PROTECTIONISM SEEN THREAT TO E. GERMAN DEVELOPMENT

PROTECTIONISM SEEN THREAT TO E. GERMAN DEVELOPMENT

A desire in East Germany to protect outmoded state-run companies from competition threatens the potential for "dynamic" growth there, said Otto Lambsdorff, chairman of West Germany's Free Democratic Party.

In remarks prepared for his speech at the National Press Club last week, Mr. Lambsdorff said that opening East Germany to the West already has had a profound effect on its centrally planned industry."As was to be expected, the government-owned companies in (East Germany) are now no longer able to sell their products, since they are unable to compete with the products from the West which are now available," he said.

"As a result, the idea has arisen in the GDR of late to protect the German economy from this new competition by imposing quotas and import duties." He said that this inclination, represented already in a plan to stabilize agricultural markets, would be "getting off on the wrong foot."

"Sealing off the (East German) markets would only delay necessary adjustments," Mr. Lambsdorff said. "Wrong price signals would be given and there would be new structural mismanagement. This would not be of benefit either to the economy, nor to the people of the GDR."

Mr. Lambsdorff is a former economic minister and now leads a minority party in West Germany's ruling coalition.

Most of his remarks Friday were directed at the coming economic and monetary union of the two Germanys July 1. He noted that he was the first politician to push for a rapid political unification by the end of 1990, and predicted that it would be achieved by early next year.

He also predicted that the Soviet role in unification would continue to revolve around economic matters.