US stuns Nicaragua moderates

By halting all financial aid to the leftist Sandinista government in Nicaragua, the United States has struck a severe blow at Nicaraguan moderates who have been trying to stem the Central American country's left-wing drift.

Monitor Latin America correspondent James Nelson Goodsell reports that the moderates, including hundreds of businessmen, had argued that the current $75 million aid package was evidence of Washington support for their efforts to maintain a free-enterprise system in Nicaragua.

Many observers have felt the effort was having its effect -- for the less radical elements in the Sandinista movement appeared to be in the ascendancy.Without the US aid, these elements may lose out.

The US action April 1 not only halts $15 million in aid in the pipeline, but also asks Nicaragua to reimburse the US for the $60 million already disbursed under terms of the current aid program.

Reagan administration sources say the aid cutoff results from Nicaragua's role as the conduit for Soviet-bloc arms en route to leftist guerrillas in El Salvador. Nicaragua has officially denied such a role, but has told Washington privately that it was no longer involved in the effort. In announcing the aid cutoff, however, the State Department indicated it was still not satisfied with the Nicaraguan respon se.