NEWS OF THE WEEK
THE agreement between Moscow and the East German Government is not mere electioneering; it is not a minor palliative; it is a major declaration of Soviet, policy. For the concessions that have been thrust upon Herr Grotewohl by M. Malenkov are no cold war phantoms but a real contribution to the economic health and wealth of East Germany. They are different in kind from any concessions that have preFeded them in either Germany or Austria. The decision to end reparations, to return the remain- ing East German firms in Russian possession, to cut occupation costs, and to increase Russian exports to East Germany, is in fact a decision to hand over to Herr Grotewohl the larger part of East Germany's industrial production at Russia's expense. This, then, is Russia's answer to June 17th; it may even be an answer to problems of longer standing, of which June 17th Was merely one expression. For it is the recognition of some- thing that Stalin ignored altogether—that there is a human limitation to the extent to which physical resources can be exploiteld. Neither Moscow nor the satellite Communist Parties can afford to prolong a situation in which fear of the Soviet Army is the only guarantee of law, order and co-opera- tion. Therefore, the puppet government of East Germany must become a little more than a puppet. It must be allowed to engage at least the self-interest, if not the affection, of the people it governs, even at some cost to Russia's development plans. Somewhere lurking in the . Grotewohl-Malenkov agreement there may lie a leading clue to the post-Stalin policy for Europe. The old policy of get-strong-quick at all costs seems to have been abandoned. The new policy is to buy time, with some kind of a détente—which does not, for the Moment at least, appear , to include any major retreat in Europe—in order to get strong slowly. This will enable Moscow `to spare some of its resources for the consumer market in Russia itself (hence Malenkov's budget) and for winning over not merely the satellite peoples but also their neighbours. Peace will be used to confuse them and prosperity to lure them (hence Herr Grotewohl's pious statement that the economic and financial relief he had received was the best proof of Russia's determination to achieve a settlement of the German problem.) It is a shrewd move and it may yet succeed. On the other hand, it may not.
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