European Stars And Stripes (Newspaper) - February 18, 1986, Darmstadt, Hesse                                Page 2 stars and stripes tuesday february 18. 1986r quo & i Row a i a u t Nir a j to i _ allies Back planned reply to Gorbachev Washington not president Reagan s pro posed response to Mikhail a Gorbachev s plan 10 eliminate nuclear weapons by the year 2000 has been Given a positive reaction from . Allies according to administration officials. But they said that reservations had been expressed particularly by Japan and that suggestions to modify the response arc under consideration. The allies reaction was presented by two envoys sat urday at a White House meeting. The envoys arc Paul h. Nitzsc who had been consulting with the Western euro Pean allies and Edward l. Rowny who had been briefing Japan China South Korea and Australia. Reagan s response to Gorbachev focuses on the first phase of the wide ranging nuclear disarmament plan specifically Gorbachev s proposal for eliminating medium Range missiles in Europe. Reagan endorse the idea of eliminating the mis Siles from Europe but also proposes culling the soviet ss-20 missile Force in Asia by 50 percent. But the president rebuffs the soviet suggestions that British and French nuclear arsenals be Frozen and that the United states pledge not to Transfer missiles to other nations. Another Clement of Reagan s proposal would give the United slates the right to store medium Range or nisus carrying the same number of warheads As the Bovitt Union bos deployed in Asia. 0 her medium Range weapons would be destroyed. American officials said Japan and to a lesser extent China arc concerned that the Reagan response by not insisting on the elimination of All ss-20 missiles from soviet Asia portrays asian Security problems As secon Dary to Security concerns in Europe. The officials said that Britain has expressed concern Over the idea of eliminating All medium Range missiles from Europe. Britain is said to prefer retaining a Low level of missiles As a symbolic demonstration of the . Commitment to the defense of Western Europe officials said the Netherlands has expressed concern that the Reagan response might undercut support for the dutch government s decision to go ahead with the deploy ment of . Cruise missiles. West Germany is comfortable with the suggestion to eliminate All missiles in Europe the american officials said. Despite the reservations the allies Are generally pleased that the United slates intends to respond to the Gorba Chev plan in a positive fashion officials said. They Laid icy Are considering several adjustments but do not expect that the Reagan response will be changed in a major Way. There is a general feeling among administration officials that the Issue of medium Range missiles hold the most Promise for an agreement. Officials Point out that this is primarily a political rather than a military Issue. Even if All medium Range weapons were eliminated from Europe the two sides would still have intercontinental weapons that could be directed at targets in Europe they say. Officials said the soviet arms negotiators in Geneva seemed to be waiting Tor the United states to respond to Gorbachev s offer. They said there were no major dead of mints at a special session of the full delegation held saturday in Geneva at soviet request. An american official said the soviet negotiators Tome times proposed such meetings instead of separate sessions on medium Range weapons strategic weapons and space and defensive systems to underscore the soviet View that there is a linkage among them especially Between Strate Gic weapons and the Issue of a space based missile  Tow tha Ine undue injends.0ponti & Gic weapons and the Issue of a space based missile defend. Iraq uses missiles in Fry of remake Porf pm his bpm my . By United press International Iii Ismini i he her Iraq used ground to ground missiles against iranian Iran released ibis photograph of iranian troops celebrating their rapture of port of from Iraq last week. Apr two by United press International Ira t forces occupying port Fao Iraq at the Mouth of the Shalt Al Arab waterway As iraqi forces continued to Advance on the City monday reports from the Region iranian radio said heavy fighting continued at port Fao where iranian forces beat Back an iraqi attack killing 500 enemy troops and injuring Many  casualties including both killed and wounded mounted to 14,000 on the eighth Day of the latest flare up the radio said the forces of Iran were consolidating their positions the radio said using a team it often employ when Iran s forces find themselves under heavy pressure by the Abu Dahabi s Gulf news Agency said the iraqis bad deployed medium Range missiles in Mobile units around Basra Iraq about 53 Miles Northwest of port Fao and had already used  Tehran iranian prime minister Mir a Osseif a Savi said the Only Way the . Security Council com end the set year conflict would be to Issue a Resolution condemning Iraq As the  he was replying to an Appeal by Secretary Genera Javier Perez de Cuellar calling on both sides to Eno hostilities to promote conditions for peace moves. A military communique in Baghdad Iraq said that iraqi forces at port Fao were advancing in an organized manner destroying iranian positions and their defense on the second Day of a three pronged offensive aimed at pushing them off Irvi soil. Iranian units used anti tank rockets to deliver heavy blows against iraqi Armor in the Battlefield iranian radio quoted a military statement As saying. The iraqis began their latest push at Dawn on sunday at port Fao where Iran s forces last week captured 313 Square Miles of territory around the port. Iraq said the iraqi army was confident it could read its objectives by the end of monday. Plunging Oil prices spell trouble for Banks new York up amen can Banks with Loans to Mexico Venezuela and Domestic companies in Oil related businesses Are highly vulnerable to losses As Oil prices plummet said a study released  Bank Bank of America manufacturers Hanover Trust and Chase Man Hattan Bank would be Hurt most by a debt payment crisis with Mexico and Venezuela both of which depend on Oil for their Export earnings a data resources inc. Study that ranks exposure relative to equity and assets  economies of these Oil exporters already plagued by austere fiscal policies and diminished exports will be crippled said Paul Ross an economist for data re sources a division of Mcgraw Hill Finan Cial and economic information  Banks with foreign Loans Aren t the Only ones that stand to  Bank with a High concentration of Loans to the Oil Well equipment crude producers and Coal industries will undoubtedly suffer greater loan losses than a Bank with out those Industry concentrations Ross said. Banks Topping that list Are Central Bank of Denver with More than one third of its Loans to Oil related industries and first City National Houston Colorado National Bank and United Bank of Denver All with roughly one Quarter of their assets in the Oil Patch. Many Large american Banks Are unsettled by the prospects of negative growth in Mexico and Venezuela data resources said. If the Low prices continue debt re payment schedules already tenuous at Best cannot be  the study was released As Mexico Cut its Oil prices by almost $5 to Sis a barrel and Venezuela abandoned its pricing mechanism. Data resources estimates that each i decline results in an income loss of $500 million a year but other observers said this depends on How much the lower Price in creases sales. Mexico which signed a multiyear refinancing package in 1985 that did not in clude any new Loans was having problems meeting its economic targets even before the recent Oil Price crisis. Mexican official reportedly Are working non Stop to adjust their economic program to meet the new Challenge presented by lower Oil income. Venezuela also has asked its creditor Banks to postpone payments on debt Princi pal agreed to in a rescheduling agreement to be signed next week. Is ,." Dave in the 5 us Banks the Federal Reserve and the International monetary fund probably will cooperate to Ros said s0"le Short com solution in the worst Case scenario Mexico or Venezuela will default on their Loans Rosi Toni. I n6 t10pllnjislic a Domestic Banks in Only stand to lose a Little 1?" Citibank with $2.9 billion in to Mexico stands first in Dollar amount chemical with $1.46 billion manufacturers Hanover $1.67 billion Bank of America $2.5 billion and Chase with $1.63 billion have the largest exposure relative to their equity and assets data re sources said. Citibank s exposure to Venezuela a leu than the percentage that requires disclosure but chemical has $720 million. Manufacturers Hanover has $1.015 billion Bank of America $1.46 billion and Chase $1.2 billion to that  Midland s30i million Welt Fargo s268 million and Continental Illi Nois s320 million were the Only other Large Banks with sizable exposure in Venezuela. Other Banks vulnerable to mexican prob lems again ranked by asset and equity Cap ital Are Marine Midland $362 Miuwa Bankers Trust is .3 billion Wells Fargo $5 8 million Continental Illinois,$561 Mil lion first Chicago $568 million first interstate ban corp $741 million and Morgan guaranty Trust $1.16 billion