President Bush pledged $47.5 million in new agricultural credits for Hungary yesterday and called on the International Monetary Fund to increase substantially its lending to Eastern European nations to help them absorb the economic blows caused by the Persian Gulf crisis.
Welcoming Hungarian Prime Minister Jozsef Antall to the White House, Bush praised Hungary's transition to democracy. "Hungary is no longer an emerging democracy," Bush said during arrival ceremonies. "Hungary is a democracy."
Antall expressed appreciation for U.S. efforts to bring about democratic reforms in the Soviet Union and Eastern Europe but made clear much remains to be done in his country.
"We have . . . laid down the grounds for a free market economy," he said. "At the same time, we do not want to hide the fact that to implement an economic change in the country is far more difficult than execute a political one."
As further signs of the new relationship between the nations, Bush also announced that the United States would lift travel restrictions on Hungarian diplomats and would open a Hungarian Consulate General in Los Angeles, which the Hungarians had been seeking.
Administration officials said Bush and Antall spent much of their time together discussing events in the Persian Gulf. Hungary has supported the United Nations resolutions condemning Iraq's invasion of Kuwait, but the economic embargo against the Iraqis has hurt Hungary's fragile economy.
Until the invasion of Kuwait, Hungary had hoped to make up for shortfalls in Soviet oil production by purchasing oil from Iraq.
"Hungary and the other new democracies of Central Europe are paying a high price for resolutely supporting the United Nations sanctions against Iraq," Bush said.
He called on the IMF to adjust its lending requirements to make an additional $5 billion available to Hungary and other Central European nations. But it was not clear how the IMF would be able to do this.
Hungary has the largest per capita foreign debt of any Eastern European nation, at $20 billion and a population of 10 million.
Bush also urged the World Bank to accelerate its energy assistance for Eastern Europe.
The $47.5 million in new agricultural credits and loan guarantees will help the Hungarians meet more than half of their 800,000-ton shortfall in feed grain production, due to severe drought.
Antall also met yesterday with Secretary of State James A. Baker III and Commerce Secretary Robert A. Mosbacher.