The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Thursday, clean up crews fought to contain an oil spill threatening the coast of Southern California, Pres. Bush says he hopes to negotiate a new trade agreement with the Soviet Union by summer. We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary, the politics and [FOCUS - ONE GERMANY] the finances of the new rush toward German reunification with the West German Ambassador, Juergen Ruhfus, East German Journalist Andreas Kabus, former U.S. Ambassador to West Germany George McGhee, International Financial Expert Robert Hormats, and West German Banker Friedbert Malt. Then Fred De Sam Lazaro reports on the search [FOCUS - MEDICAL MYSTERY] for the cause of a mysterious blood disease, and we close with our Thursday night essay [ESSAY - WINTER WONDERLAND].NEWS SUMMARY

MR. MacNeil: Clean up crews were fighting tonight to contain an oil spill off the Coast of Southern California. A spill occurred last night near Huntington Beach, which is lined with pristine beaches, expensive homes and bird sanctuaries. About 300,000 gallons of oil spilled from a British petroleum tanker yesterday when the ship's anchor apparently pierced its bow. The Exxon spill off Alaska was 36 times bigger, but this is considered a major spill. It created a four mile long slick, the edge of which came within just 200 yards of the shore, but favorable winds later pushed the slick further out to sea. Calm seas were also helping clean-up crews who were trying to contain the slick with booms. It was not clear how much damage has been done to wildlife, but some oil covered birds have washed up on shore. A Coast Guard spokesman in California described the clean-up operation.

CAPT. JAMES CARD, Coast Guard: We're using every piece of equipment that we can find out there and they're going to be, in addition to having vessels which have arms which hang out which skim oil, they're also going to be doing boom between other vessels which will catch oil in their apex. So we're bringing to bear all the resources that we have and I think they'll be directing that effort with helicopter from the company to direct the vessels in those places, so whether it's going to be enough to get it all -- some of the oil is very very thin and it's not going to be able to be picked up.

MR. MacNeil: The ship's captain and other crew members were given drug and alcohol tests which are routine. A Coast Guard spokesman said the alcohol tests were negative. The results of the drug tests were not yet available. British Petroleum said it will cover all the clean-up costs. Jim.

MR. LEHRER: Pres. Bush talked about U.S.-Soviet trade today. He said he expects a new agreement to be completed before he meets Pres. Gorbachev in Washington in June. He spoke at a political event in Omaha, Nebraska.

PRES. BUSH: I hope to negotiate a new trade agreement with the Soviet Union by the time of our 1990 summit, not too many months away, and this will relax trade barriers between East and West, expanding markets for American exports. And I feel strongly that selling our grain to the Soviet Union is in America's interest as well as in the interest of the Soviet Union.

MR. LEHRER: Mr. Bush also visited the headquarters of the Strategic Air Command at Offut Air Force Base in Nebraska. He put on a flight jacket and climbed into the cockpit of a B-1 bomber. He spoke via telephone to SAC crews around the world. He said his administration would continue to modernize strategic forces as it pushed for new arms agreements with the Soviets. The President's three day trip to rally support for his defense budget drew criticism today. House Majority Leader Richard Gephardt told reporters the United States needed new thinking to match the political situation in the Soviet Union.

REP. RICHARD GEPHARDT, Majority Leader: With freedom ready to ring from the walls of the Kremlin to the streets of Prague, with the Communist Party surrendering its power monopoly in the Soviet Union, Americans are asking one question. Why is Pres. Bush in Nebraska beating plow shares into swords? Forty years ago on Abraham Lincoln's birthday, Albert Einstein warned against needlessly maintaining a mentality created by war long after we have vanquished an external enemy. George Bush isn't living that warning, he's defying it.

MR. MacNeil: In Moscow, arms control progress was reported after a second day of talks between Sec. of State Baker and Foreign Minister Shevardnadze. Both sides said the talks were going well. According to Reuters, senior U.S. officials said the Soviets had removed one obstacle to reaching a treaty on limiting long range nuclear weapons. And in Vienna today, NATO presented Pres. Bush's troop cut proposal to Warsaw Pact negotiators. Mr. Bush proposes to cut U.S. and Soviet troops in Europe to 195,000 on each side.

MR. LEHRER: Manuel Noriega will be tried in Miami on drug charges. A federal judge so ruled today. He rejected the former Panamanian leader's claim the court did not have jurisdiction. Judge William Hoovler declined to rule on Noriega's assertion he was a prisoner of war. The judge said he would leave that to other authorities to resolve. And that it's for the News Summary tonight. Now it's on to the politics and finances of German reunification, the search for a cause of a blood disorder, and our Thursday night essay. FOCUS - ONE GERMANY

MR. LEHRER: The fastest train in Europe right now is the one destined for a unified Germany and that remarkable story is our lead focus tonight. The West German Ambassador is here as is an East German Journalist, A Former American Ambassador to Bonn and two financial experts one German one American. The rush for reunification really began only three months ago when the Berlin Wall Started coming down but it accelerated this week. We have a Judy Woodruff backgrounder.

MS. WOODRUFF: Eight days ago East Germany's Prime Minister Hans Modrow went to Moscow. He found the Kremlin ready to ease up on its long standing opposition to a United Germany. For the first time Soviet leaders said they might go along with a German confederation. On the same day the East German Communist Party which is running way behind in the polls for next months Parliamentary election also endorsed a single German State but stipulated that it should be part of a Europe with out military alliances. The reaction of Prime Minster Helmut Kohl's Conservative West Germany Government was jubilant. Officials there had said that Gorbachev had removed the last major obstacle to reunification. The West German's did reject one other suggestion made by the Soviets that the reunification question be put to an international referendum. Chancellor Kohl said that the issue is for Germans to decide. Meanwhile West German Foreign Minister Hans Dietrich Gincher spelled out ideas on how a reunited Germany could be part of NATO but that no NATO troops would be stationed in the East. Gincher brought that proposal to Secretary of State James Baker last Friday. In news reports since Baker is said to have gone along with the idea. In Czechoslovakia where Baker was visiting on Tuesday State Department Officials told reports, "unification is taking place on the ground right now". The pace of events has been accelerated by the desire of both Germanies to stop the continuing mass exodus of people out of the Communist State. An estimated 2 to 3 thousand East Germans are going to West Germany every day. Already 70,000 have left this year. This past Tuesday some additional dramatic proposals were made by Chancellor Kohl. Among them a creation of a new cabinet level department to deal specifically with reunification issues including the monetary systems of the two countries. Kohl and Foreign Minister Gincher also announced a series of whirl wind visits to sell reunification to the victors of World War II. They will meet in Moscow this week end with the Soviets and with Secretary Baker who will still be there. And on February 24th and 25th Kohl will meet President Bush at Camp David.

MR. LEHRER: We get three perspectives now of the pace and out come of the German reunification. Juergen Ruhfus is West Germany's Ambassador to the United States. Andreas Kabus is the Washington Bureau Chief of the East German News Agency ADN, George Mc Gee was the U.S. Ambassador to West Germany during the Kennedy and Johnson Administrations. He has written two diplomatic memories, the latest on his tour in Germany titled at the Creation of New Germany. Mr. Ambassador do you agree that reunification is occurring on the ground right now?

JUERGEN RUHFUS, Ambassador, West Germany: Well the development has speeded up considerably and we have proposed negotiations on a monetary union and indeed situation in GDR is becoming more difficult and there is a very good prospect that we will make rapid progress toward a monetary union. As to the aspect of unification, unity in the field of security area, I think we wait for the elections to take place in the GDR and then we hope that the negotiations --

MR. LEHRER: The elections are in March?

AMB. RUHFUS: March 18th and then when a new government is freely elected on the basis of a freely elected Parliament then we hope that we can get into negotiations quickly on coming to Federal structures and making progress toward unity.

MR. LEHRER: You mean boom suddenly there is a unified German?

AMB. RUHFUS: No we are aware of the fact that of course there is interests of our neighbors, interests of the allies, and the members of the European Community and we have made it clear that we will remain a loyal partner of the alliance, committed to the alliance. We have made it clear we will remain a member of the European Community and we know that we have to talk to our neighbors and allies. This is why Minister Gincher was here. This is why the Federal Chancellor is coming to Camp David but we know we have to speak to the East Europeans and to speak to the Soviet Union and take in to account the security interests of the Soviet Union.

MR. LEHRER: Is it strictly the sad situation in East Germany that is driving this thing so fast now or are there pressures in West Germany as well that are pushing, pushing for a quick resolution. a quick unification.

AMB. RUHFUS: Speed has come up by the destabilizing in East Germany. A number of, as we just heard, 3000 refugees almost 70,000 since the beginning of the year. That is being felt heavily in the East German economy and we offered the economic and monetary union. It is an effort to stabilize development in Europe that things do not get out of hand.

MR. LEHRER: Mr. Kabus do you agree with that that it is a bad situation in your country that is driving this thing now?

ANDREAS KABUS, East German Journalist: I do agree. Of course it comes to the assessment of the situation and the possible prospects I would have to argue with the Ambassador about possible out come or methods.

MR. LEHRER: What is the problem?

MR. KABUS: Let me just say that I basically agree with the situation in GDR, the GDRs economy is deteriorating at quite a speed and we have to do something and we have to do it together with the Federal Republic and we have to do it with the governments concerned.

AMB. RUHFUS: I agree.

MR. LEHRER: Is the situation so bad and deteriorating so fast that any kind of unification is no longer between equals. It is between strong West Germany and a weak East Germany and the rules are going to be written in West Germany rather than the East.

MR. KABUS: I think there are attempts in the Federal Republic for certain politicians and certain political servants to do it but it would be a really unwise thing to do it that way because it could create new problems, create new enemies and new social unrest which wouldn't serve the people in the East or the West. So what we have to do is find a way of common sense in tackling the situation. Of course the West German economy used to be and is much stronger than the East Germany economy and the impact to be felt in the East willbe quite a big one if it is going to happen.

MR. LEHRER: Do the rank and file people of East Germany want this to happen now. Is it beyond any kind of recall?

MR. KABUS: You see we did have an opinion poll the other day by the Leipzig Institute. I think Mr. Ambassador you have seen it that according to the poll 75 percent of the people are in East Germany and the German Democratic Republic are in favor of unification. At the end of last year it used to be half of the population.

MR. LEHRER: That was before the falling of the Wall. Was that before the Wall?

MR. KABUS: I think even at the time of the Wall.

MR. LEHRER: Is that right Ambassador?

AMB. RUHFUS: The number has increased rapidly ever since the opening of the Wall and I think that now it is fair to say that all the political groupings and parties have put unity on the basis of self determination including Prime Minister Modrow who came with his own proposal. We from the ruling Party the PDS now is in favor of unification but of course the Communists or the Socialists as they are calling themselves offer a different political structure in a United Germany.

MR. LEHRER: Ambassador Mc Ghee it is going to happen is that right? We've had a lot of discussions on this program in the last three months about is it going to happen but it is no long a question is it?

GEORGE McGHEE, Former U.S. Ambassador, West Germany: There is no question at all. It is beyond the point of no return.

MR. LEHRER: What is the U.S. interest now. Is it in our interest for this to continue at this pace the rate it is going or do we have another interest?

AMB. MC GHEE: It is very much in our interest. This is a good thing. It is headed in the right direction. The only problem is to face the grave problems and difficulties and roots of solution but there is no question that they can be resolved. Our record in support of reunification is very strong starting with the Post wall. We made it very clear that we supported the Germans if they both decided through free elections that they should be reunited. The only reservation that I made in my time was that we didn't want to push them. We didn't want to be more German than the Germans but there is no question. I think that both states will recognize that we have supported this.

MR. LEHRER: AM Rosenthal wrote a column this morning in the New York Times where he challenged the U.S. position on this. He said that the U.S. and the West should be saying wait a minute slow down and he quoted the Soviet Foreign Minister, Mr. Schverdnadze as saying there are sinister shadows in Germany's past that should be discussed, should be out on the table and the West should lead the discussion about them with the rest of the World. What is your view about that?

AMB. MC GHEE: Well I read this article and it disturbed me very much. As a matter of fact there are quite a few articles that are appearing at this time along these same lines. The one today I think said that West Germany wanted to Europe, dominate the World even. I think this doesn't recognize the Russians in Germany since the War. Germany has worked very hard in support of European Unity. Germany has given no indication that she has any highly nationalistic or aggressive designs. Germany has done well economically but so have we, so have other countries. They don't indicate that they seek to abuse this. The Germans have no Army. Their Army is the NATO Army. They don't have a general staff they can not use nuclear weapons. The Germans have given up their economic sovereignty to the European Community. There is no way that Germany can take advantage of this and why should they in light of the great success that they have made so far.

MR. LEHRER: Well Mr. Rosenthal if he were sitting here would be the devils advocate as he said sure that is what they have done but in 14 or 15 years down the road they can snap their fingers and say no more they will emerge as the strongest nation in the World.

AMB. MC GHEE: Well I think that we have to make up our mind about the Germans. I made a speech in Heidelberg when I was in Germany.

MR. LEHRER: At what point?

AMB. MC GHEE: This was about 65 when Earhardt was on the platform and I said the time has come for the World to make up their minds about the Germans. We made up our mind after the War. We helped Germany recover like we helped Japan. I don't think that you can look back now and accuse the Germans of seeking to recreate the Fourth Reich. I don't think that is in the mind of any Germans. They couldn't do it if they wanted to. They have no incentive to do it.

MR. LEHRER: Ambassador Ruhfus what do you say to somebody who says wait a minute why should the United States, the Soviet Union and the rest of the World cooperate in creating a country, the new unified or the reunified Germany that could be the most powerful nation in the World.

AMB. RUHFUS: I doubt that it could be the most powerful country in the world and I must say that we are part of the European Community we remain committed to the Western Alliance. I think that is the first part. Of course we are aware of the concern of some our neighbors. I think that the strongest argument in our favor is we are speaking in favor of self determination world wide. We give this to any Third World Country. Now if the Germans in East Germany decide on March 18th in free elections that they want to have unity then they turn to us and say lets have the Unity I think that it would be difficult to tell them that self determination doesn't go for you. As the concerns voice as Ambassador Mc Ghee just said there has been a tremendous change in my country and we remain a partner of the European integration and the country we will work for more integration so we will stay a member and very integrated in this alliance.

MR. LEHRER: Mr. Kabus but the East Germans, your countrymen and women are fleeing to West Germany because it is strong. They wouldn't mind being connected with the strongest nation in the World would they?

MR. KABUS: The reason that most of the people going is to get a higher standard of living a better income and better chances to buy things for the money they earn. So this the main reason for people leaving the GDR and I think that a few are going because they feel that the country's fate is full of uncertainties.

MR. LEHRER: East Germany?

MR. KABUS: East Germany and they want to escape to a more safer place which may not be a safer place as such because we do face I think in Germany in the future a situation with high unemployment, with quite a number of social impacts and some people will have second thoughts afterwards.

MR. LEHRER: Ambassador Mc Ghee many West Germans have said and East Germans as well particularly West Germans have said wait a minute United States, Soviet Union, other powers this is basically a decision to be made as Ambassador Ruhfus just said by the people of East and West Germany. Does the United States have a real say so? Should the West Germans listen to what we have to say if for instance the President should decide hey wait a minute slow it down or whatever? Do we have the right to interfere in other words?

AMB. MC GHEE: Well we have the right I believe in the light of our contribution to the recovery of Germany. Did you see the remarks that were made by Chancellor Kohl about his visit to the Soviet Union. He said that he was going to explain to them that the Germans had no right to take advantage of the Eastern European countries and the Soviets had legitimate concerns which they intended to recognize. And so they had said about our particular interest. Could I make one point?

MR. LEHRER: Sure.

AMB. MC GHEE: This idea that Germany is going to be the strongest country in the World is rather curious because what they mean is the German economy would be the strongest or a strong economy and 17 million people to 60 would be a larger economy.

MR. LEHRER: In other words a unified Germany would be 77 million rather than 60. But we in our country don't recognize bigness as being an evil thing. If it is we are the biggest so we are the most evil. If 77 million Germans are prosperous economically within a unified Europe they will have earned it. It is not proof that they seek to dominate or that there is anything bad about them.

MR. LEHRER: Do you agree?

AMB. RUHFUS: Yes I agree and let me add something to the economic problems, of course there is a considerable number which has come over to our country but so far we have been able to cope to a large extent with the booming economy but of course we have an interest to stabilize the situation and give a perspective to the Germans in East Germany so that they can stay and this is why we ate offering this negotiations on a monetary union to give them a perspective to stabilize the situation.

MR. LEHRER: And do you resent the interference and the comments. When you pick up a column and read a column like in the New York Times today or any body else Times today. An American saying this is what West Germans should do, here is what the East Germans should do. You should wait this and do that. Do you feel that is unjustifiable interference?

MR. KABUS: The East Germans will decide and then we will have negotiations but we know that when we have had these negotiations and we have come to terms on unity, of course, it has to be embedded in the European development and the frame work for this is for us the Helsinki Process, the CSEE Process. Once we have come made progress it certainly will be entered on way or the other in to the Helsinki process. Of course we do have allied rights in Berlin, We do have remnants of the occupation powers political influence and decision making and we have to deal with those factors in our political life. It concerns the Federal Republic, West Germany as well as the German Democratic Republic.

MR. LEHRER: If you had to make a prediction tonight, I am going to ask you too. When do you think the two countries will be reunified?

MR. KABUS: I think that it will take couple of two or three years to reach if it goes to the present.

MR. LEHRER: Two or three years sir?

AMB. RUHFUS: Economic and monetary union will go very quickly, the political union including the security solution will take a little longer.

MR. LEHRER: Like two or three weeks on monetary? Two or three years on the other?

AMB. RUHFUS: No I wouldn't give out numbers.

MR. LEHRER: Ambassador McGhee?

AMB. MC GHEE: Former Chancellor Helmut Schmidt said the next century but I think things are moving faster. I would say that with in five years perhaps. There has to be a peace treaty there has to be some reconciliation in Berlin in which we participate.

MR. LEHRER: Thank you Gentlemen. Robin.

MR. MacNeil: Next we turn to one of the most specific dramatic ideas raised this week. On Tuesday, West German Chancellor Helmut Kohl urged East Germany to quickly adopt the West German mark as its currency. Yesterday he created a committee to come up with a plan for economic reunification. As Correspondent Nik Gowing of Independent Television News reports, the proposal was not immediately popular with the head of West Germany's Central Bank.

MR. GOWING: Bundesbank Pres. Karl Otto Pohl rejects speedy monetary union with East Germany, but Chancellor Kohl's cabinet swept aside objections of the country's most senior bankers and voted to push for immediate monetary union. They will now begin talks next week when the East German leader, Hans Modrow, visits Vaughan. The pressure is now on. The East mark is a soft, non- exchangeable currency. Currently one West German mark buys three East German marks at the official rate. East Germans desperately want West marks. The black market rate can be as high as 10 to 1. But the other way, East German marks can't buy West marks and East marks have no value in the West. Chancellor Kohl has defied the economists and bankers and taken a political gamble. He hopes that the East Germans at the prospect of earning West German marks in their jobs in the East will stem or possibly halt the flow to the West. The government in Bonn believes the gamble will work, but a study by one leading East-West think tank says monetary union will not solve the core problem, the dramatic difference in standard of living between East and West. That study concludes that even if East workers are paid in West marks, the discrepancy in real incomes will remain enormous. Following a meeting at the East German State Bank, the top central bankers of East and West Germany continued to have reservations. They both say monetary union is premature without a sweeping program of market reforms in the East, reforms which they agree should take place over what they called a long time. And West German financial institutions in Frankfurt are anxious about the possible destabilizing effect of embracing under the West German mark East Germany's post Communist economic problems. Already the government needs an extra 3 billion pounds for the first stage of the program to bail out East Germany, money likely to be raised from higher taxes on West Germans. Meanwhile, in East Berlin, East Germany's new caretaker coalition today struggled to come to terms with the unrelenting pace of developments. They complain that Chancellor Kohl had failed to communicate directly to them his plan for a new German currency. They'd only heard about it on West German television. Before visiting Bonn next week, Prime Minister Modrow appealed for an easing of the pace.

HANS MODROW, East German Prime Minister: [Speaking through Interpreter] Each side needs time to consider -- that's normal and there's nothing to be said against that; then authorities on both sides should openly make adequate plans; to rush into things ill prepared would not be normal.

MR. MacNeil: Joining us now to discuss the economic reunification plan is Robert Hormats, former Asst. Sec. of State for Economic Affairs, now Vice Chairman of Goldman Sachs International, a New York investment firm, and Friedbert Malt, General Manager of the DG Bank in New York. DG is one of West Germany's largest banks. Bob Hormats, why this sudden leap to the idea of a common currency?

ROBERT HORMATS, Investment Banker: The leap was I think precipitated by the big exodus of East Germans to the West; 2,500 or 3,000 are leaving every day. If this continues, the East German economy will collapse and neither the East Germans nor the West Germans want reunification to take place on West German soil. They want a strong East German economy, they want reforms in East Germany, and they want to have a balanced unity. Also in the West there's a lot of pressure now. The West Germans are not happy about a huge influx of people. It's costing social security money, there's a housing problem, and there's a reaction in the West about this big influx and they would like to slow it down.

MR. MacNeil: Do you think announcing a common currency, just making this announcement, Mr. Malt, would have the effect of persuading East Germans to stay in East Germany?

FRIEDBERT MALT, General Manager, DG Bank: I think the announcement itself will not do the trick, but I guess this is the goal that is associated with trying to come to an agreement with East Berlin about the implementation of this program and that is to establish one currency, and that makes the West German mark in both sides of Germany.

MR. MacNeil: Let's discuss how quickly this could happen. First of all, is the opposition of the West German banking community likely to slow it down?

MR. MALT: No.

MR. MacNeil: No.

MR. MALT: I think there is hardly any opposition and I would not over emphasize either the first indications from the Bundesbank - -

MR. MacNeil: Which is the national bank?

MR. MALT: Which is the national central bank. My understanding is that there is an acknowledgement on the part of the Bundesbank as well that this is more at this point a political matter than an economic matter and it is not the economies who are designing the rules of the game. It is really the people who walk over from one part of Germany to another who are putting pressure on everybody to do something in order that they stay where they are.

MR. MacNeil: All right. Let's discuss the practicalities of this. The East German Economics Minister, Crystal Luf, said today her government can't negotiate this because they've got elections coming up on March the 18th. She also said there wouldn't be any time to make structural changes and create necessary jobs for people made redundant. What does she mean by that?

MR. HORMATS: Well, she means that ultimately East German reforms are going to have to result in closing inefficient factories. A lot of people in these factories, even factories that will remain in existence will have to be fired, because there are redundant workers. So there's going to be massive layoffs as structural reform takes place in the East. Also prices are going to have to go up. There are huge subsidies in the East and the East is going to have to eliminate those subsidies. That means prices go up and that will have a wrenching effect on the East German economy.

MR. MacNeil: So, in other words, having the same currency would mean, in effect, forcing East Germany to adopt a market economy right away?

MR. MALT: Well, I think a common currency under normal circumstances would be at the end of the process of trying to adjust those two economies, and part of that adjustment process which has to take place is for example that they have to come, get away from the planned economy and establish a market economy, that they establish private enterprise, private ownership. There is a whole number, a whole host of changes that need to take place in order that a common currency can function. The problem is that we do not have the time to do one first and then do the second. I thinkmore and more pressure is put on both governments to do this peril at the same time. This will create many times.

MR. MacNeil: If you suddenly went to a market economy, and the Poles are faced with this, and you end the subsidies and you start pricing vegetables and things at their real prices, wouldn't that cause East German workers to flee even faster? I mean, it would make life even harder for them than it is now.

MR. HORMATS: This is part of the problem. The reason for this urgent acceleration of the move toward a monetary union is to stop the outflow of people. The structural forms are going to make more time, so what they're trying to do now is establish either some type of currency union or a favorable exchange rate so they won't leave East Germany to go over and work in West Germany.

MR. MacNeil: So now supposing after the East German elections, the victorious parties agree to negotiate the solution to progress towards a common currency. Could it be done quickly, or would there have to be some phase in transition period in the East German economy? Is it that even realistic? Would it have to happen overnight?

MR. MALT: I think it's quite realistic that it happens very soon.

MR. MacNeil: Faster than they were saying?

MR. MALT: No, Amb. Ruhfus I think indicated that the economic unification will take place much earlier than the political unification and I would agree with that.

MR. MacNeil: But you have economic unification, you have the same currency, you have the same economic system, the free market economy ruling both countries, they speak the same language, they were formerly the same nationality, they have the same political parties contesting the elections. Doesn't that, in effect, become the same country, whatever they call it politically? For all intents and purposes, isn't that reunification?

MR. MALT: I guess in terms of unification, you need to implement this in the greater scope of things and that includes obviously the European scenario and of course --

MR. MacNeil: You need to draw up the legal documents that make it --

MR. MALT: Not only that, but I think it needs to develop a consensus by which somehow everybody who has serious concerns about this development can live with it and become comfortable with it, and I think this is a challenge that Germany has to pass.

MR. MacNeil: Let's discuss the serious concerns about it. What impact would it have on West Germany to do this, to start the same currency?

MR. HORMATS: Well, initially if the Bundesbank printed enough money to convert these East marks into West marks at a reasonably favorable rate for the East, it would require them to print additional sums of money. That's one alternative, and that would add a bit to inflation in East Germany. The other alternative is to create, issue bonds, and the bonds would generate Deutschemarks and the Deutschemarks could be used as sort of a --

MR. MacNeil: You'd borrow money to pay for them?

MR. HORMATS: Borrow money and that would be less inflationary, but probably raise interest rates in West Germany. A third alternative is to increase taxes in West Germany to generate the Deutschemarks which we use, and that would probably slow down the rate of growth to a degree, but it would also create a lot more spending power because East Germans would spend a lot of the money they get and that would boost demand ultimately and probably also contribute a bit to inflation.

MR. MacNeil: What do you see as the cost? I've seen one estimate that it would cost 60 billion marks, which is about I guess something like $35 billion, for West Germany to pay for the effect of doing this economic reunification. What will it cost West Germany?

MR. MALT: I don't think anybody knows. I think it's pure speculation. My feeling is that it may cost more than anybody expects at this point because as days go by, the situation in East Germany deteriorates quickly, and the more the whole development to readjust will cost.

MR. MacNeil: Which will come back to the political equation of whether the West German population would support that politically.

MR. MALT: I think there's every indication at this point that they will support this.

MR. MacNeil: Now does this cost make East Germany weaker economically, or does it make stronger to bring in all these talented, well trained, well educated workers?

MR. HORMATS: There's a short-term cost, a little bit more inflation, perhaps an additional tax, housing shortages for a period of time. The long-term is overwhelmingly beneficial to both Germanies particularly if unification takes place in a reasonably short period of time. It adds a new labor force, a very vibrant labor force, people who want to work, who are reasonably well trained, and it essentially means that the Germany economy now divided will be whole. There is a very dynamic possibility for a united Germany over the next several years, but in the short-term it is costly, and most Germans I think are willing to accept the short-term costs for the long-term benefits. And of course, the general German population favors the political unity and unity of the currency, unity of the Deutschemark, is really the first step toward that political unity. It's probably an indispensable step.

MR. MacNeil: Do you disagree with any of that?

MR. MALT: I would agree with that and it's not only going to be to the benefit of the German economy, German companies. I think it will be to the benefit of all Western European and U.S. companies who are going to make use of the opportunities as they will exist in Eastern Germany as well as in Western Germany, and I think particularly the United States has a long history after the war to contribute to the redevelopment of the German economy and they benefited greatly. And I think whatever happens in East Germany is not only going to be for the benefit for the West Germans. These will be open borders. There will be liberalized trade, liberalized investment laws at some point hopefully, and everybody will benefit. And I think everybody should be encouraged, including those in the United States, to think in terms of what can we do in order to participate in the process at a very early stage.

MR. MacNeil: In other words, it makes the European community bigger by one country, East Germany, if East Germany is --

MR. MALT: That would be the immediate effect, hoping that other European countries will come into that scenario as well.

MR. MacNeil: So are there no negatives? I mean apart from, is it simply a short-term and acceptable absorbable cost to West Germany?

MR. MALT: I would, in economic terms, I think the adjustments that are necessary will create a lot of problems and also burden German taxpayers in one way or another. And that may take time and there may be a controversy that will develop and we don't of yet, but in the final end, I think I would agree with you that it should be beneficial, in particularly beneficial for the East Germans, because this is what it is all about. Let's not forget, they have been losing the second world war for 40 years, but also for the West Germans as well as for the Europeans and as well for the Americans.

MR. MacNeil: Let's talk about Americans for a moment. Chancellor Kohl said today to do this would make Europe stronger. The 1990s will be the decades of the Europeans and not of the Japanese. Does making Europe stronger not also make it a much stronger competitor with the United States?

MR. HORMATS: Europe will be a stronger competitor, that's for certain. It would have been in any case. It certainly will be if the two Germanies unite and also if the Eastern European countries are drawn more closely into the --

MR. MacNeil: I mean, aside any emotional fears about German --

MR. HORMATS: Sure. I don't have those. I think basically it is going to be a stronger Europe, a more competitive Europe, but also a stronger market for the United States, and a better partner, because it's important to recognize that what's happening in Germany and what's happening in Europe is not splitting the difference between the East and the West. It's East Germany joining West Germany. It is the Eastern countries joining Western Europe based on Western values, Western capitalist market principles. This is overwhelmingly beneficial to the West. It's really what the United States wanted when it developed its Post World War II policy, a strong and democratic and market-oriented Europe. It will help us. I was in East Germany in a few days ago and in fact, the East Germans want American investment and want us to play an important role there as do the other Eastern Europeans.

MR. MacNeil: Well, Bob Hormats and Friedbert Malt, thank you both for joining us. FOCUS - MEDICAL MYSTERY

MR. LEHRER: Next a report on a mysterious blood disorder known as EMS that has hit more than 1000 Americans since August; 12 have died. The common link among victims is their use of a popular over the counter dietary supplement taken by millions of Americans. Our report is from Fred De Sam Lazaro of public station KTCA- Minneapolis-St. Paul.

MR. LAZARO: Donna Askenette's visit to the Mayo Clinic and Dr. Joseph Duffy is the latest chapter in a personal horror story. It began last summer when the Madison, Wisconsin, woman was hospitalized for depression.

MS. ASKENETTE: After I was discharged, the doctor put me on the L-Tryptophane.

MR. LAZARO: Used mostly by women, L-Tryptophane has been a popular dietary supplement available in the vitamin section of drugstores. Although sold without prescription, it was recommended by many doctors for weight loss, premenstrual syndrome and insomnia, a common symptom of depression. St. Paul health food store owner John Mastel says the testimonies have been numerous and glowing.

JOHN MASTEL, Health Food Store Owner: Hey, it's the first time in years they had a chance to sleep good and I wish I'd had recordings of some of that. They had been using it for a number of years. I started selling it in 1975 or '76.

MR. LAZARO: Tryptophane is an essential amino acid the human body needs to produce proteins. It occurs naturally in several foods like milk and poultry, a fact that probably accounted for its popularity.

DR. JOSEPH DUFFY, Immunologist: I think the majority of people considered it safe because it's an essential ingredient, they don't consider it a drug or a medication. They consider it a food or a supplement and with that goes a certain assumption that it's a safe product.

DONNA ASKENETTE: I didn't really want to take any medication at all, but because the doctor said that it was a form of a vitamin, I thought, well, I have to take it, it's for my own health.

MR. LAZARO: Instead of getting the relief she was supposed to for insomnia, Askenette says she began to suffer muscular pain, tenderness and skin rashes. The problem has worsened over time and she's been hospitalized twice.

DR. DUFFY: Every place I touch it hurts.

MS. ASKENETTE: When you touch it, it hurts. If I did not have that painkiller, I wouldn't be able to function.

MR. LAZARO: Donna Askenette is one of more than 1200 Americans that have reported similar symptoms. The disease has been called eitsamafalia myalgia syndrome or EMS, and its severity ranges from mild to life threatening. So far there have been 12 deaths in this groups. One thing all patients have in common is that they were users of L-Tryptophane. That prompted the Food & Drug Administration to order it off retail shelves last November. But the number of people coming down with EMS continues to increase steadily. The epidemic has the medical community baffled and has created a steady flow of referrals to centers like Mayo.

DR. DUFFY: The most instructive test would be to do a muscle biopsy. We will get a good idea of how intense the inflammation is and exactly where it's located.

DR. GERALD GLEICH, Rheumatologist: You would think it would likely come on when patients are taking the Tryptophane. That doesn't appear to be the case.

MR. LAZARO: A part of Donna Askenette's biopsy tissue goes to Mayo immunologist Gerald Gleichs' laboratory. Gleich specializes in inflammatory diseases like E

MS. Similar conditions occur in some asthmatics, but until now have never been linked to L- Tryptophane. Gleich says EMS is a kind of infection false alarm that triggers the production of disease fighting white blood cells. These cells are attacking the body's own tissue, mostly muscle, causing the painful inflammation.

DR. GERALD GLEICH, Rheumatologist: Something is clearly signaling the bone marrow that it's time to make -- we need to identify what it is that's giving that signal that allows us to identify the substance and in turn may allow us to identify how the administration of L-Tryptophane would stimulate that substance.

MR. LAZARO: What confounds doctors like Gleich is that L- Tryptophane is not directly triggering the disease. Many patients who've stopped taking the drug have remained ill, gotten worse, in fact. Gleich says many consumers of L-Tryptophane are becoming ill months after they stop taking it.

DR. GLEICH: When you look at the epidemiology, it seems that there's a few cases out here in time, back in '86, maybe '85, surely '87, '88, and then suddenly in '89, there's this tremendous increase in cases, an epidemic in short.

MR. LAZARO: Suspicion in such situations usually centers around a possible contaminant in the product, however, tests by the federal government have turned up nothing that can be linked to the painful blood disorder. Another theory is that certain individuals have body metabolisms that react adversely to high doses of L- Tryptophane. That doesn't explain why some became ill with small doses and the sudden epidemic.

DR. GLEICH: It appears that the vast majority of people who have taken L-Tryptophane are not ill. That's the good news. The bad news on that point may be that a certain proportion of those asymptomatic Tryptophane users, nonetheless, have certain abnormalities which one can detect in their blood with careful testing.

MR. LAZARO: In other words, these healthy individuals could well have developed symptoms had they continued on L-Tryptophane, and they may yet do so. Disease specialists say millions of Americans are potentially at risk.

MICHAEL OSTERHOLM, Epidemiologist: L-Tryptophane is a very important public health problem, but it's just a symptom of a much larger problem in this country in terms of looking at food safety.

MR. LAZARO: Michael Osterholm is Minnesota State Epidemiologist. Random surveys by his office show that nearly 3 percent of the general population used L-Tryptophane in 1989. Some 4 percent, nationally that would be 10 million Americans, have used the food additive at some point since it was first introduced in the late '70s.

MICHAEL OSTERHOLM, Epidemiologist: There have been many issues, as you're well aware, associated with licensure of various drugs and how to look at safety and what information is required before a product should be licensed in terms of relative benefit versus risk. Here's an example of something that completely fell through the cracks, a food additive, a food supplement.

MR. LAZARO: Osterholm says compared to procedures that police the production and distribution of prescription drugs, there's only scant federal government scrutiny of over the counter products like food additives and supplements. He says the resulting lack of data about substances like L-Tryptophane makes it difficult to investigate epidemics like the one linked to it.

DR. OSTERHOLM: There are many many products on the market today where because it's something that's already in the food if we concentrate it more, or we put it in tablet form or we put it in a capsule, it's no different than eating its raw form or its basic form in nature, therefore, it should be safe. We just have not even looked at this issue yet.

MR. LAZARO: And doctors say in an age of increasing health consciousness, consumers will have to re-think a commonly held belief.

DR. GLEICH: Individuals who say an injection of natural products -- as I said, L-Tryptophane is a normally occurring amino acid which is essential to life -- obviously have been given the lie - - it's clearly not the case.

DR. DUFFY: It's been a valuable lesson that we cannot take anything for granted in terms of what we ingest for medical or therapeutic or preventative purposes. We always have to be careful and because it is available, a substance is available over the counter, doesn't necessarily mean it's going to be safe, and that it would be wise to clear all substances of this sort with a local physician, your family doctor.

MR. LAZARO: It's a lesson for doctors, as well as the general public. In many cases like Donna Askenette's it was the local family doctor who put her on L-Tryptophane. Askenette says she's learned her lesson.

MS. ASKENETTE: If I can get through this, and I've never been one to take anything other than an aspirin before, if I can get through this, I am not going to take another pill no matter what.

MR. LAZARO: As she struggles to pull through, Donna Askenette is surviving on a potent battery of painkillers and steroids. Each has dangerous side effects, but so far it's all doctors can come up with. As for her getting through the so-called einisofilia myalgia syndrome --

MS. ASKENETTE: What are my chances?

DR. DUFFY: For recovery?

MS. ASKENETTE: Right.

DR. DUFFY: I wish I could give you a straightforward answer, and I cannot right now. We've had very little experience with illnesses like this before now.

MS. ASKENETTE: And I will be scheduled for a biopsy that will - -

DR. DUFFY: Right. We can go out and set that up right now. Okay?

MR. LAZARO: As doctors at Mayo work to come up with answers for EMS patients, there have been recent reports that the federal Centers For Disease Control has identified a contaminant. It was reportedly traced to certain batches of L-Tryptophane imported from Japan where most of the substance is commercially produced. CDC officials, however, caution that their suspicions are still in the hypothetical stage and have yet to be confirmed by chemical analysis.

MR. LEHRER: This week a Portland, Oregon, woman who contracted the disease filed a $20 million lawsuit against a Japanese manufacturer of the supplement. ESSAY - WINTER WONDERLAND

MR. MacNeil: We close with our Thursday essay. Jack Perkins, who lives on an island off the Coast of Main, has some thoughts about winter in the country.

MR. PERKINS: If you live up here in the country, you're bound to get the question. A friend who lives in the city asked me the other day in the kindliest way, doesn't it get awfully desolate there in the winter? Well, let's see. Desolate, first definition, deserted? Deserted? Now, this little town near us is a tourist town, out of season its streets are quiet, many of its storefronts boarded, their snowbird owners flown South, most restaurants and bars are closed. What the town does this time of year is what the countryside does, pull back, simplify. Winter is when nature reduces itself to the essentials, no flamboyant blossoms, or colorful fruits. Winter is a monochrome. Life's energies must be husbanded, for the ultimate essential is survival and trees and birds and people must realize that. Now isn't that good, to be forced once a year to put aside the embellishments, vivid blossoms or bars and deal with only the essentials of life? Deserted? No, this is a splendid isolation. So second definition, unfit for habitation. Well, at times it does get cold and at times it does get very cold, 10, 20 below, taxing, testing cold, the kind you suffer and survive and are proud. You complain about it, but as a way of boasting. To say our weather has been ferocious is to say we who endure it must be terrific. Not fit for habitation? Well, we'd like others to think so, but only as a way of flattering ourselves. The third definition, dreary or dismal. Overcast days tend to do that. The fact that days are shorter can do that. Cabin fever sets in or as scientists call it, SAD, apt acronym for Seasonal Affective Disorder, shortness of light affecting the physiology, winter can depress, but the answer to that and to many of winter's blues is simple, if seemingly counterintuitive, don't huddle indoors where winter seems to drive you. Get outside. You'll get more light and less depression and fewer colds because colds, of course, aren't caused by cold, but by being inside with other people's germs. Snow is not hazardous to your health. In cities, it falls and goes instantly dingy, in cities, it's a burden soon ugly, but in the country? Not dreary, not dismal. And the fourth definition, without hope. On the contrary, this is the season of hope. In nature's withdrawing and simplifying is the hope of next spring's burgeoning. Not long will it be before trees sense winter's loosening grip and sense sap gushing through veins, dripping into sugar in buckets. Nature is readying, as the town living in winter's hope is preparing for one more time of bursting forth. Town, trees, people, hope suffuses all. Some people choose to ignore it, mutter and gripe, but their problem is themselves, not winter. If they chose, they could appreciate the splendid isolation, the pride of enduring nature's tests, the splendor, the hope. Desolate? Oh, no, my city friend, not if you don't want it to be. RECAP

MR. LEHRER: Again, the major stories of this Thursday, emergency crews worked to contain the damage from an oil spill off the Coast of Southern California and Pres. Bush said he hoped an agreement on a new trade agreement with the Soviet Union would be ready by summer. Good night, Robin.

MR. MacNeil: Good night, Jim. That's the Newshour tonight and we'll back tomorrow night. I'm Robert MacNeil. Good night.