Foreign Relations of the United States, 1981–1988, Volume X, Eastern Europe

33. Paper Prepared in the National Security Council Staff¹

Washington, undated

EASTERN EUROPE: “WHAT IS TO BE DONE?”

(OUTLOOK FOR A SECOND TERM)

I. U.S. Policy Toward Eastern Europe

Since the early 70s, the U.S. has pursued a policy of differentiation toward Eastern Europe. This policy, as defined in NSDD 54, seeks to effectuate a major long-term U.S. goal in Eastern Europe, namely, “to loosen the Soviet hold on the region and thereby facilitate its eventual reintegration into the European Community of nations.” U.S. policy has been predicated on the assessment that “the United States can have an important impact on the region, provided it continues to differentiate in its policies toward the Soviet Union and the Warsaw Pact countries of Eastern Europe, and among the countries of Eastern Europe, so as to encourage diversity through political and economic policies tailored to individual countries.”

The policy of differentiation has been and remains the only viable approach for dealing effectively with Eastern Europe. We cannot afford an East European policy that blindly follows the course of our relations with the Soviet Union. Conversely, the decoupling of our ties with individual East European countries from the overall context of East-West relations would be equally inappropriate. Differentiation has enabled the U.S. to maintain flexibility vis-a-vis the region and successfully integrate diverse considerations (i.e., Soviet, West and East European factors) into a coherent policy posture.

II. Policy Achievements

The pursuit of a differentiated approach over the last four years has resulted in a number of important foreign policy achievements. We have: a) averted the deterioration of U.S. relations with several East European countries despite U.S.-Soviet tensions and tighter Soviet controls in Eastern Europe; b) significantly improved U.S.-Hungarian relations (i.e., resolution of all outstanding family reunification cases, continuation of high-level visits, support for Hungary’s IMF membership); c) maintained and strengthened relations with Romania (i.e., effective repeal of education repayment tax, progress on human rights, and fruitful exchanges on arms control and foreign policy issues); d) preserved our special relationship with Belgrade in the aftermath of Tito’s death and effectively supported an independent, unified, non-aligned, economically stable Yugoslavia (i.e., U.S. sponsorship of “Friends of Yugoslavia” economic assistance package, successful implementation of President Spiljak’s visit²—the first head of state visit to the U.S. since 1978).

III. Projected Developments in Eastern Europe

Despite these accomplishments, a number of emerging trends both indigenous and exogenous to Eastern Europe suggest that for the rest of the 1980s and beyond, successful implementation of the differentiated approach would require a new policy mix. Such trends include:

A. East European Economic and Debt Crises: Almost all East European countries are struggling with problems of declining economic growth, heavy debt burden, and growing consumer dissatisfaction. Despite the economic recovery in the U.S. and Western Europe, it is unlikely that the West would be able to provide economic aid and credits to Eastern Europe on a scale comparable to the massive transfers of the 1970s. At best, a new infusion of funds would suffice to stabilize the East European debt situation. Thus, it is clear that Western economic aid, which until now has been a key instrument of the differentiated approach, would be unable to play an equivalent role in the future.

B. Soviet Coercion: In the last several years, Moscow has been striving to reimpose orthodoxy in Eastern Europe, place curbs on U.S.-West European relations with the East and reintegrate East European economies into CEMA. This rigid approach is likely to exacerbate present East European problems—economic weaknesses, deep popular discontent, recurrent political disruptions, spreading ideological decay and a pervasive, often anti-Soviet nationalism. Despite the counterproductive nature of this policy, it is extremely unlikely that Moscow in the next decade would be able or willing to change its heavy-handed approach.

C. Need for an Active Policy: The ability to demonstrate improved relations with Eastern Europe is likely to acquire growing importance for U.S. foreign policy in the years ahead. Given the prospects for U.S.-Soviet relations, West European anxieties and U.S. domestic pressures, the development of strong and viable ties with key East European countries would improve intra-Alliance cohesion, increase European security and enable the Administration to better respond to its domestic critics.

IV. Recommendations

Given these emerging trends, there is a need to reconsider the way in which the policy of differentiation should be implemented.

Eastern Europe

A. Instruments of Differentiation:

— Economic Aid. There is a need to develop better criteria for deciding how and when economic aid is to be apportioned among East European recipients. Concomitantly, we need to explain to the East Europeans that existing economic realities permit the provision of only modest economic assistance. This might dispel some of their unrealistic expectations and compel them to pursue more vigorously prudent economic policies.

— Technology Transfers. We have to vigorously resist the intense pressure to utilize technology transfers as the main vehicle of differentiation. The growing complexity and interdependence of modern technologies has enhanced the probability that most civilian technologies would be dual-use capable. Also, the relentless Soviet drive to acquire key Western technologies is likely to trigger intensified pressure on East European recipients of U.S. technology transfers. To manage effectively technology transfers, there is a need to break the interagency deadlock and develop detailed criteria that are both country and technology specific.

— Intensified Bilateral Ties. The main instrument of differentiation should be the development of an extensive framework of cultural and scientific exchanges, visits, treaties/agreements, and other similar steps between the U.S. and individual East European countries. Although each of these steps by itself might have only a negligible impact, in totality, they would foster close and vigorous contacts among our peoples and between our governments.

While it would be inappropriate to utilize these instruments vis-a-vis each East European country (i.e., high-level visits, in particular, should be planned discriminatingly), dialogue should be intensified with even such countries as the German Democratic Republic (GDR), Bulgaria and Czechoslovakia, albeit at a low level. We should also consider undertaking such low-cost steps as negotiating cultural agreements with these countries, provided that an agreement clearly benefits us.

The strong desire of key East European leaders to play a positive international role should also be tapped. Their interest stems from a deep-rooted dissatisfaction with their dependency on Moscow and craving for international recognition. Thus, we should make a special effort to solicit East European views on such issues as arms control, East-West relations, and regional conflicts, and underscore our belief that East European countries can and should play a vital role in solving international problems.

— High-level Visits. A visit by the President to Eastern Europe (Hungary, Romania, Yugoslavia) in May 1985 would provide an excellent opportunity to underscore our policy of differentiation, strengthen our ties with these countries, and manifest to the West Europeans and domestic critics our commitment to improving East-West relations. Other high- level visits (i.e., the Secretary of State) should be conducted periodically.

B. Declaratory Policy: There is a need to rethink our public strategy on how to clearly and effectively enunciate the policy of differentiation toward Eastern Europe. Our declaratory policy should emphasize the quality and intensity of U.S. ties with Eastern Europe. It should be made clear that differentiation is not a rigid system of rewards and punishments nor does it seek to discriminate against any East European country. The essence of our policy is that we seek to improve relations with all regional actors so long as they demonstrate a willingness to engage in positive steps in their foreign and domestic policies.

C. Implementation and Coordination: To better implement the differentiation policy and coordinate the use of the above referenced instruments, an interagency group should be convened. This group should: a) Reexamine and expand NSDD 54 into an operational document outlining a specific policy agenda. b) Develop a strategy for better coordination with West European countries as there are a number of areas in which U.S. and West European efforts can be complementary and mutually reinforcing. (In those countries in which direct U.S. involvement can be counterproductive, i.e., GDR, we should seek to work with and through the West Europeans.) c) Devise guidelines for our declaratory policy on Eastern Europe.

Poland

We have reached a critical juncture in our relations with Poland. In order to manage the remaining sanctions and promote positive changes in the Polish situation, we should seek to acquire a better grasp of what are the intentions of the present Polish regime. Toward that end, it would be highly desirable to conduct exploratory high-level discussions with Warsaw. The best approach would be to send an envoy (Walter Stoessel) who knows Poland and would be well received by Jaruzelski, to be accompanied by Mark Palmer and Paula Dobriansky. This should enable us to explain our policies and concerns firsthand, to probe Jaruzelski’s intentions and to assess the prospects for positive change in the Polish internal situation. If approved, this mission should be handled in a very low key, discreet fashion to avoid premature leaks and ensure its effectiveness.

Yugoslavia

This key area of the Balkans is highly volatile and crisis-prone due to ethnic rivalries, institutional conflicts and a stagnating economy. Our primary interest in Yugoslavia is the preservation of Belgrade’s unique foreign and domestic policies. Thus, it is imperative that we continue to monitor closely the situation, reaffirm periodically our support for Yugoslavia’s territorial integrity and independence, and furnish needed economic aid. Given these considerations and our long-standing military cooperation, we should also immediately resolve the current bureaucratic impasse (State/Defense) over Yugoslavia’s military assistance requests. This matter ought to receive serious interagency consideration so that a) a better conceptual framework for evaluating the desirability of individual military sales can be determined and b) pending requests be reviewed and acted upon.

1. Source: Reagan Library, Paula J. Dobriansky Files, Europe, Eastern (General) (3). Secret; Sensitive. In a covering memorandum of November 5, Dobriansky wrote to McFarlane that per his request, she was sending him her concept paper. (Ibid.)
2. February 1–2, 1984. See Document 215.