West Unlikely to Forgive Soviet Loans, U.S. Says

Western governments are considering temporary measures to help the Soviet Union through a looming debt crisis, sources said Thursday, but a top U.S. official insisted that forgiving the loans permanently is out of the question.

The issue is likely to dominate a meeting in Bangkok, Thailand, later this month between Soviet officials and the so-called Group of Seven. It will mark the first time that the Soviets have attended an official session of the group of leading industrial democracies, made up of the United States, Japan, Germany, Britain, France, Canada and Italy.

By the year’s end, the Soviets could face payments of more than $10 billion on their official debt, which exceeds $60 billion. And they already are several billion dollars in arrears in payments to Western companies.

As the magnitude of the Soviet debt problem becomes clearer, the industrial countries are “groping to try to figure out if there’s a way we can do something,” said one official, who asked not to be identified.

But Treasury Undersecretary David Mulford said: “Reducing (Soviet) debt is not on the agenda, not on anybody’s agenda.” He refused to comment on specific options, however.

Another official said the possibility of a bridge loan to the Soviets has been all but ruled out. More likely, he said, is the possibility that creditor nations would permit the Soviets to delay payments.

Officials have stressed that the size of the overall debt is not in itself particularly worrisome. Although exact figures are unavailable, “you would not find the Soviet Union in the category of some of the big Latin American debtors,” Mulford said.