HC Deb 22 November 1949 vol 470 cc197-8
49. Mr. Keeling

asked the Chancellor of the Exchequer when first the Italian Government refused to acknowledge their liability to honour their guarantee to repay 20½ per cent. of the drawn bonds of the Austrian conversion loan, 1934–59; what reason they gave; and what further representations are being made by His Majesty's Government.

Sir S. Cripps

The Italian Government's attitude on their default, which dates back to 1939, is given in the Press announcement of 13th July, 1948, to which I referred the hon. Member on 5th April, 1949. We shall continue to press the Italian Government to meet their obligations.

Mr. Keeling

Yes, but would the right hon. and learned Gentleman state when they first disputed their liability—a fact which was first revealed by the Economic Secretary only two or three weeks ago?

Sir S. Cripps

I stated, in 1939.

Lieut-Commander Gurney Braithwaite

Is it not the case that the Italian Government are at present in possession of a sterling credit of some £40 million? Would it not be reasonable for those arrears of withdrawings, which amount to no more than £750,000, to be met?

Sir S. Cripps

That is a question of who is giving the decision as to what is reasonable.

58. Lieut-Colonel Sir Cuthbert Head-lam

asked the Chancellor of the Exchequer what steps he has taken since 1st July, 1949, to induce the Czechoslovak Government to terminate its default in respect of the Austrian Government Guaranteed Loan, 1934–59; and whether His Majesty's Government have accepted the interpretation of Article 8 of the Trade and Financial Agreement of the 28th September, 1949, which holds the Czechoslovak Government liable to fulfil its guarantee, but not necessarily until the last day of the duration of the agreement, namely, 30th June, 1954.

Sir S. Cripps

After protesting against this default, His Majesty's Government made every effort during the recent financial and trade negotiations to ascertain the standpoint of the Czechoslovak Government and to induce them to pay. It appears that the Czechoslovak Government contend that their guarantee was. conditional on the continued operation of certain measures of international control over the Austrian Government's finances, which have lapsed. His Majesty's Government have supported the Trustees in rejecting this contention entirely. Several other Governments are involved, and discussions are proceeding through the diplomatic channel. The answer to the second part of the Question is in the negative.