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The emerging democracies of Eastern Europe need financial assistance both from Uncle Sam and the private sector, according to Rep. John J. LaFalce.

But American business people and legislators need to recognize that the Warsaw Pact countries are not all alike. They are distinct nations with vastly different needs, the Tonawanda Democrat said during a recent interview.

"We have to have a country-by-country strategy, not just an Eastern Europe policy," LaFalce said, explaining he spent two weeks earlier this month leading a Congressional delegation to Poland, East Germany, Hungary, Czechoslovakia and Yugoslavia.

"We don't yet know what new type of economic system will emerge," he said. "But there are going to be some problems, including economic dislocation."

Because of America's huge budget deficit, however, an economic assistance program such as the Marshall Plan, which rebuilt Western Europe after World War II, isn't possible. Thus, LaFalce is encouraging low-budget multilateral efforts and private initiatives.

The congressman has suggested forming an Eastern European development bank, similar to other multinational lending agencies; granting more favorable trading status to nations; sending Peace Corps volunteers behind the Iron Curtain, and encouraging American citizens with family ties to the area to consider helping their relatives.

"What can Buffalo do? Buffalo can't take on the world, but maybe it can take on one city in each country," LaFalce said, explaining a sister-city program would help strengthen Western New York's already strong links to Eastern Europe.

President Bush also should expand the Office of Ethnic Affairs, so it can coordinate the activities of those ethnic communities that wish to help their homelands, the congressman said.

"We have to trade with them. We can't let these countries be swallowed up by West Germany," LaFalce warned.

"We must do everything in our power to establish a secure environment for all countries in the post-Cold War era -- beginning and ending with Poland," he added.

LaFalce is worried about events in Warsaw. He noted that Poland's inflation reached 900 percent last year and its foreign debts total $40 billion.

The U.S. Ambassador to Poland, John Davis, told the congressman that "in 1989 we witnessed the triumph of Poland's democratic revolution; 1990 promises to be the year of economic revolution: at this point, we are not sure about the outcome."

While LaFalce said he is confident that Poland will survive its current economic woes, he acknowledged that the new Solidarity government has embarked on an austerity program that will test the people's faith in democracy.

"I came away from Warsaw with the distinct impression that, more than ever, Poland is looking to the United States for help as it tackles new challenges. We must give it," he said.

Poland isn't the only Eastern European country looking toward America and the European Community for help. LaFalce also outlined the diverse problems facing the other countries he visited:

Yugoslavia: Ethnic strife threatens to overwhelm this country as it struggles with rampant inflation. Yugoslavia, however, has a strong exporting program and $6 billion in convertible currency reserves. Thus, it is urging American companies to establish joint-ventures.

Czechoslovakia: "They aren't looking for American loans, they want educational and cultural ties with the West. They want to rejoin Europe," LaFalce said.

East Germany: Despite having the highest standard of living behind the Iron Curtain, East Germany has made the least progress toward democracy. Unless the reformed Communist party moves quickly, revolution could develop.

Hungary: "Its leaders hardly expect miracles . . . But they do recognize that expanded trade and investment ties with Western countries holds the key to future competitiveness in global markets," LaFalce said.

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