European officials indicated yesterday that they agree with optimistic American assessments that the U.S. current account deficit will be reduced sharply next year.
At a meeting in Paris, the Organization of Economic Cooperation and Development working group on balance of payments problems estimated the deficit at only $8 billion, even with an oil price increase of 5 to 7 percent.
The 1978 deficit in the U.S. current account (trade and services) is expected to be about $19 billion.
Meanwhile, a French source at the OECD estimated that the first tranche, or instalment, of U.S. foreign borrowings to bolster its stock of the mark, Swiss franc and other currencies to be used in dollar-support operations, would be about 2.5 billion to 3.0 billion marks, worth $1.25 to $1.5 billion.
U.S. Treasury officials would not comment on the French report. But they are in the final stages of negotiations for a mark denominated bond, to be followed by one sold in the Swiss capital market. A final decision has not been reached on whether to borrow in the Japanese yen market. Announcements are scheduled after Dec. 8, when Treasury Secretary W. Micheal Blumenthal returns from a visit to Bonn.
These borrowings, up to $10 billion, are part of the $30 billion dollar rescue package announced by President Carter on Nov. 1.
U.S. sources previously indicated that the borrowings would be piecemeal, adjusted to the capacity of foreign markets to absorb the offerings. The bonds will be sold primarily to banks and other institutional investors, with some safeguard to assure that the buyers will not liquidate existing dollar holdings in order to take up the new issues.
At a press conference yesterday in Paris following the OECD session, U.S. Treasury Under Secertary Anthony Solomon told reporters that the dollar support package is working "very well."
The OECD estimate of the U.S. balance of payments deficit checks almost exactly with that of the U.S., which has put the 1979 red-ink figure at $6 billion, assuming no increase in oil prices. The Treasury has said a 5 percent increase would add $2 billion to that estimate.
Since announcement of the Nov. 1 program, the dollar has recovered a sizable part of its year-long loss against the strong currencies of Europe and Japan. Private experts believe that the U.S. already has used perhaps $6 to $8 billion of the potential $30 billion "cushion" in support operations, including the full amount of U.S. automatic borrowing rights at the International Monetary Fund.
Solomon stressed again, as he had in a Washington Post interview 10 days ago, that the $30 billion cushion operation involving West Germany, Japan and Switzerland as well. These countries have pledged to intervene "without limitation" to support the dollar, Solomon told The Post.
Yesterday, Solomon declined to estimate the size of the U.S. intervention so far, but said it was only "a reasonable fraction" of the four-country intervention total, Dow Jones said.