EUROPEAN COMMUNIST COUNTRIES' HARD CURRENCY DEBT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79M00467A002400040003-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 16, 2016
• Document Release Date: June 22, 2005
• Sequence Number: 3
• Publication Date: July 1, 1976
• Content Type: REPORT

Approved elease 20 1 I~RDP79M0 002400040003-9
European Communist Countries' Hard Currency Debt
The European Communist countries* incurred hard
currency deficits in 1975 of about $12 billion as imports
soared and exports to recession-hit Western countries slumped.
As a result, total hard currency debt rose by more than
40% to about $35 billion. Although a substantial volume
of government-backed credits were used, Communist borrowers
were forced to rely heavily on private banking sources to
deal with their deficits and debt service -- about $9
billion was borrowed on. the Eurocurrency market. At yearend
1975 Eurocurrency debt was roughly $16 billion, almost half
of the total outstanding debt.
The biggest Communist borrowers were the USSR and
Poland. Because of the sharp rise in their debts, both are
encountering some difficulties in raising new bank loans.
Nevertheless, they continue to place large orders for
Western equipment and grain. Banker confidence in Poland
probably has been eroded further by Gierek's handling of
the recent difficulties. Romania and Yugoslavia also may
encounter difficulty in borrowing in Eurocurrency markets
but they are now attempting to control their debts by
curbing imports. Bulgaria, despite a gigantic 65% debt
service ratio, seems to be obtaining Western bank credits
without great difficulty,.,
* The USSR, Bulgaria; Czechoslovakia, East Germany, Hungary,
Poland, Romania, and Yugoslavia.
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European Communist Countries: Estimated Hard Currency Trade and Debt and Debt Service
(Billion US$)
Indebtedness Current Account Debt Service Debt Service
at Year End Deficit Exports Payments Ratio l/
1970 1975 1975 1975 1975 (percent)
25
USSR
Eastern Europe
Poland
East Germany
Romania
Hungary
Bulgaria
Czechoslovakia
Yugoslavia
2.00 10.00 5.20
4.63 18.99 5.83
0.77 6.87 2.93
0.99 3.77 0.97
1.23 ti 2.97 0.38
0.60 2.10 0.58
0.70 '/ 1.83
0.64
0.33
2.14 5.60 0.96
7.80 1.75 22
10.89 3.67 34
3.06 1.31
2.65 0.65
1.95 0.74
1.10 0.35
0.40 0.26
1.73 0.36
2.56 1.14 45
1. Repayments of principal and interest as a percent of hard currency exports.
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Approved For Release 2005/07/13 : CIA-RDP79M00467AO02400040003-9
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If you wish to clarify with Sec. Simon
his statement that Soviet hard curJency
debt soared froia 21--- to b.0 billion, from
our figures this 40 billion repr::scnt
JS,'R plus Pastern Europe.
Maurice Ernst says there is no significant
difference between Treasury figures and
CIA's on this question.
proved For Release 2005/07/13 : CIA-RDP79M00467AO0240004
 Approved For Release 2005/07/13 : CIA-RDP79M00467AO02400040003-9
Approved For Release 2005/07/13 : CIA-RDP79M00467AO02400040003-9