democratic and market-oriented. Moreover, Soviet 

 political and military domination of those countries has 

 dissolved equally rapidly, along with the East-West 

 confrontation which justified the Atlantic orientation of 

 the European Community. 



The political unification of Germany occurred on 

 October 3, 1990, and economic integration at a practical 

 level had been moving ahead full steam for the previous 

 year. Germany is certain to experience short-term social 

 and economic dislocations as a result. The cost over the 

 next five years of rebuilding eastern Germany has been 

 estimated at over 700 billion dollars, and both political 

 and business leaders will be necessarily preoccupied 

 with internal problems and their solutions. At the same 

 time German economic growth, already doubling the 

 rate predicted for 1 990, will be fueled by the 

 reconstruction needs of eastern Germany. Assuming the 

 restoration of oil price stability near the level antedating 

 the invasion of Kuwait, German economic growth will 

 most likely continue to lead that of other EC members. 

 A serious issue for the rest of the European Community 

 during the remainder of the decade is how to 

 accommodate a Germany whose population, market and 

 economic power will overshadow any other member of 

 the Community, but whose leadership will likely be 

 preoccupied overwhelmingly with domestic concerns. 



The Nature of Community: Deepening vs. 

 Broadening 



A second source of uncertainty in S&T planning 

 derives from broader internal disagreement in the EC on 

 overall strategic policy planning. Within the past two 

 years, a dispute has emerged within the Community over 

 the general character of the EC in the post- 1992 period. 

 One faction, led by France, has advocated a "deepening" 

 of integrative processes, designed to bind the members 

 of the Community tighter in mutual interdependence, 

 while devolving considerable sovereignty over 

 economic and political policies to Community 

 institutions. At the same time, inclusion of additional 

 members in the EC would be delayed for up to a decade. 



This movement has been opposed by a smaller bloc 

 led by the United Kingdom and the Netherlands. This 

 "broadening" faction would favor restricting the power 

 and sovereignty of the EC government, granting it only 

 enough to implement and enforce the Single Market 

 directives and a loose type of monetary union. Their 

 major argument stresses the need to "broaden" the 

 Community's aims, influence and Single Market 



advantages to other nations in Europe whose political 

 and economic systems are compatible with those of 

 the Community. The nature of individual countries' 

 association with the EC would be somewhat flexible, 

 implying a sort of confederation where members would 

 have varying degrees of rights and obligations. The 

 obvious appeal of this argument is that such a system 

 would provide for a quick and relatively easy inclusion 

 of EFTA countries and the gradual absorption of most 

 Eastern European nations, while simultaneously limiting 

 the growth and exercise of centralized authority by the 

 EC governing institutions. 



The Germans have played an active role of arbiter in 

 this growing dispute, taking middle-of-the-road 

 positions generally favorable to greater cohesion within 

 the EC. Now that German attention is riveted on its own 

 unification and the needs of its closer eastern Europe 

 neighbors, and with the most creative German talents 

 focused on new opportunities in that direction, a 

 continuing rift within the EC could make movement 

 toward full integration less predictable. 



Aid to Eastern Europe Strains EC Commission 

 Resources 



A third potential source of instability in S&T 

 integration lies in the EC's commitment to assist Eastern 

 Europe with a variety of economic and technical needs. 

 On behalf of the 24 wealthiest, industrialized nations 

 ("G-24"), which are analogous to the Organization for 

 Economic Cooperation and Development (OECD), the 

 EC has taken the lead in strategic planning and 

 coordination of assistance to East Europe. It has moved 

 swiftly to take advantage of the unexpected opportunity 

 to wield influence in the shaping of a new Europe. 

 Among the potentially effective tools available for 

 "leapfrogging" the wide East- West gap in industrial 

 capabilities and market potential is technology transfer. 

 However, the opportunity carries a requirement to focus 

 attention on external affairs at a critical time in the 

 implementation of the 1992 Plan. Issues associated with 

 the next phase of integration are said by European 

 officials to be getting far less than full attention, the 

 result of EC efforts to address even minimal needs in 

 Eastern Europe. Those needs will grow tremendously in 

 the next several years, if democracy and market 

 mechanisms take root successfully, and the Commission 

 could become hard-pressed in tackling them with the 

 limited personnel and funding it has available. 



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