Editor’s Introduction

Abstract

Three phases can be distinguished in the evolution of East-West relations since the end of the 1960s. The first half of the 1970s saw fast expansion of trade between the two groups, encouraged by a clear relaxation in political attitudes; the decade opened with what appeared, in the words of Levcik/Stankovsky (Ch. 4), as a “decisive breakthrough towards détente”, while Sołdaczuk (Ch. 3) finds that it was “possible to speak of a new era emerging in East-West relations”. The expansion of trade was encouraged by some liberalisation of trade barriers and by the building of a network of intergovernmental agreements, leading to the Helsinki Conference on European Security and Cooperation in 1975. Contributors from both East and West, though with differing emphases, agree on the interdependence between political attitudes and the periodically precarious economic relationships. These years were marked by other new features. First, favouring trade expansion, were the massive loans to Eastern economies from Western banks and (to a smaller extent) governments, allowing all the CMEA countries to run substantial trade deficits with the West throughout most of the 1970s — in strong contrast with earlier efforts to maintain bilateral balance. But the second, and unfavourable, feature was the emergence of “stagflation” in the West. The inflation, accentuated but not initiated by the price increases for oil from late 1972, offset part, but not all, of the expansion in nominal values of trade. The accompanying slowdown of Western growth rates limited market demand. At the same time, it was, in great part, the funds accumulated from OPEC surpluses which found their way through Western financial circuits to CMEA treasuries.