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TFD/FC/182

9.    ..An initial draft of the Workjng Partyis report included a* recotmnendatj.on that groups of three or morę countries should, from time to tirne cr regularly, exchange Information on their bila terał bałances with a view to effecting compensations „ This proposal aroce out of a suggestion by the Russian expert that, as a half-way step to a wider multilateral system, the central banks of a group of countries could arrange compensations via the central bank of one of the countries in tle group* Most of the eastern countries argued that arrangements of this kind would enaule a group of countries to make progress tov/ards ! Ir • multllateralism without v;aiting for other countries. This kind of system v/as opposed by the experts of certain*E«P.U. countries, because they could not see the implications of such arrangements and because they considered that limited systems of this kind would prejudice the wider multllateralism which they themselves favoured. In generał, the experts of the E.P.U. countries, together with Finland and Yugoslavla, favoured a multilateral compensatioń system in which the largest possible number of countries would participate. They pointed out that the value of a compensatlcn system depended very greatly on the number of countries and the volume of trade covered by it. They insisted that the only wsy to operate compensations successfully was on the basis of regular reports to a central agent® Most of them suggested that the agent should be the B.I.S.

10.    The experts of Federal Germany, the United Kingdom and the United States of America, pointed out t at the facilities already afforded for transfer or conversion of t ^eir currencies, retidered unnecessary for them other approaches to the problem of multllateralism in payments arrangements for East/West trade.

The expert .of the United Kingdom said that all the United Kingdom¹s payments and receipts in its relations with Eastern European countries were carrled out In sterłing. Eastern European countries maintained sterling bałances in London which resulted from and could be used for every class of transaction. These bałances were not inter-Governmental and no compensations on them were possible, compensation already being completed on a day to day basis by the crediting and debiting of these bałances. Tlie expert for Federal Germany said that the system of "Limited Ccnvertibility Deutsche Marle Accounts" afforded sufficient possibilities for multilateral payments between Eastern Suropean countries and Federal Germany. The expert for the United States together with the expcrts for the Federal Republic of Germany and the United Kingdom said that, while they v/ere interested in any scheme for inereasing the level of trade, they considered the • question of progress towards multllateralism in payments relations wita Eastern European countries to be primarily a matter for tlie decislcn of other governments.