Rumania fails to pay debt

Press, 26 February 1982, Page 5

Rumania fails to pay debt

NZPA Washington Rumania, following Poland’s example, has failed to pay the Commodity Credit Corporation SUSS.B million it owes for American agricultural products, the “Washington Post” said in yesterday’s editions.

Agriculture Department officials said that cheques covering ' Rumania’s debt would be issued this week to reimburse two New Yorkbased banks handling collection of money due from the Eastern European country on Government commodity loans, according to the newspaper.

“It’s pro forma.” a Deputy Under-secretary of Agriculture, Thomas Hammer, was quoted as saying. “I would imagine that the next step is for someone at the State Department to go talk to the Rumanians.” Rumania, like Poland, is " in the grip of a severe economic crisis and late last year imposed food rationing at wartime levels. Rumania is the second Soviet-bloc nation to fail re-

cently to pay money owed for loans either made directly or guaranteed by the Commodity Credit Corporation, a branch of the United States Agriculture Department.

Poland missed payments totalling SUS 77 million owed to United States banks. The Reagan Administration said last month it would pay the banks on the grounds that a default by Poland would erase the debt and leave the United States with less leverage for eventual collection.

The “Post” said that First Chicago International and the European-American Bank paid the Commodity Credit Corporation ?USS.B million on behalf of Rumania on the due dates last month. When the banks were unable to collect from Rumania’s bank for foreign trade, they asked the Credit Corporation for' reimbursement, the newspaper said. “We are under a legal obligation” to reimburse the banks, Mr Hammer was quoted as saying.