Democracy Defense Initiative Act

Democracy Defense Initiative Act - Amends the Support for East European Democracy (SEED) Act of 1989 to require the United States to provide assistance to Eastern European countries taking steps toward: (1) political pluralism and economic reform; (2) respect for human rights; and (3) a willingness to build a friendly relationship with the United States. Makes eligible for SEED assistance Poland, Hungary, Czechoslovakia, Yugoslavia, and any other Eastern European country reported to be taking such steps.

Extends specified debt reduction and stabilization assistance currently available to Poland to such countries.

Directs the U.S. Government, to the extent that an Eastern European country continues to evolve toward pluralism and democracy and to implement economic reforms, to urge creditor governments to negotiate debt reduction for such country, provided a specified international financial institution agreement, program, or facility is in effect with respect to the country. Authorizes the President to provide debt reduction to such country subject to the same conditions.

Revises provisions concerning debt-for-equity swaps. Requires the President to explore and encourage innovative approaches to the discounted sale of government-to-government debt.