US to repay a Polish debt without default statement
The US government has taken the extraordinary step of deciding to repay at least $71 million Poland owes American banks without first having the banks declare Poland in default, administration sources said.Skip to next paragraph
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The action was taken secretly last week on orders from the National Security Council to the Agriculture Department, which has made $1.6 billion in loans to Poland to finance grain purchases, the sources said.
The New York Times reports the decision could obligate the US government to repay $396.5 million in Polish debt owed this year.
The action circumvented Commodity Credit Corporation rules that require the banks to find a foreign country in default before the US government is forced to cover bad debts.