ABSTRACT
Private creditors have largely ceased providing new financing for Eastern Europe and the Soviet Union or, in the case of their trade and project financing, they are now requiring repayment guarantees from Western governments. In theory, Western governments are prepared to support, through their export credit agencies (ECAs), financing for this region because it promotes their domestic exports and has little budgetary impact. However, in practice, the level of ECA financing depends upon demand in the importing country and reasonable assurance of repayment. Conditions in Eastern Europe currently are not conducive to continued rapid expansion of ECA financing. It will be particularly difficult for the ECAs to provide financing for the emerging private sector where it is most needed.
