Innovational Technics of Foreign Debt Reduction in Poland

Foreign debt, although it arose in Poland in the seventies, leading as a result to the debt trap, is a factor which must be taken into consideration both in decision-making concerning current economic policy and in the construction of a long-term strategy of the development of Poland. The subject of the article are the Polish foreign obligations to the creditors associated in the Paris Club and London Club.
In order to solve the debt problem in 1981 Poland undertook lasting several years negotiations with the creditors associated in the Paris Club and London Club. Breakthrough moments in the conducted restructuring talks were: April 1991 with the Paris Club and March 1994 with the London Club. The agreements concluded with the creditors from both clubs caused a reduction of the Polish foreign debt by about 9.7 billion USD in 1994. In accordance with the accepted schedules the return of the debts to the Paris Club is to be finished in the year 2009; a small payment is due in the year 2014, whereas to the London Club in the year 2024. The established schedule of payment of the foreign debt which utilizes new techniques of reduction of foreign debts (debt for nature swap, Brady Bonds, buy-back) has as its purpose the creation of time for the Polish economy to develop the export potential, attract foreign investments on a larger scale and to structurally adapt making possible the integration of Poland with the European structures.