Group of 7 Expects Banks to Join In Deferring Soviet Debt Payments
TOKYO -- The Group of Seven industrial nations, which agreed last week to let the Soviet Union defer debt repayments, strongly expects private creditors to accept the same terms and conditions, an official of Japan's Finance Ministry said.
If private creditors do not agree to comparable treatment, the agreement on deferral of public debt may be in peril, he said.
The official said there was a very strong possibility the private creditors will accept the plan.
Another Meeting Set
Details of last week's accord to defer Soviet debt repayments will be decided at a special meeting of creditors, the official said. The meeting could be called within a matter of weeks.
The official said private creditors to the Soviet Union are strongly expected to accept the same terms and conditions.
Senior Group of Seven finance officials decided last week to defer financial payments by the Soviets for up to one year to help that country through the economic crisis accompanying its transition to a market economy.
No Authority Involved
The Japanese official said the official agreement carries no authority to force private creditors to join. But he said the Soviets would ask private creditors to join and the G-7 nations - the United States, Canada, Japan, Britain, France, Germany, and Italy - believe that comparable treatment of public and private debt is very important.
A finance ministry official said Friday that the Soviet Union was likely to begin talking with countries outside the G-7 and private creditors about deferring debt payments.
The official said the finance ministry won't instruct private creditors to defer payments, but he noted that the government has expressed its feeling that deferral is desirable. The official said the finance ministry won't negotiate with the Soviet on behalf of private creditors. The official said Friday that the amount of debt covered by the G-7 deferral plan amounted to roughly $4 billion.
Self-Interest Pointed Out
On Monday, a separate finance ministry official said it would be beneficial for private creditors to accept the debt deferral plan.
If private creditors don't accept deferral, and a shortage of foreign exchange forces the Soviet Union to default, it would be "disastrous for private banks," the official said.