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THE WHITE HOUSE

                  Office of the Press Secretary
                         (Bonn, Germany)

                       BACKGROUND BRIEFING
                                BY
                 SENIOR ADMINISTRATION OFFICIALS

July 11, 1994

                        The Maritim Hotel
                           Bonn, German

3:30 P.M. (L)

SENIOR ADMINISTRATION OFFICIAL: I'll give you a little bit of background on the meetings with President Herzog and, of course, the initial meetings with Chancellor Kohl. The focus of these meetings touched a lot of the bases that we've been touching throughout this trip in terms of the focus on integration of the East European new democracies, on the economy and the need to increase jobs, and on how we can adapt our institutions in building this new united Europe.

In the meeting with President Herzog, the President was interested, given Herzog's previous status as the head of the German Constitutional Court in the likely outcome of the Court's decision on Germany's out-of-area activities, and Mr. Herzog gave a general review of the issues involved, but didn't obviously want to preview what the decision was going to be, particularly in his new capacity.

They focused in that discussion to a great extent on Eastern European issues. President Herzog asked President Clinton for his impressions from his trips to Poland and to Latvia. President Herzog emphasized Germany's strong interest in establishing good relations with Poland, noting the difficulties imposed by history, but that the Germans were determined to establish friendly relations and saw the importance of drawing Poland closer to Western institutions, including NATO.

The President gave him his impressions of the trip to Riga and the combination of exhilaration one could sense about their new-found freedom, and at the same time their sense of uncertainty about the future and sense of vulnerability, given their own tragic history.

There was a bit of a discussion about Partnership for Peace. The President emphasized the importance of Partnership for Peace in developing a new, comprehensive security system in which all nations of Europe respect one another's borders, as he did at the lunch today, which I think you heard, stressed the importance of how the military's role is unique in creating this new integrated and democratic Europe.

Herzog was very interested in the President's efforts at home on health care reform and other efforts in the social area, and strongly praised the President's leadership in this regard, and they had a detailed exchange of view on some of the issues involved in comparing the German and American health care systems.

Turning to this morning's meetings between the President and Chancellor Kohl, I think it's important to note the extent to which this further developed their close, personal relationship. They spent about 40, 45 minutes at the beginning alone and had a largely personal discussion.

The substantive exchanges focused first on the economic situation in Europe. There was agreement that things in Europe were beginning to pick up, that the trends are turning around, and they also discussed the economic impact of German unification; and there, too, the Chancellor noting how difficult an experience it had been, but that the process was looking up.

The sense of discussion of the issue of Russian troop withdrawals from the Baltic States, in light of the progress made in the discussions in Naples, but at the same time recognizing that some issues are still unresolved and still left in doubt whether the Russians will live up to their commitment to get the troops out by August 31st, the two leaders agreed to coordinate their efforts and -- both with the Russians, the Estonians and other interested states in the region in trying to get over the hump there and ensure that the Russian troops are out by the end of August.

On Central and Eastern Europe, extensive discussion of both the situation in the region and the specific institutional ways in which we can respond, Kohl emphasized Germany's strong determination to bring the East European democracies into the European Union, which the President strongly supported, noting that this is going to be a difficult process, but that Germany will try to shorten, if possible make this as rapid a process as possible.

They spoke, also, about the relationship between Partnership for Peace and the future expansion of NATO, agreed that this is an important question in the overall process of creating the integrated Europe, and that we should be in increasingly close contact as the Partnership develops and as we look towards the eventual expansion of NATO.

Finally, they had a brief discussion of Bosnia, agreed that the Contact Group effort was on track. There was a more detailed discussion of that between Secretary Christopher and Foreign Minister Kinkel, who met separately while this private session was going on between the President and the Chancellor. There was general satisfaction with the endorsement for the contact group initiatives at the G-7 -- or by the G-7 plus 1 -- and agreement on the need to hold firm to the basic principles agreed by the ministers on July 5th, as the two week deadline approaches on July 20th. So those are the basic issues.

Q When the President urges Kohl, or Germany, to take a stronger role in global leadership, is he just talking about in terms of military -- this troop decision, or is it broader than that?

SENIOR ADMINISTRATION OFFICIAL: I would say that I think it's a more broader question than just the military issue. That was obviously an important dimension and we all keenly await the decision of the constitutional court tomorrow because, given Germany's military strength and the importance of its forces to the overall strength of NATO, we think that Germany should be able to play a commensurate role in international peacekeeping under U.N. or CSC auspices, both nationally and through NATO.

But it's a much broader question. We do see the Germans as perhaps the key European state in terms of relations with the countries of Central and Eastern Europe. They have natural affinity in terms of trade relations, and their sheer proximity, of course, gives them a strong interest in extending stability eastward. So there, too, we strongly welcome the Germans desire to play a major role starting with their U presidency and in increasing the priority that the European Union, as a whole, attaches to Eastern Europe.

And one can go further afield -- relations with Russia, Ukraine, Germany also plays a very important role and that's part of the broader international role that is already developing, which we very much support.

Q What are the barriers now to EU membership for the Poles, the Czechs and the others? And what could the Germans conceivably do, either through their presidency or independently, to lower those barriers, to get these people in more quickly? And what did Kohl say they could do?

SENIOR ADMINISTRATION OFFICIAL: Well, they didn't get into those kinds of specifics. Obviously, they're primarily economic barriers given the way -- and I'm not your best expert to explain those in details so I would hesitate to get into them.

But given the lower GDP levels of these countries and the still early stages of the reform process, the way the EU operates would require the other states to take on a major burden of subsidization of these economies, which is clearly not something they're prepared to do now.

And the countries themselves have not completed the transition to being full-fledged market economies, so that they're not compatible as yet. But that factor probably will become less of a real one for at least the more successful of East European states. But the other one will take a bit longer, and even if one thinks of the turn of the century, plus or minus a few years -- European states. But the other one, I think, will take a bit longer. And even if one thinks as the turn of the century, plus or minus a few years, as the time that it's talked about, there will be an economic burden. And that's going to probably be the hardest thing withstanding political goodwill.

Q The "I-agree-with-Helmut" speech -- would you like to repeat your assertion that this has nothing to do with German politics?

SENIOR ADMINISTRATION OFFICIAL: I think that it's undeniable that the President and the Chancellor have very close and warm personal relations. And the President was simply reiterating that in his toast, as you would expect him to do in a festive occasion of that kind.

But we're not here to serve any domestic political purposes for the Chancellor. And as we've noted, even as we speak, the President is meeting with Mr. Sharping, head of the main opposition party. And he'll be meeting with the other members of the ruling coalition, as well, in their party capacities. So we're trying to keep this out of politics.

Q Did they at all get into the Ukraine elections, even if they're preliminary results?

SENIOR ADMINISTRATION OFFICIAL: As far as I know, there was no discussion thus far. I mean, they will be meeting for many hours still to come, both in their private dinner in Oggershiem and tomorrow at the US-EU summit discussions, by which time we may have more conclusive results. So you may have been premature.

THE PRESS: Thank you.

END3:51 P.M. (L)