Walesa Asking Bush for $1 Billion Loan Guarantee; Poland Seeks Backing to Help Privatize Housing; U.S. Officials Say Approval Is Unlikely
Polish President Lech Walesa recently asked President Bush for a four-year, $1 billion housing loan guarantee, but administration officials said the uncertainty surrounding Poland's reform efforts and political and economic pressures on the United States make approval unlikely for some time.</br></br>Walesa wants to borrow money to help Poland carry out a massive privatization of its state-owned housing stock. Poland's new finance minister, Andrzej Olechowski, completed talks in Washington yesterday with U.S. and international financial authorities during which he said Poland intends to present a more detailed plan for the housing program to both the United States and Europe in the future.</br></br>Olechowski's more immediate mission was to reassure nervous Western financial institutions about Poland's commitment to economic reform and control of its budget deficit. Poland faces the loss of several billion dollars in Western loans and grants unless it meets an International Monetary Fund (IMF) demand to reduce its budget deficit to 5 percent or less of the country's national output.</br></br>Olechowski told reporters yesterday he had received IMF backing for a revised budget plan that envisions new taxes and spending cuts to hold the deficit down. He said the IMF will send a delegation to Warsaw next month to work on "reactivation" of the Polish program and help with continued debt relief from the West.</br></br>Olechowski said he was repeatedly reminded by U.S. officials and international financial experts of the need for more rapid structural change in Poland, particularly privatization.