To realize this potential, nothing short of a complete revitalization of the industrial infrastructure in Eastern Europe and the Soviet Union will be required. The economies of these countries lie on the verge of ruin. Their productivity is low and declining. They desperately need foreign exchange, but have little of value to sell to the Western world. Their currencies are inflated and, with a few exceptions, their national budgets are crippled by defense spending and debt.
Productivity remains the central problem.
Most industries in Eastern Europe and the Soviet Union are subsidized. As a group, their goods are inferior in quality to Western goods and are manufactured in antiquated factories on outmoded equipment. There is little automation or innovation. Most goods are protected from competition and are guaranteed markets in the Soviet Union or elsewhere in Eastern Europe. State of the art technology and the best scientists are allocated to military rather than industrial service.