European Stars and Stripes (Newspaper) - May 19, 1991, Darmstadt, Hesse                                Sunday May 19, 1991the stars and strikes Page 13commentaryflora Lewis . Inches ahead toward new order new Worp orders it the idea of a new world order is still no More than a formless phrase on the horizon. But in fits and starts relations Between states and the Way they seek to influence each other Are changing. Its happening in Concrete Steps in response to specific disasters rather than through a grand design. 1 Quot experience and need will be better guides than an arbitrary bloodless abstract formula. The danger though is of overloading the capacity to respond to crises with too Many demands for urgent action too Many plagues to wipe out All at once. The focus is on the United nations suddenly perceived As the Center of new vitality after having been left to Wither. But it is a fragile organization no More Able now than before to operate Effee Lively without agreement among the major Powers. The United nations concentrated for so Long on blocking agreement Between t h e pow e is a up 11 i n g a t to n age. A head of a snipe Tench in recruiting its vast staff and Luumi rhetoric ahead of. Action a that its timid stumbling can to be surprising. A Secretary general Xavier Perez de Gueilar insists on taking Saddam Hussein a objections to . Impediments a which wet id guard against his Gettinger Corwith the pm dish rebels a quite literally c Small . Contingents have moved into the North and to the zone along the Iraq Kuwait Border. _ a but shiite opposition leaders say Saddam a forces Are at this moment pursuing a three pronged offensive against 800,000 people who have fled from Southern cities to the marshes in the West. For the United nations to carry out accumulating new responsibilities it is Clear that a vigorous administrative Reform is essential. This is True of practically All its subsidiary agencies As Well. None functions adequately and the Leonard silk change will have to come from the Tope that is for the longer term. More immediately the bargaining going on Over what can be done under . Auspices so american troops can pull out reflects another intricate Factor in the spreading Effort to impose conditionality on state behaviour. A a soviet requests for food Aid and China a Hopes to retain most favored nation Trade benefits with the United states Are loaded with diverse issues a from human rights to economic Reform to Security Council votes. Which should have priority still conditionality is an idea whose. Time has come. 11 is another result of the fading cold War when both the United states and the soviets put Only one condition on their attitudes to other countries not to be on the other Side. But now As a general approach to International affairs takes shape the proposed use of conditions is mushrooming. This would include a switch to Active rather than passive responsibility to improve the behaviour of other governments instead of j u s t up n ish i n g t he m for do i no w to n a Sempr singly Many leading Afi icons have come to Quot plead for Condit finality in the Trca men t p f their country is. H a 1 f Oft he m spend More on arms than on education. These spokesmen want to see Coridi Lions Quot of democracy and human rights imposed too As Well As world bunk and International monetary fund Type conditions on economic Reform. _ these Are new approaches to the old idea of sovereignty which though still enshrined at the United nations is shrinking. These Are creeping erosion of the Way the world has been organized giving More weight to people and less to the will of their governors. It Isnit orderly and it will be much More complicated. But Little by Little it is Likely to make the world More democratic. The new York times a a t3.,. W it. Nations k everywhere you too pm a Stawaz a a we atoms a a divergent cultural economic a coalition of top Bush administration officials and business executives has been pushing the Federal Reserve. To reduce interest rates and thus far Alan Greenspan the chairman of the fed and a majority of the feds policy makers have been cautiously going along. The economist last week read the riot act to both the administration and the fed a not Only has the Bush administration shown itself incapable of exercising Wise economic leadership but much More disturbing it seems that the Federal Reserve stands ready to do its  in Germany however the Bundesbank has been acting like Horatio at the Bridge defending its Strong anti inflationary policy and interest rate Structure against any and All threats from the Eastern provinces of Germany Brussels Bonn or Washington. Does this contrast in German and american Centra Hank style simply reflect a difference in the personalities of the fiery Karl Otto Pohl the president of the Bundesbank who announced his resignation thursday for personal reasons and the mild Greenspan g or does it represent a difference in politics Pohl is a social Democrat unlike the Christian democratic Chancellor Helmut Kohl Greenspan a Republican take president Bush but the Bonn government proclaims its own anti inflationary Fervour and the Mark has risen on the Market s expectations that when Pohl leaves office he will be replaced by an equally orthodox keeper of the Bundesbank a Faith and integrity. V the difference in German and american monetary policies May represent contrasting National cultures germans giving their highest priority to avoiding in tation and americans to avoiding depression. The greatest economic trauma of Germany was the hyperinflation of the Early 1920 a which wiped out the value of Money undermined the Middle class and prepared the soil for nazism. It 1 the worst economic trauma of the United states was the great depression and mass unemployment of Tajc 1930s, which transformed capitalism and gave the state the responsibility of ensuring High employment. Yet there is still another Way of interpreting recent Federal Reserve is. Bundesbank behaviour As a reflection of their different reactions to the respective political and economic dangers facing both countries. In the United states both the consumer Price Index Quot and the producer Price Index Rose in april by a modest two tenths of 1 percent. Since december under the Impact of the recession producer prices have declined at an annual rate of about 3.5 percent. And since feb raw consumer prices have risen at an annual rate of Only about 1 percent. In 1990, con a. Sumer prices Rose by 6.1 percent and producer prices by 5.6 percent. As a result of the Sharp decline in inflation there has been Little or no decline in real interest rates measured As nominal interest rates minus the current or prospective rate of inflation. Since the recession began last july the Treasury Bill rate has come Down to 5.57 percent from 7.66 percent without a Cut in real rather than just nominal rates the economic recovery is Likely to get no help from monetary policy. How much should real rates come Down to help the Economy overcome its sluggishness a at a recent conference at the Jerome Lew economic Institute of Bard College prof. Benjamin Friedman of Harvard said to done to know and i done to pretend to know exactly How much real interest rates would have to come Down but Quot i do know they Haven to conic Down that  a he calculated that the one year Treasury Bill rate had come Down a visibly less than the decline in the average inflation rate in seven of the last eight recessions. A what recovery we have in the. Next year a Friedman said a will be recovery not because of Monc. Tary policy but despite monetary policy. But As inflation cases in the United states inflationary expectations Are rising in Germany though the consumer Price Index for the whole of Germany has been rising at an Art Nual rate of about 3�?~ percent up Only slightly from the 1990 rate of 2.7 percent inflation has soared at an annual Rale of 20 percent to 30 percent in what was formerly East Germany said Adolphe j. Warner chairman of global assets management associates and the retired senior adviser to Deutsche Bank capital corp. Quot. The threat to inflation in the Federal Republic of Germany stems not just from the Eastern provinces but from the governments huge expenditures on the East big budget deficits and potential membership on the Bundesbank Board of political Hacks from the East. Thus the contrasts Between German and american monetary policy Stem not just from cultural or in Coretti Cal differences but from real differences in the political and economic problems confronting each country this May be becoming a global Economy but nation states and National currencies still matter. A a   press International