Euro-credit near breaking point

INTERNATIONAL repercussions are beginning. to emerge from the bankruptcy of Equity Funding Corporation in which many big names of American finance are involved.

The firm was forced into bankruptcy last week when the Securities and Exchange Commission in New York discovered that at least a third of its $3,240m life insurance business was bogus.

The Equity Funding bankruptcy has burned the fingers of some prestige investors who regarded the 13-year-old company as a glamour stock. Democrats protest colonial policy Portuguese anti-war march AT LEAST 25 people Portugal, when and demanding an end Caetano . 'Oldest Investors are now looking twice at all glamour stocks.

The bankruptcy is adding to an already marked reluctance to buy shares which might well lose their value overnight.

Particularly badly hit by fear and uncertainty is the Euro-bond market, particularly the market in dollar bonds.

SQUEEZE

The Euro-bond market involves the sale of shares to holders of Euro-currency, chiefly dollars held by non-residents of the United States which are therefore free of exchange controls.

Equity Funding has an standing bond issue worth the town of Aveiro, in central were injured in ittacked demonstrators to Portuguese wars in Eye witnesses said heavily-armed police used dogs to break up the protest march and sent demonstrators fleeing in all directions when they paraded up Aveido's main street.

The clash came on the final day of the Third Portuguese Opposition Democratic Congress when about 1,500 people defied a ban on public demonstrations and tried to march to the monument of a well-known local democrat, Dr José Estevao.

The demonstrators were chanting such slogans as 'Down with the colonial wars' and 'amnesty for political prisoners,' witnesses said.

At least two people taken to hospital and a number were injured by truncheons and dog bites.

Portugal is at war in all three of its African colonies, Guiné-Bissau, Mozambique and Angola.

The cost of the war is borne by the workers and peasants of Portugal, who have one of the lowest living standards in Europe, and the colonies.

At least 40 per cent of the budget goes on arms, many of them supplied under NATO auspices by Britain and the United States.

Conscription US deeper in Cambodian THE VISIT to IndoChina of General Alexander Haig, President Nixon's senior troubleshooter in south-east Asia, is raising fears in Washington that the US may be drawn deeper into the Cambodian war.

American ground troops are not at present involved, with the result that the unwilling conscript army of General Lon Nol has been cut to pieces by the liberation forces which enjoy enormous popular support.

JOHN SPENCER which matures (becomes due for repayment) in ten months' time. News of the bankruptcy slashed the price of the Equity Funding bond by half.

The Equity Funding disaster is the second major blow to hit the Euro-bond market in recent weeks. There is also the case of UȘ Financial, which was due to pay dividends on SIlm-worth of Euro-bonds on April 1.

It still has 22 days' grace to find the money, but there is no indication that it can. US Financial must first settle an outstanding debt which takes precedence over the debt to its bond holders. out- For more than a month the $23m market in dollar-denominated singing the Internationale BY OUR OWN CORRESPONDENT four years-and sometimes up to age 35—is in operaThis year the Portuguese and the British Tory government are celebrating the 600th anniversary of the Treaty of Alliance between the two countries, which makes Portugal 'Britain's oldest ally'.

Dr Marcello Caetano, the Portuguese dictator, is to have dinner with the Queen at Buckingham Palace in July as part of the celebrations and the Duke of Edinburgh is visiting Lisbon in June.

THE LABOUR Party executive has voted not to send a delegation to the celebrations in Lisbon, causing some bitterness among MPs who were looking forward to a convivial few days as guests of the right-wing regime.

Three MPs, Alfred Roberts, Ben Ford and Ted Garrett, were to have made the trip as part of an interparliamentary delegation.

Their acceptance of the invitation put the Labour Party in an impossible position.

Only a few weeks previously the party executive had passed a resolution urging the Tory governent to have nothing to do with the mire But American planes have been pounding the liberation forces' positions around the capital Phnom Penh for several weeks.

It is only a matter of time before a giant B52 bomber is shot down and US servicemen taken pri. soner.

Whether Nixon would use this as a pretext for intervention of ground troops remains to be seen-the Lon Nol regime has no popular basis and no terriCarl Gewirtz of the national Herald Tribune' ments that 'attempts to anything but the best-know top-credit-rated companies market are ruled out f‹ time being'. 600th anniversary celebrations.

Messrs Roberts, Ford and Garrett are reported to be less than delighted with the decision and are claiming that some of the NEC 'lefts' take their holidays in Portugal.

The right-wing friends of Portugal within the Labour Party seem oblivious to the fact that the Social-Democrațic Party, with which their own organization has 'fraternal' ties, is illegal and membership is punished by heavy jail sentences.

SIX leading Japanese firms said yesterday they were considering the immediate release of surplus land and wool which they are accused of hoarding and thereby contributing to price increases. Representatives of the six firms told this to the ruling Liberal Democratic Party when they were summoned to party headquarters to explain the activities which are said to have caused unusual price rises in many commodities.

tory in the country speak of.

One thing, however, is certain: the Lon Nol dictatorship cannot last much longer on its own.

The Nixon administration must decide whether to intervene more actively to prop It up or suffer a particularly humiliating and de cisive defeat.

On Saturday the Saigon regime announced that the deterioration of the military situation in Cambodia constituted a 'serious menace for the Republic of Vietnam'. Euro-bonds has been virtually Closed down. High interest rates have made it unprofitable for 'professional' market operators to borrow money to buy bonds.

They are caught in the squeeze between the high cost of Eurodollars used to finance their positions and the yields on their bond purchases, which are not high enough to offset the financing charges.

UNRAVEL

THOUSANDS of college and high school students together with tactory workers and trade unionists were planning to march through Paris yesterday afternoon in support of the wages struggle at Renault and the demand for reintroduction of military deferment. schools.

Intercombring n and Or the The demonstration followed the first meeting of the new French Council of Ministers, where President Pompidou urged the adoption of a tough line with the movement in the high At the same time, however, the President was more conciliatory in the words he used about the Renault strikers and immigrant workers in general.

No doubt he hopes to create divisions between the workers and the students.

Pompidou and his Education Minister Joseph Fontanet, made clear after the cabinet meeting that the education service would be kept going and university liberties would be protected.

Neither aggression from outside, nor illegal occupations of public buildings would be tolerated, he said.

The authority of the chiefs of the educational establishments would be strengthened.

The uncertainty on the Eurobond market reflects growing awareness that it can act as a transmission belt for all the problems of international big business.

The market is part of a network of credit which is international in its scope.

As the 'Financial Times' put it last month, quoting Professor A. A. Walters: 'One large collapse could hit confidence a severe blow, falling on the US commercial banks and in practice being transmitted back to the Federal Reserve system.' The complex network of Eurocredit has become so stretched that if one thread snaps the entire fabric of international credit could begin to unravel and no one would be able to stop it.

troops Workers and students back Renault strike Pompidou was considerably more conciliatory when he turned to the question of the Renault strike and the conditions of production-line and immigrant The government, he said, should show itself imaginative and generous' in satisfying the demand for changes in workers' coositions, particularly those The President's tone demonstrates the fear that unless the present situation is delicately handled there could be an explosion of class Pompidou is particularly anxious to try to prevent any revival of the unity between the middle class and the workers which was demonstrated in May-June 1968.

He is heavily dependent on the Communist Party to hold the working class check - a task which it has religiously carried out over the past few months, especially in the pre-election period.