Not So Quiet On Germany's Eastern Front

German politicians usually try to avoid making foreign policy waves. But when Chancellor Helmut Kohl visited his old friend Boris Yeltsin in Moscow last month, he boldly revamped Western policy on Central Europe. Kohl told the Russian President that inclusion of such countries as Poland, the Czech Republic, and Hungary in NATO "needs to be postponed for a long time." The remark pleased Yeltsin but came as a shock to Central Europe and the U.S., which has been pushing to extend the NATO umbrella eastward.

Of course, Kohl was trying mainly to boost the tottering Yeltsin's chances in Russia's June presidential elections. But the chancellor's controversial pronouncement also underscored Germany's increasing willingness to play a heavyweight role to its east, where it finds itself inexorably drawn. The major security threats lie in that direction--mostly in Russia. So do the big opportunities--in Central Europe. "These are new responsibilities that the Germans have taken up at last," observes Alexander Rahr, Russia expert at the German Society for Foreign Policy in Bonn. "Finally, the political elite is realizing that Russia is in trouble."

The last thing the Germans want is for Yeltsin to be replaced by Communist leader Gennady Zyuganov or one of the other dubious figures stalking the presidency. An unstable Russia would be a nightmare for Germany. Among other things, it would jeopardize Germany's budding sphere of influence in Central Europe.

EASY CREDIT. As infrastructure improves, a closely knit commercial region is emerging in the heart of Europe with Berlin as its future capital. German companies view this area as one with enormous potential both as a manufacturing zone and as a market. They are much more skeptical about Russia. Only $31 million in German investment went into Russia in the first half of last year--a puny sum that Yeltsin complained about to Kohl. By contrast, some $1.9 billion in German investment went into Central Europe in 1995--as much as went to the U.S. Kohl recently redressed the balance somewhat by helping persuade the International Monetary Fund to extend Yeltsin a $9 billion loan on easy terms. He also leaned on German banks to cough up $2.7 billion in loans for the Kremlin in early March.

Stabilizing Russia, of course, makes the Central European nations more secure, but they want more. These countries have made early admission to NATO and the European Union their top priority. It makes them uneasy to see other countries cutting deals on their futures--especially Russia and Germany, who have a history of carving up Central Europe.

HUGE COSTS. But the Central Europeans do not have much choice but to go along with whatever timetables Kohl sets. They need German money to grow, and Kohl is still their chief patron inside the EU and NATO. In the heady days after the fall of Communism in 1989, Kohl promised support for putting these countries on the fast track for membership in both groups, but now he is putting more emphasis on the EU, which doesn't raise Russian hackles. "The first step is EU membership, with NATO membership as a follow-up later," says Horst Teltschik, a former Kohl foreign policy adviser who is now on BMW's board.

Although the Central Europeans may balk at that message, it is a tough one to brush off. NATO membership would require huge and probably unnecessary defense expenditures from these relatively poor countries. Why not instead devote their limited resources to bringing their economies up to EU standards? That is certainly what German companies putting their money into these countries would prefer.

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