U.S., Allies Weigh Soviet Debt Package : Finance: The leading economic powers--known as the Group of Seven--are looking at how to help the Soviets grapple with their liquidity problems.

The United States and its principal Western allies are considering a combination of temporary debt-relief measures for the Soviet Union, including both a deferral of principal payments and a “bridge” loan, Treasury Undersecretary David Mulford told a Senate panel Monday.

Some analysts have estimated that, with a significant part of their $70-billion debt coming due in the next few months, the Soviets could be facing a shortfall of more than $5 billion.

Mulford told the Senate finance subcommittee on international debt that the situation is likely to become “quite tight” and that the Western allies are exploring ways to give the Soviets “a breathing space of something like six months to a year to try to sort the situation out.”

The primary option being considered is a deferral of Soviet principal payments, Mulford said. However, he added, that may not yield enough relief to see the Soviets through the crisis, so it might be backed up by temporary financing, in which Soviet gold might be used as collateral.

Mulford insisted that the leading economic powers--known as the Group of Seven--are in broad agreement on how to help the Soviets grapple with their short-range liquidity problems.

After a meeting between the group and Soviet representatives last week in Thailand, however, several European officials said publicly that they had rejected a U.S. proposal that Soviet principal payments be deferred. They also said that the Soviets had not asked for any such relief.

Germany, in particular, was reluctant to make such a move because its bankers hold the largest share of Soviet debt. By comparison, the Soviets owe relatively little to the United States.

One U.S. official, speaking on condition that he not be identified, said that the differences among the allies lie in “nuance, tactics and so on.”

The official said the disagreements center on such issues as how the action should be portrayed publicly, whether the allies should wait until the crisis occurs or head it off in advance, and whether they should require the Soviet central government and the 12 republics to have an economic union in place before granting debt relief.

Mulford told the panel that it may not be possible to wait for an economic union treaty, which would spell out such issues as tax and budget policy, trade relations and--perhaps most important to creditors--how the republics and the central government will share their responsibilities for debts.

“We don’t have the luxury of waiting for all the pieces to be dealt with and fall into place,” Mulford said.

The undersecretary repeated his earlier assertions that the overall debt load is not too heavy for a country the size of the Soviet Union and that its long-term solvency picture is not so gloomy.

But subcommittee Chairman Bill Bradley (D-N.J.) said he is not so sanguine, particularly in light of the rapid deterioration of the Soviet economy.

“I don’t know if I agree with your statement describing (the problem) as temporary,” Bradley said. “My fear of course is, if you defer for six months or a year, you get to the end of six months to a year and suddenly the debt is now 50% of (gross national product) and inflation is now 800%--and you haven’t really improved the situation.”