European Stars and Stripes (Newspaper) - May 19, 1990, Darmstadt, Hesse                                Nmn a Al. A a. V a is the Preakness a Page 21the sell amp Aioli stripes authorized unofficial publication for the . Armed forces Good morning vol. 49, no. 35 saturday May 19, 1990 a a 25� daily and sunday d 8693 a East German prime minister Lothar de Maiziere left and West German Chancellor Helmut Kohl Toast their historic economic treaty Friday in  economies to merge on july 2 cutting deficit could Send . Into a recession by the new York times Washington a White House and congressional negotiators ended their second Day of budget talks thursday in general consensus that the Federal deficit or the fiscal year that begins oct. 1 could not be Cut More than $60 billion without tipping the Economy into a recession. That assessment complicated the negotiators task because even the most optimistic forecasts suggested that a Cut of $50 billion to $60 billion would not be enough to bring the deficit Down to the $64 billion ceiling mandated for 1991 by the Gramm Rudman Hollings budget balancing Law. The negotiators thus face some unpalatable choices risk recession in their View with spending cuts and tax increases totalling More than $60 billion raise the target in the budget balancing Law and thus loosen the Only current form of discipline that governs the Federal budget making process or both. The Gramm Rudman Law requires automatic cuts in Domestic and military spending if the ceiling that the Law sets is not  near arms agreement Bonn West Germany apr the two German nations Friday signed a historic treaty that will make them a single economic entity in less than seven weeks and introduce fragile East Germany to the Rigours of capitalism. The signing Means that As of july 2, when the treaty takes effect the four decade division of Germany will come to an end in Many ways. However the thorny Issue of the military status of a United Germany remains to be resolved especially the soviet unions rejection of propose see merge on Back Page Moscow apr Secretary of state James Baker and soviet foreign minister Eduard a. Shevardnadze narrowed the differences Friday in the Way of a major arms control declaration by the United states and the soviet Union. After nine hours of hard bargaining details remained to be worked out. But officials who spoke on the condition of anonymity said Baker and Shevardnadze had reached agreement on most of their differences Over limiting the ranges of cruise missiles carried aboard planes and ships. A settlement on the elusive nuclear tipped weapons would Clear the biggest obstacle to a treaty cutting the Overall arsenals of . And soviet Long Range nuclear weapons by 30 percent to 35 percent. President Bush and soviet president Mikhail s. Gorbachev Hope to announce an agreement in principle at their Summit May 31-june 3. Gorbachev insists Lithuania must abide by soviet Law Moscow apr president Mikhail s. Gorbachev said Friday that the Kremlin is prepared to examine any possibility to resolve the dispute Over Lithuania a Independence provided the soviet constitutional process is observed. Lithuanian prime minister Kazimiera Prunskiene met with Gorbachev on thursday and later said that significant Progress was made toward settling the dispute however she added that their main difference remained unresolved. Prunskiene met Friday afternoon with Secretary of state James Baker who has said the Baltic impasse was casting a Shadow Over the Summit to be held later this month in Washington Between Gorbachev and president Bush. Baker arrived at Spaso House the Home of . Ambassador Jack Matlock an hour and 45 minutes late indicating that his earlier meeting with Gorbachev had run longer than expected. Gorbachev speaking to reporters before meeting with Baker on Friday morning said that a through the constitutional process we Are ready to consider any possibility any  Prunskiene after meeting Gorbachev said Progress had been made but that neither Side suggested that the dispute had been settled. The meeting late thursday followed a lithuanian offer to suspend Laws made after its declaration of Independence March 11, if negotiations could begin with the Kremlin to resolve the standoff. Gorbachev had not met with lithuanian representatives since the Republic declared Independence. Instead he applied economic pressure that included a virtual blockade of fuel other raw materials and manufactured goods. The official soviet news Agency Tass said the lithuanian proposal for a Compromise was a sign that a certain Steps had been made toward the normalization of the  but it added a a Prunskiene a attention was drawn to the indispensable necessity that the lithuanian supreme soviet cancel a or at a minimum suspend a this act the Independence declaration and All the legislative measures following it that contradict the soviet  Prunskiene speaking with reporters at the lithuanian Mission in Moscow said the republics parliament see Lithuania on Back Page a actress Dies Jill Ireland the British actress who courageously fought cancer for five years died Friday from the disease. See Story on Page 28