Evening star., 1949-08-14

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rope is the shortage of dollars.
Therefore. the urgent task of
Western European countries is to
get as much of its essential i'm
ports al possible from rpn-dollar
sources. This problem will be-
come all the more acute when a
greater degree Of recovery will
have been achieved and Western
Europe will look for vaster mar
kets for its surplus exportable
products.
/ Common Economic Problems
Seemingly. the problem of post
war reconstruction of Europe pre-
sents itself as a whole, as unit.
The Eastern and the Western bloc
of countries have much in COM
mon and the relative success of
their reconstruction efforts are
closely interdependent. 1t is no
secret that many recipients of
ECA aid in the West are resent
full of the United States; and to
"a higher degree the countries in
the East are resentful of Soviet
Russia. The low level of agricul-
tural production Is common to
Europe as whole. Also. the gap
left by German production and
trade is not being filled either in
Eastern or in Western Europe.
Lack of integration of the various
national recovery and develop
ment plans and the absence of a
rational pattern Of intra Euro
pean trade are equally conspicu-
Gus in the East as in the West.
1t should be noted that to the de-
gree at which Soviet Russia
shapes the economic destinies of
Eastern Europe the feuds and
rivalries between and among that
bloc of countries are lesser in
scope and magnitude than in
Western Europe.
Countries in Western Europe no
longer receive the invisible" in
come from investments, shipping
and other service transactions
which enabled them to cover the
excess of imports over exports. 1t
is unlikely that these invisible
receipts will offset the substantial
payments which these countries
must make on debts ine eurred dur
ing and since the war. Recon-
struction and development of
Western Europe with view to in
creaSing living standards are
contingent upon finding ways of
filling the present huge gap in
their overseas balances of pay
ments now covered by extraordi-
nary outside assistance. In order
to achieve these objectives, pro-
duction will have to be greatly in
creased and East-West trade ex-
ceed even the preWar pattern.
Western Europe must needs ex-
port about IS per cent of its sur
plus products to Eastern Europe.
the only major non-dollar market
available, provided credits and
loans could be arranged on a quid
pro quo basis. Moreover, deeply
embedded nationalistic pride mo-
tivates most Western European
countries to clamor for expansion
of East West trade in preference
to ECA assistance.
OF equal significance is the fact
that there does not prevail in
Western Europe a unity Of pur-
pose. The United Kingdom can
i'll afford to permit France to be-
come again a great power, and
neither France nor England dare
permit Germany to be fully re-
stored as dominant country on
the European continent. The
trends and movements toward
socialization and naturalization
of basic industries are In direct
conflict with the basic tenets of
the American free-enterprise sys-
tenn. Also, the practice of BIZ
lateral trade agreement is as
widespread in the West as it is in
the East.
I u. S..Soviet Policies
We shall be deluding no one but
ourselves and we would be rem
dering a decided disservice to an
enlightened public opinion if we
were to attribute the absence of
unity Of purpose on the part of
Western European government
exclusively to the turbulence of
the rulers of Soviet Russia. The
rigid United States licensing pol
icy which was further restricted
in March, 1948, resulted in still
more drastic reduction in East
West trade. BY our own admis-
sion. the export-control mechan-
ism was concentrated more on
shipments to Eastern Europe as
political and military considera-
tions acquired an overriding i'm
portance resulting from the de-
terioration of relations between
the U. s. S. r. and the U. s. A.
By their own admission, So
Wet Russia Is not in a position
now, nor is she likely to be with
in the predictable future, to make
effective economic contributions
to the reconstruction and de-
velopment of Eastern European
countries parallel to those cur
rently made by the ECA.
The needs for industrial equip
ment and technical "know-how"
in the Eastern European countries
are so urgent and so large that
some political and strategic COM
promises and bargaining might of
necessity have to be made.
In prewar years, Germany held
a key position in trade of Eastern
Europe. In 1898. nearly II per
cent Of Germany's imports orig
mated in Eastern Europe and more
than II per cent of her exports
went to Eastern Europe. Evidently
Soviet Russia has so far failed to
replace Germany in the commerce