A Debt to the West: Recent Developments in the International Financial Situation of East-Central Europe

Abstract

East‐Central Europe is undergoing a rapid political and economic transformation. The unprecedented depth and speed of the economic reforms have produced serious questions about the stability of the region, and its future relations with western Europe and the world economy. This paper surveys and evaluates the size and character of existing debt stocks owed to the West by Hungary, Poland, and Czechoslovakia. The future political and economic stability of East‐Central Europe and the European Community depends, to a large extent, on the ability of the Western financial system to respond to the long‐term needs of the region.

Geopolitical Legacies and Central European Export Linkages: A Historical and Gravity Model Analysis of Hungary

“…Bleaney 1990, 250;Branda 1992, 247;Michalak and Gibb 1992, 269;Richter 1992, 971. was to import industrial components and technologies from the West to establish robust export industries. Export volume proved inadequate and the economic credibility of Communist regimes was irreparably damaged (Bleaney 1990;Michalak and Gibb 1992). By 1976 more than 25% of satellite nation's exports went to Western Europe, but this accounted for less than 4% of the latter region's imports (Knirsch 1980;Hughes and Hare 1992).…”

“…Hungary is the best example of a trade-oriented, centrally planned economy because of its efforts in the 1970s and 1980s to reform the Communist economic system. The Hungarian case has peculiarities but reveals the European economic landscape from an eastern perspective that has received scant attention in the geographical literature (Michalak and Gibb 1992). Hungary's New Economic Mechanism (NEM) created political sympathy among Western countries and increased access to Western institutions such as the General Agreement on Tariffs and Trade (GATT), the International Monetary Fund (IMF), and the World Bank (Kostecki 1979).…”