EU studying credit quarantee offers

EU studying credit quarantee offers

SINGAPORE (AFP): Credit guarantees proposed by developed nations to spur trade in crisis-hit Indonesia need to be examined to avoid overlaps, British Prime Minister Tony Blair's special envoy said yesterday.

Derek Fatchett, also special representative of the European Union (EU), said the EU was reviewing a proposal by Singapore Prime Minister Goh Chok Tong in February to help Indonesia acquire up to US$20 billion worth of multilateral guarantees to pay for imports.

Goh's initiative was followed by a similar initiative by the Group of Seven (G-7) finance ministers in London for its member nations and 11 other countries to provide an export credit guarantee system.

"We are still discussing the extent to which there is the overlap between the Singapore idea and the G-7 plus idea," Fatchett said at a news briefing here.

"What we mustn't do is to get overlap on too many schemes. We need to be focused," said Fatchett, who is also Britain's Minister of State for Foreign Affairs.

Fatchett explained the export credit guarantee system proposed by the G-7 gives a guarantee to trade exports from the participating countries into Indonesia and other Asian countries.

"There is no need to put a figure on it," since the credit guarantees were being discussed on a "case-to-case basis," he said.

"But the most important factor is it shows the confidence that 18 countries have in this region," Fatchett said.

Fatchett is leading a delegation from the EU, whose rotating chair is held by Britain.

Fatchett emphasized the implementation of Singapore or the G- 7's initiatives for trade credit guarantees depended on Indonesia's adherence to the reforms mandated under the International Monetary Fund (IMF) program.

This point had been expressed here on Tuesday by the director of the Treasury of France, Jean Lemierre.

"The French, Singaporeans, and everybody will be on board with that point. There isn't any difference between us," Fatchett said.

"Where it has been agreed that IMF programs are necessary, we firmly believe their early implementation is crucial," he said.

"The last thing we want to see are barriers and protectionism springing up particularly in the countries facing the more severe problems," he said.

"The region's problems will be at the top of the ASEM agenda. We aim to ensure that the summit makes a positive contribution to its solution," he added.