
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 15, 1990                   TAG: 9003152668
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/3   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                 LENGTH: Medium

U.S., SOVIETS AT ODDS OVER LOANS

The Bush administration is embroiled in a dispute with the Soviet Union over a new international lending organization being created to foster economic reform in Eastern Europe.

Treasury Secretary Nicholas Brady said Wednesday the United States will refuse to participate in the new bank unless the Soviets are prohibited from borrowing any more money than they put in.

Brady also said the United States insists that the loans made by the proposed European Bank for Reconstruction and Redevelopment be limited to democratic countries.

But Soviet Finance Minister Valentin Pavlov, wrapping up three days of meetings with Brady and other U.S. officials, took issue with both points, charging that it was part of an effort by the United States to politicize the bank.

Brady called the lending issue a "real sticking point" in the effort to establish the new international lending institution to promote economic development in Poland, Hungary and other emerging democracies in Eastern Europe.

Plans call for the bank to have a lending pool of $12 billion in capital contributed from participating governments.

Brady said the United States did not want loans to the Soviets to divert resources from other nations that are further along in their democratic reforms.

The Soviets have asked to be included in the bank and are tentatively scheduled to contribute 6 percent of the bank's $12 billion in capital.

American officials are weighing contributions ranging from 8.5 to 11 percent of the bank's capital.

Brady said the Bush administration had no objection to allowing the Soviets to take loans up to the level of its contribution to the bank because that would not result in any net loss of funds available for other countries.

by CNB