MULTILATERAL SETTLEMENTS INCREASING IN EASTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001000300002-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: November 16, 2016
• Document Release Date: April 6, 2000
• Sequence Number: 2
• Publication Date: May 23, 1961
• Content Type: BRIEF

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CURRENT SUPPORT BRIEF
Copy No..
23 May 196;1.1
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MULTILATERAL.SETTLEMENTS INCREASING IN EASTERN EUROPE
OFFICE OF RESEARCH AND REPORTS
CENTRAL INTELLIGENCE AGENCY
This report represents the immediate views of the
originating intelligence components of the Office
of Research and Reports. Comments are solicited.
W-A-R-N-I-N-G
This document contains information affecting the national defense of
the United States, within the meaning of the espionage laws, Title 18
USC, Sections 793 and 794, the transmission or revelation of which
in any manner to an unauthorized person is prohibited by law.
C-O-N-F- I -D-E-N-T- I-A-L
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MULTILATERAL SETTLEMENTS INCREASING IN EASTERN EUROPE
For the first time data have become available which indicate
that there has been a great deal of activity going on to promote
multilateral trade within Eastern Europe. According to the Bul-
garian journal Vunshna Turggviya the volume of goods agreed to be
settled through multi ateral clearing from September 1959* to August
1960 amounted to 600 million rubles ($150 million).** By contrast,
multilateral circuits arranged through ECE from July 1959 to June
1960 were valued at $15.9 million, representing only one fourth of
the total of balances originally offered for disposal through the ECE.
Although bilateralism is not being given up as the basic method
of conducting trade in the Bloc, its disadvantages are now being
recognized And the advantages of multilateralism extolled. In fact
Vunshna Turgoviya goes so far as to say "The future belongs to mul-
tilateral p^'aymments." Multilateralism, it is now said, expands trade
beyond the confines of trade agreements, is "more progressive," makes
possible a "more meaningful" composition of trade turnover, reduces
costs, and utilizes additional production capacity.
CEMA countries have had to restrict their trade because of the
necessity to balance receipts and payments bilaterally. As an addi-
tional consequence, goods "have been directed from their natural
channels and traditional markets... Such goods should not be allowed
to leave the area of the socialist world market nor-be involve in
a tripartite operation involving one or more capitalist countries."
The new view of multilateralism therefore is not one that is
world-wide in scope but rather is confined to the Bloc. But within
this area, Vunshna Turgoviya argues, multilateral trade should be
unlimited. oo s row m the regular plans for export and import and
goods destined for re-export must also be offered.."
Since about the middle of 1959, Western European countries
have drawn the Eastern European countries increasingly into trade
and payments agreements which compel the cessation of bilateral
balancing and the acceptance of automatic transferability of bal-
ances. (see Table) In these agreements, it is not the Eastern
European currencies which are automatically transferable; accounts
are held in the currency of the Western. European country, and in
this currency, which in most cases today is fully convertible, the
creditor can demand payment. In practice, where full transferability
of balances has been established, agreements typically have meant the
termination of swing-procedures and increased pressure on the Eastern
countries to balance their accounts or make payments in convertible
currencies. Since the latter is difficult for them to do, other so-
lutions must be found. (Multilateral clearings through the ECE agent
have not been a satisfactory solution, for these have declined steadi-
ly.***) Hence, both from within and without the CEMA area, the pres-
sures are on for multilateralization of trade.
*The-sate of the first "trade meeting" sponsored by the CEMA
Commission for Multilateral Clearing.
**As of December 1960 not all shipments had been contracted for
by the Bloc partners, and as yet no later information is avail-
I-
con i ~.
***See(CIA/RR.-CB-61-17,' 16 March 1961.
23 May 1961
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Czecho- East
Albania Bulgaria Slovakia German Hungar Poland, Rumania USSR
Partial
Extent of Automatic Transferability of Earnings and Balances
of C M Countries in the E Region*
Austria
Belgium
Denmark
.France
West Germany Full
Greece
Iceland
Ireland Full
Italy Full
Netherlands Full
Norway
Portugal
Sweden
Switzerland Full
Turkey
UK
Finland
USA
C-O-N-F-I-D-E-N-T-I-A-L.
Full Full** Full Full Full Full Partial
Full** Full** Full Ft,13,
Partial Full** Fu1.1 ''
Full Full Full Full Full Full Full
Partial
Full Full Partial
Full Full Full Full Full Full F"u! 1.1
Full Full Full Full Full Full Full
Full** Full** Full** Full** Full** Full.** Partial
Partial Partial
Partial Partial Partial Partial
Partial
Partial Full** Part iial
Partial Partial Flu:,l l
Full Full Full Full Full
Partial Partial
Full Full Full Full
Partial.
Full Full Fiuj.I I
Partial Partial
Full, Full Y all
u in icates that all earnings an,d alaiaes are rans
means that transferability is applicable to a portion or to obligatory
settlement of debts beyond swing limits.
**Since June 1959.
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V'unshna,Turgoviya, no. 1, 1961 U.
conom-c.omm te6 for Europe Committee on the Development
of Trade, Trade/106,.add. , corr. 2, 6 Mar 61. U.
3. International. Monetary Fun , Annual Report on Exchange Re-
strictions, no. 11, 196 . U.
23 May 1961 CIA/RR-CB-61.30
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