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East Bloc: More price hikes, but promise of democracy

By PATRICIA KOZA

WARSAW, Poland -- Eastern Europe rings in the new year with yet another round of price hikes, but also with a whiff of euphoria over its leap toward democracy.

Only in Poland and Hungary, where tough economic reforms are already well under way, was the mood more somber than ecstatic as the old year wound down Sunday.

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Poland, which in 1989 produced the first non-communist government in the East Bloc, goes into the new year with some of the stiffest price increases in post-war history.

The familiar long lines -- which had dwindled as more goods came on the market under the Solidarity-led government -- were back again before the long holiday as Poles stocked up on sugar, gasoline and other basic consumer items in advance of the price hikes.

In Hungary, where prices are going up an average 25 percent, the daily Mai Nap reported on a Gallup poll of people in 64 countries on their opinions of the new year.

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Hungarians gave the most pessimistic answer, the newspaper said, with 53.1 percent believing 1990 would be worse than 1989.

Some 64 percent of those queried in the Soviet Union, the only other East Bloc nation polled, thought the new year would be a more peaceful one than 1989.

By contrast, a sense of euphoria prevailed in Czechoslovakia following the inauguration Friday of playwright and essayist Vaclav Havel, the longtime moral voice of the opposition, as president.

Czechoslovakia also devaluated its currency and is preparing to inaugurate its own tough economic program, some parts of which go into effect Jan. 1.

But the atmosphere on the last day of the old year was festive, as witnessed by a special performance at the National Theater in Prague of the opera 'Libuse' by Bedrich Smetana, the famous 19th century Czech composer.

The opera is about a legendary noblewoman who, during the dark period of rule under the Hapsburgs, prophesied a bright future for Czechoslovakia.

'It is often performed on New Year's Eve, but it takes on a special significance for us this year,' one opera buff said.

In Romania, with the fall from power of the Ceausescu clan, the mood was positively jubilant.

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Meat, oranges and coffee have appeared on store shelves for the first time in years, and the first public poll ever taken in the country showed 97 percent of Bucharest citizens were confident life will be better for them now.

In Poland, the Solidarity administration of Prime Minister Tadeusz Mazowiecki is 6 months old, and, despite some grumbling, Poles have so far borne a series of price hikes that would have sent them out in the streets under the communist leadership.

But with new legislation passed last week by Parliament, real living standards in Poland are expected to drop 20 percent in 1990 and there is concern the patience may not last.

Apartments, food, and fuel are among the major items to be hit by price increases averaging 400 to 500 percent, but in some cases hitting 1,000 percent.

Electricity, central heating, warm water and gas prices will rise by 400 percent on Jan. 1. Domestic telephone calls will double and postal fees increase 150 percent, while foreign postal fees and telephone calls will jump by 200 percent.

The government also announced a major devaluation of the zloty, from 6,500 to 9,500 zloties to the dollar, effective on New Year's Day.

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Although Poland and Hungary are in the lead in reshaping their economies to open them to competition, every country in Eastern Europe will undergo the same painful process as they dismantle their centrally planned economies.

'I don't complain. My situation has not deteriorated so much,' said Wiesia Grabinska, manager in a Warsaw jam-making factory. 'But I am afraid most people will not stand for it.'

Grabinska, who makes 770,000 zloties, or $81, a month, said the rent on her family's three-room apartment leaped from 15,000 to 150,000 zloties per month, although that includes the increase in utility rates.

Among the hardest-hit in the new year could be pensioners. Regina Turek, 75, now will pay about 70,000 zloties, or $7.37, for her tiny flat on her 348,000 zloty ($36.60) monthly pension.

In communist nations, rents traditionally account for a much lower proportion of expenses than in the West, while food, even though heavily subsidized, takes more than half of the family income.

'It will be harder and I will have to watch my money more carefully, but somehow we will have to survive this period,' Turek said. 'They say it will be better in six months or a year, but it's hard to believe it.'

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In a New Year's address Polish President Wojciech Jaruzelski underscored the tough road ahead.

'We look into the future with hope and confidence,' he said. 'The new year will not be easy. We have to overcome the difficulties. There cannot be a retreat from the road of reform.

'I wish you persistence, peace, understanding and health.'

Of the dramatic changes, he said, ' Poland could have been the detonator (in Eastern Europe), but it has become a bridge between East and West,' he said.

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