Related topics

Communist Trading Bloc Comecon Agrees it Needs Overhauling With AM-Romania, Bjt

January 10, 1990

SOFIA, Bulgaria (AP) _ The 10-nation Communist trading bloc Comecon agreed on Wednesday that the system was outdated and needed a complete overhaul.

But Soviets and the more radical Eastern Europeans remained split at the end of the two-day Comecon summit over how far and how fast reforms should go.

Delegates apparently compromised on a Soviet proposal Tuesday that all Comecon trade by 1991 should be done at world market prices and in hard currency.

The Eastern Europeans, long dependent on Soviet fuel and energy supplies, claimed such a fast liberalization would be disastrous for their economies, already strapped for hard currency.

The delegations said in a final statement that their 45th session ″underlined the necessity for decisive renovation of the whole system of mutual cooperation″ within the Council for Mutual Economic Assistance - as Comecon is formally known.

The statement also called for ″radical restructuring of the activities of the Council, a re-examination of its functions and aims, (and) ... a new statute suitable to current and long-term requirements″ of member nations.

″A 40-year period is coming to an end,″ Bulgarian Premier Georgi Atanassov said at the closing session. ″This meeting marks a real new start ... with new rules of the game.″

Soviet Premier Nikolai Ryzhkov, who held separate talks with several new Eastern European prime ministers while in Sofia, told reporters Moscow was satisfied with the outcome.

″The Soviet Union is happy with the meeting because it means Comecon has a future,″ he said.

Officials indicated, however, that most Comecon trade in the future would be on a bilateral basis, diminishing Soviet dominance as Eastern Europeans abandon centralized, five-year plans that were the bulwark of four decades of Stalinist economic management.

A gradual switch to world market prices on a hard currency basis will take place within the bloc, which cut itself off from most other global commerce since its founding in 1949.

Delegates agreed to set up a commission to discuss the changes and work out ″in the shortest possible time drafts for new basic documents of Comecon,″ the statement said.

Hungary’s deputy premier, Peter Medgyessy, told The Associated Press details will be decided by a workin commission that will report to Comecon’s Moscow-based headquarters and then to the bloc’s next summit in Budapest.

A Bulgarian official, speaking on condition of anonymity, said he thought it would take three to five years to move from current trading practices, based on barter, and artificial currency exhange rates.

″We went for a soft-landing scenario,″ he said, indicating the Soviets agreed to phase in the transition.

But the lack of details in the statement reflected apparent discord among members over when and how reforms should be put into effect.

Delegates from more reform-minded members, such as Czechoslovakia, Hungary and Poland, were clearly pushing for swifter action Wednesday.

″It doesn’t take an Einstein to figure out what’s wrong with Comecon,″ said Vaclav Klaus, Czechoslovakia’s outspoken finance minister and an advocate of free-market policies.

″We don’t want to pay for new commissions to make more nice blueprints. we want to go ahead ... by trial and error if necessary.″

Prime Minister Tadeusz Mazowiecki of Poland said later, ″I will be satisfied if radical reforms come into effect,″ adding that depended on each country’s success with internal reforms and overall East-West integration in Europe.

A Czechoslovak official, who also demanded anonymity, said Prague’s suggestion was rebuffed that an extraordinary plenary meeting take place as early as March to discuss commission findings.

He said a summit before June was sought to try to avoid chaos in the bloc, with Poles, Czechs and Hungarians possibly trading bilaterally in hard currencies while other members still used fixed rates.

Warsaw and Prague have already said they will begin trading in hard currencies and will link their own currencies in a direct rate, bypassing the ruble - Comecon’s non-convertible accounting unit.

Comecon finance ministers will meet next Tuesday through Thursday in Prague for further discussion, Klaus said.

He said he saw a future Comecon as a loose, ″umbrella organization″ for trade agreements that could be signed by ″a few, some or all members.″

Hungary has already broken with one Comecon key practice, which assigned production of certain goods to individual countries, by signing an agreement with Japan’s Suzuki Co. to manufacture cars for sale at home and abroad.

In Comecon previously, only East Germany, Romania, the Soviet Union and Czechoslovakia were allowed to build cars.

The organization includes the Soviet Union, Poland, Romania, Hungary, Bulgaria, Czechoslovakia, East Germany, Vietnam, Mongolia and Cuba.

Update hourly