such cases, the

person who issued the power of attorney is responsible

Article 12. Equipment, machinery, installations, tools, for any damage, within the limitations of the power of

devices, raw and other materials, and accessories may attorney and in agreement with the recipient of that

also be imported by small enterprises, in keeping with power.

the regulations in force. Article 19. The activities of small enterprises will be in

Article 13. The Ministry of National Economy and the keeping with the regulations of the Commercial Code,

National Commission for Small Industry and Services unless different provisions are established under the

will establish the conditions and cases in which certain present decree-law.

raw and other materials, fuel, and energy allocated under

material budgets may be put at the disposal of small

enterprises. Section II. Working Associations

Article 20. Working associations may have at the most As a rule, resources may be allocated from budgets on the 10 members and are established on the basis of contract. basis of cooperation contracts.

Article 14. Prices and tariffs for goods and services The association contract will feature:

provided by small enterprises will be freely set. a) the purpose, name, and address of the association;

Goods will be sold and services provided to state units b) the manner of formation of assets and of assets

only on the basis of written contract, administration;

Article 15. The products and services of small enterprises c) the manner of organization, management, and funcmay be exported directly or through foreign trade enter- tioning of the association;

prises or foreign firms, on the basis of an export authorization legally issued. d) the distribution of profits among the associates;
JPRS-EER-90-025

18 POLITICAL 28 February 1990

e) the manner of termination and liquidation of the To obtain an authorization to establish a small enterassociation. prise or working association, entrepreneurs need prior

approval from the National Commission for Small Article 21. The provisions of Articles 4 paragraph 2; 5 Industry and Services.

paragraph 3; 9, 10, 11, 12, 14, 15, and 16 paragraph 2;

and 19 will be appropriately applied to working associ- Violation of the authorization provisions or of legal

ations, too. regulations will be punished by at the most 15 days

suspension of the right conferred under the authorizaAssociates are collectively responsible for damages. tion, or by withdrawal of the authorization, as the case

Article 22. Persons employed in state and cooperatitve may be.

units may form associations only if they do not interfere Article 29. Litigations concerning refusal to issue an

with their working schedule in the respective units, authorization or its withdrawal will be judged by county

Section III. Family Associations courts and of the Bucharest Municipality. Court appeals

may be filed within at the most 10 days of the date on

Article 23. Family associations may be formed among which the refusal or withdrawal notifications were

family members sharing a household. received.

Article 24. The provisions of Articles 4 paragraph 2; 5 Article 30. Small enterprises become legal entities on the

paragraph 3; 9-11, 14, and 19 will be appropriately date of their registration with the financial authorities.

applied to family associations. Working association may become legal entities by registering with the financial authorities as such; registration

Section IV. Persons Authorized To Work Independently is compulsory.

Article 25. Individuals may be authorized to carry out

independent activities in the areas of manufacture or CHAPTER IV

services.

Authorization for services may be issued by the relevant Final Regulations

authorities on the basis of demonstrated skills; in the case where specific professional organizations exist in Article 31. The period of time for which employees had

the respective area, the authorization requires their working contracts with small enterprises is viewed as

approval, length of service and specialization.

Article 26. Individuals authorized to work independently Similarly, time periods for which individuals were

may also be employed in a state, cooperative, or small employed in working associations, family associations,

enterprise, if the authorization does not stipulate other- or independently are also considered as length of service

wise. or specialization if contributions were made throughout

this period to state social security and additional pension Article 27. The provisions of Articles 4 paragraph 2; funds.

8-12, 14, 15, and 9 will be appropriately applied to

individuals authorized to work independently. Organizers of small enterprises may also enjoy the provisions of paragraph 2.

CHAPTER III

Article 32. The Labor Code provisions concerning Authorization Regulations transfer and uninterrupted length of service in the same

Article 28. Authorizations to establish small enterprises, unit will also apply to enterprises organized in keeping

working associations, family associations, or for inde- with the present decree-law.

pendent work by individuals are issued by county may- Article 33. Legal provisions concerning industrial proporalties or of Bucharest Municipality. erty also apply to small enterprises, working associaApplications for authorization will be resolved within at tions, and individuals authorized to work independently.

the most 30 days, and the conditions established by the Article 34. Income tax levels for small enterprises,

government for issuing such authorizations will be working associations, family associations, and persons

observed. authorized to work independently will be established

The name, address, and purpose of small enterprises and specifically according to area of activity and in relation

working associations are established under authoriza- to the social usefulness, incentive-providing, and protion. In the case of family associations and individuals gressive nature of the activity, the end purpose being to

working independently, authorizations will show the encourage individual and collective initiative while name of the applicant, address, and purpose. ensuring social justice in the area of personal income.

Similarly, authorizations may also feature specific Regulations concerning the establishment and levels of

working conditions, income tax will be issued by the government.
JPRS-EER-90-025

28 February 1990 POLITICAL 19

Article 35. Small enterprises and working associations condition that one of the parents fulfills the labor

may join among themselves or with other units only with volume specified by the cooperative's general assembly.

the approval of the National Commission for Small

Industry and Services. Article 3. Working cooperative members and agricultural cooperative retirees are entitled to spa treatment

Article 36. The provisions of the present decree-law and vacations at units belonging to the Union of Agri- apply to contract work, too. cultural Cooperatives; 70 percent of the cost will be

Article 37. The present decree-law will come into force borne from the pensions and social security fund, and 30

30 days from the date of its publication in the MONI- percent by the respective members.

TORUL OFICIAL. Agricultural cooperatives that have the necessary funds

By the date of enactment of the decree-law, the govern- may cover-partially or entirely-the 30 percent share

ment, the Ministry of National Economy, the Ministry of of the cost of the treatment or holiday incumbent on the

Finance, and the National Bank will hammer out the members.

regulations listed under Articles 4 paragraph 5; 8, 10, 16,

17, 28 paragraph 2, and 34 paragraph 2. The regulations Article 4. Working agricultural cooperative members,

will be published in the MONITORUL OFICIAL. cooperative retirees, and their family members are entitled to free treatment and drugs during hospitalization in

On the date of enactment of the present decree-law, the facilities belonging to the Health Ministry.

Council of Ministers Decision No. 1, 189 of 31 May 1968

on the administration of commercial units by mandatory Article 5. Employment in the livestock sector of agriculemployees, and any other provisions to the contrary, are tural cooperative units up to the starting date of work

abrogated. contracts for cooperative members according to Article 7

of Decree-Law 43/1990, is recognized as length of service

Ion Iliescu, president of the National Salvation Front for the purpose of state social security pensions.

Council

Article 6. An Autonomous Pension and Social Security

Fund [APSSFF] for Farmers will be established within

Increased Pensions for Farmers the Union of Agricultural Cooperatives and will have its

90EB0267B Bucharest ROMANIA LIBERA in own statute.

Romanian 6 Feb 90 p 3

The APSSFF will carry out all operations-as envisaged

in its own statute--concerning the formation and admin-

["Decree on Raising Pensions and Other Social Security istration of pension funds and other social security rights Rights for Agricultural Cooperative Members"] for agricultural cooperative members and individual

[Text] farmers, and will establish and allocate those rights.

Article 1. As of 1 February 1990, age, disability, and Article 7. Affairs concerning pensions and social security

survivor pensions for agricultural cooperative members for the peasantry are transferred from the Ministry of

are raised as follows: Labor and Social Welfare to the Union of Agricultural

Cooperatives-APSSFF. The transfer and reception will A) pensions between 60-400 lei are raised to 500 lei proceed legally, on the basis of balance sheets.

monthly;

B) between 401-500 lei, to 600 lei monthly; Employees involved in activities transferred from the

C) between 501-600 lei, to 700 lei monthly; Ministry of Labor and Social Welfare and its county

D) between 601-700 lei, to 800 lei monthly; offices will consider themselves on office transfer; their

E) between 701-800 lei, to 900 lei monthly; salary fund and other rights are also transferred from the

F) between 801-900 lei, to 1,000 lei monthly; Ministry of Labor and Social Welfare to the Union of

G) bretween 901-1,000 lei, to 1,100 lei monthly; Agricultural Cooperatives.

H) between 1,001-1,100 lei, to 1,200 lei monthly;

I) pensions over 1,100 lei are raised to 1,300 lei monthly. The Ministry of Finance and the Ministry of National

Economy will make the necessary amendments con- Article 2. Children allowances for agricultural coopera- cerning the salary fund and the number of personnel tive members are raised as follows: affected.

A) for the first child, from 100 to 300 lei monthly;

B) for the second child, from 100 to 350 lei monthly; Article 8. Within 60 days of the issue of the present

C) for the third child, from 200 to 430 lei monthly; decree-law, the Union of Agricultural Cooperatives will

D) for the fourth and additional children, from 300 to advance proposals to uniformly regulate pensions and

500 lei monthly each. other social security rights for agricultural cooperative

members and individual farmers, on the basis of princi- These allowances are allocated to cooperative members ples similar to the ones used in the state social security

who are not entitled to state allowances for children, on system.
JPRS-EER-90-025

20 POLITICAL 28 February 1990

The funds required to increase pensions and other social Similarly, cooperative members may organize in free

security rights in keeping with the provisions of the associations to use the buildings, stables, and other

present decree-law will be secured from pension and available facilities of the agricultural cooperatives, with

other social security funds of the agricultural coopera- the latter's accord.

tives, formed in accordance with Law No. 4/1977.

Livestock that is not taken over under such cooperation

Article 9. Article 138 letters B and D of the Finance Law ventures or cannot be maintained by the cooperative

No. 9-1972 are amended to read as follows: may be sold by the latter at legal prices to other agriculsfor labor and other tural units or to cooperative members who pledge to pay B) "payments for cash payments forrtemainprodutsdoryoung

afferent rights, and contributions to the APSSFF;"

D) "payments for goods, work, and services delivered, Article 3. The pasture fields belonging to agricultural

and insurance premiums." cooperatives in hilly-mountain areas and urban outskirts

will be used as communal pastures.

Article 10. Article 7 of Law No. 4/1977; Articles 16 and

17 of Decree No. 410/1985; Article 8 of Decree No. Article 4. The general assembly or agricultural coopera247/1977 concerning [?medical] treatment units of the tives in the other areas may assign arable lots of up to

Union of Agricultural Coooperatives and any other 5,000 square meters or the agricultural equivalent to

regulations to the contrary, are abrogated. each cooperative member of retiree, mechanics, or other

workers of agricultural machinery stations, on condition

Ion Iliescu, president of the National Salvation Front that the latter continue to deliver the work or mechaCouncil nized operations established to the cooperative.

Land Incentives for Farmers In keeping with the conditions stipulated in the above

paragraph, the general assemblies may also assign such

90EB0267C Bucharest ADEVARUL in Romanian land to individuals who desire to return to villages and

1 Feb 90 p 5 become cooperative members.

["Decree-Law Regarding Incentives for Farmers"] The general assemblies of agricultural cooperatives throughout the country may also assign up to 7,500

[Text] The National Salvation Front Council decrees: square meters of arable land per family to other categoArticle 1. The general meetings of agricultural coopera- ries of non-cooperative members residing in the com- Artiles 1. hellygeuneraln mree s ofd a lurbal ooirtsa-e mune or in neighboring villages and towns, on the

tives in hilly-mountain areas and urban outskirts are conditions that they cultivate the land properly and pay

entitled to assign arable land and hayfields to coopera- the cooperative an annual tax established by the general

tive members in the respective communes or villages for assembly.

long-term use.

Vineyards or fruit orchards may also be assigned. The size of the tax will reflect the quality and potential of

the land assigned.

Land plots will be assigned to individuals who work and

obtain good yields without needing to hire help. To ensure that crop rotation is observed and that disease

and pests are properly combated, the fields assigned Land plots and hayfields may be assigned after delin- under the present decree will always be located in

eating the areas required to supply fodder for the live- compact areas within the precinct of the village.

stock left in agricultural cooperatives after the cooperation ventures envisaged in Article 2. Article 5. State agricultural units may assign to their

Article 2. The general assemblies of agricultural cooper- permanent workers arable fields of up to 5,000 square

artile in Thilly-munerai assembles ad ubagcultsirts c - meters from their own land. Workers who reside in other ative in hilly-mountain areas and urban outskirts may localities can receive plots as stipulated from the state or

organize cooperation ventures, on the basis of contract, cooperative agricultural units in the area where they live

with cooperative members wishing to take over and raise and with the latter's approval, provided they fulfill their livestock. The latter will deliver the products and young own work duties in the units in which they are employed.

established to specialized contracting units on behalf of

the cooperative with which they have the cooperation Article 6. Agricultural cooperatives that have assigned

contract. arable land and hayfields for long-term use according to

The contracting unit will pay for the products of the Article 1, and that will remain active through cooperaagricultural cooperative with which it has a delivery tion ventures in livestock, small industry, marketing,

contract to the state fund. and other areas, will be managed by a chairman elected

by the general assembly of cooperative members, who

The conditions, advantages, rights, and obligations will be paid out of the cooperative's income, and by

involved in the cooperation venture will be established agricultural experts and a chief accountant, paid by the

by agreements between the contracting sides, state.
JPRS-EER-90-025

28 February 1990 POLITICAL 21

Article 7. Persons assigned land according to the present production costs and ensuring normal profitability, and

Decree-law, who do not properly cultivate it or who use from selling produce on the market and through their

it for purposes other than farming, will forfeit their right own stores, as well as from services.

to the land; the decision along this line is made by the

generaly assembly of the agricultural cooperative or the Article 2. Within 30 days of the present decree, the

management of the respective state agricultural unit, as Ministry of Agriculture and Food Industry, together with

the case may be. the Ministry of Finance and the Union of Agricultural

Cooperatives, in extensive consultation with agricultural

Article 8. The land on which houses and household producers, will present for approval new contract and

buildings stand, and the yard and garden around them, purchase prices according to areas, as well as other

located in cooperative areas, are the private property of incentives that will be granted to all the categories of

the holders, and may be sold or bequethed. agricultural producers for produce delivered to state stocks.

The land cited in paragraph 1, together with the plot that

may be assigned to a cooperative member for use The new prices, set according to paragraph 1, will come

according to Article 4, may not exceed an area of 6,000 into force as of 1 January 1990.

square meters per house owner. Article 3. As of 1990, investments and expenses incurred

Article 9. Holders or owners of agricultural land are free in the national interest by state and cooperative agriculto sell the produce obtained on it, without a market list tural units and by private producers for agricultural,

price, including livestock, poultry, and animal produce, livestock, and veterinary purposes and for land amelioboth on the market and on the basis of contracts signed ration-including the exploitation and maintenance of

with specialized units, in mutually advantageous condi- such projects-antiflood and antifreeze projects, envitions. ronmental protection, basic research, and soil recovery will be financed from the state budget.

Producers who are in cooperation ventures with agricultural cooperative units may freely sell, without list price, Incomes secured by state agricultural units from producthe produce due to them from such ventures. tion and services established by the Ministry of Agriculture and Food Industry together with the Finance Min- Article 10. Through its agricultural machinery stations istry, will be paid into the state budget.

and other units belonging to it, the state will assist all

farm land holders by performing mechanized opera- Article 4. Payment for work in agricultural cooperative

tions, for which it will be paid in cash and in kind. units will be determined by the general assemblies on the

basis of labor norms and tariffs established by them in

At the same time, specialized units will help farmers consultation with the Ministry of Agriculture and Food

procure seed, seedlings, fertilizer, pesticides and herbi- Industry and the Union of Agricultural Cooperatives,

cides, stud and insemination material, fodder, household ensuring levels similar to those of state agricultural

implements, etc., and technical assistance. Payment for workers in the same conditions of productivity and

mechanical work, materials, and equipment, will be equipment.

made in kind and cash, at the price and tariffs established according to the law by the competent authorities. Salaries similar to those in state agriculture will also be

established for managerial, technical, economic, admin- Article 11. Agricultural machinery stations and other istrative, and service personnel in cooperative agriculstate agricultural units may auction off to private tural units.

farmers tractors and other agricultural equipment for

which the normal service period has elapsed. The Ministry of Agriculture and Food Industry, together

with the Ministry of Labor and Social Welfare and the

Article 12. Any regulations contrary to the present Union of Agricultural Cooperatives will establish uniDecree-law are abrogated. form tariffs for the agricultural sector, in correlation with

Ion Iliescu, president of the National Salvation Front the other branches of the national economy and in

Council keeping with the complexity of the work and working

conditions.

Incentives for Farm Units Article 5. Personnel permanently employed in state

90EB0267D Bucharest ADEVARUL in Romanian agricultural units, who did not request a plot for personal

2 Feb 90 p 2 use, and seasonal workers who work more than 60 days a year in a unit, may receive produce totaling up to 10

["Decree-Law on Measures To Provide Incentives for percent of their earnings, at contract price.

Farmers and for the Economic Activities of State and

Cooperative Agricultural Units"] Article 6. Payment for agricultural and other operations

and for services rendered by agricultural machinery

[Text] Article 1. The agricultural units will finance their stations [AMS] and other state units to agricultural

production from income derived from selling produce to cooperative and other units and to private farmers will

the state on the basis of contracts, at prices reflecting be made in full, in kind and in cash, in keeping with the
JPRS-EER-90-025

22 POLITICAL 28 February 1990

volume and category of work done, according to the maintain the same name, location, organizational grade,

tariffs in force and the legal pay schedule, subordination, and organizational structure as before the

adoption of this decree.

Mechanics will be paid for mechanized operations in full

and in relation with the volume and quality of the work The assets and debts established on the basis of balance

performed, according to salary tariffs for various catego- sheets dated 31 December 1989, the indexes concerning

ries of complexity, after acceptance of the work. economic and financial activities, and contracts signed

for 1990 will be transferred in accordance with legal

The personnel of state and cooperative agricultural units procedures.

and other persons who work on holidays and weekends

will be paid 50 percent more for work done on such days. Within 30 days of the date of the present decree, the

Ministry of Agriculture and Food Industry will present

Article 7. To provide incentives for and stabilize the proposals to reorganize certain state agricultural units

labor force in the livestock sector, cooperative members designed to increase their efficiency.

and other workers employed in agricultural cooperative

units in that sector will be hired with work contracts for Article 14. The provisions concerning the establishment

indeterminate periods of time, on the basis of attested and functioning of joint agroindustrial state and cooperskills in their respective areas. ative councils and any other regulations concerning

those councils, are abrogated.

Persons hired on the basis of work contracts in keeping The general directorates for agriculture and food

with paragraph 1 will be entitled to pensions in the same industry will secure jobs with county agricultural units

conditions as the personnel of state units, for the personnel of the former joint agroindustrial

Article 8. To assist agricultural cooperatives, agricultural councils in keeping with their qualifications.

experts, legal advisers, and other professional cadres, as Chief economists will be assigned by the Ministry of

well as chief accountants employed in agricultural coop- Agriculture and Food Industry and the Bank for Agriculeratives will be hired by the general directorates for ture and Food Industry to the general directorates for

agriculture and food industry; their salaries and other agriculture and food industry and to branches of the

legal rights will be paid out of the state budget. Bank for Agriculture and Food Industry. The same

Article 9. Children allowances for cooperative members procedure will apply to the fleet of vehicles and drivers

and state children allowances for the personnel of the above councils.

employed in agricultural cooperative units and state Each AMS will institute a slot for a chief agronomist; the

agricultural and food industry units located in rural directorate for agriculture and food industry will create

areas, will be the same as those established for urban slots for a specialized inspector (or inspector general) for

workers. economic, financial, and legal issues, or for a (main) legal

Article 10. The Bank for Agriculture and Food Industry adviser.

will grant loans--on the basis of substantiated applica- Article 15. The personnel transferred as a result of the

tions-to agricultural cooperative units, state units, and present decree-law is viewed as transferred on the job;

private producers to supplement their own funds, to personnel transferred to lower paid jobs will draw the

finance vegetable and livestock production, small same salary as before for a period of three months.

industry, and services.

Article 16. Debts for production loans and unpaid cash

Article 11. A special insurance fund will be formed to advances, including loans taken out to pay suppliers on

cover the ill effects of natural factors on vegetable and an exchange basis, given to agricultural cooperative

livestock production; state and cooperative agricultural units, and the interest due on them for 1989 and previunits will participate to the fund, which will be admin- ously, totaling 57 million lei, are canceled and will be

istrated according to the law. The state will also partici- covered from the budget surplus of previous years.

pate to the fund in the case of natural disasters. Similarly, previous years' budget surplus will also be

used to cover the sums required to pay for deductions in Article 12. Investments and capital repairs in state and 1989, totaling 5 billion lei, established under Article 2 of

cooperative agriculture and in the food industry will be Decree-law No. 35-1990.

financed out of the units' own funds, state loans, and

budget allocations. Investment credits granted to agricultural cooperative

units and due by 31 December 1989, including interest, Private producers will finance investments out of their totaling 550 million lei, are canceled and will be covered

own funds, state loans, and loans received from credit out of the budget surplus of previous years.

coooperatives. Article 17. Circulating cash losses recorded in 1989 and

Article 13. State agricultural units and AMS that were in previous years, as well as other amounts not paid,

joined in accordance with Decree-law No. 220/1989 will including fines and the interest due on them, incurred by
JPRS-EER-90-025

28 February 1990 POLITICAL 23

state agricultural and food industry units, will be finan- The Council of the National Salvation Front Decrees:

cially settled when the balance sheet is drawn for the

national economic and financial activities carried out in Article 1. The contract and purchase prices and the

1989. Until the financial settlement of those losses and advantages given to private agricultural producers, coopdebts, interest and fines will not be applied as of 1 erative members, and state and cooperative agricultural

January 1990, and the Bank for Agriculture and Food units for delivering vegetables and animal products, as

Industry will finance the activities of state agricultural well as fowl and live animals, to the state supply are set

and food industry units within the framework of the in Attachments 1-19.

funds envisaged under quarterly credit plans for 1990. Article 2. The prices of seeds, seeding material, breeding

and work animals, as well as the prices of other agricul- Article 18. Regarding agricultural cooperative units, tural products for which contract and purchase prices are

amounts not paid into the pension fund, social security not established by the present decree-law, are set by the

fund, and the state budget and the fines due for them for Ministry of Agriculture, the Ministry of Food Industry,

1989 and previous years, totaling 42.6 billion lei, will be and the Union of Agricultural Cooperatives with the

canceled and erased from the records of those bodies and

of other creditor institutions, agreement of the Ministry of Finance.

The contract and delivery prices for vegetable and

Article 19. State agricultural and food industry units and animal products and their subproducts which are delivagricultural cooperative units are relieved of the need to ered among the agricultural state units, the food

pay fines for non-payment of bills on time, and fines and industry, and the cooperative units, as well as between

damages for not executing economic contracts for 1989 these units and private producers, for the purpose of

and previous years. production, are set by the Ministry of Agriculture and

the Ministry of Food Industry, together with the Union

Article 20. Payments due by cooperative members and of Agricultural Cooperatives, on a case-by-case basis.

other personnel employed in state and cooperative agricultural and food industry units as a result of the Article 3. The prices of vegetable products, animals, and

establishment of overall salary rights at the end of fowl and animal subproducts will be calculated on proprevious years, will not be pursued. ducer delivery prices, based on their modes of transportation.

Similarly, the debts of cooperative members and other

personnel of agricultural cooperative units and other Article 4. The retail prices of agricultural and industrial

persons, stemming from failure to implement statute products obtained by processing agricultural raw mateprovisions concerning the holding of agricultural land, rials-sold through the state and cooperative trade netwill no longer be pursued. work-which are in effect as of the date of the present

decree-law, remain unchanged.

Article 21. Tractors, automatic combines, agricultural Article 5. The differences between the new contract and

machinery, and other equipment belonging to AMS and purchase prices approved by the present decree-law and

lent to state agricultural units will be transferred to the those in force up to 31 December 1989 for vegetable and

latter as of I January 1990. animal products are financed, for 1990, from the state

Article 22. Any regulations contrary to the present budget.

decree-law are abrogated. The Ministry of the National Economy and the Ministry

of Finance are authorized to introduce changes in the

Ion Iliescu, president of the National Salvation Front economic indicators and in the state budget for 1990

Council based on the results from the application of the present

decree-law. [These changes will be based] on the proposals of the Ministry of Agriculture and the Ministry of

Contract, Purchase Prices for Farm Products Food Industry and other relevant ministries, and pre- Increased sented within 30 days of the date of the present decree27000004P Bucharest ADE VAR UL in Romanian law.

13 Feb 90 pp 1, 3 Article 6. The contract and purchase prices set by the

present decree-law apply as of 1 January 1990.

["Decree Increasing Contract and Purchase Prices and Article 7. The Ministry of Agriculture, the Ministry of

Giving Advantages to Agricultural Producers"] Food Industry, the Ministry of Light Industry, the Ministry of the Chemical and Petrochemical Industry, and

[Text] In order to give agricultural producers an incen- the other ministries benefiting from agricultural prodtive for increasing vegetable and animal production and ucts, together with the Ministry of the National

to increase their income by delivering the largest possible Economy and the Ministry of Finance, will present, by

quantity of products needed to satisfy the requirements 31 October 1990, proposals for new production and

of the population and of the national economy, delivery prices for food products and non-food products
JPRS-EER-90-025

24 POLITICAL 28 February 1990

resulting from the processing of agricultural products. products, especially milk and meat, products for which

These proposals will be based on the new contract and the current delivery prices will ensure-under normal

purchase prices, the reform measures for the improve- production conditions-an average profitability of

ment of production processes, manufacturing technolo- about 25 percent. The same can be achieved in the case

gies, and [the efforts to] perfect economic flow. of vegetable products. In the opinion of specialists,

compared to the average prices paid in 1989, the new Article 8. Regulations dealing with the conditions and prices will have a positive effect on financial results

criteria for making and implementing delivery contracts throughout the agricultural sector, amounting to more

for vegetable and animal products, as well as for fowl and than 34 billion lei. Consider this figure in comparison to

live animals, set by Decree No. 69/1984 and Decree No. the level of yields recorded last year, especially in animal

70/1984, remain in force, husbandry, in which, as we know, the level for producArticle 9. Attachments 1-19 are an integral part of the tion was among the lowest in the entire history of this

present decree-law. sector.

Article 10. Any regulations contrary to the present The truth is that, for many products, the level of current

decree-law are abrogated. prices exceeds even the most optimistic hopes of the farmers. First of all, it should be understood that these

Finally, the disgraceful price system which has bank- price increases must be matched by more work and

rupted agricultural industry and the peasants has been better organized work. No matter how great the effects of

abolished. Not only the peasants, but all of the agricul- the price increases might be as incentives, this cannot be

tural sector were sacrificed in the name of false national the measure for resolving the great problems of our

interests; agriculture was reduced to poverty. In the year agriculture. In addition, under conditions of improper

of "the highest yields in the history of the country", activity, high and uncontrolled prices lead to inflation; in

Romanian agriculture had losses amounting to more addition, small yields generate losses. Under conditions

than 32 billion lei, while only two of its direct beneficia- in which the question of increasing prices paid by

ries deposited about 50 million lei in the state budget. consumers has not been raised and is not being raised, all

The great majority of the profits were achieved by agricultural resources should be used efficiently everyrobbing the agricultural workers. The peasant, who pro- where. Efficiency in agriculture means, above all, high

vides the bread and all the things which are vitally yields. More than in the past, it is necessary to act wisely

necessary to feed the people, arrived at the deplorable and clearly to eliminate those extra costs which unallowsituation of not being compensated, in some cases, by ably increase the prices, as well as those flagrant inconeven half the price which the legion of intermediaries sistencies which still exist in the system of producing and

between producers and consumers put in their pockets. utilizing different products.

This was a serious and corrupt anomaly in the economic

mechanism-a term which the terrible imposters which

created it had the impudence to coin. Decision on Management of Economic Activity

The price which agriculture had to pay for the industri- 90EB0274A Bucharest ADE VAR UL in Romanian

alization of the country was very dear. But this substan- 10 Feb 90 p 3

tial effort pales in the face of the immense damage to

agriculture caused by those sick minds which obstructed ["Government Decision on Measures Concerning Ecoso shamefully the possibilities for progress. This truth- nomic Management"]

and not those illusions trumpeted by the mouth or pen of

some who do not know, or act as if they do not know, the [Text] In accordance with the provisions of Decree-Law

current situation of Romanian villages-was the point of No. 10/1989 on the formation, organization, and funcdeparture of the new governmental bodies when they tioning of Romania's Government, and taking into

established the essential directions for the agricultural account the need to strengthen stability in economic

reform program. The agricultural units were given back management,

their autonomy and the right to decide on all problems

related to the management of their resources.

Reconsidering the place and role of the small producer, Article 1. To stabilize and increase production effimaterial conditions have been assured for helping the ciency, the managements of enterprises, institutes, and

immense mass of consumers prosper. With the legisla- other economic units that exist on the date of the present

tion of a new and high-incentive price system for all decision, will remain in place.

agricultural products, one can state that this is the first Subsequent managerial changes may be carried out only

time in 40 years that agriculture truly has an opportunity by a body higher up in the hierarchy.

to develop on the basis of its own resources and financial

earnings. According to the new regulations, the current Article 2. Until new regulations are issued on the mancontract and purchase prices are, on the average, 40 agement of enterprises, centrals, and ministries, the

percent higher than those paid to farmers last year. following bodies are established in accordance with

Naturally, the largest price increases were for animal current requirements:
JPRS-EER-90-025

28 February 1990 POLITICAL 25

a) Administrative councils in industrial enterprises and etc.--caused by activities that do not directly pertain to

centrals, made up of seven to 11 persons: a director- the production process and that may be carried out only

director general-chairman, a technical director, a corn- outside working hours.

mercial director, two representatives of the working

people, a chief engineer, a chief accountant, the heads of Article 6. The specific role of the trade unions is to

the major sections or departments appointed by a body represent the economic and social interests of the

higher up in the hierarchy, and a legal adviser, employees.

b) Scientific councils in research and design institutes Prime Minister Petre Roman

and centers, made up of seven to 11 persons: a directorchairman, a deputy director for science, technical deputy Decree-Law on Early Retirements

director, two representatives of the working people, a

secretary for science, a chief accountant, the heads of the 90EB0274B Bucharest ADEVARUL in Romanian

major research and design sections, workshops, and labs, 9 Feb 90 p 3

appointed by a body higher up in the hierarchy, and a

legal adviser. ["Decree-Law on Early Retirement for Certain Employc) In ministries: ees"]

[Text] The National Salvation Front Council decrees: Administrative councils made up of 19-25 persons, as

operational working bodies: a minister-chairman, the Article 1. Employees who have worked the required

deputy ministers, the directors of the specialized direc- number of years may request to retire up to two years

torates of the ministry, the directors general of industrial before the legal retirement age.

centrals, the director general of the Central Institute, and Article 2. Employees who have worked the required a legal adviser.Arie2.Epoeswohewokdteeqrd number of years may request to retire up to four years

Managerial boards made up of 41-47 persons: a min- before the legal retirement age in the following situaister-chairman, members of the Administrative Council, tions:

seven representatives of the working people, the direc- -for health reasons, on the basis of medical certificators of the main industrial enterprises, foreign trade tion, without having to be disabled;

enterprises, research and design institutes, and representatives of the relevant institutes of higher education. -if the respective unit management, with the agreement

Article 3. Regarding vacant positions in the management of the working collective, deems that the request is

of economic units-such as for technical director, com- well founded and that the employee's productivity is

mercial director, chief engineer, chief accountant, and low.

plant managers-the management of the hierarchically Article 3. Employees who have greater length of service

superior body will appoint acting stand-ins until the than the minimum number of years legally envisaged

positions are filled. may request to retire before the age of 60 for men and 55

Persons released from positions may not be appointed as for women. In such cases, the retirement age is lowered

acting officials in managerial positions of the respective by the number of years by which length of service was

economic units, exceeded, but not to less than age 55 for men and 50 for

women.

Article 4. In view of the greater rights and responsibili- Aricle

ties inherent in the principle of autonomy, the adminis- and 4. Employees who have at least 10 years of service

trative councils will provide operational management and membership in social security may be retired, upon

and will take measures to: request, at age 60 for men and 55 for women.

ensure ongoing production, research, and develop- Article 5. (1) Persons retired in accordance with the

ment activities for the present and future; enhance present decree-law will have their pension suspended for

efficiency and ensure profitability; permit only invest- as long as they draw an income from a salaried job, as

ments that are efficient; protect the technological and members of an artisans' cooperative, or from a private

computerized equipment of the unit; ensure payment of enterprise, except for agricultural production.

salaries and workers' training and placement; release and (2) In cases such as the ones cited in paragraph 1, within

appoint hierarchically lower cadres; improve the person- 15 days of resumed work, retirees are obligated to

nel's working and living conditions; hammer out and apprise the pension fund of the new situation, so that

approve bylaws concerning organization and running, pension payments can be stopped.

labor norms and regulations, and collective work contracts. (3) The provisions of paragraphs 1 and 2 apply to men under the age of 60 and women under 55.

Article 5. The administrative councils will take the

necessary measures to avoid production losses and work Article 6. On the basis of documentation presented by

disruptions in the various units---enterprises, institutes, plan holders for the implementation of the provisions of
JPRS-EER-90-025

26 POLITICAL 28 February 1990

the present decree-law, the Ministry of Finance is autho- of socialism or possibly its true beginning. That revolurized to amend accordingly the financial indexes envis- tion is going to take place, either with those who stand at

aged for 1990. the head of society or in spite of them. But their bloody

course can be prevented if they bend in that direction, if

Article 7. The number of positions at regional pension they lead them. Probably it can already be said at this

offices is increased by four positions for each office. point that the democratic changes of what was only

Article 8. The present decree-law will come into effect on called socialism are an inevitability of the course of

1 March 1990 and will be implemented for a period of history, but those who cherish prosperity certainly

six months, with the exception of article 7. cannot be indifferent about their taking place in the most

peaceful and painless manner.

In the countries where socialism was imported on tank

YUGOSLAVIA tracks, it is much easier today to throw out what was

imposed. Wherever there was an authentic revolution,

Writer Deplores Policies of 'Yugoslav Ceausescu' and wherever the Communist Party had historic

90EBO179A Zagreb DANAS in Serbo-Croatian achievements to its credit-even if in the first elections

26 Dec 89 p 12 after the war, when it had the greatest chance to get democratic legitimacy, it let it slip--abandonment of

what was one's own choice is much more difficult and

[Article by Jelena Lovric: "On the Trash Heap of His- traumatic. Not only because of the still rather resilient

tory"] awareness that power which has once been taken through

[Text] Are the thousands of corpses in the streets of a struggle is not given up without a struggle. Even those

country close to ours in more ways than geography the who know that a bloody price that has once been paid

last blow from the tail of the monster in the throes of does not signify a perpetual subscription to power have

death, or has the bloody circle from Tiananmen to difficult reconciling themselves emotionally to this fact.

Timisoara-which are less than a year apart-not yet Will it mean that even on this soil the changes which are

been closed, threatening to catch up someone else in the an inevitability and which are only a matter of time will

maelstrom of human bodies and tank tracks crushing occur with that same death rattle of power defending

them in the name of the liberation of man? The man who itself at every price, much as occurred in Romania?

just a few days ago was euphorically applauded in a Except that there it was the power of a tyrant that was

country with closed borders and an enslaved mind and a being defended, while here it is now being felt as the

regime which is ready, out of incomprehensible insanity tyranny of a party, and that even though objectivity does

and a heedlessness equivalent to bestiality, to pay for its not deny it historic achievements. If the leading forces of

own perpetuation by massacring people, which leaves this society do not stand unreservedly on the side of

those whom it has shot without medical aid by way of progressive changes, economc and political liberalizacruel punishment, and which hauls away large numbers tion, then even in our context there could be a conflict

of dead rebels in garbage trucks or does not manage to between those who are on the side of progress and those

remove them even in that fashion-must end up on the who are objectively on the side of regression, and given

trash heap of history. our problematical and complicated relations, this could

easily be portrayed as a conflict of nationality against

In its departure, as it collapses in upon itself, that system nationality.

is perhaps showing its true face more now than ever

before: It will stop at nothing, it asks not the cost, it takes We are horrified by what is happening in neighboring

its own bloody tribute, leaving behind it scorched earth, countries, astonished by the heedlessness of a Stalinist

poisoned water, and civil war. system and the sufferings of the people it has ground

under, as though we have been intentionally repressing the

In a form that moves one to tears and to bewilderment, fact that this year some 30 people have died in the actions

yet another massacre in the name of socialism is dem- of the state in this country, that in the past months even in

onstrating precisely how inevitable its change has this country the system has been shooting at people as it

become, regardless of whether it is called its death or its defended itself under circumstances which have not been

reform, regardless of whether one thinks that a new altogether clarified, and that there should have been the

socialism will be borne from its ashes, or a new civiliza- courage to speak with piety about the children that were

tion which has only indirect ties to it. The longer those victims. As though we are forgetting that aside from

changes are delayed, and the greater the resistance to Romania we are the only country in Europe with a state of

them-the more traumatic and bloody the form they emergency, with political trials, with a large number of

take. It seems that every existing socialism must go political prisoners, with tear gas in the streets, as though we

through a kind of hell of human misfortune and its own are intentionally closing our eyes to the penetration of a

catharsis, uncertain as to its outcome. History is form of neo-Stalinism. The only difference is that our

marching through Eastern Europe with a dramatic step. Ceausescu is still loved. The applause of the Yugoslav

Wherever the leading political forces realize in time the Ceausescu from behind the closed doors of a republic is

inevitability of the changes, they are carried out more still echoing from a congress in which anachronistic assesseasily, regardless of whether they are proclaimed the end ments of counterrevolution were bandied about, at which
JPRS-EER-90-025

28 February 1990 POLITICAL 27

democratic changes were rejected, at which the multiparty We must be aware that those who are driving it crazy and

system was rejected-though, of course, it is not the only manipulating it in that way, just as in Romania, will stop

pledge of democracy, at this point it is the threshold that at nothing. They know, after all, that they are defending

must be crossed if we are to be able to talk about democ- not only their power, but probably much more. Those

racy at all. It is only under our complicated and entangled who have initiated the political processes know that

circumstances that it is possible for the spokesmen of should they fall, the same treatment may be applied to

political conservatism, who are not ready to undergo the them. That is why they will do everything to see that that

test of a multiparty system, to be perceived as spokesmen moment does not come. They are ready to pay any price

of freedom and democracy. Everywhere in the world of for that. With the lives of others, of course. It will take

dying socialism people are seeking a multiparty system, much more decisiveness and courage, then, for certain

seeing it as the only hope that the potential of society that painful truths to be stated openly. For example, that

has been enslaved up to now will be liberated after the neo-Stalinism has today put Kosovo further away from a

oppression of "one-mindedness." Except that in our resolution of its crisis and brought the entire country

country those who are the representatives of political within the range of civil war. The dogmatic forces cannot

rigidity and who proclaim the multiparty system a betrayal lose so long as salt continues to be thrown, as it is now,

of orthodox Communists are proclaimed liberators. It is an on the open wound of Kosovo. The silence about this

irony of history that in our country today, while the Berlin cannot go on any longer. The message of Romania is so

walls of socialism are coming down on all sides, the people terrible that all opportunism and fear of frank and open

is being used to build those walls, speech must yield to it.
JPRS-EER-90-025

28 ECONOMIC 28 February 1990

INTRABLOC AFFAIRS will every country go its own way or, on the contrary, will

some sort of new community arise on CEMA's ruins?

Central European Common Market Advocated Several months ago I read a statement made by Zbigniew Brzezinski in which he suggested that Polish foreign and 90EP0338A Warsaw POLITYKA-EKSPOR T-IMPOR T economic policy should prepare for an alliance, and even

in Polish No 2 (3), 20 Jan 90 p 17 a union, with Czechoslovakia and the Hungarians, perhaps even with the participation of the GDR. At that

[Article by Jerzy Baczynski: "In Place of a Brotherhood: time this seemed totally unrealistic. But today? Today it

Is a Central European Common Market Possible?"; is at least something to consider. And so let us consider

article was written prior to the 45th CEMA Session in it...

Sofia] Whether we like it or not, in the past 40 years we have

[Text] Who would have guessed that the system of real become mutually dependent economically. Approxisocialism would collapse over the course of a few mately 60 percent of the foreign trade of CEMA counmonths? Things happened so fast that today, somewhat tries is transacted between them. Obviously this is priunawares, we have found ourselves in a totally new marily a consequence of strong ties with the USSR, but

geopolitical and economic situation. Back in the spring, trade between the "lesser brothers" also reaches 20-25

after the roundtable deliberations, it seemed that Poland percent of their trade turnovers. What's more, we shall

and Hungary would long remain isolated in their risky still be doomed to each other for a long time to come

attempts to build a new system. Then, when the first because in each of our countries an economic "Central

noncommunist government went into power in Poland, European sector" has been created to produce goods for

I was afraid of sanctions and sabotage from our law- the local needs of partners, items which are, practically

abiding CEMA brothers. Let us recall who was in power speaking, unsalable in the West. Moreover, due to the

then in the GDR, in Czechoslovakia, Bulgaria and nonconvertible currencies, we must take advantage of

Romania. In such company we could not even dream of mutual deliveries of raw materials and semi-finished

adopting the Polish drafts for reforming CEMA, or of a products. Besides, regardless of how low we assess the

closer economic alliance with our neighbors. And sud- degree of integration within the CEMA framework, over

denly everything is turned around: in Czechoslovakia, a the years we have woven a net of various trade, copropersonal friend of Jacek Kuron has assumed the office of duction and personal ties-it makes no difference

president, the new premier of Romania is cutting himself whether these ties have been desired or imposed.

off from all ties with the communist party; in Bulgaria,

Todor Zhivkov, the "fox of the Balkans," is expected to The most important thing is that the states of the former

come before the courts, and E. Honecker, CEMA's CEMA (this organization can no longer function as

defender, has been thrown out of the party... For the first before) are finding themselves on a similar level of

time, the possibility of a new, real integration of Central economic development (or the lack thereof). If we look

Europe has been manifested, out from the center, it is easy to observe basic differences

between Poland and Czechoslovakia or the GDR, for

Several times in the past year we have written in POLI- example. On the other hand, from the West European TYKA of covert and overt conflicts between the coun- perspective, for example, we look the same because we

tries of our camp: tariff wars, the harassment of tourists, are separated by the same technological and organiza- ecological quarrels, national minorities issues, the disre- tional distance. True, the Czechs have better industrial

gard of economic agreements and, finally, growing ideo- traditions, the Hungarians have a decent infrastructure,

logical and political enmity. The walls of mutual ill will, the GDR has the Germans as well as the FRG, Poland is

disdain and feeling out of place had arisen between the most advanced in the building of a market system

"brother states." These ill feelings, still fresh, have been and Romania's debts are paid, but in sum none of these

somewhat stifled in the euphoria ofjoint liberation-but countries has developed enough to aspire to the role of

only somewhat. Our attitude to the other nations of this equal partnership in the West European community.

region continues to be full of inconsistencies. Suddenly Thus, Jacques Delors, chairman of the EEC Commiswe have taken a fancy to the courageous Romanians, we sion, invented the theory of the "Europe of Concentric

regard the Czechs and the Slovaks with a wait-and-see Circles": the first circle is the new Western Europe

sort of reserve, for a brief period we befriended the integrated after 1992; the second is the developed states

people of the GDR, only to become all the more aware of that, however, want to preserve their separate identities

their shocking anti-Polish campaign clearly steered by (Scandanavia, Switzerland, Austria and perhaps Great

the new-old government. The Bulgarians were always Britain); the third is the associated states (primarily

distant, and so the gentle changes in that country do not former European colonies and Yugoslavia); we-Central

arouse any special emotions in us. The Hungarians have Europe-are the fourth circle; in the fifth circle would be

played something of a dirty trick on us by seeking an the Soviet Union... Our fourth circle would constitute a

alliance with Austria and competing with us for help sort of waiting room to Europe. As we progress democfrom the West. And so now we are faced with a funda- ractically and in the restructuring of economic systems,

mental question: does the breakup of the camp have to we could advance to the group of associated states, then

signify the deepening of the differences that divide us, to the EFTA and finally to the Common Market.
JPRS-EER-90-025

28 February 1990 ECONOMIC 29

While this is an ostensibly tempting concept, it is largely USSR. But above all, we should seek a new model of

unrealistic. Mere association with the EEC requires the economic integration. Over the long term, it is imposunanimous agreement of all the member countries. This sible to retain idiotic restrictions in personal and tourist

is not to be expected, since the states of Southern Europe travel, the protection of our own markets as in the past

(Greece, Portugal, Spain, Italy and, in time, Turkey, and the primitive exchange of item for item, nonconvertwhich is waiting to be accepted into the EEC) may fear ible currencies and the like. Obviously, Poland and

the competition of newcomers, both for economic assis- Hungary, as the most advanced in the field of economic

tance and directly on the markets, especially on the labor reform, would have to "wait" for Czechoslovakia,

market. Membership in EFTA (Austria, Switzerland, Romania and Bulgaria. However, since the new governSweden, Norway, Iceland and Finland) is also highly ments of these countries are beginning to move in the

unlikely, since differences in the level of economic same direction, it is merely a question of time and

development between Eastern Europe and the EFTA are Mutual Aid, including real mutual aid. Besides, integraprobably still greater than differences between CEMA tion can and should finally be voluntary. To be sure, it

and the EEC. should also be achieved in stages.

It is understandable that in the first reaction after the fall Without entering into details, I urge that we take advanof the Iron Curtain, the states of Central Europe are tage of the special political situation, drawing conclustanding in line for the Common Market, competing sions from what has happened recently in our part of the

amongst themselves for the best possible position. If we continent. We must forget our bad past and invent and

exclude the GDR, which is a special case, sooner or later negotiate a new CEMA again from the beginning, finding

the governments of the other Central European states, a new, more appropriate name for it (the Central Eurohowever, should come to the conclusion that it is impos- pean Community?, the E.S. [Central European] Ecosible to ignore the fact that in spite of everything we are nomic Association?, the Economic Union?). The sense of

creating a regional economic, civilizational and, finally, such a venture is more important than the name: we

also a political community. Even if we assume that it will have a common past, similar problems today and hopes

only be a waiting room for the "real Europe," we can for the future. There are no longer any "people's democfurnish it better. racies," but psychically we are still strongly embedded in

that era of compelled brotherhood. Can you imagine our These are not new ideas: Poland, Hungary and the USSR really befriending and liking the Czechs, the Romanians

already attempted earlier to urge CEMA partners to and the Bulgarians? Can we imagine today a Polishfundamentally restructure their organization. A program Czechoslovak economic union or a free market of

for creating an Eastern common market was even devel- people, goods and monies extending from the Baltic to

oped. These draft programs ran up against the ill- the Black Sea? I would merely like to say that several

disposed position of the GDR and Romania and failed months ago there were many other things that we could

to receive unanimous support from the governments of not imagine...

Czechoslovakia and Bulgaria. Then the idea of a "little

CEMA" including Poland, Hungary and the USSR was

conceived. Accounts between these countries were to be CZECHOSLOVAKIA

cleared in hard currency and according to world prices,

while the existing intergovernmental economic coopera- Prague Spring's Theorists on Prague Fall's

tion was to be replaced by direct cooperation between Prospects

enterprises. At least the system of clearing accounts from 90EC0233A Prague MLADA FRONTA in Czech

this draft will be implemented gradually beginning in 19 Jan 90 p 3

1990. Even though nothing more could be accomplished

for political and ideological reasons, this minimal pro- [Excerpts from interview with Ota Sik and Karel Kouba,

gram was itself quite revolutionary. Now, however, in prepared for publication by Jiri Leschtina: "The

the new situation, it is worthwhile and even necessary to Rubicon Was Not Crossed"; date and place not given;

return to the idea of a common market for Central first two paragraphs are MLADA FRONTA introducEurope. tion]

I liked the proposal announced in RZECZPOSPOLITA [Excerpts] [Passage omitted] They last spoke together in

calling for the appointment of a Central European par- Prague in 1968. Ota Sik, then director of the Economics

liament to bring together those political forces which are Institute of the Czechoslovak Academy of Sciences

interested in democratization and in the introduction of [CSAV] knew that he would have to stay in Switzerland.

market reform in their respective countries. One can He recommended his long time close associate, docent

conceive of other, less formalized ways of mutual con- Karel Kouba, for the position of director. Shortly after

sultation as well. There is no doubt, however, that it is his selection as director, however, Kouba also was fired

essential for us to reflect together upon the future of this from the institute and went to work for the Prague

region, on paths for resolving existing conflicts and on factory of Ceskomoravska Kolben-Danek [CKD].

system reforms as well. We could also think about

developing a more unified position on the issue of A complex 20 years have passed. However unbelievable

Western aid, indebtedness and cooperation with the it may have seemed a few weeks ago, Karel Kouba, now
JPRS-EER-90-025

30 ECONOMIC 28 February 1990

in the CSAV Projections Institute, and Ota Sik are again upon our economic reform project as a unique, piositting together in Kouba's Prague apartment. [passage neering attempt to reach the outermost limit of a soluomitted] tion to critical phenomena within a socialist, single party

system. It was an attempt to cross the Rubicon of

[MLADA FRONTA] Don't you feel that, even though traditional reforms introduced in the 1950's and 1960's

later reformers quite stupidly repudiated your reform in several socialist countries. We wanted to make enterideas, these ideas nevertheless were also the object of prises independent, terminate their monopolistic posisometimes uncritical glorification? tions, create a market for goods, money, and capital. We

also proposed a program to achieve convertibility for the

[Kouba] Glorification has absolutely no place in this koruna. The forced abandonment of that program in the

regard. Anyone who wants to evaluate objectively our early 1970's, during which all its professional supporters

reform efforts of that time must remember that this in research institutes and in enterprises were liquidated,

newly formulated program was weighed down from the has resulted in profound stagnation and an interruption

beginning with a number of forced compromises and in the continuity of our economic development. I coninconsistencies. For instance, the first step in imple- sider this to be the main, primarily political error, of the

menting the reform was the reorganization of the enter- former leaders of the party and the nation.

prise sphere, which by the way would have resulted in

the strengthening of an already excessive level of monop- [MLADA FRONTA] Recently the last obstacle to your

olization. This was not an error on our part, but a former reform efforts has been removed, the monopoly

compromise. Our original intention was to reorganize on power of the communists. What do you consider the

the center as the first phase of a reform, by eliminating main dangers in implementing fundamental corrective

several completely unnecessary ministries and estab- measures in our economy?

lishing a ministry of industry. We were unable to get this

done even in 1968, however. The opposition from the

various sectors was too intense. [Sik] One danger is that we continue to delude ourselves

that enterprises with monopoly access to markets and

[Sik] Even during the initial phase of the reform program the certainty that the state will always take care of them

the party leadership was very upset by its final phase, in will by themselves look for the most efficient production

which we proposed several steps that would have methods. No production structure can be isolated from

restricted the influence of the party on the management market pressures today. This means that we cannot be

and output of enterprises. At that time, in the early afraid of allowing firms that have been unprofitable for a

1960's, we could not even speak about enterprises' long time to fail. I see a danger that during the process of

independence. This would have been branded as Yugo- free elections many candidates will run a campaign of

slav revisionism immediately. We therefore emphasized indulgence. So as not to lose the support of voters they

the role of the unions, of management, and the like. Even may attempt to keep afloat enterprises that demonsuch a modestly conceived phase of our program had to strably bring the society no profits. This is why it is

be almost completely eliminated, essential to separate production enterprises completely

from the state. This, however, does not rule out state

[Koubal Later, in 1968, these plans were published as subventions when an important firm runs into tempoarchival materials, rary difficulties. We also must be careful about evoking

the specter of unemployment. But these are all problems

[Sik] Even in the most liberal period of the Prague Spring that can be resolved without long term shocks by a

we had no chance to introduce the idea that just as a strategic national economic policy administered by an

single center cannot manage an entire economy, so a enlightened center.

single party cannot control an entire society. The concept

of political pluralism was blasphemy for the vast [Kouba] This peaceful revolution has shown us the way

majority of Dubcek's politburo. For practical purposes, to free elections, but has also brought political conflicts

there were only three radical reformers in the politburo: that are far from velvety. The communist party is not

Kriegel, Smrkovsky, and Spacek. I considered Dubcek prepared to share power. This leads to conflict situations

himself, along with Svoboda, Cernik, and Cisar as cen- not only at the center but mainly in districts and regions.

trists for whom the idea of getting rid of the leading role Moreover, many participants in this new political scene

of the CPCZ was unacceptable. are not accustomed to holding jobs that include the

difficult process of forming well run democratic institu-

[MLADA FRONTA] In your opinion what were the tions. We cannot allow either the circumstances of the

consequences of the forced abandonment of the reform election struggle, or the work of the newly elected govprocess following the August occupation of Czechoslo- ernment to force the fundamental problems requiring

vakia? economic correction to the sidelines. This is the more

urgent because the Prague Fall found our economy in

[Kouba] We lost an excellent opportunity to become much worse condition than it was in the Prague Spring.

integrated into the flow of world economic changes of Our economy requires decisive corrective measures and

that time. Today, despite my above reservations, I look profound, democratically administered systemic
JPRS-EER-90-025

28 February 1990 ECONOMIC 31

changes. Under no circumstances, therefore, should we very significant matter. I also regard as very significant

allow the economy to be sacrificed to political compro- what Kornai emphatically refers to as having to accord

mises. preferential treatment to private property. Unfortunately, neutral treatment does not yet exist today; the

HUNGARY private sector does not easily obtain credits and

imported materials. One must also mention the fact that

today's political system could not yet prove to HunTardos Condones Nemeth Economic Policy garian citizens that political risk is negligible in the

25000618 Budapest NEPSZABADSAG in Hungarian course of investments. As a result of the above3 Feb 90 p 8 mentioned circumstances the private economy does not

augment successful business activity, but wants to max- [Address by Marton Tardos, leading SZDSZ economist, imize income instead, and then either consumes that

at the NEPSZABADSAG Economic Policy Club, date income or takes it out of the country, or invests it into

not given: "From a People's Republic to a Republic; The material goods which carry the minimum political risk.

Operation Is More Painful Than Kornai Thinks"; first This is one of the main reasons why private production,

paragraph is NEPSZABADSAG introduction] which constitutes at least one-third, but perhaps barely

[Text] Members of the Nemeth government have faced less than one-half of Hungarian national income producthe situation that has evolved, thus it is fair for them to tion, is not efficient enough. Aside from traditional

confidently claim that they have done an excellent job in agricultural small merchandise production and tradithe course of the transition of power, according to tional industrial trades, private capital appears only in

Marton Tardos, leading Alliance of Free Democrats places where monopolistic profits can be ensured at

[SZDSZ] economist. While arguing with Janos Kornai's present. And it remains present only as long as monop-

"Passionate Pamphlet," Tardos expressed his views of olistic profits can be ensured in such a manner that

the present economic situation at the NEPSZABADSAG capital investment needed for production remains minEconomic Policy Club. imal.

The experiences gained during the past 20 years prove I agree with Kornai that everything possible must be

that no market can be established alongside an existing done to develop private businesses, and I also agree with

party-state, to use current terminology. In political and his statement that thus far the government has not done

ideological terms one could say that official ideology everything it could have. But I will say that this is not the

could not be in conflict with social solidarity while the sole miracle cure. Actually our dispute with Kornai

party-state reigned. Contradiction could play only a pertains to the issue that he wants to liquidate the

subordinate role within society, and therefore the market dominance of state and large cooperative property by

of resources cannot be made to function. In economic way of a single channel of direct privatization, a matter

terms: In order to have a free market, one needs a free that may take place in such cases only very slowly and

mercantile market and a capital and labor resource may last for decades. But the market cannot become

market. But the moment we begin to operate capital and efficient until private property does not achieve relative

labor in market form, the contradiction between capital dominance. On the other hand, if we accept Kornai's

and labor appears on the surface in a coarse form. (True, recommendations, state and large cooperative ownerthis contradiction is present in every plan directive and ship will remain dominant for a long time to come. modified plan directive system, but only in a veiled

fashion.) mfasion.) Fon For this tisreativesysothem, reason the 18 1968 modely model made mnadee no Kornai further functioning wants to resolve of the the state contradiction sector on between the the one hand,

advances with respect to formulating a labor and a frhrfntoigo h tt etro h n ad captals m hrkpet, and increased efficiency on the other, by introducing capital market. harsh control mechanisms. Quite naturally, this is an

The foregoing also suggests that in the framework of oversimplification, nevertheless I will say that the

capital and labor the freedom of social strata and groups method proposed by Kornai would actually restore the

to organize themselves politically is needed in order to plan directive method.

permit the market to function. Along with this, the

proprietary system must transform itself, or must be It is true that Stalin succeeded in achieving huge quan-.

transformed, in order to permit society to organize on titative results with an economy characterized by state

the basis of capital. ownership. But not even this debatable success could

have been achieved without the promise of making

Why Is Private Enterprise Not Efficient? communism a reality. Along with this, success also

required that those in power motivate business leaders

I fully agree with Kornai when he states that privatiza- with the promise of personal advancement, and that

tion is the key issue in performing these tasks. Whatever these leaders be stringently punished if their perforhe calls privatization I regard as direct privatization. mance was unsatisfactory.

This is a proprietary transformation which deals with a

situation in which a significant proportion of state and The fact that these methods cannot be utilized in today's

large cooperative property is transferred to ownership by situation can be easily seen. In my view, those who

families and private individuals. I consider this to be a operate state property must not have their fingers
JPRS-EER-90-025

32 ECONOMIC 28 February 1990

burned, but must be given economic freedom and an the state would be incapable of performing this function

opportunity to prove themselves instead, holding them in the economy as a whole, a large part of state property

accountable for the return on capital. One cannot do must be privatized.

business assuming from the outset that a person will

spend too much money and will not work well. We must But even with the best of intentions, nationalized propnot take this approach, particularly at a time when the erty cannot be distributed among members of society in

state does not have sufficient strength and opportunity such a way that people feel that the distribution was fair.

to control its managers. Career opportunities must not If we give capital to enterprise workers, public service

be taken away from the present managerial strata, workers, for example, will raise the question of why they

because we have no assurances that we will be able to did not receive capital. Another question that may arise

replace them with better managers. Rather than relieving could be this: Why does the worker of a capital intensive,

the present managers, we must assign them the task of profitable enterprise receive ten times as much capital as

accomplishing the return of the invested capital. This the worker of an enterprise that operates with a loss and

task can be expressed in specific terms only if a large part is short on capital. A different problem would arise if we

of the economy is transferred to private hands, and only were to privatize state property on a basis other than

if the rest of the enterprises are able to achieve results in enterprises, and provide an opportunity to members of

competition with the private sector, society to purchase that property. Citizens who do not'

make investment decisions themselves and who are not

informed of opportunities available to them may end up Government Officials Should Not Be Layed Of in very different situations as a result of investments

I would like to mention in this relationship that there is made on the basis of state decisions. One would become

an urgent need to determine which state administrative rich as a result of the state decision, while another could

positions have a political character. I believe that it buy himself only a glass of wine and soda. Society would

should be stated that the question of whether an indi- have difficulty tolerating such differences in wealth. I

vidual has been a member or officer of some party at one believe that the kind of property transformation I call

time or another must not even be asked from persons direct privatization may and must be used, but there is

serving in the specialized apparatus. Simply put: The also room for another kind of privatization. Thus, even

foolishness of kicking out masses of people from the if not exclusively, the channels I am critical of may also

expert apparatus just because they were part of it yes- be applied. In addition, in the course of property transterday, must not be accomplished. What could be formation, one may assign a great role to institutional

accomplished by replacing these people with persons investments. Quite naturally, this statement is debatwho do not understand the conditions even to the extent able, because it is questionable what conduct the insurtheir predecessors do? ance companies, pension funds, and nonprofit organizations will manifest in the marketplace. This threat must

Let us return to the subject of privatization. As far as I be contrasted to the dangers inherent in today's practice

am concerned, in a broad sense I regard every action as of state enterprise accountability for their resources. privatization which discontinues the state's disposition

over property, and puts an end to the practice of 98 Shock Therapy

percent of cooperative property being indivisible. Privatization begins at the moment when these rigid forms There is yet another area where I disagree with Kornai.

change into some more flexible forms. This is because at He says that nothing but an operation can help the

that point the possibility came about for the evolution of situation the Hungarian economy is in today. In his view

a qualitatively different, more modern proprietary form. it would be possible to perceive an operation which, in

the course of a year or two, would place the country in a The trouble at present autonomous enterprises is that no period of healthy development, and that this healthy

one can call such enterprises his own, and in the course development would show the marks of full stability in

of transformation the state property agency will not be virtually every area.

able to manage well the affairs of the possibly "renationalized" enterprises. In the framework of various trans- In my view this process is far more difficult, and the

formations and sales, certain methods should be sug- operation is far more serious than Kornai thinks. Our

gested by which a person in authority may be found, one author presents an illustrative example by saying that as who may be held accountable if the value of enterprise long as a person's leg must be cut off, it is better to cut it

assets declines; if in response to monetary restrictions an off all at once, than piecemeal. So that I also present an enterprise gives up its capital in the greatest variety of illustrative example, I will say that any kind of operation

ways by selling its machinery, vacation homes, and demands an appropriate physiological condition, and

shops, and by not investing the amortized value, but by that the great strain involved in an operation does not

converting it into wages and material costs instead, make it possible to simultaneously perform any number

Accordingly, under such circumstances, as long as an of operations on a patient in just any kind of general

enterprise is owned by the state, state organs must not condition. In and of itself, proprietary transformation is

control the details of doing business. The state must an extremely complicated, difficult matter. One must

control the end result instead: the manner in which the count on many kinds of resistanc in this process. In

enterprise's assets appreciate or depreciate. But because today's Hungary one may count on an even greater
JPRS-EER-90-025

28 February 1990 ECONOMIC 33

conflict as a result of the fact that the standard of living does not exist in Hungary. Undoubtedly, the possibility

accepted and regarded as legitimate by society is not in exists that a weak government, along with liberal policies

harmony with its performance potential. The bulk of and under assumed conditions of trade union and entersociety thinks that every government has an obligation to prise obstruction, implements policies which cause run- ensure the standard of living society considers to be away inflation. At that point Kornai's suggestions could

legitimate. In reality the desired standard of living could be placed on the agenda. But today's Hungarian inflation

not be ensured even if some good solution, bordering a cannot be treated with shock therapy.

miracle, could be found with regard to the management

of our existing indebtedness. As a result of this fact, one The fact that inflation is not beneficial is true indeed.

must count on the fact that the problems of the coming The question is whether a country with a distorted

years cannot be resolved without exchanging conflicts, pricing system is capable of transforming its pricing

and one must count on significant resistance on a soci- system without inflation. I apologize to Kornai for what

etal scale to the pursuit of an economic policy that is I am about to say, but Kornai's response to this matter is

warranted, tricky. He does not make unequivocal statements about

changes in price levels in the course of the operation, and

The Confusion in Society about the duration of the operation. Even if one assumes

a limited volume of money issued, the streamlining of

In the final analysis, the troubles and concerns on the supply and demand would take a long time. Everything

present agenda reach back to 1948, the year of the possible must be done not to force the Ministry of

turnaround, and to the consequences of that turnaround. Finance and the National Bank to relax their tight

Unmanageable conditions were created at that time. The money policies in the course of establishing free prices,

Miklos Nemeth government, which regards itself as a and as a result of trade union and large enterprise

nonpartisan government, also carries the negative con- obstruction. If this were to happen nevertheless, the

sequences of that period, but these consequences will volume of money would produce inflation which may be

weigh far more heavily on the future government. Hun- treated only with shock therapy.

garian society is very confused in this regard. One must see the issue clearly: Conditions must be established The above suggests that the evolution of a new pricing

which enable the country to join Europe, not at the level system is a complicated process, which cannot come

of standards one finds in Outer Mongolia, to mention a about overnight. In my view, under such circumstances

country which is symbolic, and cannot be found on the the criterion for success of an economic policy is whether

map. The country will have no perspective, and the it is capable of preventing the acceleration of inflation,

situation may lead to tragedy unless we are able to and if it is capable of reducing inflation later, in the

convince potential trade unions that it is against our course of one or two years.

national interests to obstruct a rational economic policy There is no government capable of resolving the avaby using populist watchwords, unless we are able to lanche of historical problems within a short period of

convince most enterprise managers that under certain time, and without accepting conflicts. We will progress

conditions financial restrictions are not foolish, and that very slowly, in a very tormented way and only at the

it is under such conditions that they are able to develop price of great conflicts, but the possibility of a realistic

from a European standpoint. In other words, we will evolutionary policy exists indeed. We must recognize the

have no perspective, and the situation will lead to fact that the era of a people's republic has come to an tragedy if we do not succeed with all of this. end, and we must be able to build a new, successful

I believe that the post-election Hungarian government republic. This becomes possible if we are able to over- which will make government appointments will be in a come the helplessness caused by political watchwords

less favorable position to assess the difficulties than the which seek popularity, the clumsy contrariness maniNemeth government is today. I believe that Hungarian fested by Western creditors, and internal political batsociety harbors illusions with regard to the new govern- tles.

ment. Despite this fact I feel that there is an opportunity

for Hungarian society to confront these tasks. The West Economist Envisions 25% Inflation in 1990

could also be encouraged not to present foggy ideas to 25000619A Budapest FIGYELO in Hungarian

Hungarian society concerning a pleasant future, but to 8 Feb 90 pp 1, 4

clearly define the conditions of support instead.

[Article by economist Dr. Janos Czinkotai: "The

Inflation Expert's Prediction: a 25-Percent Inflation Rate This

I also disagree with Kornai in regard to inflation. My Year"; first paragraph is FIGYELO introduction]

dispute pertains to the degree by which one should be [Text] A promise that the inflation rate this year will be

anti-inflationary, and to financial policy management. between 19 and 20 percent at most has been made. In his

To begin with, economic writings recommend shock passionate speech to representatives in Parliament the

therapy only to countries which experience runaway finance minister insisted that the inflation is indeed

inflation, because 1,000-percent inflation can be held "manageable." The author's-economist Dr. Janos

down only in this way. Fortunately, this phenomenon Czinkotai's-thought process and arguments appear to
JPRS-EER-90-025

34 ECONOMIC 28 February 1990

prove that either this prognosis represents a simple possible establishment of the market economy, provide

professional error, or it constitutes professional irrespon- sufficient "backing" to support the idea of abiding by the

sibility. declared 19- to 20-percent rate, or if the approximately

22- to 25-percent rate based on the absence of the desired

This is the third year at the beginning of which my economic policy turnaround should be considered the

writing has appeared on the pages of FIGYELO with a realistic prognosis.

forecast for the expected increase in consumer price

levels. During the past these calculations have provided

a good estimate of how price levels will evolve in Never before has this prognosis contained as many

individual trades, and of course within the whole of uncertainties as it does at present, in 1990. It should

production and consumption. And they have provided suffice for me to refer to only a few facts: the uncertaininformation concerning the government's pricing policy ties of socialist exports (of the socialist market), the

intentions, of course. Anyone who has paid attention to anticipated evolution of world market prices (e.g. grains,

actual price changes as shown by statistical data could meat), inflationary expectations related to the devaluarecognize that, aside from small or large fluctuations in tion of the forint, etc. Personally, I am counting on a

certain trades, there has been no substantial difference situation in which this year's inflation will evolve

between "real life" on the one hand, and the prognoses according to scenario (1), because due to weak market

on the other during the past several years. This permits conditions, no fundamental turnaround in the improveus to draw two conclusions: ment of economic efficiency may be expected in 1990.

For this reason I regard the between 19- and 20-percent

(1) Pricing processes within the economy have been inflation rate projected by official calculations as overly

fundamentally guided by the conveyance of costs, and optimistic. Even on the basis of conditions that were

quite naturally by economic policy and financial mea- known last December, it would be more realistic to

sures implemented by the government, while internal establish this year's anticipated inflation rate at between

market conditions have played a background role; and 22 and 25 percent (at a minimum!-The editor).

(2) Insofar as the market did not follow the "planned" The calculations I have made were fundamentally based

processes, the possibility for broadly based intervention has existed with regard to specific price relationships and on the expected increase of domestic producer price pricelevels. Within this, I have tried to express numerically

the formulation of prices in given instances, the classic cost factors, i.e. export prices, subsidies, and

Last year's pricing processes, however, already signaled taxes, as well as changes in foreign exchange rates, the

what would be the necessary consequence of economic increased interest rates, and the direct effects of expected

and social transformation, namely that this kind of wage and other income outflow on increases in price

planning practice cannot be continued, and that the levels. Beyond these one must also take into considereconomic policy means designed to combat inflation ation that price controls were removed within the food

must be placed on new foundations. The insistence on economy, and for this reason the price increases implemaintaining planned prices is no longer one of the first mented on 8 January did not strictly conform to actual

class economic policy goals, if one assumes that we want changes in costs. Most of the drastic price increases are

to build on the economic regulatory, and efficiency- supported by intentions to improve the profitability of

improving role of the market and of money. What the food economy. The components of this year's

sunchanged is one of the most important eco- increase in consumer price levels are expected to be as remainsfollows:

nomic policy tasks, i.e. the harnessing and management

of inflation; meaning that the government must recognize and plan according to the expected the rate of Designation Percent Increase

inflation based on objective facts. I. Reduced subsidies, increased taxes 4

This matter was the subject of diverse analysis in the 2. Estimated effect of 22-percent forint 3-5

devaluation accomplished in 1989 on 1990 framework of formulating this year's economic policy price levels

program, the state budget, monetary policy, and other 3. In addition to the above, the effect of the 13

state tasks. Disregarding extreme approaches, as a result tandem movement of producer and

of this, government organs were thinking in terms of a consumer prices

15- to 25-percent bracket. The lower figure was regarded 4. The effect of the (larger than projected) 2

as the minimum realistic inflationary expectation, while profitability increase accomplished in the

the higher figure was regarded as the threshold above food economy

which inflation would become unmanageable. Quite Total: 22-24

naturally, a decision made by the government and the

National Assembly in the meantime "pushed" the lower

value gradually higher. Thus, the question today is Quite naturally, in reality the effects designated under

whether the tasks described in the annual economic items 2 and 3 which contribute to price increases are not

program, the measures which serve the purpose of imple- delineated, they are reflected in prices simultaneously. In

menting stringent monetary policies and the earliest addition, all the domestic inflationary effects of the
JPRS-EER-90-025

28 February 1990 ECONOMIC 35

22-percent forint devaluation are naturally greater than because it is commonly known that the price and income

the values shown in the table, because a good part of the flexibility of these products is relatively low. The sole

inflationary effects presented themselves in 1989, and obstacle was the constraint in the price mechanism. It is

they play a significant role in the framework of infla- no coincidence that the attack by this trade was aimed at

tionary expectations, in general. the relaxation of this constraint. It is not difficult to

notice the advent of the "now it's our turn" effect.

Behind the between 22- and 25-percent growth rate of

the consumer price level we find an average of 18-19 At the same time, it is also true that because of the

percent increase in domestic producer prices-including peculiar feature of agricultural production (because of its

the effects of reduced producer price subsidies, and long cycle), nowhere else do we find as strong a producer

within that an approximate 25-percent increase within interest as in this field. In case of a mistaken decision,

the food economy. (The difference between producer the correction may produce results only years later.

and consumer price levels is explained decisively by

changes in financial bridging arrangements, price gaps, The dialogue, of course, has not come to an end. If

and import prices that exist between the two.) individual income increases only at the planned rate, we

will indeed spend less in the future for durable consumer From the standpoint of industry branches, the antici- goods, clothing, etc. If, on the other hand, individual

pated price increases to take place in the energy sector, in income significantly surpasses the planned levels, this

infrastructural service provisions, and in the food circumstance and the coincidence of inflationary expececonomy will play a definite role in this year's inflation. tations may provide a significant thrust to the acceleraFrom among these an approximate 25-percent increase tion of the inflationary spiral. After all, it is well known

in the cost of energy and its effects will produce a that within the food economy producers are prepared to

"splashing" effect throughout the economy. With regard "leap" for another price increase. Precisely for this

to the by now virtually inoperative infrastructural ser- reason it was extremely risky to essentially fully libervice provisions, the conveyance of cost increases is alize prices in the absence of a stable market background

unavoidable, and so is the reduction of subsidies and the (the advance formulation of the order and conditions for

"advancing" of part of developmental resources in terms sales and for intervention measures) in a trade which

of prices in certain places. manifests a monopolistic pricing behavior, and to top it

off, in a field which has a low price flexibility rate from

But the key issue of this year's inflation is the anticipated the standpoint of demand.

behavior of prices in the food economy. This follows on

the basis of the relative significance of the products Supposedly this decision was supported by the idea that

involved, and from the extent of price increases. In this after a long period of time, food exports payable in

relation I will call attention to one peculiar circumstance, convertible currencies are rather favorable in 1989/90.

The government envisioned that production would be

A peculiar "dialogue" has been going on between this secure only if prices are radically liberalized, meaning

trade on the one hand, and society on the other. The the simultaneous fulfillment of domestic demand and of

trade argues that for decades the official form of prices exports.

has decisively prevailed for decades. Stemming from

social policy considerations, the main goal of this was to The trade argues that the obligation to assume a social

maintain consumer prices below the actual costs of policy role, and the consequences of a fixed price mechinvestments expended by society, so that these may also anism, are mutually blurred. By subsidizing the prices of

serve social policy tasks. This took place at a time when food industry products, it was not the trade that agreed

those engaged in doing business with industrial products, to perform social policy tasks; the budget did so. After

most of whose prices were not subject to price controls- all, if subsidies were reduced, the consequences of such

and a large part of whom manifested a monopolistic reductions could be instantly enforced in the form of

pricing conduct similar to the food industry--did not buying up prices. In cases involving other inputs [as

have to take into account social policy considerations in published] it is undoubtedly true that in general, conveyformulating their prices. I will note here that although ance of costs was realized only with a delay and in a with regard to the latter the number of actors in the fragmentary manner. At the same time it is also a fact.

marketplace is substantially greater than in the case of that such conveyance has been realized essentially

certain industrial items, some rather forceful monopo- throughout the field. This is also shown by the graph

listic and cartel endeavors may be observed in the below representing the evolution of consumer price

behavior of those who buy up products, and in the food indexes between 1961 and 1990. processing industry. In the case of merchandise produced and sold by the

In the final analysis the battle is being waged over the food economy, the increase in the price level is some- issue of what proportion of their income consumers may what higher, both in the long run and in the short term,

spend on food products, industrial goods, or services, than the general inflation rate. Accordingly, it is not true

This is true although food products would have had a that the food economy was "ruined" by pricing motimuch greater chance of receiving a greater share in the vated by social policy concerns, one that was designed to

redistribution of societal income than industrial goods, be gentle to consumers. Another factor that played a role
JPRS-EER-90-025

36 ECONOMIC 28 February 1990

Consumer Price Indexes Between 1961 and 1990* (percentage)

356

272 297264253 2726

2034

,t ~ 8. 1990/1960

!0 4

* Central Statistical Office: changes in consumer prices as they affect the chief strata of the populace. 1988. Figures

for 1989-90 show the anticipated pace of increment.

Key: 1. Food

2. Specialty Items

3. Clothing

4. Heating, Household Energy

5. Durable Consumer Goods

6. Other Industrial Goods

7. Services

8. Total

in the increase of price levels is that during the past [Text] The Polish helicopter industry which has generdecades an income parity between agricultural work and ated hard currency for our country for years and has

industrial work was established, and they significantly enjoyed good reputation both in the East and the West

reduced producer and consumer subsidies, has definitely come to a crossroads. Changes under way

in virtually all CEMA countries, especially the need to Solely because of the volume of this material, we will reduce the military budget forced on them by the critical

disrupt the author's line of thought at this point. We will economic situation, have already influenced unfavorably continue in our next issue by proving that for the time the portfolio of orders of our largest producer of helicop- being the abyss between the present pricing mechanism ters, the WSK [Transportation Equipment Plant] PZL

and the real "market" conditions cannot be bridged, and [Polish Aviation Plant] Swidnik. Progressing internaby dissecting the issue of whether we could have gotten tional detente between Washington and Moscow, as well

away this year with a lower inflation rate. as the gradual extinguishing of a majority of local armed

conflicts, will undoubtedly cause these trends to mount

POLAND further, all the more so because a relatively large segment of the Mi-2 vehicles produced in Swidnik is purchased

by military consumers in our country and abroad.

Fate of Helicopter Industry Linked to West Under these circumstances, a collapse of helicopter pro90EP0374A Warsaw R YNKI ZAGRANICZNE in Polish duction in Poland appears quite realistic. Eventual

No 8, 18 Jan 90 p 1 increased demand by our domestic civilian enterprises

will not offset the unavoidable drop in sales to the

[Article by Marek Slawatyniec: "The Polish Helicopter military. Likewise, exports to Western countries will not

Industry at a Crossroads"] increase substantially in the immediate future because
JPRS-EER-90-025

28 February 1990 ECONOMIC 37

our offerings to date cannot be of meaningful interest to Finance Minister Leszek Balcerowicz Talks About

extremely discriminating consumers from highly devel- Polish Economic Reforms"; date and place not given]

oped countries.

Nonetheless, all of the above does not amount to the [Text] SPIEGEL: Mr. Minister, your reform program

absolute lack of prospects. The new economic system demands heavy sacrifices from the Poles. Real income is

poses a threat but it also gives us an opportunity. Taking dropping by 25 percent this year. Don't you think that at

advantage of it in the best way possible is the order of the some time or other the workers will take to the streets?

day. Opportunities for an expansion should be sought

primarily in establishing and enhancing cooperation Balcerowicz: The figures are correct, but it is impossible

with leading Western enterprises. We may ensure the to stifle hyperinflation without risking a reduction of real

influx of adequately up-to-date technology and access to wages. Nor have we kept silent about this connection.

markets for our sales only in this manner. The first steps We, therefore, believe that there will not be any violent

in this direction have already been taken: Several weeks protests.

ago, a preliminary agreement on the joint production of

light general-purpose helicopters was signed with the SPIEGEL: The main feature of your ambitious economy

leading French company Aerospatiale. Further joint program is the devaluation of the zloty, whose purpose,

ventures, also with Western partners, are already at the among other things is to dry out the black market, to free

stage of detailed negotiations. If they are set up the future prices while restricting wages, and to make loans more

of the Polish helicopter industry should not trouble us. expensive. Is that really an incentive to work harder?

At present, it is difficult to say unambiguously whether Balcerowicz: There are no other measures that can put

our flagship enterprise in this industry, the WSK PZL an end to inflation. Nor do we see any other prospects for

Swidnik, will be in a position to take advantage of the long-term economic growth.

expected improvement of world market trends. The

arrival of new designs such as the Sokol and the Kania SPIEGEL: With the principle of hope, no one can buy

gives us grounds for cautious optimism. However, it is himself anything.

undoubtedly the order of the day to accelerate research

and development programs in the absence of which our Balcerowicz: Even over the short term, a different pronew developments will be threatened by premature gram would hardly motivate the workers in light of the

aging. This statement should apply primarily to devel- rate of inflation.

opers and designers, but not just to them. SPIEGEL: Other countries, such as Yugoslavia, have

In the case of this field which is peculiar and at the same tried to stop inflation with similarly tough measures, and

time important due to the development potential avail- have failed every time. What makes you think that

able, it is worthwhile to analyze opportunities for Poland will be able to hold out?

increasing outlays for basic research and development

work. It should be recalled that even in the most devel- Balcerowicz: Such difficult programs cannot always sucoped capitalist countries considerable financial aid is ceed. That goes without saying. But one must also keep

given to the producers of aircraft. Neither the Notar of in mind the countries that made it.

McDonnell Douglas nor the helicopter with a slanted

rotor of the Boeing-Bell-Textron consortium would have SPIEGEL: Where did it work?

been developed without government orders and prefer- Balcerowicz: Countries in South America, such as

ential loans. To be sure, the scope of both our needs and Bolivia, Coutries In We arericawatching our opportunities is completely different. However, Bolivia, made it, but also Israel. We are now watching essentially it is the same issue. Argentina; there are a lot of difficulties there, but one cannot as yet speak of a failure of the anti-inflation

The issue of funding for research and development program.

should be resolved as soon as possible. We cannot allow

one of the few markedly export-oriented industries SPIEGEL: Can one compare Poland to underdeveloped

which we have to fall. The squandering of the capital of Latin American countries?

skills and experience of Polish aviation engineers and

technicians should be prevented. Balcerowicz: Wherever the fight against inflation has

succeeded two prerequisites were fulfilled: first, the

program was structured properly, and, secondly, it was Balcerowicz: Economic Reform Demands Hard carried out consistently. That means neither the governChoices ment nor the politicians nor society gave up as soon as

90EP0303A Hamburg DER SPIEGEL in German the first difficulties arose.

No 5,29 Jan 90 pp 140-14 7

SPIEGEL: That is also supposed to be true of Poland?

[Interview with Leszek Balcerowicz, deputy premier and

minister of finance, by Klaus Reinhardt and Martin Balcerowicz: I think both conditions have been fulfilled

Pollack: '"Many Firms Threatened by Bankruptcy'- in Poland.
JPRS-EER-90-025

38 ECONOMIC 28 February 1990

SPIEGEL: Would it not have made more sense to stop Balcerowicz: Of course, in Poland in the first few weeks

inflation, which amounted to 700 percent at the begin- we have to deal with the contradiction of great demand

ning of the year, with a currency reform? and inadequate supply.

Balcerowicz: I am afraid you confuse the situation in SPIEGEL: As yet the market has not braked the rise in

Poland today with the conditions in postwar Germany prices.

and the reforms of Ludwig Erhard. Our problem is not

that we have too much money in circulation. In our Balcerowicz: There are already some signals. We have

country one cannot buy enough with the money avail- information to the effect that producers are putting

able. Therefore, we are not helped by a currency reform pressure on sellers because they also want to sell their

but only by a restrictive income policy and a just as goods. The speed of price increases is lessening from

consistent policy as regards public budgets and the week to week.

awarding of credits. SPIEGEL: But it appears that at present the goods

SPIEGEL: The Yugoslavs, too, found out in the end that supply is more or less adequate only because the demand

one cannot manage any longer with huge bundles of bank is small, because fewer and fewer buyers can afford the

notes, and eliminated a few zeros on their notes. expensive goods.

Balcerowicz: Over the short term, that is so. At a time Balcerowicz: That was a purely mechanical operation. when prices rise while there is a restrictive monetary and

One can do that of course, but rather as a crowning of a income policy, one cannot buy any more than is possible

whole operation and not now at the start, at the given income and given price.

SPIEGEL: Do you have a fixed date already? SPIEGEL: And over the long term?

Balcerowicz: No, the matter is not important enough for Balcerowicz: We expect a stimulation of production in

that. the second half of the year because demand will increase

again, with prices having adjusted to the market in the

SPIEGEL: On advice of the IMF, you have reduced meantime.

government subsidies by more than half. In the realm of

consumption, the state now controls no more than 10 SPIEGEL: Polish farmers are demanding guaranteed

percent of all prices any longer. Who fixes the remaining minimum prices for their products and inexpensive

90 percent? loans-the kind of preferential treatment also being

accorded to agriculture in Western countries. Do you

Balcerowicz: The remaining prices are market prices. find that unjustified?

That is, they are prices fixed between producers or

suppliers and consumers. Balcerowicz: We are, of course, interested in the further

development of agriculture, but it must be in agreement

SPIEGEL: Without government intervention? with the principles of our economic program.

Balcerowicz: There are a few indirect price controls-the SPIEGEL: What does that mean?

antimonopoly law, for example. Besides, there are a few

prices which are directly controlled, the control con- Balcerowicz: It means that what goes for the market

sisting in the producer or supplier having to give notice economy also goes for agriculture. We do not want to

of a price increase in advance. Such an increase can be introduce rigid prices for agricultural products, but we

denied, are prepared to balance excessive fluctuations in prices

through intervention purchases.

SPIEGEL: The price of flour, and thus also the price of SPIEGEL: In principle, similarly as the EC, you want to

bread, has just about exploded now. build a mountain of butter or a lake of milk?

Balcerowicz: That is one of the cases we are looking into Balcerowicz: We have to make sure that this does not

urgently. We are going to react quickly. destroy the anti-inflation program. In other words, subSPIEGEL: Is the state supposed to put on the brakes sidies to farmers must be limited.

here? SPIEGEL: And are you not afraid to lose the next

election with such measures?

Balcerowicz: Yes, we know there are prices one might

call socially sensitive. The growth of these prices must be Balcerowicz: It is not the farmers that are hit worst by the

watched, and there has to be intervention if need be. reduction of subsidies.

SPIEGEL: Is it, in fact, possible at all in a scarce SPIEGEL: Is there not now a threat of farmers dying

economy with excessive demand and too little supply to out? Is your program not depriving many small unproregulate prices solely through supply and demand? ductively operating farmers of their livelihood?
JPRS-EER-90-025

28 February 1990 ECONOMIC 39

Balcerowicz: I do believe that our policy can put such Balcerowicz: We are trying to abolish the monopolies.

processes in motion. It will occur only very gradually, We started with the meat industry, and transport enterhowever. We also figure that quite a few people doing prises and the sugar industry are supposed to come next.

farming on the side who lose their jobs in towns can be

retrained and take up work in the country outside SPIEGEL: What about the trade monopolies?

agriculture. There is an enormous demand there. Balcerowicz: Soon we will examine in the Sejm a law

SPIEGEL: You mean in the services sector? about the so-called cooperative organizations. Some of

these organizations have been cooperatives in name

Balcerowicz: Yes, with this solution no housing problem only, and in fact state organizations. Here the reduction

would arise, for the people live in the country, and it is of monopolies is particularly important.

there that they also would find new jobs. SPIEGEL: What is to happen to the state enterprises?

SPIEGEL: Many Polish car owners have canceled the Balcerowicz: We are thinking of privatization, but it has

registration of their cars because they can no longer pay to be accompanied by the abolition of monopolies.

for the expensive gas, insurance, and taxes. That is also

true of the transport industry. Can the state permit this SPIEGEL: Don't expensive credits lead to the danger of

in light of the weak infrastructure? sound enterprises, too, getting into difficulties?

Balcerowicz: That primarily concerns privately owned Balcerowicz: A restrictive credit policy is bound to result

vehicles and a portion of the farmers. In the case of in financial difficulties in the enterprises. That was

transport companies and forwarders, privatization has predictable and planned. Many companies are threatbeen strongest the past year. They will survive. ened with bankruptcy.

SPIEGEL: But Poland cannot afford that.

SPIEGEL: You have levied an extremely high duty on

the import of cars, computers, and cosmetics. Why? Balcerowicz: Right. We, therefore, developed instituPerhaps in order to protect the domestic market? It has tions which are to operate as a kind of filter. There,

little to offer in these branches. enterprises in difficulty can temporarily receive support.

Balcerowicz: Those are temporary restrictions. They are SPIEGEL: State subsidies again, after all.

part of the protective measures designed to stabilize the

zloty vis-a-vis the dollar. At the same time we substan- Balcerowicz: By no means. Any loan must be repaid.

tially relaxed foreign trade restrictions, virtually abol- Besides, the enterprises must establish a reform proishing the state monopoly in this field. We figure that in gram. If it is accepted, the enterprise gets the opportunity

some areas imports might increase very rapidly. to get out of the difficult situation. If not, it goes

bankrupt.

SPIEGEL: You would like people to buy machines and SPIEGEL: Does there already exist a list of potential

artificial fertilizer abroad, not cars or computers. bankruptcies?

Balcerowicz: Over the short term, artificial fertilizer is Balcerowicz: We have an idea, but, having renounced a

indeed more important than a private car. But as soon as planned economy, we do not want to plan which enterit should turn out that the payment balance is satisfac- prises should go bankrupt.

tory, we will be in a position to reduce these duties.

SPIEGEL: Your colleague, Labor Minister Jacek Kuron,

SPIEGEL: The German Bundesbank has reproached you figures that this year already there will be up to a million

saying that price reform without a simultaneous increase unemployed. What is to happen to them?

in goods supply is a "grave mistake" and is bound to lead

automatically to galloping inflation. What is wrong with Balcerowicz: First of all, those affected should try to

that reproach? quickly find other work. Because there are many jobs

vacant, the opportunities do not look bad.

Balcerowicz: Anyone making such a reproach would have to name at least one country for me which has SPIEGEL: In what fields?

stifled galloping inflation with increased supply and not Balcerowicz: For instance, as streetcar or bus drivers in

primarily with restricting the amount of currency on the municipal transport enterprises and in the entire services

market. Before opting for our economic strategy, we sector.

looked very intensively for an example, but unfortunately could not find one. SPIEGEL: And what will happen to those whom it is

difficult to place in the job market?

SPIEGEL: What is supposed to become of the dinosaurs

of state industry which produce 94 percent of the Balcerowicz: For them we have a social program, a

national product but operate utterly uneconomically? protective program for temporarily unemployed.
JPRS-EER-90-025

40 ECONOMIC 28 February 1990

Besides, it is possible to receive a loan for establishing Balcerowicz: I agree with you. Therefore, I will make

one's own enterprise, and if none of that works, there is some basic changes in the next few days. Among other

unemployment insurance, things, the agency will get a new chief who, it is hoped, will improve the situation.

SPIEGEL: According to a Solidarnosc paper of last year,

Poland needs about 10 billions' dollars worth of Western SPIEGEL: But it is not only a question of that office. It

financial aid to reform its economy. Is that still true? concerns the entire infrastructure. Telephoning in

Warsaw is ....

Balcerowicz: Please don't pin those $10 billion on me.

That amount is not meant to comprise only new credits, Balcerowicz: ...Thank you. I know. The telephone system

but it refers also to debt conversion. I don't want to cite definitely is on the list of priorities. It is urgent that we

any concrete figures here, but we are urgently interested solve this problem, but we cannot do so without foreign

in soon starting negotiations about reducing old debts, participation.

SPIEGEL: If one adds the already pledged assistance by SPIEGEL: Hungarian Deputy Prime Minister Peter

the World Bank and the IMF, the United States, the EC, Medgyessy recently proposed a close economic alliance

and finally also Japan, the necessary amount would have between Poland, Hungary, and the CSSR. Do you think

to be almost there. such integration makes sense?

Balcerowicz: What you have added up is mostly no more Balcerowicz: Yes. I think countries with similar ecothan promises so far.... nomic systems should maintain close economic relaSPIEGEL: ...which will have to be fulfilled, however. tions.

Balcerowicz: Even if we can use the credits, it will often SPIEGEL: Might this also lead to a political confederabe possible only with great delays, as if the time factor tion?

were of no consequence whatever in Poland. Often the

way these monies can be used is limited. Sometimes one Balcerowicz: I think it is still too early to talk about that.

gets the impression that bureaucracy in the West is But as a rule economic cooperation also leads to integragreater than here. We are greatly interested in being able tion in other areas. Take the EC.

to take advantage of this aid speedily and flexibly. SPIEGEL: What do you think of the new magic formula

SPIEGEL: That means without framework conditions? of "central Europe?"

Balcerowicz: Framework conditions are okay, but not Balcerowicz: It is definitely a better term than East

bureaucratic restrictions and limitations. Europe, for it accords with the geographic facts. Moreover, central Europe also has that additional cultural

SPIEGEL: The change in Europe since last fall has also undertone which we greatly appreciate.

improved the chances for foreign investments in other

countries, such as the GDR and Czechoslovakia. Do you SPIEGEL: Mr. Balcerowicz, because you studied in the

fear this competition? United States for a time, you are often called the Polish

Milton Friedman in the political debate. Others compare Balcerowicz: Our changes, in fact, presuppose our having your policy to the course of economy of Mrs. Thatcher in

to live in constant competition with other countries. We Great Britain. Whom would you describe as your model?

regard this development only as an additional argument

for our having to make our system competitive. Balcerowicz: Those are only labels, of which none

applies to me 100 percent. I gladly leave to others the

SPIEGEL: No envy at all? fascinating activity of finding a suitable label for me.

Balcerowicz: No, no. What is developing in East Europe SPIEGEL: Thank you for this interview, Mr. Minister.

has only confirmed our conviction that we need a stable

economy based on a stable currency as soon as possi- [Boxed item: As first deputy prime minister and finance

ble-all the more so because the changes among our minister in the government of Tadeusz Mazowiecki,

neighbors are proceeding in the same direction. Leszek Balcerowicz drafted the general plan for the

SPIEGEL: Do you have the feeling that the West recog- rigorous economic reforms which have been in effect

nizes Poland as a pioneer of this development? since January. A convinced monetarist who relies on the

self-healing process of the market, he studied at the

Balcerowicz: Judging by words, yes. Warsaw College for Planning and Statistics, and two

years at the New York St. John's University. For a time,

SPIEGEL: You are promoting joint ventures in the he was a fellow of the German Friedrich Ebert FoundaWest, but the office responsible for this in Warsaw has tion. As a college professor, he dealt with the problems of

only three telephone lines, one telex which does not the various economic systems. Balcerowicz, 43, who also

work, and not a single computer. How do you intend to helped the Polish Communists in economic questions

obtain partners that way? until 1980, since that time has been the most important
JPRS-EER-90-025

28 February 1990 ECONOMIC 41

economic adviser of the Solidarnosc trade union, in There was a time when the difference between the

whose election victory last June he played a crucial role.] income of agricultural workers and nonagricultural

workers was 114:100. Then it began to change to the

Government Agricultural Policy, Relationship to disadvantage of the farmers, and at present, is 98:100.

Economic Policy Outlined Rapid changes in prices paid for means of production

90EP0260A Warsaw RZECZPOSPOLITA in Polish and the flexible prices of agricultural products convinced

13 Dec 89 pp 1-2 the farmers that the government has no definite economic policy with respect to agriculture, and if it does

[Article by Edmund Szot: "Bases of the Agricultural have one, it is a decidedly anti-agriculture policy.

Policy: Give Something to Get Something"] This is an unfounded opinion. It does not take into

[Text] Putting the food economy on a market basis account the difficult time in which all of Polish economy

improved shopping for food, but this was achieved not as finds itself. The present difficulties can be overcome

a result of an increase in supply of agricultural products, only by cooperative efforts of all social groups.

but at the cost of a decrease in level of consumption by

some population groups. From the first putting the food The goals of government agricultural policy remain

economy on a market basis had the support of the unchanged. They are: to use economic means to stimufarmers, and was even proposed by them. This enthu- late agricultural production to a level that would ensure

siasm ended, however, the moment difficulties devel- adequate maintenance of the population and fair work

oped with the surplus food stuffs produced. This resulted conditions and living conditions for the farm and village

in a drop in food prices which coincided with a sharp rise population.

in cost of production supplies. The farmers began to

signal the drop in profitability of agricultural production Achieving these goals will be promoted by the creation of

in various ways. conditions for efficient functioning of the agriculturalconsumer market and of the market supplying agriculIn response to their demands, on Wednesday (6 Decem- tural equipment. Agriculture will then be provided with

ber), the Minister of Agriculture, Forestry, and Food equipment according to market prices in the same way

Industries presented a proposal of new minimal guaran- that the farmers will realize the effects of their work

teed prices. This 'Father Christmas gift' proved to be a according to market prices. At present the market mechpresent from someone else's pocket. Two days later, the anism in both groups of these commodities is deformed

finance minister expressed disagreement with the pro- by significant monopolies in both the farm equipment

posal. This appeared the same day (8 December) on market and the food processing market. These monopotelevision news, followed by... a press conference of the lies will be offset, however, by government intervenagriculture minister during which he presented proposals tions, including an adequate import policy. These

for price changes. The next day, the press inserted a actions will serve to increase the agricultural production

communication justifying the decision of the finance potential and will safeguard the income of the village

minister. population.

The farmers can claim, not without reason, that they However, an important goal of the policy with respect to

were side-tracked or even disregarded, as a representa- agriculture will be striving toward an increase in effective of the Peasants Party maintained. tiveness of expenditures provided for agricultural proThe Council of Ministers will take up agricultural mat- duction. Limiting appropriations to means of productes Coun13Dcember, M ad inisters take daysthey will agtion one will bring about their desired reallocation, that is, ters on 13 December, and in a few days, they will be one the expenditures will go to the best, most efficient of the themes of the Sejm meeting. producers. This will mean an increase in demands with

The state of agriculture and the food economy and their respect to the farmers, but the process of increasing

supplies are generally known. Only 5 percent of national demands will not pertain only to them. We may say that

industry is devoted to meeting the needs of this branch "parity of demands" with respect to the farm population

of the economy. The level of mechanization in agricul- and non-farm population will be maintained.

tural work is low, shortages in the means of crop production continue, and supplies of fodder have decreased. The government intends to intervene in the free shaping

The inadequate supplying of agriculture together with of prices for means of production and prices for farm

the archaic agrarian structure (the area of the average products only should a large proportion of farms be

farm does not exceed 6 hectares) decreases the efficiency prevented from delivering food to the market because of

of agricultural production and is one of the reasons for the high cost of the balance of prices. The government

its high costs. This year, inflation was added to the does not, however, treat the improvement of the agrarian

plagues that worry the farmers, and this is a clear threat structure as an end in itself. It is only a condition for

to their income, increasing the effectiveness of expenditures and production and raising farmers' income. For the rest of the

The second half of 1989 was, however, a period of population, these changes should have the effect of

marked increase in the receipts of agricultural producers. moderating food costs.
JPRS-EER-90-025

42 ECONOMIC 28 February 1990

The following are expected to be the instruments of fact that no decision has yet been made about whether

government agricultural policy: a system of prices, inter- the power plant will be built.

vening purchases by the Agricultural Market Agency,

subsidies, taxes, credits, social assistance, stimulation of Fortunately, for the importer, Electrim, the import costs

foreign trade with agricultural-food products, food from can be charged to the general contractor, in other words,

foreign aid, and legislative regulation of market func- Megadex. But who will pay Megadex now that the

tioning. These instruments will be presented in greater project's financing has been suspended?

detail at the next meeting of the Sejm. There are many dilemmas of this type. In connection

Some of the present disturbances in the food market are with this, the question arises of what should be done in

the result either of a deficiency in these instruments the future to avoid overdue payments for imports from

specifically or of a failure to exploit them adequately. the CEMA countries. It seems that we should perhaps

Farmers must, however, count on a much more limited quickly state the general conditions of CEMA deliveries,

range of government intervention, which do not at all fit our present economic system.

However, this will demand agreements with our part- ners. Until they are terminated, foreign trade enterprises

CEMA Supply, Payments System Blamed for will probably be forced to apply advance payments in

Enterprises' Shortages import.

90EP0255A Warsaw RZECZPOSPOLITA in Polish But what is to be done with the already existing arrears?

6 Dec 89 pp 1, 2 After all, the civil code states rather explicitly that goods

that are not paid for are still the property of whoever

supplied those goods. Thus, one simply has to repossess [Article by Tomasz Bartoszewicz: "The Bill For A Reac- goods that have not been paid for from unreliable payers tor"] and sell them to the next person who has ready cash (of

[Text] The difficult financial situation of many enter- course, this is not a solution to the Zarnowiec affair). It

prises prevents them from being in a position to pay all will be interesting to see what kind of foreign trade

of their bills on time. Sometimes uncollected debts lead enterprises will decide on such an undertaking, which

to a state of affairs of this kind. However, there is no lack will certainly antagonize many clients. However, times

of those who are certain candidates for bankruptcy. are hard and one may not be guided by sentiments,

because one may very easily find oneself in a situation of

Many suppliers are already guarding against potential bankruptcy.

bankruptcies. More and more often, goods are sold on

the condition that payments are made in cash or by Agricultural Machinery Production Held Up by

certified check. After all, one bankruptcy can pull down Steeltagel

a whole chain of others. Steel Shortages

90EP0255B Warsaw RZECZPOSPOLITA in Polish

However, it is not possible to discipline unreliable payers 6 Dec 89 p 3

everywhere. Up till now, they were able to fall behind in

payments for goods imported from the First Payment [Article by (jesz): "Fewer Agricultural Machines"]

Region [the CEMA countries] with impunity. This is

simply a result of the general conditions of supply that [Text] In recent months, it has been necessary more and

are in force in the CEMA. Ruble payments for import more often to halt work at the Ursus Mechanical Works

deliveries are remitted on the basis of debt collections as well as at agricultural machinery plants, including the

made through administrative documents and not on the ones in Strzelce Opolskie (machines for harvesting potabasis of a letter of credit as is done in the case of imports toes), Slupsk (beet-harvesting machines and rotational

made through the free exchange of foreign currency. mowers), and Plock (reaping and threshing combines).

The reason is the same everywhere: shortages of metalThus, a paradoxical situation arises: enterprises involved lurgic materials. Their deficit is currently estimated at

in foreign trade have to pay their foreign suppliers 140,000 tons.

immediately in foreign exchange, not knowing whether

they will succeed in collecting zlotys from their domestic Because of the tie-ups at the factories, stocks of technical

purchasers, who delay payments as much as possible, supplies for agriculture are 30 to 50 percent lower than a

treating overdue payments as a source of cheap credit. year ago. Thus, compared to last year, agriculture is

getting 11,000 fewer tractors, 1,000 fewer potato- In some enterprises involved in foreign trade, overdue harvesting combines, 6,000 fewer tractor trailers, 500

payments are already reaching several hundred billion fewer cultivation aggregates, and 1,000 fewer irrigation

zlotys. What is worse, it is not really known whether they sprinklers.

will at all be able to enforce payment of the amount due

for imports. Who, for example, is going to pay for the The Ministry of Agriculture, Forestry, and Food Indusreactor at Zarnowiec? The Czechoslovakian supplier has tries, when informing the secretary of the Economic

acquitted himself of the conditions of the contract and Committee of the Council of Ministers about this fall in

has obtained his due in full. He is not interested in the production, at the same time emphasized that only 6
JPRS-EER-90-025

28 February 1990 ECONOMIC 43

percent of metallurgical production goes toward the The Peace Invalid Cooperative in Lodz, which produces

production of tractors and farm machinery. (I myself electrical equipment has received the International

would add that this is steel of rather meager quality. It American Award for producing connectors for control

will not, for example, withstand any comparison what- boards. The value of the cooperative's exports equals 14

ever with the materials used in agricultural machines in percent of production--l.5 million rubles and $40,000

West Germany.) Thus, not only are there no positive annually.

results of any kind to be seen coming from industrial

restructuring, but it seems to be moving in the other The Piotrcovia Miners' Sports Club in Piotrkow Trybudirection. The results of this may be very lamentable. nalski, an innovation and implementation unit, received

the Gold Medal at the Polagra 89 Fair for production of

artificial fertilizers from chimney exhausts from lignite Regional Press Column: Economic Reports coal.

90EPO301A Warsaw GAZETA BANKOWA in Polish

No 43, 47; 23-29 Oct, 20-26 Nov 89 There are 169 convertible currency exchange offices in

Gdansk Voivodship, not including those in banks.

[Unattributed weekly columns: "From the Regional The administration of the City-Center housing cooperaPress"] tive in Zawiercie has been leased to a private individual.

[No. 43, 23-29 Oct 89 p 61 The condition for the agent to receive payment is regular performance of housing repairs within two days after the

[Text] The Polish Housing Society has been registered. problems are reported.

Its goal is to support social and economic initiatives to

improve the housing situation of citizens and efforts to In Lublin, the Industrial and Trade Society has been

liquidate the formal and institutional barriers hampering formed. The founders are 60 private entrepreneurs.

the development of construction.

Paradoxes Noted in Waste Paper Collection, The English firm GEC which produces railroad equip- Usage

ment has held talks with Pafawag of Wroclaw on the

joint production of electric locomotives. 90EP6255D Warsaw ZYCIE WARSZp WY in Polish 6 Dec 89 p I

The Poznan engineering and implementation partnership Alfa which began operation in 1987 with an initial [Article by Piotr Ceglowski: "Difficult Approach to

capitalization of 66,000 zloty earned 34 million zloty Waste Paper"]

during its first year. Last year it earned 140 million zloty.

The firm's most recent initiative is a new restaurant [Text] Only the poor can afford to be wasteful and

technology plant which it started in cooperation with the certainly that is why we continue to throw out things in

Austrian firm of Schaerf International. the garbage that people who are richer than us industriously put to good use. There is really no competition in

In Krakow, the American firm Budget Rent-a-Car has this area, although of late a few firms have appeared

opened a lending office. The rental of a Volkswagen Golf which are engaged in the purchase of waste paper.

costs $29 a day (or 44,000 zloty) and $0.29 a kilometer

(or 440 zloty); a Mercedes 230E costs $68 (100,000 zloty) The OPSW [Regional Secondary Materials Enterprise]

a day and $0.68 a kilometer (1,000 zloty). If payment is of Poznan bought a machine to bale waste paper for

in zloty, a driver is provided gratis as a peculiar form of $ 100,000. No one-with the exception of small producroad insurance for the expensive vehicle, ers-wants to buy used paper in any other form. Not

long ago paper mills still set up conditions that were very

The wholesalers and intermediaries in Poznan have difficult to meet. The demand in the country was so

organized a blockade of the fruit and vegetable market to small that waste paper was exported to Yugoslavia for a

protest letting individual consumers purchase goods pittance. Lately, the situation has undergone a change.

more cheaply directly from the producers, the farmers. Some paper mills have changed their technology (for

example, the factory in Tarnowka) and are recycling

[No. 47, 20-26 Nov 89 p 6] waste paper. Soon the demand for this secondary mate- rial will be significantly greater than supply.

[Text] The L. Teliga Ocean Yacht Shipyard in Szczecin

has joined two joint ventures--one with the Swedish Already cardboard packing materials, which OPSW profirm Volvo (to produce roof-mounted baggage carriers duces in Rawicz, is a difficult commodity to obtain.

for cars) and with the Liechtenstein firm of Cort Uni- Large industrial plants, including the Lenin Steelworks,

versal Mining Establishment. claim supplies of newsprint, which are put into molds in

boilers.

The Szczecin enterprise Unikon has formed a joint

venture with West German capital. The new firm Wi- Thus, it is necessary to increase the purchase of waste

Kon Trading leases a portion of a factory building to paper. However, that is dependent on the prices, which

produce standard containers and plans to start produc- there is no way to raise, since the costs of transport and

tion of isothermal containers, recycling are rising. In this situation, OPSW decided to
JPRS-EER-90-025

44 ECONOMIC 28 February 1990

start a network of points of purchase in new housing FRG Westinghouse Offers Free Installation of Air

developments. But that is difficult. Residents' commit- Sampling Probes

tees do not agree on the proposed locations, explaining 90EP0289A Warsaw RZECZPOSPOLITA in Polish

that there is a greater need for parking. 21 Dec 89 p 3

OPSW buys and recycles other materials too. Among [Article by Barbara Cieszewska: "A Westinghouse

other things, they produce a powder made from hides Branch in Katowice?"]

and manure. This product is exported to the West. It can [Text] Along with representatives of the FRG branch of

not be sold domestically because they have not obtained the American firm Westinghouse, a completely new

a license. Instead Polish gardeners procure the powder problem appeared in Katowice. What is happening is

from Holland for dollars! that we are looking for firms which want to take advantage of Westinghouse's offer to install air sampling

probes in their smokestacks, i.e., devices to measure air

Small Breweries Proposed for Social, Economic pollution. Free of charge! As of now, there are no takers.

Reasons

90EP0255C Warsaw RZECZPOSPOLITA in Polish It can, of course, be assumed that the gentlemen from

6 Dec 89 p 3 Westinghouse are not making this offer simply out of the

goodness of their hearts. They are doing this as advertising, because they assume that some day we may [Article by (jesz): "POLPIW's Suggestion-Buy a Brew- become a good sales market for their pollution control

ery"] equipment. But this kind of intention should not

diminish the attractiveness of their offer.

[Text] In better organized countries, beer is used in the For a long time we have been sounding the alarm that

fight against alcoholism, which is simply incomprehen- Silesia is being buried in waste. There is beginning to be a sible to some of our adherents of total national sobriety. shortage of places to store this waste. Mr Doering, head of

In the GDR, no one is surprised at the sight of an elderly the Westinghouse-Europe office, and Mr Liebenov, his woman sipping beer from a mug in a restaurant while assistant and director of the branch in Frankfurt, also

knitting. Because in that country a sort of Drinking propose the construction of an incinerating plant in Silesia.

Culture has developed. However, it is difficult to Nonpolluting, of course, so clean that no protection zone develop such a culture in our situation, in which a city of will be required. All that is needed is a 150 by 200-meter more than one and a half million has just five or six beer area. This is an investment of about $50 million. These

taverns. The POLPIW company, which is promoting gentlemen suggest that it be entered on the "list of agreesmall beer-producing facilties which can be tended by ments" between the Polish and FRG governments and one person and can produce 300,000 liters of beer their government could then grant the credit. In this case

annually, has initiated an attempt to remedy continued there is hope that a contract will be signed because the

shortcomings in this area. governor of Katowice has become interested in it.

The company director, Dariusz Kacperczyk, lists pos- Marek Mutka, director of Elektromontaz 2, invited the

sible places where such facilities could be installed, Westinghouse representative to Katowice because a few

"They could be in the larger hotels, restaurants, and beer years ago his firm had occasion to work for Westinghouse

taverns, and for this purpose a space of 120 square in Bagdad. The companies signed something on the order

meters is sufficient." of a letter of intent, in which a broad range of cooperation

is anticipated. Already in January, five specialists from

The raw materials for such a plant are hops-mash con- Elektromontaz are going to Frankfurt for 6 months. When

centrate, yeast, and potable water. The whole process of they return they will train their coworkers in Katowice. beer production is completely automated. The plant is This will be the beginning of the fulfillment of the goal

not at all burdensome to the environment, because there which the visitors from Frankfurt set for themselves: to

is brewing vat here. open a Westinghouse branch in East Europe. And they say that it will be in Katowice. Meanwhile, they have given the

Elektromontaz management full authority to conduct talks The cost of facilities of this type is determined by the with firms which would like to take advantage of the entire value of acid- resistant sheet metal used for tanks of a

different sort, the cost of installing automated systems, range of their offers. Including the free ones.

and the price of an imported beer filter. Together such a It was also suggested to the director of Elektromontaz that

plant would cost 400 to 500 million zloties (in terms of he establish a branch of their enterprise in the FRG.

prices at the end of November). Presumably there are no formal obstacles and this would

certainly make cooperation easier. The Elektromontaz

The POLPIW company can set up such a plant to half of directors are men of the world, but when they talk about

next year. Its buyers guarantee a supply of all the the last proposal-to establish a firm in the FRG, they find

indispensable installations and raw materials, it almost unbelievable.
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