WASHINGTON -- American banks have not put up any money to finance Soviet purchases of American grain, despite the Bush administration's efforts to facilitate such loans.
No American banks participated last month in a $600 million loan to the Soviet Union for grain purchases, even though the United States guaranteed repayment of almost all of the principal and half of the interest, banking and grain industry executives said.
Despite the government loan guarantees, American bankers said that they were worried about the declining ability of the Soviet Union to pay its bills and that their own financial problems had limited their ability to make loans to anyone.
Eventually four European banks stepped forward to make the loans, reportedly under pressure from their governments. The loans have an adjustable interest rate that is initially set slightly below 7 percent.
Agriculture Department and banking officials said they could not recall a previous instance in which a major guaranteed agricultural-export loan had been claimed entirely by foreign banks.
The absence of American banks is likely to embarrass the administration, which certified the Soviet Union as creditworthy when it arranged the guarantee. It also spells further trouble for the crippled and shrinking Soviet economy, which desperately needs foreign loans and investment to try to make itself competitive in world markets.
In essence, the European banks are charging the Soviets the equivalent of an interest rate exceeding 20 percent on the very small portion of the loan that is not guaranteed by the United States.
The situation could be a vicious circle for the Soviet Union if a disappearance of loans deprives it of the foreign currency needed for imports, which are needed to keep the economy running and creditworthy.
"Declining industrial imports feed back into declining output," said Joseph S. Berliner, a professor emeritus of economics at Brandeis University who has been studying the Soviet economy since 1950.
Some American banks did discuss the loans with Soviet officials. But the Americans wanted even higher interest rates than what the Europeans got, bank executives said.