9. NIE 12-90, April 1990, The’ Future of Eastern Europe (Key Judgments only) Fy Brest of Confidential a) ceri Intelligence cinemas The Future of Eastern Europe ccnp) National Inteligence Estimate This Estimate represents the views af the Director of Central intelligence ‘withthe advice and assistance of the US intetigence Community. ue 12.90 Son tit “857 1799. (Continued) Biactr of Gonfidontet NIE 12-90 The Future of Eastern Europe (cnr) Information avaiable as of 26 Apr 1990 was used inthe preparation ofthis Navona aligance Estate, The folowing ineligance ogeniaationsparicioated Inthe preparation ofthis Esumate ‘The Cantal nteligence Agency ‘The Detense Irteligence Agency The National Secuety Agency ‘The Feder Bureau of vestigation The Bureau af Ineligence and Research, Deparment of State ‘The Ofice of Ineligance Suppor, Department ofthe Treasury ‘abo parciating ‘The Office ofthe Doputy Chef of Sta forimeigence, Department of tre Army ‘Tho Ofice of the Director of Naval Intligence, Department ofthe Naw ‘Toe Assstant Chet of Sta, imagenes, Daparemont of he Ai Force The Dreotor af inaligence, Headquarters, Marine Corps This Esumote was approved fer publication by the [National Freignineligence Board. 400 1980 1809. (Continued) Seat The Future of Eastern Europe e-nr]— + The reolations in Eastern Enrope provide the basis for developing democracy and market economies. But this will not be a linear process, and a number of countries will continue to face political in- stability, ethnic turmoil, and economic backwardness. + Even with Western help, Eust European economies—excluding th (of East Germany—are likely to make only modest progress during the next five yeas. ly in the Balkans, where the lifting of Communist hegemony Uhreatens to revive old ethnic animostis, civil strife, and interstate tensions. The environmental nightmare will also persist. + West Europeans are better positioned to lead in shaping the East European future, but the United States has important advantages, among them the desire of East Europeans for a counterweight to Soviet and German inflence, (o> 1819. (Continued) Key Judgments ‘Communist party rule in Eastern Europe is finished, and it will not be re- vived. This an the lifting of Soviet hegemony create new opportunities for ‘itablishing representative democracies and self-sustaining market econo- tmies. The way wll also open for new modes of regional political and ‘conomic cooperation. The greatest impetus i the resolve of East Europeans and thei leaders to achieve reforms by emulating Western economic and political models foe) ‘The evolution of the region will make the designation “Eastern Europe” increasingly imprecise, as East-Central European countries—Poland, Czechoslovakia, Hungary, and East Germany—move ahead in closer sociation with the West and the Balkans—Bulgaria, Romania, and ‘Albania—settle into a more separate role. Yugoslavia, if it holds together, will continue clase testo the West. (23) In some East European countries, however, we will ee political instability and perhaps even a revival of authoritarianism, amidst lingering economic ‘backwardness and reemersing ethnic animosities. Despite Western aid and investment, the East European economies—excluding that of East GGermany-—are likely to make only uneven progress during the five-year timespan of this Estimate fee) Ubimately, prospects for healthy democracy will be closely tied to the way in which East Europeans resolve their systemic eoonomic crisis: + Western aid willbe essential, especially inthe early stages, to make up the “capital deficit” required to cushion any transition to market + Such aid will have tobe linked to private investment, access to Western ‘markets, and long-ierm programs designed to develop the sills and institutions necessary for a modern economy, as well as to full mobilza- tion of indigenous resources for investment.feaery— The outlook is more promising forthe countries in East-Central Europe— particularly Bast Germany, which wll rapidly merge into West Germany's ‘economy. Elsewbere, several countries have good potential a sits for "The asst Secretary of Sate for Inligence ad Research, Deparment af State Selves that boad real subroutines adopted for antl comer sucha Eaue-Central Europe and th elon tine biuret ferences een cue sem9. (Continued) Western-owned manufacturing plants with preferential entree to the -Buropean Community. The agricultural sector has the capability for quick turnaround. (o*) But the strain of even successful economic reform that is accompanied by inflation and unemployment will test the patience of people fed up with economic hardship and traditionally cynical about political promises. Lingering economic erses and resurgent ethnic divisions may fuel chronic politcal instability and interstate tensions, notably inthe Balkans ‘+ The major near-term danger to democratization in Eat-Central Europe is thatthe whole process wil run out of steam as popular euphoria wanes and lite substantial economic improvement has occured. The result ould be a paralyzing political impasse or prolonged “muddling through,” as in the Third World. + The worst case seenario—most likely in Romania and Yugoslavia—will not be a return to Communist regimes but a tur to authoritarianism, ‘rowing repression of ethnic minorities, civil strife, and even the onset of areater interstate frictions to-er) Meanie, despite the Albanian regime's readiness to use brutal repres- sive measures to suppress dissent, itis kely that revolution and reform will come to Albania within five years fort) ‘The Soviet Union's size, geographical proximity, security concerns, raw ‘materials, and market wil continue to make it @ maior factor in Eastern Europe. Bu even an aggressive, post-Gocbachey Kremlin leadership would ‘not—or could not—substentialy alter the course of events there. Moscow will eek to replace its lost dominetion of Eastern Europe with the advantages of & broader engagement with Europe as @ whole-town ‘A united Germany, however, will move even more assertively into Eastern ‘Europe as an economic and political influence in the vanguard ofthe European Community. Ths wil be a source of wory for most East Europeans, particularly the Poles. This concern, however, wil be Cush ioned, because Germany will be democratic and integrated into the European Community. German influence willbe somewhat diluted as ther Western counties also build economic and political ties tothe egion Even so, Germany's weight and occasional insensitivity will raise hackles. fem} East Buropean events will continue to take place against a backdrop of declining relevance for the Warsaw Pact and NATO. The Warsaw Pact as ‘a military alliance is essentially dead, and Soviet efforts to convert it into a Confidential “ 183,9. (Continued) political alliance will ultimately fil. Most East European stats wil aspice to build links fo Western Europe and will hope that the CSCE process can provide a bass for such broader security arrangements. (6%) East Europeans will continue to seek substantial US participation in their development as 2 counterweight tothe Soviets and Germans. Inthe region ‘where both world wars and the Cold War began, 2 democratic, prosperous, and independent Eastern Europe would be an element of stability rather than an object of great power rivalry in the borderlands between East and West-senr) 184