Loan for Romania

Late last year, the Community agreed on a medium-term loan of ECU 375 million to Romania. Commission Vice President Henning Christophersen and Director-General Enrico Cioffi signed the contract for the Community and Romania was represented by Economic and Finance Minister George Danielescu and Central Bank President Mugur Isarescu.

The loan was one of a series of G24 measures intended to provide $1 billion support for the Romanian balance of payments (the Community and other members of G24 had committed about $730 million for 1991 at that stage).

It was paid over in two instalments, the first of them, ECU 190 million, immediately, so as to repay a bridging loan which the Community's central banks made in September 1991 in anticipation of the Community loan. The second instalment was paid in early 1992.

When signing the loan contract, Henning Christophersen welcomed the progress Romania was making with its reform programme and said how important it was to pursue reforms geared to the market, so as to get on with changing the economy and ensure that growth takes off again and the standard of living improves. The Community, he said, was particularly in favour of unification of the exchange markets and the forthcoming introduction of convertibility of the Romanian currency.

ECU 500 million credit guarantee for Russia

Mr Van Miert, the European Commissioner responsible for credit and investments, welcomes the ECU 500 million credit which the Community has guaranteed for Russia.

The guarantee, originally intended for the Soviet Union, is to cover a loan which a banking consortium headed by the Deutsche Bank has granted for the purchase of food products in accordance with the exchange of letters between the European Community and the Soviet Union, represented by Mr Silaev, on 26 November 1991. The dismantling of the Soviet Union, and particularly the reorganisation of the banking structures, meant that lengthy negotiation was required to ensure that the whole operation went off smoothly.

An exchange of letters between Mr Van Miert (on behalf of the Commission) and the Russian Government (represented by Mr Bourboulis, the Prime Minister) clarified the situation and settled problems related to the guarantee. The banking consortium can therefore go ahead with the loan for the Republic of Russia, which will enable food to be supplied rapidly.

New boost for Community food aid for Russia

New developments have occurred in the Community programme three months after the Maastricht decision to grant food aid worth ECU 200 million to the cities of Moscow and Saint Petersburg.

Mid-way report on an innovative programme

ECU 5 million-worth of humanitarian relief (2600 tonnes of food and 271 t of medicines and medical supplies) was channelled through the NGOs when the operation began and the Community is now completing its despatching of two instalments-worth ECU 10 million end ECU 85 million-covering 13 000 t of milk powder, 12 500 t of butter and 47 200 t of beef.

More than 40% of what has arrived so far has been put on sale in State shops. The prices were fixed in the light of trends in the 'market' and are currently lower than those charged elsewhere, especially in other shops. Goods have gone faster in recent weeks, in particular because there are now more sales points (700 in Moscow and 450 in Saint Petersburg). More than 2200 t of meat were sold in Moscow on 16-22 March, a considerable increase on the 950 t of the previous week, and stocks have been reduced to provide meat for sausages-more than 3000 t in Saint Petersburg and 4000 t in Moscow.

Money accruing from the sale of these foodstuffs will go straight into the counterpart funds set up in the two cities.

Losses have stayed within reasonable limits, by and large, the average being less than 1.5%-the satisfactory result of the monitoring and control prescribed by the Commission. With a task force of 60 experts from the Member States, specialists from three Community companies and the support of the Russian authorities, the Commission has indeed set up an efficient system there. More than 100 people are involved in the operation.

Fresh stimulus

First use of the counterpart funds

The counterpart funds enable the Community to reach underprivileged sections of the population - some of whom, selected with the help of the Russian authorities, have been getting allowances or meals in local canteens since early March.

Thanks to the sale of the first ECU 10 million instalment, the Moscow fund has already allocated a monthly R 150 increase to 222 000 people on retirement pensions. Single mothers, large families, any family with a handicapped child of under 16 and families with no income will also be getting R 150 per month for a period of three months. More than 618 000 schoolchildren get the equivalent of R 45 per month for their meals.

In Saint Petersburg, 33000 students (orphaned, disabled, married, pregnant) have received an R 150 allowance and 33 000 pensioners and invalids will be getting free meals in local canteens (equal to R 450 per person) for a period of three months.

All in all, the sale of the first two instalments of Community aid (ECU 10 million + 85 million) will make it possible to assist more than 3 million people in Moscow and Saint Petersburg.

Goods put out to public sale contract

A public sale system, based on sealed bids and aimed at macro-consumers and groups of retail shops, started operating this week. Traders who undertake to stick to the rules (on wholesale bans, local consumption etc) will be getting quantities of about 20 t.

Next instalment-ECU 100 million- released

Once it had received formal applications from the two cities, the Commission produced a list of products to be sent out in April and June. Although milk products are still the priority, other things such as oil, baby food and sugar are creeping in. Meat will not be so important this time.

Extending the operation to other cities

Other Russian cities have expressed a need for assistance so the Community has decided to extend the operation to Nizhny Novgorod, Saratov and Chelabinsk, which will each be receiving 1000 t of milkpowder, 500 t of baby food and 100 t of sugar (worth ECU 10 million in all).

European Community and Lithuania initial a trade and cooperation agreement

On 1 February 1992, Community and Lithuanian delegations initialled a trade and economic and commercial cooperation agreement-the first agreement between the two since the EC recognised Lithuania's independence in August 1991. The Lithuanian delegation was led by Vytenis Aleskaitis, Minister for External Economic Relations, and the Community delegation by John Maslen, head of unit at the Commission of the European Community.

The new agreement is similar to those which the Community has negotiated with various countries in Eastern and Central Europe over the past couple of years, but there are innovations. In particular, specific quantitative restrictions on Lithuanian goods imported into the Community have been removed. Like its predecessors, the agreement includes the most-favoured nation clause for trade, cooperation in a wide range of economic fields and the setting up of a joint committee to monitor trends in relations between the two parties. It also provides for other agreements to be negotiated in particular sectors in the future.

Emergency aid

Estonia

Urgent humanitarian needs calling for immediate action led to the Commission's recent decision to provide ECU 250 000-worth of emergency aid for Estonia.

It will be used to buy, shift and distribute about 500 t of sugar and will be implemented by the Commission's usual partners or the Commission itself.

Armenia

ECU 500000 are being provided to cope with humanitarian needs arising from Armenia's domestic troubles. This will be used to buy, shift and supply medical equipment, medicines and first aid and hygiene equipment and will be implemented by Pharmaciens sans Frontieres, France (ECU 400 000).

The Directorate-General for Development will allocate the ECU 100 000 reserve (via the European Humanitarian Relief Office as soon as it begins operation) as eligible requests come in from the Commission's usual partners.

Azerbaijan

Azerbaijan has had internal troubles, in Upper Karabakh, and ECU 500 000 are being provided to cope with the situation and the humanitarian needs it has triggered. The aid will be used to buy, shift and supply medical equipment, medicines and relief and hygiene equipment and will be implemented by Medecins sans Frontieres, Belgium.

Bosnia-Herzegovina

Displaced persons in Bosnia-Herzegovina are to get food aid from the Commission.

The decision to send 1500 t of flour was taken one day and implementation began the next, the rate of delivery being 200 t (in 10 trucks) per day. The transport is being organised by the Commission and distribution by the UN High Commission for Refugees, via the local Red Cross.