U.S. Agrees to Return Gold To Baltics and Ease Barriers
President Bush announced Wednesday that the United States was granting most-favored nation trading status to Latvia, Lithuania, and Estonia and would move "as soon as possible" to unfreeze Baltic gold and other assets that have been safeguarded for more than 50 years.
Baltic government officials had asked the Bush Administration to help jump-start their nascent economies after they were granted independence.
In 1940, Estonia, Latvia, and Lithuania jointly deposited 24.2 tons of their bullion with the central banks of the United States, Britain, and France.
Before the Annexation
The gold, now worth about $260 million, was spirited away before the Soviet Union annexed the Baltic states at the onset of World War II.
The Estonian state central bank wants the bullion to launch a new gold-backed currency, the kroon, according to its governor, Rein Otsason.
The kroon is to be gold-based, as Estonia has no reserves of convertible Western currencies, he says.
The United States holds 82,000 ounces of Estonia's gold, valued at $29.2 million. It also has $300,000 in blocked Estonian private assets, frozen after Moscow's annexation.
The Treasury Department said in Washington on Wednesday that the United States has a total of $52.2 million worth of gold from all three Baltic countries.
Britain Voices Willingness
France has already returned its share of the Baltic gold hoard.
Britain sold its Baltic gold, totaling some 14 tons, as part of a trade and financial package with the Soviet Union in 1967.
However, the British Foreign Office said this agreement with Moscow was never intended to preclude any claims from independent Baltic states.
"The British government is open to applications for the gold," the spokesman said.
Estonian state bank governor Otsason says the U.S.-British share of the bullion is "very necessary" for establishing the Estonian currency, part of which is already printed, as his nation develops its monetary and banking independence from the Soviet Union.
President Bush also announced an unspecified economic aid package for the three Baltic states.
Separately, a study by the European Community says the Baltic states will need $2 billion to $3 billion a year in Western aid to assure backing for the new currencies they are minting. [Tabular Data Omitted]