HC Deb 09 January 1990 vol 164 cc578-9W
Mrs. Gorman

To ask the Secretary of State for Foreign and Commonwealth Affairs what is the level of direct economic aid which Her Majesty's Government has provided(a) bilaterally and (b) through the European Community to (i) Poland, (ii) Hungary, (iii) Bulgaria, (iv) Czechoslovakia and (v) East Germany since the beginning of 1989; and whether any such assistance will be used to construct free markets.

Mr. Waldegrave

We have so far committed funds only for Poland and Hungary. Details are as follows. A great deal of our total aid is being used to encourage the development of market economies. We do not yet have programmes for the other countries of eastern Europe but stand ready to respond to their needs at the time they put into place the necessary economic and political reforms. United Kingdom Assistance for Poland

Bilateral

  • Know-How Fund (50 million over 5 years)
  • Agricultural project (£15 million)
  • Short-term ECGD cover
  • Investment insurance through ECGD (war and expropriations risk only)

EC

  • Free food supplies (UK share: £4–5 million)
  • EC budget allocation (UK share: £9–14 million, depending on size of abatements)
  • Trade measures (QRs and GSP)
  • European Investment Bank (EIB) lending (1 billion ecu over a number of years for both Poland and Hungary)

Other international

  • Stabilization Fund (UK contribution: $100 million)

Prospective

  • Debt rescheduling in Paris Club ($4 billion in 1990, of which UK would account for about 18 per cent.)
  • IMF drawing (about $700 million over 18 months)
  • World Bank/IFC loans (up to $1 billion over a number of years)
  • United Kingdom Assistance for Hungary

Bilateral

  • Know-How Fund (£25 million over 5 years)

EC

  • EC budget allocation (UK share: £9–14 million, depending on size of abatements)
  • Trade measures (QRs and GSP)
  • European Investment Bank (EIB) lending (1 billion ecu over a number of years for both Poland and Hungary)

Other international

  • IMF drawings under last SBA (July 1988-June 1989): (Total loan 265 million SDRs ($350 million) of which 215.35
  • SDRs (about $275 million) were drawn)
  • World Bank: loans outstanding: $1,165 million (30 June 1989)
  • IFC: commitments: $36 million

Mrs. Gorman

To ask the Secretary of State for Foreign and Commonwealth Affairs what plans Her Majesty's Government have to provide economic assistance to Poland, Hungary, Czechoslovakia and the German Democratic Republic.

Mr. Waldegrave

We are assisting Poland and Hungary through the know-how funds and other bilateral aid efforts, as well as our contribution to EC programmes. We, together with other OECD countries, have declared our willingness to respond positively to other countries in eastern Europe at the time they put into place necessary political and economic reforms.

Mrs. Gorman

To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make it his policy to ensure that bilateral and European Community assistance to the emerging democracies in Eastern Europe emphasises the mechanisms needed to create free markets in those countries.

Mr. Waldegrave

The know-how funds for Poland and Hungary set up by the Government aim to provide the skills needed to run free market economies and democratic societies. A great deal of EC project aid for these countries will be directed at vocational and management training.