COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC89) 470 final 
Brussels/ 27 September 1989 
ACTION PLAN FOR COORDINATED AID 
TO POLAND AND HUNGARY 
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Action plan for coordinated aid 
to Poland and Hungary. 
The Commission explains the coordination effort so far 
and proposes additional Measures 
1. The Arche Summit, which was held in Paris on 14 and 15 July, 
entrusted the Commission with the task of coordinating aid to Poland 
and Hungary, which is designed to facilitate the restructuring of these 
two countries' economies. The Commission sees this task in the context 
of the restoration of the major financial and monetary balances and the 
economic adjustment of these two countries, including, with regard to 
to Hungary, the possible granting of specific financial support for 
their balance of payments (bridging loans) in the framework of action 
by international financial organisations. The Governments of Poland and 
Hungary have clearly indicated that this restructuration requires 
budgetary, monetary and exchange rate reforms, the elimination of 
subsidies as well as the clear separation between Government and 
enterprise. The action plan is the fruit of close contacts with both 
countries and, as regards action by the Group of 24, the information 
supplied and the efforts of the working parties set up at the meeting 
on August 1. 
The action plan must meet certain well-defined conditions: 
there must be a firm commitment from both the recipient countries 
to introduce as soon as possible, and continue with, substantial 
reforms in their current economic systems; 
a lasting partnership must be established, linking the recipient 
countries to those which are undertaking to provide the aid; 
the aid which is being added to that already committed or promised 
by the participating countries must be additional; 
the burden consented to by the participating countries must be 
shared, since they all have an interest in what Is politically and 
economically at stake. 
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2. In accordance with the mandate conferred by the Arche Summit and 
confirmed by the 24 countries at their meeting on 1 August, the 
Commission is determined to carry out its task by coordinating the 
activities of the 24 participating countries and exercising its power 
of initiative within the Community in order to implement the action 
plan. It thus intends to make an active contribution to this operation 
and imbue aid to Poland and Hungary with an element of dynamism. The 
Commission will take steps to identify the areas where such aid can be 
most useful and propose ways of filling any gaps that might be revealed 
by multiannua I programming, accompanied where appropriate by Community 
measures or Community funds; such measures would have to involve 
increased Western aid. 
3. The measures will involve, in particular, the following fields: 
A. Agriculture: supplies and restructuring 
The Commission has organized the supply of agricultural products to 
Poland approved by the Council of Ministers on 17 July. This will 
continue over the coming months until the quantities available are 
exhausted. The sale of these products under Polish market 
conditions constitutes a counterpart fund, whose value-indexation 
and utilization have been agreed with the Polish authorities. The 
counterpart fund finances restructuring and training measures. 
The Commission is now proposing a new, multiannual measure, more 
wide-ranging in scope, to integrate the supply of means of 
production such as pesticides and agricultural machinery. Only a 
contribution of this nature will be able to meet the genuine needs 
of Polish agriculture. 
This measure, which is designed to give Poland the means of 
achieving the level of agricultural self-sufficiency of which it 
seems capable, cannot under any circumstances replace the efforts 
which Poland itself must make to modernize its production and 
develop in accordance with the economic reforms in this area, 
especially the demonopolization of distribution. 
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B. Access to markets 
Action to modernize the Polish and Hungarian economic system must, 
initially, involve measures to facilitate access for products from 
these countries to the markets of 24. Poland's and Hungary's 
expectations in this respect cannot be disappointed. 
As far as the Community is concerned, the Commission is envisaging 
proposing , in the approriate bodies, the following measures: 
the accelerated abolition of quantitative restrictions 
specifically applied to imports of Polish and Hungarian 
products; 
Improved agricultural concessions by the Community, taking into 
account the importance of agriculture in these two countries, 
its development potential, and the sensitivity of trade in 
agriculture; 
possible tariff concessions by the Community vis-à-vis Poland 
and Hungary, in the light of these two countries' and the 
Community's international commitments; 
extension of the benefits of the system of generalized 
preferences- to these two countries as from next year. 
In the context of its coordination of the 24's efforts, the 
Commission finds that some of these measures are already being 
applied by the countries participating, notably as regards the 
system of generalize preferences. It expects that the benefits of 
the system can be applied by other participating countries and that 
supplementary facilities will be envisaged in the agricultural and 
industrial sectors for better access for Polish and Hungarian 
products to those countries' markets. 
C. Investment 
Poland and Hungary have strongly emphasized the importance of 
promoting Investment In their countries. The process of reforming 
their economies must result In an improved climate for foreign 
investment. 
The Commission takes the view that measures can be envisaged 
both by the Community as such and by the Member States with a 
view to facilitating and guaranteeing new investment in both 
countries. Such measures could consist of: 
making Poland and Hungary eligible for loans from the ECSC and 
the European Investment Bank» to be guaranteed by the Community 
budget ; 
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the utilization of other sources of funds, currently enabling 
the Community to finance risk-capital operations In the 
developing countries; 
new initiatives concerning export credit or bank guarantees, 
Investments and the promotion of Investment protection 
agreements between the Community and Poland and Hungary, as 
provided for in the trade and cooperation agreements concluded 
with these two countries. 
D. Vocational training 
The economic reforms in Poland and Hungary can only be implemented 
through a vast action plan for training at very different levels 
(executives, instructors, managers, students). This urgent need is 
felt in very different fle Ids, especially financial and banking 
services. 
At Community level, the Commission, having acquired some experience 
in this area, is preparing specific training measures, to be 
implemented through public and private Institutes, which should be 
incorporated in a long-term multiannual programme. In the customs 
and statistics field, cooperation as requested by the Polish 
authorities will be started in the coming weeks. 
The Commission notes the interest expressed by most of the 24 in 
conducting or taking part in training schemes. Some of them 
already provide substantial sums to that end. 
E. Environment 
The Commission has found ample evidence that Poland and Hungary are 
aware of the problems of the environment, particlarly In the 
industrialised regions and sites of historic or artistic value. 
In accordance with the powers and activities of the Community 
In this field, the Commission is studying with the Polish and 
Hungarian authorities areas for possible cooperation. The 
Community's experience is being used in selecting projects, 
notably in regions where the environment has deteriorated. 
The Commission notes the interest of several of the 24 
countries and their intention to participate in environmental 
measures in Poland and Hungary. 
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4 . Increased financial outlay 
The Commission takes the view that the Community will have to 
contribute additional finance in order to carry out the measures 
envisaged. It is thus considering proposing special financing of about 
ECU 200 million in the budget for 1990; this does not preclude measures 
of a multiannua I nature. 
It is suggested that this outlay, which can only be one instrument 
among many, should be supplemented as regards 1990 by a contribution of 
ECU 100 mi I ion from the Member States out of their national budgets and 
of ECU 300 million from the other members of the group. 
5. Follow-up 
The Commission takes the view that the proposed action plan must be 
considered and receive support at the highest political level, it 
considers it desirable that, as soon as conditions allow, a meeting of 
the 24 participating countries should be held at ministerial level. In 
the meantime, the Commission is determined to pursue its coordinating 
and promotional activity both at Community level and in the 24 
participating countries. 
Q 
ISSN 0254-1475 
COM(89) 470 final 
DOCUMENTS 
EN 19 
Catalogue number : CB-CO-89-428-EN-C 
ISBN 92-77-53210-6 
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