HC Deb 21 October 1991 vol 196 cc313-4W
Mr. Rowlands

To ask the Chancellor of the Exchequer what assessment he received from the Soviet Union of the Soviet economy at the meeting of the G7 in Bangkok; and if he will make a statement.

Mr. Norman Lamont

Finance Ministers of the G7 and central bank governors discussed recent developments in the Soviet economy and the need for urgent economic reforms at sone length with the Soviet team, which included Mr. Yavlinsky, deputy chairman of the committee for the operational management of the national economy, and M r. Geraschenko, chairman of Gosbank. It was clear from these discussions that the Soviet Union is facing a growing economic crisis with output falling and with growing budget deficits at the union and republic levels leading to an increase in inflationary pressures. The Soviet team also discussed the prospects for a new treaty on economic union and prospects for economic reform.

I refer the hon. Gentleman to my speech of 16 October to the annual meetings of the IMF and World bank, a copy of which has been placed in the Library.

Mr. Rowlands

To ask the Chancellor of the Exchequer what estimate he has made of the contributions of each other EEC country in grants, credits and guarantees towards the Soviet Union since 1989; and what percentage these are of their gross national product.

Mr. Maples

Amounts of outstanding export credit guarantees are not published, but the following countries have all pledged packages of loans and credits to the USSR recentlyGermany. A DM 5 billion general purpose loan was announced in June 1990. A package of loans/grants linked to troop withdrawal from ex-GDR, DM 15 billion over four years, was announced in September 1990. Other loans and credits including recently agreed export credits for the purchase of goods from the ex-GDR were reported at DM 9 billion. France. Pledged loans and credits of FF 5 billion in 1990. Italy. Pledged loan guarantees worth Lire 7,200 billion in September 1990, plus export credits worth Lire 3,800 billion up to 1994. Spain. Offered loans and credits worth $1.5 billion in 1990 for purchases of Spanish food, consumer durables and capital equipment to be disbursed over two to three years. Comprehensive figures on disbursements and their timing are not available, and therefore it is not possible to calculate the percentages requested.

Mr. Rowlands

To ask the Chancellor of the Exchequer what is the estimated amount in grants, credits and guarantees the United Kingdom has contributed towards the support for the Soviet Union since 1989; and what these amounts represent as a percentage of gross national product.

Mr. Maples

Much of the United Kingdom's assistance is provided in conjunction with our European community partners through the EC budget. The United Kingdom share of which is currently about 18 per cent. This includes:

  1. (i) 250 mecu—£175.8 million—in food aid which is now being disbursed, and 500 mecu—£351.6 million —in food credit guarantees, which has not yet been used pending final agreement with the USSR on terms.
  2. (ii) 1,250 mecu—£879 million—in new standby credits, guaranteed by the EC budget to cover imports of food and medicine. This was agreed in principle in ECOFIN on 7 October, following a United Kingdom initiative.
  3. (iii) A decision has been made to commit 400 mecu— £281.3 million—in technical assistance in 1991 and a further amount in 1992.

The United Kingdom provides bilateral assistance to the USSR in the form of the know-how fund. The fund was originally set up in November 1990 and more than doubled to £50 million over three years following President Gorbachev's visit to the United Kingdom in July. The United Kingdom has provided aid following the Chernobyl nuclear accident totalling £255,000.

In addition the Export Credits Guarantee Department has guaranteed a number of export credits, but it is not normal practice to give details of credits to individual countries.

It is not meaningful to add up these separate elements, and to provide a figure for percentage of GNP.