Pan Am Flight 103 CIA Files.pdf - Paperless Archives

libya's cash shortage has forced some of its East
European creditors to accept payment in oil, and
even then Tripoli bas been less than reliable in
making deliveries.
i·some East' European
con
difficulty ietiini Libya to deliver oil to settle debts.
Recently. Romania blamed its inability to meet
payments due to Western banks on Libya's failure
to meet its commitment to deliver oil for resale.
Even if this accusation is exaggerated, such bad
experiences may induce Romania and other Bloc
countries to 10 slowly on expanding trade ties.
Libyan authorities are likely to continue to fa~r
these firms over the East Europeans. By emplo)'ing
Western firms, Qadbafi would not only receive
better quality goods and services but also isolate
the United States from its West European allies.
As long as Eastern Europe faces such competition.
its gains from increased commercial ties to Libya
will be restricted .•
-Outlook
I
Despite the risks, East European countries are
likely to try to supply Libya with goods and services
previously furnished by US firms. However, the
region·s ability to do so is limited. Soviet demands
I for oil and'ias equipment. coupled with its hard
, currency shortages, could persuade the USSR to
ii": look to its ~st EuroPean allies to replace Western
• I ,', i ," equipment purchases. The nee~ to supply the Soviet
':1 economy could leave little slack capacity to produce
I • ; goods for the Libyans. _
I.
i
, \ i •
Furthermore. competition from West European
.. and Asian firms also seeking to benefit from US
!, sanctions 'willlilnit the Bloc's gains.
est
many
ropean and Asian firms are interested inor
have actually taken over-previous US contracts
'I ., ,. for ci\;l en~iDeering and construction projects in
, i 1\ : Libya; . i
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; , I ~
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