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Current Soviet Indebtedness and the Future Availabilityof Credits from Western
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level of Sovietto the West and the type and prospectsWcsCern credits available to the
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Current Soviet Indcbtedness and the Future Availability of "Credits Trom Western Europe and"
Soviet outstanding medium and long-term debt to the West is estimated2 billion at the end4 . It will grow steadily in the near futuro given the recent growth in Soviet orders from tho West and the willingness of Western Europe and Japan to support their sales to the USSR with long-term credits. Western credits tb the USSR generally fall into two categories: general lines of credit extendedpecific period of time toroad range of capital goods sales and credits or credit lines grantedase-by-caso or project basis. General Lines of Credit
The Franco-Soviet credit agreement signed in48 billion line of credit valid for five years. This credit lino is similar to the one granted foreriod. Judging from past experience, the USSR can expect additional credits from France if the Soviets exhaust8 billion line
In5 the United Kingdom agreed to provide the3 billion lino of creditive-year period with interest rates1% and with repayment over as manyears. The interest rate and repayment period are dependent on the size of the contract.
Canada announced an agreement with the USSR whereby Canada will make available up0 million Canadian to finance Canadian exports to the USSR. All of the credit is to be utilized within two years. Case-by-case Basis
While Italy, japan, and West Germany Jo not provide the USSR with general lines,of credit, they doajor portion of capital goods purchased by the USSR. The USSR has received substantial creditsose countries in recent months. The amount of credit extended in the future will be dependent on the signing of specific contracts There does not appear to be any discernible limit to the willingness of any of these three nations to continue their credit support, although the ability of Italy to continue to-do so is questionable. Italy
Italy has recently refused Soviet requestseneral line of credit of the type recently provided by France and the united Kingdom, since the beginning of the year, however,Italian government has agreed to extend0 million in long-terra credits at subsidized rates to cover Soviet purchases of largo-diameter pipes and chemical plants. The Soviets are now in tho process of negotiating sizable capital goods purchases from Italian firms and additional credits will probably bo advanced over the next few yearsase-by-case basis.
The West German government haa refused to subsidize credits to the USSR and has also refused to support buyers credits of any type to the USSR. The government, however, does provido risk insurance on export credits andarge consortium of West'German banks which together are able to finance substantial amounts of West German exports to the USSR. Late last year, for example, Soviet purchases0 million in large diameter pipe0 million in largo trucks wore financed by long-term credits.
Japanese credits are available to the USSR onlyaso-by-casc basis, and are subsidized by low-interest funds from Japan's Export-Import Bank. apan granted the0 million lino of credit to finance the jointdevelopment of Siberian, forestry and coal reserves. Inapanecond buyers credit to cover the sale3 million in ammonia plants.