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West extends aid to East bloc -- except Soviets

BRUSSELS, Belgium -- Foreign ministers from 24 wealthy Western nations extended an aid program initially set up for Poland and Hungary to four other East Bloc countries Wednesday, but withheld including the Soviet Union until the results of a Soviet Communist Party Congress become clear.

'This is a transition never before undertaken by so many so quickly,' Secretary of State James Baker declared.

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The so-called Group of 24, including the United States, 12 European Community member countries, Japan and other industrialized nations agreed to help shift the now defunct central planning economies of East Germany, Czechoslovakia, Bulgaria and Yugoslavia toward a free market system.

The program is worth hundreds of millions of dollars in professional training, food aid and technical assistance.

'Ministers of the 24 reiterated their strong support for efforts made by the central and east European countries to introduce pluralistic and market-oriented economies,' said EC Commission Vice President Frans Andriessen, who chaired the G-24 meeting.

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Romania, as expected, was at least temporarily excluded from the extended aid program.

'The (President Ion) Iliescu regime's complicity with the miners' violent repression of demonstrators and the arrest of the political opposition, raises serious questions about its commitment to democratic reform and basic human rights,' Baker said.

The European Community sent a fact-finding mission to Bucharest, Andriessen said. He said it returned with 'considerable uncertainty about the authorities' willingness to permit the full development of political and economic freedoms.'

'Romania is not excluded as such, but must be considered not yet included in the G-24 process,' Andriessen said.

Asked why the Soviet Union was not included as the fifth country to receive G-24 aid, Andriessen stated the country should be treated as a case in itself.

'Some delegations wanted concrete actions while others think that the conditions are not fulfilled,' he said. 'The size and the scope of the country require a separate handling.'

Belgian Foreign Affairs Minister Mark Eyskens said the Group of 24 was awaiting the outcome of the Communist Party Congress now underway in Moscow as well as next week's G-7 meeting in Houston, Texas, before taking a stand on aid to the Soviet Union.

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'The economic aid to the Soviet Union is after all a (display of) political support for Mr. Gorbachev,' he said. 'We will have to wait and see how he comes out of the party congress.'

The American position was clarified by Baker, who said the United States has some problems in looking at the prospect of financial aid to the Soviet Union without setting any preconditions.

'First there are legal prohibitions that would prevent us from doing this,' Baker said. 'And a nation which spends between 18 and 25 percent of its GNP on military expenditures one might ask to see some money moving from those sources.'

'Also, they spend $9 billion to $15 billion a year to support regimes that in the past have been hostile to the United States,' Baker said. 'The absence of real progress toward a real market economy is reminiscent of the aid we extended in the 1970s to Poland without setting any preconditions.'

Under a European Commission project started in 1989, Hungary and Poland have received $288 million.

A special stabilization fund to help stem currency fluctuations and emphasize market liberization brought inflation down from 78.6 percent a month in January to 5.0 percent in May.

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The Group of 24 includes the 12 EC nations and seven other European countries, plus the United States, Canada, Japan, Australia and New Zealand.

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