Western government creditors should, in all cases, be accorded equal or pari passu treatment with private bank creditors in debt rescheduling negotiations.
Details of the debt rescheduling will now be announced on August 24th.
The reconfigured Soviet center is also collaborating with Western governments to stave off an imminent Soviet debt rescheduling by quick infusions of taxpayer-guaranteed funds.
The situation is sufficiently dire that a substantial possibility exists that China will face the need for a formal or informal debt rescheduling within the next several years.
What is called for now is expanded debt rescheduling covering several years beyond 1992 (including the debt contracted after 1 January 1991), to say nothing of debt forgiveness.
Western government creditors should, in all cases, be accorded equal or pari passu treatment with private bank creditors in debt rescheduling negotiations, which is not now the case.
Oppose further debt rescheduling for Cuba, Nicaragua and other Soviet proxies so long as they are engaged in regional aggression, narco-terrorism, abuses of human rights or other misdeeds.
Risk: Western governments and banks will threaten to deny any new credits to Russia or other CIS member states if the latter insist on substantial debt rescheduling or forgiveness.
And for the moment, the international interest in the region, besides resulting in military assistance, has helpfully translated into more aid money and debt rescheduling for its poorer countries.
They artificially lower the interest rates and increase the size of credits as the risk of any future debt rescheduling or default is transferred from private commercial banks to Western taxpayers.
The only difference as in the case of Donald Trump is that it saves embarrassed creditors the loss of face involved when imprudent lending results in an overextended borrower requiring a formal debt rescheduling.
"The Soviet Union is already in a piecemeal debt rescheduling with a series of 'quiet' Western government 'refinancings' likely this year -- all in the interest of avoiding a more formal and debilitating Paris Club process, " Center Board member Robinson said.
What distinguishes this area, however, from others (such as ruble convertibility schemes, balance of payments relief, debt rescheduling, etc.) is that it could result in improving the Soviet military's capabilities to build more advanced weapons for its own arsenal and for export.
CENTERFORSECURITYPOLICY: Help With Soviet Conversion Is Risky
They are, not surprisingly, desperately urging their allies in the West to inject new taxpayer-underwritten credits to the new Union now so that German firms and banks can be at least partially paid out before the balloon goes up on a formal debt rescheduling.
CENTERFORSECURITYPOLICY: The U.S.-Soviet Trade Agreement: Overtaken By Events
Terminate all Western government guaranteed loans to the USSR and other Warsaw Pact countries which, by definition, transfer the risk of any future Soviet debt rescheduling or default from the commercial banks involved to Western taxpayers and which artificially lower the interest rates on such loans.
Risk: It will be argued that Western banks and possibly the international financial system as a whole will be badly damaged by any interruption in repayment of outstanding principal and interest due on Soviet debt beyond the already agreed debt rescheduling of principal-only for 1992.
If an inevitable Soviet debt rescheduling is undertaken now, we can clear the decks albeit with substantial pain of pre-coup communist debt and get to the task of working closely with the most reformist republics to bring them into the Western economic and financial community.
Our response to such appeals should be straightforward and firm: Those profligate Western governments and banks (especially in Germany, Italy and France) which showered credit guarantees and direct loans on the now-discredited central authorities in the Kremlin must shoulder most if not all of the burden and costs of Soviet debt rescheduling and forgiveness.
CENTERFORSECURITYPOLICY: The U.S.-Soviet Trade Agreement: Overtaken By Events
The banking laws introduced at the beginning of the month were intended to buy time while the second stage of the debt-rescheduling plan is completed.
Even if Greece's official creditors give some leeway, by slightly lowering interest rates or rescheduling debt payments, the threat will remain that Greece will have to leave the euro.
Then they suggested a rescheduling of debt payments to German banks.
There is also growing optimism that Pakistan will get generous terms for rescheduling its debt with the Paris Club - a club of rich states which lend money to less developed countries.
All Western financial assistance measures intended to stimulate Polish reforms such as IMF support, Paris Club rescheduling and debt relief, OPIC coverage and GSP eligibility must be fully reversible in the event of subsequent political crackdowns, financial default, or other missed milestones.
"a generous rescheduling of official debt and reductions of 50% or more of the principal on official debt" in Paris Club arrangements.
The sharply increased use of bonds and other securities has actually compounded the problem of moving such governments toward disciplined, transparent financing methods and made more difficult the rescheduling of such debt instruments during periods of financial distress.
His remarks came just before a meeting in Tokyo that was to discuss rescheduling Indonesia's debt.
It should be understood, however, that there is no real distinction between an involuntary debt refinancing and a publicly announced rescheduling.
Inevitably, there will be strenuous efforts made by the Bush Administration, other Western governments and numerous private banks to stampede the former Soviet Union into a commitment to secure all debt obligations beyond the very limited rescheduling of principal payments already agreed for 1992.
An international outcry is no less in order now regarding the incipient EU rescheduling of Syria's external debt.
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