EXTERNAL DEBT -- WHAT IS IT?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R001100380001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 22, 2016
• Document Release Date: August 20, 2010
• Sequence Number: 1
• Publication Date: July 2, 1984
• Content Type: MEMO

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Memorandum r'or:
Attached is a copy of West European debt
statistics your office requested. Also, there is
a Text Box explaining the definition of foreign
debt which will appear in forthcoming Intelligence
Assessment on_West European foreign debt..
I shall be on holiday until July 15. If there
are any Questions please ca11 me upon my return
I hope we can be of further .assistance.
2 July 1984
Office of European Analysis
Gv~~~ ~y-s~~ 3~
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Text Box 1
External Debt -- What Is It?
Following the definition used by the International Monetary
Fund (IMF), external debt is the total stock of obligati~.ons
residents .of one country owe to the rest of the world. It
comprises all short-, medium-, and long-term liabilities of the
private and public sectors, including bonds, bank loans, bank
deposits, trade credits, letters of credit and bankers'
acceptances. Liabilities to a country's own citizens living
abroad, and liabilities to nonresidents that are denominated in
the country's own currency are part of foreign debt under this
geographic approach, although these two categories are a very
small part of the total.
Because of data and reporting problems country debt
compilations cannot be completely accurate. Ironically, West
European debt data are generally more difficult to compile than
data on LDCs, which are published by the World Bank. Although
the ZMF, Bank for International Settlements (BIS)- and
Organization for Economic Cooperation and Development (OECD) are
improving their collection systems, comprehensive disaggregated
data are not available on a timely basis. Moreover, countries
experiencing debt problems often hide or delay publication of
data so that creditor confidence is not jeopardized. This is
done by including borrowing activity in vague categories such as
i. - EUR M 84-10139
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"other capital flows" or by increasing the relative amount of
short-term debt -- liabilities with a maturity of one year or
less. Accurate figures for short-term .debt do not usually exist
until well after the end of a calendar year. As a result, short-
' term debt can swing greatly during the course of a year and may
or may not surface as a problem depending on other financial
flows. Portugal and France, for examgle, have used short- term
debt extensively without the market as a whole becoming fully
aware of the extent of the borrowing activity. 25X1
Conceptual (problems also require making
judgmental adjustments to the data. In countries where the banks
are significant international financial intermediaries--Austria,'
Belgium, France, Italy, the Netherlands, Spain, Switzerland, the
United Kingdom, and West Germany--short-term foreign currency
liabilities are included only to the extent they exceed short-
term foreign currency assets. We have made this adjustment
because the amounts owed by banks in these countries are to a
large extent deposit liabilities--a good portion of which are
interbank deposits--used to finance lending as well as redeposit
activity. Intercompany indebtedness between the nonresident
parent and local subsidiary is technically a part of total debt
but often not reported as such. Instead, in most countries this
credit is reported, if at all, as a component of direct
investment and is generally not separately identified, Finally,
it is also common practice among countries not to report nonbank
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trade credits. These intercompany obligations skirt the normal
letter-of-credit paper trail through banks and simply do not make
it into the reporting system; these figures are relatively
sma 11.
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Table 1
Western Europe: To
ta
l Externa
l Debt
--
(billions US $)
1978
1979
1980
1981
1982a
Total Western Europe
410.9
547.1
595.7
626.8 ~
681.9
WE-12
204.1
254.5
303.3
334.7
369.5
Belgium
8.0
14.1
19.2
26.0
31.0
Denmark
25.8
30.4'
30.4
31.8
33.4
Finland
13.C
14.2
17.1
17.6
19.1
France
50.3
65.8
81.1
92.1
106.1
Greece
5.8
6.5
8.6
10.0
11.2
Iceland
0.9
Z.0
1.1
1.2
1.4
Ireland
8.1
12.0
15.0
16.5
18.9
Norway
28.3
32.6
33.9
32.1 ..
31.0
Portugal
7.8
9.9
12.3
15.6
18.5
Spain
19.7
24.1
29.9
34.4
37.4`
Sweden
20.9
26.9
34.3
36.8
38.9
Turkey
15.5
16.8
19.4
21.6
22.6
Other WE ~
206.8
252.6
292.4
292.1
312.4
Austria
9.7
11.7
14.3
14.7
13.3
Italy
36.3
39.5
52.8
61.3
66.0
'
Netherlands
12.2
16.2
20.0
15.9
16.8
Switzerland
15.8
2I.6
26.0
25.3
28.6
United Kingdom
53.6 ~
66.0
71.8
61.8
68.3
West Germany
79.2
97.6
107.5
113.1
119.4
Preliminary
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Western Europe;
Change in Total External Debt
(Percent change)
1978-
1979
1980
1981
1982a
1982
Total Western Europe
23.4
17.5
5.2
8.8
66.0
WE-12
24.7
19.2
10.4
10.4
81.0
Belgium
76.6
35.9
35.4
19.2
287.5
Denmark ?-
18.0
-0.1
4.6
5.2
29.5
Finland
9.8
19.9
2.8
8.8
46.9
France
30.8
23.3
12.3
16.5
110.9
Gzeece
12.4
31.8
15.9
12.3
93.1
Iceland
11.1
13.7
7.0
14.9
55.6
Ireland
47.7
25.4
9.6
-14.9
133.3
Norway
15.3
3.9
-5.3
-3.3
9.5
Portugal
27.1
24.?
26.8
18.6
137.2
Spain
22.Z
23.7
15.4
8.7
89.9
Sweden
28.6
27.4
7.3
5.7
86.1
Turkey ~
8.9
15.1
11.4
4.5
45.8
Other WE
22.2
15.8
-0.1
7.0
51.1
Austria
20.5
22.1
2.5
-9.4
37.1
Italy
8.8
33.7
16.1
7.7
81.8
Netherlands
32.8
23.5
-20.7
5.9
37.7
Switzerland
36.8
20.3
-2.7
13.0
81.0
United Kingdom
23.1
8.8
-13.9
10.5
27.4
West Germany
23.3
10.1-
5.2
5.6
50.8
a Based on preliminary debt data.
25X1
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Table 3
Western Europe:
External Debt as a Share of GDP
__..
_
(percent)
1978
1979
1980
1981
1982a
Total.Western Europe
16
16
17
20
23
~~TE-12
19
20
21
26
31
Belgium
8
13
16
27
37
Denmark
46
46 ~
46
55
59
Finland
38'
34
34
36
39
France
11
11
12
16
20
Greece
18
1?
2l
27
30
Iceland
41
40
38
40
54
Ireland
66
69
84
99
108
Norway
70
69
59
56
S5
Portugal
44
49
54
66
79 __
Spain
13
12
l4
18
21
,Sweden
23
25
28
33
40
Turkey
30
24
34
37
43
0 they WE
14
14
14
16
18
Austria
17
17
19
22
20
Italy
14
12
13
18
19
'
Netherlands
9
10
12
11?
12
Switzerland
19
22
26
27
30
United Kingdom
17
~ 16
14
12
15
West Germany
12
13
13
17
18
a Based on preliminary debt data.
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Table 4
.Western Europe: External Debt Service Ratio*
1978
1979
1980
1981
1982a
Total?Western Europe
26
26
29
35
38
WE-12
26
30
32
40
43
Belgium
6
9
12
17
29
Denmazk
51 ~
49
59
60
66
Finland =
35
30
44
61
67
France
23
24
30
41
44
Greece
34
29
23
33
41
Iceland
28
25
29
36
43
Ireland
30
37
67
86
84
Norway
46
45
32
~38
39
Portugal
46
43
62
93
129
Spain
31
29
32
40
43
Sweden
29
29
30
42
49
Turkey
155
163
106
73
77
Other WE
25
23
26
32
35
Austria
36
34
3l
39
42
Italy
3l
26
27
40
42
?
Netherlands
7
7
8
9
9
Switzerland
15
18
22
27
'28
United Kingdom
18 ~
17
23
28
26
West Germany
35
35
36
42
44
* Interest lus lus a ments on Ion and short-term debt, as a
p p p y g- percent
pf exports of goods and services.
a Based on preliminary debt data. Ratios for Iceland and Ireland are 25X1
based on lGR1 nvf,r.rtc of nr,r,Ac pnA core{~+ce
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Table 5
Western Europe: Total Debt as a Pezcent of
Exports of Goods and Services
""
1978
1979 ~
1980
1981
1982a
Total Westezn Europe
55
53
54
~ 59
66
WE-12
72
70
?0
78
85
Belgium
14
19
22
30
3?
Denmark
15I
143
126
138
150
Finland
123
104
98
100
117
France
44
45
47
54
67
Greece
98
89
102
109
192
Iceland
100
91
92
100
128
Ireland
117
141
146
172
NA
Norway
166
152
120
112
113
Portugal
200
187
178
248
314
Spain
88
80
88
102
108
Sweden
77
77
87
99
111
Turkey
535
560
524
365
286
Other WE ~
44
43
43
46
53
Austria
4?
45
46
52
48
Italy
50
42
50
61
67
?
Netherlands
19
20
21
17
19
Switzerland
46
56
60
61
~71
United Kingdom
53
49
43
39
47
West Germany
45
47
46
51
54
a Based on preliminary data.
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WE-12:
Table 6
Months of Imports Covered by Foreign Exchange Holdings
?
19?8 1979
1980
1981
1982
western Europe
2.1 2.1
2.2
1.7
1.5
WE-12
1.2 l.6
2.5
1.4
1.1
Belgium
0.6 0.7
0.9
0.5
0.4
Denmark
1?.8 1.5
1.4
1.1
1.0
Finland
1.3 1.2
1.1
0.9
0.9
France
1.0 1.4
1.8
1.4
1.1
Greece
1.9 1.5
1.3
0.9
0.9
Iceland
1.8 1.7
1.5
1.9
1.3
Ireland
3.7 2.2
2.5
:2.4
2.3
Norway
1.6 2.1
2.5
2.7
2.9
Portugal
1.8 l.5
0.8
0.5
~0.4
Spain
5.4 5.0
3.2
3.0
2.2
Sweden
1.7 1.0
0.8
1.0
1.0
Turkey
2.0 1.5
1.7
1.5
1.1
Other WE
2.6 2.5
2.0
1.9
1.8
Austria 3.0 1.6
1.7
1.9
2.1
Italy 1.9 2.3
2.2
2.0
1.4
Netherlands 0.7 1.0
1.3
1.1
1.3
Switzerland 7.2' S.~S
4.4
4.3
5.0
United Kingdom 1.9 1.7
1.5
1.1
0.9
West Germany 3.3 3.7 -
2.2
2.2
2.3
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Table 8
WE-12: Foreign Debt and Current Account Estimates
(Billions US$)
Foreign Debt Current Account
'
Total a
Percent of GDP
OECD
Balancesb
1983
1984
1985
1983
1984
1985
1983
1984
1985
wE-12
.383.0
390.5
390.5
34
33
33
-14.3.
-7.9
-0.9
Belgium
31.5
32.0
,''30.5
39
37
34
-0.5
-0.3
1.5
Denmark
34.5
36.0
37.0
6I
61
60
-1.2
-l.5
-1.0
^inland
20.0
21.0
22.0
42
41
40
-1.0
-1.0
-0.8
'.~1nce
110.0
112.0
111.5
2I
21
20
-4.0
-2.0
0.5
13.0
15.0
17.5
38
44
48
-I.9
-2.0
-2.3
.:.3
1.5
1.5
1.5
61
61
61 ~
-0.1
0.0
0.0
. ? '~ ~ndc
19.5
20.0
20.5
107
108
108
?1.1
-1.1
-0. 5
;I~rway
28.5
26.0
24.0
53
50
47
2.5
2.3
2.0
Portugal
20.0
21.0
21.5
101
110
116
-1.5
-0.8
-0.8
Spain
40.0
40.5
40.5
26
26
24
-2.4
-0.5
0.0
Swedend
40.0
39.5
38.0
44
111
38
-1.1
0.5
1.5
Turkey
24.5
26.0
26.0
51
48
48
-2.0
-1.5
-1.0
a Projected. Based on current account balances and rounded to the nearest
one-half billion dollars.
s i s in governmen po ides.
assumes no ma 25X1
c Ireland's current account figures for 1983 and 1964 are official Irish
~yc;nbers reported by the US Embassy in Dublin and were not available to the OECD f
?~ublication in the July Outlook.
d The OECD 1985 current account forecast for Sweden we believe is overly
:.~timistic and should be closer to $0.5 billion. 25X1
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Distribution: West European Foreign Debt Statistics
Orig -
4 - IMC/CB
1 - D/EURA
2 - EURA Production
3 - EURA/EI
2 - EURA/EI/EI
1 - Author
DDI/EURA/EI/EI
(2Ju1y84) 25X1
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