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Debt Relief and Eastern Europe: Why Poland is a Special Case

  • James W. Dean
  • Aihua Xu
Part of the Central Issues in Contemporary Economic Theory and Policy book series (CICETP)

Abstract

A key determinant of Eastern Europe’s (1) prosperity under capitalism will be its ability to attract foreign loans and investment. Ironically, under socialism Eastern Europe’s ability to attract international bank lending (though not equity capital) was high and its repayment record (excepting Poland’s and Yugoslavia’s) was uninterrupted. However, in recent years, secondary market prices for much of this debt has declined dramatically: a “debt overhang” has developed (2). Moreover, some bankers are worried that the prospects for repayment will deteriorate still further under the new, less authoritarian regimes (3). Whether the Eastern European countries can attract foreign capital in the 1990s despite their debt overhang from previous regimes is the focus of this paper. For some countries, the way to break the apparent impasse may be some form of debt relief.

Keywords

Commercial Bank Trade Credit Current Account Deficit Debt Service Debt Relief 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© SIPI Srl, Rivista di Politica Economica 1993

Authors and Affiliations

  • James W. Dean
    • 1
  • Aihua Xu
    • 1
  1. 1.Simon Fraser UniversityVancouverCanada

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