§ Lord Kennetasked Her Majesty's Government:
Why they have a bilateral debt agreement for £1.576 billion with Poland when no outstanding export credit loan to any other country exceeds £0.5 billion; what transactions this debt covers, and what are its implications for Poland's entry into the European Union and NATO, and consequent need to meet extra expenditure. [HL2518]
§ Baroness Symons of Vernham DeanExport Credits Guarantee Department (ECGD) have world wide exposure and commitments to the order of £30 billion. The United Kingdom has signed debt rescheduling agreements with 55 countries involving some £7 billion. The amount outstanding under the Polish debt agreement currently stands at £900 million. It arose following non-payment under a wide range of capital goods contracts entered into by UK companies prior to 1984. Half of the outstanding Polish debt was written off by 1994. The remainder is due to be repaid by 2009. Poland's ECGD exposure places it outside their top ten, and its figure for unrecovered ECGD claims is by no means the highest. The Polish government is maintaining a tight stance on macro-economic policy. Foreign direct investment, which is non-debt creating, remains high (around £4 billion in 1997 and £5.5 billion expected in 1998). We therefore do not expect Poland to experience problems in servicing its debt in connection with its NATO and EU membership preparations.