ABSTRACT
The Council for Mutual Economic Assistance (CMEA) countries have consistently run hard currency deficits in their trade with the West. This chapter considers very briefly the extent and causes of these deficits. It discusses various Eastern convertible-currency proposals, which are related to financing these deficits. According to Western estimates, CMEA's hard-currency indebtedness was in the neighbourhood of $32 billion at the end of 1975. This is considerably above the $22.3 billion estimated for the end of 1974; and the 1974 figure represents an approximate $5 billion increase over 1973. The externally convertible rouble (ECR) would be a purely financial instrument which could not be used to buy goods within the CMEA but only for exchange into Western currencies. The member nations of CMEA must make deposits in their International Bank for Economic Cooperation or some other financial institution against which they can draw ECRs with which to pay hard-currency debts to Western nations.
