FRANCE TO PROVIDE GUARANTEES

FRANCE TO PROVIDE GUARANTEES

France's export guarantee agency, Coface, will provide French investors with

financial guarantees against the political risks of doing business in Eastern Europe, Finance Minister Pierre Beregovy has said.

This is part of a concerted government effort to encourage French businesses to take advantage of new opportunities in the Eastern bloc, particularly joint ventures, he said.Mr. Beregovoy said he understood potential investors might be concerned about the uncertainties inherent in political situations that have not yet been fully played out.

"I am saying that Coface could guarantee the political risks that might arise in the East," he said. "But all purely commercial risks must be assumed by investors."

All requests for such guarantees will be examined by Coface and the finance minister himself, he said.

The prime minister has publicly urged the French business community to participate actively in the reconstruction of Eastern Europe, where he believes unleashed demand will provide an excellent opportunity for France to extend its financial influence and make a dent in its merchandise trade deficit.

East Germany is a case apart from other East European countries, and probably less risky, because of its impending unification with economically powerful West Germany, he said.

Poland and Hungary are both heavily indebted but have solid productive systems in place, he said. Romania has a low external debt but must be revitalized economically with multiple contacts and economic missions, he said.