THE LEGAL SUCCESSORS TO THE FORMER EAST-G ERMAN AGRICULTURAL PRODUCERS COOPERATIVES (LPG) WILL HAVE TO CONTEND WITH THEIR BURDEN OF INHERITED DEBT FOR MANY YEARS TO COME

Two and three-quarter years after the entry into force of the Economic , Currency and Social Union the burden of debt incurred by the LPG's, which had previously held little significance for these organisations, is still a major structural factor for their legal successors in form er East Germany. The Trust Agency has now assumed responsibility for part of these inherited debts in conformity with Article 25, Paragraph 3, of the Unification Treaty. This action, which must be seen in asso ciation with the contracts concluded between agricultural enterprises and their respective creditor bank(s) aimed at easing the burden of de bt on their annual balances (consistent with 16, Paras 3 and 4 of the DM Balance Act), is an attempt by the responsible parties to smooth th e progress of these farms towards the market economy. Many farms will nevertheless continue to experience a heavy burden through the liabili ties accruing from these debts, which in most cases are backed by only minor assets, and will be inhibited in their development for decades to come. It must therefore be assumed that many farms will be unable t o survice in the long term, and that their inherited debts will have t o be paid off by the state in the end.