Poland to Seek Debt Aid In Wake of Bush Pledge
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Poland plans to step up its efforts to obtain debt relief in the wake of President Bush’s pledge of increased economic aid, the president of the country’s central bank says. Poland plans to step up its efforts to obtain debt relief in the wake of President Bush’s pledge of increased economic aid, the president of the country’s central bank says. Calling Mr. Bush’s proposals a ”turning point” in economic relations with the United States, Zdzislaw Pakula, the central bank’s head, said in an interview on Friday that Poland would seek early relief within the Paris Club, a group of creditor governments. He said Poland would also seek increased credits from commercial banks. After Poland announced that it would legalize the Solidarity union and take other steps toward greater democracy, President Bush said the United States would offer debt relief and increased investment loans. Debt of $39.2 Billion Mr. Pakula set forth his ideas on Poland’s staggering debt, which totaled $39.2 billion at the end of last year. He said Polish proposals for the Paris Club would include restrictions of debt service to a set percentage of Polish import earnings, as well as interest rate relief. He declined to provide specifics, but Western diplomats have said that Poland would seek to limit the percentage of export earnings spent on debt service to about 15 percent, from about 25 percent now. The concessions Poland will seek from commercial banks, Mr. Pakula said, include increasing the value of revolving credits needed to finance industry, increasing short-term credit lines and the resumption of long-term credits, which were severed in the wake of Poland’s imposition of martial law in December 1981. Approval for Projects Seen In November, the International Finance Corporation, a World Bank affiliate, paid out German mark loans equivalent to $17 million to a frozen-food enterprise, Hortex, and Mr. Pakula said two further projects were expected to be approved soon. The first involves a joint venture between Poland’s largest tourist enterprise, Orbis, and Western European partners to restore the Bristol Hotel, one of Warsaw’s most splendid turn-of-the-century landmarks. The second, a glass-making venture between Polish and Japanese companies, focuses on a $170 million project to upgrade manufacturing at a factory in Sandomierz, in southern Poland. The value of the credits is expected to exceed $50 million. Inflation Called Biggest Threat Mr. Pakula avoided harsh criticism of the Government’s previous economic policies, but described the Polish economic situation in stark terms. He called inflation, which is expected to exceed 100 percent this year, ”the greatest present threat to the process of political and economic reforms.” |