The states of Central and Eastern Europe, Russia and the successor states of the former Soviet Union need advice and assistance in rebuilding democracy and a market economy. Since the very beginning of the reform process, Germany has been providing this support jointly with bilateral donors and with international economic and financial institutions. Between the end of 1989 and the end of 1996, German assistance totaled DM 56.5 billion for Central and Eastern Europe and DM 125.7 billion for Russia and the successor states of the former Soviet Union. Germany thus furnished about one third of the total assistance. In order to ensure the sustained success of the transformation process, it is presently essential that the reformist states be integrated into the international division of labor and world trade.

Germany’s exchange of goods with this region and its direct investment in the countries in transition are already characterized by particularly dynamic growth. The further development of these economic relations will largely hinge on the establishment of a sound basis for sustained economic growth through resolute structural reform.

Within the framework of the TRANSFORM Consulting Programme for rebuilding democracy and social market economies in the states of Central and Eastern Europe and the Newly Independent States, Germany is encouraging and supporting the reform process in the countries in transition. The German concept for helping these states to help themselves, for which the Federal Government allocated about DM 585 million between 1994 and 1996, is particularly valued for its flexibility, effectiveness and orientation towards demand in the partner countries. DM 1 77 million have been earmarked for 1 997.