• Short Summary

    The crisis in Poland and, in particular, its financial implications have been of increasing concern to Western bankers.

  • Description

    WARSAW, NOVEMBER, 1981: GV PAN Women and children line up for food outside shop--CU Men, women and young children waiting--women carrying food from shop--CU child eating bread (5 shots)

    KONIN DISTRICT, 1981: GV Pigs being led to slaughter house in meat factory-SV dead pigs hanging on conveyor belt-SV meat joints in container trolley PAN TO men preparing meat on conveyor (3 shots)

    GV/SV Ham being sliced--CU Sliced meat PULL BACK TO women weighing meat--CU tins of ham on conveyor belt (3 shots)

    CZARNKOW, 1981: SV People marching along road carrying Rural Solidarity banner--SV INTERIOR woman addressing Rural Solidarity meeting (3 shots)

    GV PAN OVER Farm building-GV tractor and woman raking ground--SV INTERIOR farmer throwing hay into cow shed--SV woman feeding cows (4 shots)

    WARSAW, 1981: TRACKING SHOT Cars lined up at petrol station--GV Taxis lined up at station--GV PAN ALONG cars TO petrol station (3 shots)

    FRANCE, 1981: SV People handing parcels over counter--SV woman handing over large package--SV packed boxes loaded into container (3 shots)

    GV Soviet truck along road in Poland

    PARIS, 1982: GV Conference building and CU sign "Centre de Conferences Internationales"--GVs bankers arriving (6 shots)

    FRANKFURT, WEST GERMANY, 1982: SV sign "Dresdner Bank--SV woman at bank counter--CU sign "Exchange"--SV man looks at exchange rates on board--GV people at counters of bank (5 shots)

    WARSAW, DECEMBER, 1981: TSV Polish soldiers walking through snow--TV Polish police walking to car--GV military vehicle through streets--GV military vehicles in Victory Square (4 shots)

    KATOWICE: SVs Coalminers working in pit-- SV & CU coal passing on conveyor belt-GV & CU Coal loaded on to barges (8 shots)

    Initials B

    Script is copyright Reuters Limited. All rights reserved

    Background: The crisis in Poland and, in particular, its financial implications have been of increasing concern to Western bankers. Encouraged by their government, they have lent more than 16 billion dollars (16,000,000,000 dollars) to the Poles -- they are now discussing how they can ever get their money back. West German banks made it clear they will only grant the Soviet Union new credits if it helps Warsaw pay its debts.

    SYNOPSIS: The state of Poland;s economy is now critical - the nation's output reduced by a fifth in two years. A severe shortage of basic foods means a long wait outside the shops an supermarkets. The people are said to have accumulated big surpluses of cash....they have little to buy, but want to spend their money before inflation pushes even higher.

    Poland's martial law government plans to raise the cost of food and fuel by between 200 and 400 per cent -- price reforms aimed at soaking up the inflationary excess of money. Previous attempts by Polish governments to raise food prices have led to widespread social unrest. This time, wage increases to compensate workers will be given when the prices go up.

    Last year, Poland's private farmers won an eight-month struggle when their independent trade union, Rural Solidarity, was legalised. The government has now appealed for an increase in deliveries from the farmers who cultivate about 80 per cent of the country's arable land. Poland's official media has recently described "alarmingly low stocks" of some essential agricultural products and appealed to the farmers' goodwill for the survival of their patriots...

    Petrol -- in short supply even before martial law was declared in December -- is linked with food, electricity and rent as the most sensitive price increases in the government plan. But Poland's State Prices Commission emphasises there will be a "public discussion" before they are imposed.

    Food parcels from abroad helped to keep Poles alive last year. Forty-five thousand tonnes of desperately needed food, clothing and medicine were sent to the country. But the food gifts represented only half of Poland's consumption in a single way...

    Soviet trucks have been taking part in a massive operation in Eastern Europe to bring food to Poland.

    But now Russia has been asked to do more by helping Poland pay its debts. Western bankers, with loans outstanding to Poland, have been meeting in Paris and other centres to discuss the problem. The President of the Association of West German banks, Dr. Harald Kuhnen, said on Wednesday (20 January) that Russia's request for a loan of about 140 million dollars to help finance the Siberian gas pipeline must be judged against the background of the Polish crisis. And West Germany's Dresdner Bank, which has given one of the largest loans to Poland, has decided to create a reserve to cover its Polish risks.

    The martial law authorities have made no official statements about the future course of the loan negotiations. Warsaw has made it clear, however, that its economy is not able to earn enough hard currency to meet overdue interest payments. And it is certainly unable to pay off commitments of 10.1 billion dollars due in 1982. With massive debts, low foreign reserves and poor export potential, Poland's prospects are still bleak.

    Increased exports are the only way to pay off Poland's debts and reduce the country's dependence on foreign credit. One cause for hope lies in coal. Polish coal production in 1982 could be 11 million tonnes more than predicted. It's hoped that production of the nation's main hard currency earner may bring a positive move forward for Poland's whole economy.

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