Musei, biblioteche e archivi online: il servizio MICHAEL e altre iniziative internazionali
Andreotti-Thatcher il dossier dagli archivi segreti inglesi
-
Upload
gaetano-zappulla -
Category
Documents
-
view
121 -
download
1
Transcript of Andreotti-Thatcher il dossier dagli archivi segreti inglesi
Catalogue Reference:PREM/19/87
Image Reference:0001
SERIES P R E M 19 VOLUME 87
START
Referred to
Date
Referred to
Date
Referred to
Date
Referred to
Date
Fit-*.
16 J u l y 1979
Many thnnkB f o r your l e t t e r o f 9 J u l y about t h e d e l i v e r y o f M o r r i s " V e s t ' s two books t o S l p n o r A n d r e o t t i , and f o r f o r w a r d i n p Slpnor A n d r e o t t l ' s l e t t e r of thanks. The Prime M i n i s t e r was VPTV .
The Prime Minister might begin by asking Signor A n d r e o t t i f o r h i s She might:
comments on the outcome of the I t a l i a n domestic elections (see B r i e f No 8 on I t a l i a n i n t e r n a l scene). a}
say that tho C h r i s t i a n Democrat vote seems to have held up wcJLl (down only O.'t'J i n terms of tho popular vote for tho Chnmbor of
CONFIDENTIAL
CONFIDENTIAL
b)
express g r a t i f i c n t i o n that the Communist vote has declined f o r the f i r s t time I n recent year;; (down from jh.h to JO.^J);
c)
t e l l Signor A n d r e o t t i o f the very great importance that she attaches t o r e l a t i o n s with I t a l y ; and
d)
express the hope that our r e l a t i o n s w i l l continue t o be as warm and f r i e n d l y , both b i l a t e r a l l y and i n the Community context, as they are a t present. She nay then wish t o proceed s t r a i g h t to a discussion o f the Community budget, on which B r i t i s h and I t a l i a n views are s i m i l a r , w i t h a view t o securing a j o i n t approach t o the problem a t Strasbourg.
RESUME OF BRIEFS ITEMS DEFINITELY FOR DISCUSSION EUROPEAN COMMUNITY AFFAIRS'(BRIEF HO 2) Community Budget 6. the This w i l l be an important opportunity to work f o r common ground with I t a l i a n s on the budget problem.. The s i m i l a r i t i e s between the Behind t h i s there are
I t a l i a n and B r i t i s h p o s i t i o n s are that we both s u f f e r net budgetary costs and have p a r t i c u l a r l y low r e c e i p t s from the CAP. major differences. spending. I n p a r t i c u l a r the I t a l i a n s have s p e c i a l i n t e r e s t s i n
Mediterranean a g r i c u l t u r e and favour massive increases i n Community These differences must be handled c a r e f u l l y i n seeking I t a l i a n support f o r our own s t r a t e g y .
y.
Accordingly,the Prime M i n i s t e r might t r y to focus Signor Andreotti's Our aim a t the Strasbourg
a t t e n t i o n on what i s most l i k e l y to be negotiable w i t h our partners a t the June and November European Councils. European Council should be t o get agreement on a mandate to the Commission to propose s o l u t i o n s to the Budgetary imbalance i n time f o r decisions to be taken a t the November Council (our d r a f t text could be given to Signor Andreotti i f t h i s has not been done i n advance). 1UK and I t a l i a n
1i inr; i.n 'i'iiiiiiin which
CONFIDENTIAL
CONFIDENTIAL
would s u i t no both.
Each o f us could then use our influence with theB>X. B \ A V \ ^
Commission to get them to put forward 6omething l i k e Other EEC Pointa
8.
On other EEC issues, we have less s p e c i f i c objectives with the But the Prime Minister could encourage then
I t a l i a n s a t t h i s stage.
to stand f i r m on a CAP price freeze a t least f o r products i n surplus and to work f o r a compromise on the Common Fisheries Policy on which we have no serious c o n f l i c t o f i n t e r e s t with them. Signor A n d r e o t t i may wish to hear about our p o s i t i o n on EMS, I t a l y ' s membership of which has been a c o n t r o v e r s i a l issue domestically, and or. i n d u s t r i a l p o l i c i e s . PROSPECTS FOR THE TOKYO SUMMIT (BRIEF N 3) O 9. A meeting o f the European Council immediately before the economic
summit t r a d i t i o n a l l y provides an opportunity f o r those members o f the Community who are not summit p a r t i c i p a n t s to express a view on the world economic s i t u a t i o n so that the representatives o f the Community (the President o f the European Council and the President o f the Commission) can express an agreed Community p o s i t i o n . There w i l l be general agree ment that the energy s i t u a t i o n i s complicating an already uncertain i n t e r n a t i o n a l economic s i t u a t i o n and that t h i s should be the main subject f o r discussion and decision a t Tokyo. UNCTAD V having reached only a l i m i t e d measure o f agreement - and w i t h the developing countries facing growing balance o f payments problems because o f the o i l price r i s e s - the Japanese may w e l l want the Tokyo Summit to address i t s e l f to the North/ South dialogue.
INTERNATIONAL ENERGY QUESTIONS (BRIEF NO 4) 10.
I n the present d i f f i c u l t o i l market s i t u a t i o n , energy w i l l be a
p r i o r i t y subject f o r both the European Council and the Tokyo Summit. The Community and the Summit p a r t i c i p a n t s w i l l need to f i n d a common approach t o the problems imposed by shortage o f supplies and high spot market price:;. We should welcome I t a l i a n views on the possible content For our:;clvea we believe Continuod nnd effective of such an approach*
CONFIDENTIAL
CONFIDENTIAL
demand r e s t r a i n t w i l l i n any Case be an essential element. REFUGEES FROM DIDO-CHINA (BRIEF N 5) O 11. The Indo-Chinese refugee/ problem requires i n t e r n a t i o n a l action Lo The Prime
mobilise p r a c t i c a l support and maximum pressure on Vietnam.
Minister w i l l wish to ask Sgr Andreotti to support her c a l l f o r a special i n t e r n a t i o n a l conference under Dr Waldheim's auspices and t o consider what other p r a c t i c a l assistance I t a l y can give. i n Hong Kong i s extremely serious. ITEMS WHICH MAY C M UP OE AFRICAN QUESTIONS (BRIEF NO 6) 12. W would not, ourselves, propose to r a i s e t h i s subject. e Italian However, officials The s i t u a t i o n
o f f i c i a l t a l k s were held w i t h the I t a l i a n s l a s t week.
then expressed anxiety about the Rhodesia s i t u a t i o n , and b r i e f i n g has been provided i n case Sgr A n d r e o t t i should r a i s e the matter. b r i e f i n g also covers recent developments i n Namibia. BILATERAL QUESTIONS (BRIEF N 7) O 13B i l a t e r a l r e l a t i o n s are close and have been further strengthened i n This
recent years by the assistance we have been able to give I t a l y i n dealing with terrorism (short^n^te^jTrovLded). points f o r the Prime M i n i s t e r t o r a i s e . There are no s p e c i f i c b i l a t e r a l The I t a l i a n s may, however, r e f e r
to the d i f f i c u l t i e s presently being experienced by the I t a l i a n charter f l i g h t company, I t a v i a , i n o b t a i n i n g s u f f i c i e n t f u e l supplies from Mobil at Catwick. This i s not a matter f o r HMG. A defensive b r i e f i s
included on t h i s p o i n t . BACKGROUND BRIEFING ITALIAN INTERNAL SCENE (BRIEF N 8) O A short assessment o f the current I t a l i a n p o l i t i c a l and economic /cituat
CONFIDENTIAL
CONFIDENTIAL
situation has been provided. Personality 15.
This incorporates the results of the
recent General Election and of the Elections to the European Parliament. Motes on Sgr Andreotti and Sgr Forlani are included.
Essential factual s t a t i s t i c s on I t a l y are set out at Annex C to this
Brief.
Foreign and Commonwealth Office 13 June 1979
CONFIDENTIAL
CONFIDENTIAL
ANNEX A
TilE ITALIAN DELEGATION
Sgr G i u l i o Andreotti Sgr Arnaldo F o r l a n i Sgr Catalano
Prime Minister Foreign Minister Deputy Diplomatic Adviser Chief of Protocol, M i n i s t r y of I n t e r i o r Chef de Cabinet to Foreign Minister Foreign M i n i s t r y Press Spokesman Interpreter
Sgr B o t t i g l i e r i
Sgr B i a n c h i e r i
Sgr Berlinguer
Sgra C i v e l l i
CONFIDENTIAL
CONFIDENTIAL
ANNEX B
WORKING LUNCH I t a l i a n Side
1. 2. 3. k.
Sgr Andreotti Sgr F o r l a n i Sgr Catalano Sgr Ducci
Prime Minister Foreign Minister Deputy Diplomatic Adviser I t a l i a n Ambassador
B r i t i s h Side 1. 2. 3.h.
The Prime Minister The Chancellor o f the Exchequer The Lord Privy Seal The Minister of A g r i c u l t u r e Fisheries and Food S i r Alan Campbell ( B r i t i s h Ambassador, Rome) Mr Franklin (Cabinet O f f i c e ) Mr Butler (FCO) Mr Cartledge
56. 7. 8.
I n t e r p r e t e r s w i l l be present but w i l l not be seated at t a b l e .
CONFIDENTIAL
CONFIDENTIAL
Annex C ITALY - BASIC STATISTICS (1978 and EEC Commission Forecasts f o r 1979)
Italy Population (millions) 1978 1979 56.7 57.0 21.7 21.8 7-0 6.5 186.9 208.6 3296 3659 + 2.2 + 4.6
UK 55-9 55-8 26.4 26.6 5-7 5.7240.0 264.9
Labour Force ( m i l l i o n s ) 1978 1979 Unemployed (percent o f c i v i l i a n labour force) 1978 1979
Gross Domestic Product 1978 ( b i l l i o n European Units 1979 of Account) Gross Domestic Product per head (EUA) Annual Rate of Growth of Volume o f GDP (Percent) Annual Rate o f Growth of I n d u s t r i a l Production 1978 1979 1978 1979 1978 1979
4293 4747 4 3-4 + 2.3 + 3-1 + 2.1 + 8.4 + 9-7 + 127
+ 483
+ 1-9 + 7-1 + 13.0 + 12.5 +5323 +3333
Consumer p r i c e s (changes 1978 over year e a r l i e r ) per 1979 cent Balance of Payments on Current Account ( m i l l i o n EUA) Trade B r i t i s h exports to I t a l y B r i t i s h imports from I t a l y Defence Spending T o t a l armed forces
= 2.8?J GNP
1978 1979
1977 1978 1977 1978
981 m i l l i o n 112*4 m i l l i o n 153'* m i l l i o n 1935 m i l l i o n
= 342,000 plus 80,000 C a r a b i n i e r i
CONFIDENTIAL
CONFIDENTIAL
T H I S DOCUMENT I S T H E 1'ROPERTY O F HER B R I T A N N I C
MAJESTY'S
GOVERNMENT
13 JUNE, 1 9 7 9bdiEF NO. 2
COFFERS*,
AA
:
VISITS
BY T H E P R I M E
M I N I S T E R OF I T A L Y :
1 5 JUNE, 1 9 7 9
EUROPEAN COMMUNITY AFFAIRS B r i e f b y t h e F o r e i g n , a n d Commonwealth POINT3 TO MAEE ) 1. (a) COM "U'TTY ?UDg?L'/COir-/?,RC-2:TCE UK and I t a l i a n Budget problems the problem t h a t t h e EEC B u d g e t , a n d EEC V e have w o r k e d t o g e t h e r / may n o t Our v i e w s on s o l u t i o n sr
Office
I t a l y a n d t h e UK s h a r e resource to g e t the problem
transfers, are inequitable. acknowledged.
always f u l l y c o i n c i d e .
B u t l e t u s go o n s u p p o r t i n g each o t h e r and f o r q u i c k f o r remedies.
a t t h e June C o u n c i l , i n p r e s s i n g f o r r e c o g n i t i o n , a c t i o n b y t h e Commission on p r o p o s a l s (b) O b s t a c l e s JO be overcomej
I f we p a y l e s s o t h e r s w i l l have t o p a y more. I f r o m t h e CAP: (380 m i l l i o n ) . i n 197" I r i s h total
The I r i s h w i l l n o t were 570.2 mEUA
w a n t t o see a n y d i m i n u t i o n o f t h e b e n e f i t t h e y r e c e i v e , m a i n l y FEOGA r e c e i p t s The Germans a n d t h e F r e n c h do n o t w a n t t o i n c r e a s e t h e 1?S VAT c e i l i n g .
expenditure which would breach(c) Tr-'-rentation
o f oui^ a r g u m e n t s
W e
do n o t sec m a s s i v e i n c r e a s e s i n ndn-CAP e x p e n d i t u r e a s a t o the problem. T h i s Government w a n t s t o be p r u d e n t i n c l u d i n g Community e x p e n d i t u r e . about There
solution
a l l Government e x p e n d i t u r e s h o u l d be s a v i n g s products.
i n expenditure
on s u r p l u s e s i n n o r t h e r n a g r i c u l t u . t o b e t t e r purposes. The UK
Those c a n t h e n be d i v e r t e d
(urban renewal,
i n d u s t r i a l obsolescence,
p h y s i c a l b a r r i e r s t o
t r a n s p o r t ) and I t a l y
( M e d i t e r r a n e a n a g r i c u l t u r e , m e z z o g i o r n o ) have
.
-1CONFIDENTIAL
CONFIDENTIAL
(d) This
Corrective
hanir.m
i s t h e o n l y Way we c a n hope t o g e t q u i c k a c t i o n o n t h e Y e have h a d some i n d i c a t i o n s t h a t t h e F r e n c h / this i s required.
Budget imbalances. and
Germans may t h e m s e l v e s t h i n k s o m e t h i n g l i k e considering various ideas. Proposals
V/e a r e s t i l l point from (e) The us
We s h a l l n o t r a i s e t h e better
a t Strasbourg. t h e Commission.
w o u l d i n a n y case come
F i n a n c i a1 Mechanism f i n a n c i a l mechanism a s a t p r e s e n t ( o r t h e I t a l i a n s ) any r e a l good. c o n s t r u c t e d does n o t do I t might be p o s s i b l e t o
amend i t t o g i v e t h e UK a s u b s t a n t i a l r e t u r n a n d d e a l w i t h a p a r t of our problem. to But proposals t o r e c t i f y the i n e q u i t i e s w i l l have
d e a l w i t h t h e l o w l e v e l o f UK a n d I t a l i a n r e c e i p t s gross contribution. Council
a s w e l l as
t h e UK i n e q u i t a b l e (f) Our
T a c t i c s a t trie E u r o p e a n aim a t the Strasbourg
Council should day,
be t o e n s u r e t h a t t h e r e i s
a d e q u a t e d i s c u s s i o n on t h e f i r s t
and t o g e t agreement on i n time f o r
i n s t r u c t i o n s t o t h e Commission t o propose s o l u t i o n s d e c i s i o n s t o be t a k e n a t t h e November C o u n c i l . must be c l e a r l y s t a t e d i n the Council's
These i n s t r u c t i o n s on t h e l i n e s o f
conclusions
t h e a t t a c h e d d r a f t (Annex A ) . willingness t o discuss this
[ T h e P r i m e M i n i s t e r w i l l n e e d t o shov; Commentary a t
text with Andreotti:
Annex B . ] V e s h o u l d g i v e t h i s / a f e w days b e f o r e in (g) favour o f i t . F o i l ow-ua t o t h e E u r o p e a n
t e x t t o t h e o t h e r member Governments
t h e E u r o p e a n C o u n c i l a n d l o b b y them i n t e n s i v e l y
Council o u r s e l v e s , b u t s h o u l d use ideas
V/e s h o u l d n o t p r o p o s e s p e c i f i c s o l u t i o n s our i n f l u e n c e with
t h e C o m m i s s i o n t o g e t them t o p u t f o r w a r d
on t h e l i n e s we f a v o u r . 2. OTHER COMMUNITY ISSUES CAP. . . .
(a)
surplus products continue
t h i s year.
Trust I t a l i a n
Government a l s o
will should
t o support
Coinmis^^^^^^or.als.
Ultimate target
CONFIDENTIAL
be
CAP based on common p r i c e s
c u t a t a l e v e l where t h e r e i s no f o r consumption,
incentive Italians
t o p r o d u c e more t h a n i s r e q u i r e d
unsu.bsidised e x p o r t s , f o o d a i d and n o r m a l s t o c k s . have s u p p o r t e d c o s t - e f f e c t i v e of mediterranean a g r i c u l t u r e . s u r p l u s e s o f I.Iediterranean (b) CFP
Agree
with 'Y .e
t o o much money s p e n t on N o r t h E u r o p e a n a g r i c u l t u r e .
measures t o i m p r o v e t h e s t r u c t u r e B u t must a v o i d measures w h i c h l e a d t o those o f n o r t h e r n goods.
products l i k e
Hope d i s c u s s i o n s i n Community c a n now be u n d e r t a k e n i n b e t t e r L e g i t i m a t e UK i n t e r e s t s . B u t we w a n t s e t t l e m e n t . 25 June C o u n c i l s h o u l d be l o w - k e y a n d a v o i d a c r i m o n y . l e a d i n p u r s u i n g s e t t l e m e n t d u r i n g summer. direct conflict of interest with for the any (c) a c c e p t a b l e a n d f a i r CFP. UK r e s e r v e on I t a l i a n Italy.
spirit.
Fisheries
Commission s h o u l d No
Then s u b s t a n t i v e
d i s c u s s i o n o f p r o b l e m s , p e r h a p s i n autumn F i s h e r i e s C o u n c i l . As s p e c i a l
Hope I t a l i a n s w i l l w o r k c o n c e s s i o n we have l i f t e d
f i s h i n g o f f A f r i c a d e s p i t e absence o f
p r o g r e s s on CFP i n t e r n a l r e g i m e . EMS W i l l decide whether t o p a r t i c i p a t e i n o f the
W w i s h t h e EL1S w e l l * e
exchange r a t e mechanism when a s p e c t s o f t h e f u n c t i o n i n g s y s t e m a r e r e v i e w e d i n September. o p e r a t i o n o f system? (d) What i s I t a l i a n
experience o f
We w i l l t h i n k a b o u t s w a p p i n g r e s e r v e f o r ECUs. Policy competition
I n d u s t r i a l and R e g i o n a l
Government's a p p r o a c h t o Community r o l e i n r e g i o n a l , and t o c u t down on f i n a n c i a l a i d t o i n d u s t r i e s viable but future. A c c e p t Co.'.omission's r o l e t h a t some i n d u s t r i e s inevitable
i n d u s t r i a l p o l i c i e s d i f f e r e n t f r o m Labour Government's. w h i c h have no i nmonitoring state
Intend aids steel
long-tern
v / i l l need t e m p o r a r y f i n a n c i a l EEC f u n d s o u r a p p r o a c h But s h a l l adopt
support. etc). to public positive
I t a l y a n d UK have s i m i l a r p r o b l e m s ( s h i p b u i l d i n g , and o t h e r n o n - a g r i c u l t u r a l s p e n d i n g r i g o r o u s i n EEC a s a t homo.
On r e g i o n a l
a t t i t u d e t o EEC p r o p o s a l s when l i k e l y t o be more e f f e c t i v e
.
I bilaterally of with I t a l i a n s c o n t r i b u t i o n ' t h e a c m i g h t make t o s o l u t i o n i n JoGONFlDEAJTIAL t h e Budget
problem
CONFIDENTIAL
FACTUAL BACKGROUND For Vrr.r. Use
1.
Community Hut! "-ot/"onver^onc c
( a ) UK Budget P o s i t i o n
The P r i m e M i n i s t e r i s aware o f t h e d e t a i l s o f t h e UK b u d g e t a r y (agreed l i n e t o t a k e and t a b l e o f n e t b u d g e t a r y
position
t r a n s f e r s f o r 1978 a t t a c h e d a t Annex C). (b) S i m i l a r i t i e s a n d d i s s i m i l a r i t i e s b e t w e e n UK a n d I t a l i a n Budget The problems similarity i n our Italian
f i g u r e s f o r 1978 show a c o n s i d e r a b l e
positions.
We b o t h do b a d l y o u t o f t h e CAP (UK t o t a l r e c e i p t s FEOGA e x p e n d i t u r e , I n the overall c o n t e x t o f t h e Budget o u r D e v e l o p m e n t Fund (59 mEUA small. Both t h e ofItaly at
e q u i v a l e n t t o a b o u t 5$ o f t o t a l r e c e i p t s about 9$). to are (c)
r e s p e c t i v e r e c e i p t s from t h e Regional
t h e UK, 79 mEUA t o I t a l y ) a r e e x t r e m e l y
UK n e t c o n t r i b u t i o n o f 942.5 mEUA a n d t h a t
752.3 mEUA
e q u i v a l e n t t o a b o u t 0.4;' o f o u r r e s p e c t i v e n a t i o n a l GDP. However t h e I t a l i a n b u d g e t a r y side. The UK's g r o s s problem i s e n t i r e l y on t h e
expenditure
c o n t r i b u t i o n t o t h e Community
B u d g e t i n 1979 i s 17.4;' ( c . 19.5# i n 1930) w h e r e a s o u r GNP s h a r e w o u l d be 15.4/S a n d o u r r e c e i p t s f r o m t h e Community B u d g e t a r e o n y 7.5/'.1
The c o r r e s p o n d i n g
f i g u r e s f o r I t a l y a r e 11.58$,
12.2$ a n d
8%
Not (d)
f o r Use The Commission t e n d t o p r o p a g a t e t h e v i e w t h a t t h e I t a l i a n separate f r o m o u r own a n d t h a t i t s h o u l d bo extent
problem i s e n t i r e l y1
dea" 1 w i t h s e p a r a t e l y . this
I t i s u n c e r t a i n h o w e v e r t o what
i s b e c a u s e o f t h e v/ish o f v a r i o u s o f o u r p a r t n e r s ( r e f e c t e d
i n t h e C o m m i s s i o n ) t o i s o l a t e t h e UK p r o b l e m .
/(e) CONFIDENTIAL
CONFIDENTIAL
(e)
I ti nn o t possible t o estimate t h e size o f other States' p o s i t i o n c o u l d improve over t h e n e x t two y e a r s . greas c o n t r i b u t i o n w i l l drop from
r e c e i p t s , b u t i t seems f r o m o t h e r f i g u r e s t h a t t h e I t a l i a n budgetary First, of t h e i r percentages
13756 i n 1978 t o 11.58# i n 1979 b e c a u s e o f t h e r e p l a c e m e n t t h e f o r m e r GNP e l e m e n t o f c o n t r i b u t i o n s b y one b a s e d o n VAT S e c o n d l y , new CAP r e g i m e s c o v e r i n g and v e g e t a b l e s a s w e l l , as a. new efficient olive as f r o m J a n u a r y 1979. o i l and processed f r u i t Mediterranean
s t r u c t u r a l package c o u l d b r i n g I t a l y a n a n n u a l advantage o f t h i s .
400 mEUA n e t , p r o v i d e d t h e i r a d m i n i s t r a t i o n p r o v e s enough t o t a k e f u l l
2.
CAP
For Free Use (a) The of for in The e s t i m a t e d c o s t o f t h e CAP i n 1979 i s some 6,500 m i l l i o n . bulk o f t h i s w i l l t h etotal.. 1980 w i l l be s p e n t on t h r e e commodities - m i l k , rapidly. Preliminary figures expenditure estimated 14,500 mEUA w h i c h a c c o u n t r e s p e c t i v e l y f o r 37^, 199" and 1 Q6 9 even w i t h a farm p r i c e f r e e z e , reach
c e r e a l s and s u g a r ,
The c o s t i s g r o w i n g be some 12.57^ h i g h e r .
1980 i n d i c a t e t h a t
The Commission have
t h a t on present
t r e n d s t h e c o s t o f t h e CAP w i l l
( 9 , 3 0 0 m) b y 1 9 8 2 . (b) Italy i s e i g h t h i n o r d e r o f p r o s p e r i t y o n GDP p e r head i n She i s a n e t c o n t r i b u t o r t o t h e CAP; i n 1978 she s e c o n d o n l y t o t h e UK (590 m i l l i o n ) and ahead A l s o l i k e t h e UK, she i s a n e t f o o d
t h e Community. of
p a i d 327 m i l l i o n ,
t h e PRG (140 m i l l i o n ) .
importer, p a r t i c u l a r l y o f "northern" products. ( c ) Statistics
Net c o n t r i b u t i o n t o FKOGA, 1978 I t a l y 327m UK 590m o f GDP, 1977
A g r i c u ' t u r e / F o r est ry/l-'inhin,r as Italy 9.0?6 UK 2.896
Italy
1 5 . 9 * cONFIDENrflAi: '' " 5
7
Community (9)
8.296
/A/.'.ri c u l t u r c
CONFIDENTIAL
-6~ Agricu tural Italy1
s o l f - s u f f i c i oncy 1Q76 89/o UK 62?6 Community 91 $>
Not f o r Use (d) Italy has so f a r s t o o d b y t h e UK i n s u p p o r t i n g t h e
Commission's p r o p o s a l f o r a p r i c e f r e e z e f o r 1979/80, b u t h e r i n x c r e s t i s l e s s i n a p r i c e f r e e z e n e r se t h a n i n a c h i e v i n g a b e t t e r balance sugar, products (fruit, between those " n o r t h e r n " p r o d u c t s (milk, c e r e a l s e t c ) which a r e i n m a j o r s u r p l u s and " s o u t h e r n " T h e r e i s a s t r o n g r i s k o t h e r Member
vegetables, o l i v e o i l , e t c ) , i n order t o increase
h e r r e t u r n s f r o m t h e CAP. States w i l l the price-fixing.
t r y t o b u y h e r o f f i n o r d e r t o i s o l a t e t h e UK i n
3. (a)
CFP
Italy
I t a l y n o t much c o n c e r n e d b y m a i n CFP n e g o t i a t i o n s .
c l a i m s 12 m i l e f i s h e r y l i m i t s .
Most I t a l i a n f i s h i n g i s l o c a l ,
b u t d i s t a n t w a t e r f l e e t has i n t e r e s t s o f f A f r i c a and A m e r i c a . I n UK i n t e r e s t t o k e e p I t a l i a n s f r o m s e e k i n g a c c e s s t o N o r t h A t l a n t i c waters. useful For t h i s reason (and t o a v o i d a n t a g o n i s i n g l a s t week, cost t h e This w i l l a l l y o n o t h e r Community i s s u e s ) we l i f t e d ,
o u r r e s e r v e o n EEC/Senegal A g r e e m e n t . 50 I t a l i a n t u n a (b) of boats.
Community $12 m i l l i o n o v e r 2 y e a r s t o p r o v i d e a c c e s s f o r a b o u t
UK n a t i o n a l c o n s e r v a t i o n m e a s u r e s p l a n n e d Community a c t i o n .
1 J u l y i n absence
C o n s e r v a t i o n t o be d i s c u s s e d a t 25 June
Council.
I t a l i a n s n o t a f f e c t e d by UK c o n s e r v a t i o n m e a s u r e s .
4.(a)
EMS S i g n o r A n d r e o t t i u n l i k e l y t o want t o d i s c u s s t h e a c t u a l , I t a l i a n experience I t a l y opted. has b e e n g e n e r a l l y
f u n c t i o n i n g o f t h e EMS. the
s a t i s f a c t o r y : t h e l i r a has b e e n b u o y a n t and t a k e n a d v a n t a g e o f w i d e r 6fo band f o r w h i c h The l i r a has i n f a c t Andreotti not r e m a i n e d c o n s i s t e n t l y above t h e 2.!^ m a r g i n .
l i k e l y t o wtuit t o d i s c u s s c u r r e n t D a n i s h and B e l g i a n probTemn
CONFIDENTIAL
/ ( t h e two
CONFIDENTIAL
( t h e two c u r r e n c i o o f o r w h i c h t h e r e minimum l e v e l p e r m i t t e d (b)
has been grid).
consistent
i n t e r v e n t i o n i n o r d e r t o p r e v e n t thorn f a l Ling b e l o w t h e by t h e p a r i t y
He may h o w e v e r r a i s e t h e q u e s t i o n o f t h e i n t e r e s t
rate
s u b s i d i e s w h i c h a r e c u r r e n t l y b l o c k e d by us p e n d i n g j o i n e d t h e exchange r a t e mechanism (thereby
recognition
t h a t t h e UK w o u l d be e l i g i b l e f o r such s u b s i d i e s i f i t c o n f i r m i n g "our p o s i t i o n as
one o f t h e l e a s t p r o s p e r o u s members o f t h e Community, a p o s i t i o n which others e s p e c i a l l y t h e F r e n c h a r e i n c l i n e d t o c o n t e s t on o f N o r t h Sea o i l ) . The t h e g r o u n d s t h a t we have t h e b e n e f i t f a r have opposed any f o r m u l a t i o n p r o s p e r o u s Member S t a t e . per b e c a u s e o f t h e amounts i n v o l v e d
I t a l i a n s have g i v e n us some s u p p o r t on t h i s b u t t h e F r e n c h so implying t h a t we a r e a l e s s T h i s issue i s important t o us l e s s ( u n l i k e l y t o be more t h a n 50 m t h e case we make o n t h e Exclusion from against
annum) t h a n b e c a u s e i t r e i n f o r c e s
n e e d f o r a c t i o n t o remedy o u r b u d g e t a r y p r o b l e m . eligibility us i n o t h e r (c) the contexts.
f o r i n t e r e s t r a t e s u b s i d i e s w o u l d be i n v o k e d
We have a r g u e d t h a t i f we j o i n e d t h e exchange r a t e
mechanism
we a g r e e t h a t new money s h o u l d be made a v a i l a b l e a proportional loss.
o v e r and above
200 mEUA a g r e e d so t h a t I t a l y and I r e l a n d w o u l d n o t s u f f e r
5.
I n d u s t r i a l and R e g i o n a l
Policy
c o m p a n i e s I B X , ENI e t c a n d have resisted that Some I t a l i a n w o r r y great
I t a l i a n s through state holding have l a r g e they w i l l eg. regional and Commission c o n t r o l s on s t e e l fund aids. on s t a t e a i d s .
scale i n t e r v e n t i o n i n the industry,
be on t h e i r own i f UK a c c e p t s Commission m o n i t o r i n g I t a l i a n s also attach importance t o ( t h e y g e t 3 9 . 4 ^ o f p r e s e n t f u n d o f 610 m i l l i o n The n e t payments f r o m EEC B u d g e t t o OK and o t h e r n o n - a g r i c u l t u r a l1
compared w i t h UK 2'/^). I t a l y f r o m regional
funds can
make a p o s i t i v e c o n t r i b u t i o n t o overa" ' Bud/ret s i t u a t i o n o f both countries. UK M i n i s t e r s s t u d y i n g p o s s i b i l i t i e s f o r i i h p m v i n We w i l l have
some e x p e n d i t u r e from UK E x c h e q u e r to EEC Budget. CONFIDENTIAL
/interest 7
CONFIDENTIAL
interest
i n s e e i n g w h e t h e r we have common g r o u n d w i t h patterns.
Italians
i n p r e s s i n g f o r changes i n EEC s p e n d i n g
FOREIGN AND COMMONWEAIffH OFFICE 13 June 1979
CONFIDENTIAL
CONFIDENTIAL COMMUNITY BUDGET
ANNEX A
The financial
European C o u n c i l recognised that at p r e s e n t the c o n s e q u e n c e s o f t h e Community budget c r e a t e f o r two o f t h e t h r e e member S t a t e s w i t h I n time, these difficulties
difficulties
b e l o w - a v e r a g e GNP p e r h e a d . s h o u l d become l e s s surpluses should itself will to serious.
Reductions
in agricultural That i n
reduce
t h e c o s t o f t h e c.a.p.
l i g h t e n t h e budgetary to policies
b u r d e n and s h o u l d make i t e a s i e r designed t o reduce regional
switch expenditure
disparities. that
Meanwhile s o l u t i o n s a r e u r g e n t l y r e q u i r e d t o ensure
t h e Community b u d g e t p r o d u c e s a f a i r b a l a n c e o f c o s t s and, i n p a r t i c u l a r ,
and b e n e f i t s f o r a l l member s t a t e s does n o t c o n t i n u e
t o h i n d e r member S t a t e s , w i t h b e l o w - a v e r a g e economic
GNP p e r h e a d i n t h e i r e f f o r t s t o improve t h e i r performance. to
T h e Euror-eas C o u n c i l i n v i t e d t h e C o m m i s s i o n
make p r o p o s a l s b e f o r e "the end o f September t o d e a l w i t h d e c i s i o n s t o be t a k e n at the
t h i p problem i n o r d e r t o permit
.next E u r o p e a n C o u n c i l i n D u b l i n .
CONFIDENTIAL
CONFIDENTIAL
ANNEX B
TALKS WITH SI:MQR
Mummm.
COMMENTARY OH THE DRAFT CONCLUSIONS ON THE COMMUNITY BUDGET 1. The f i r s t s e n t e n c e i s i m p o r t a n t b e c a u s e i t w o u l d s e c u r e r e c o g n i t i o n b y o t h e r member Governments o f t h e UK and I t a l i a n Budget p r o b l e m . The s e c o n d , t h i r d a n d f o u r t h s e n t e n c e s go a s f a r as we c a n 2. t o meet t h e I t a l i a n t h e s i s t h a t t h e p r o b l e m c a n b e c u r e d b y more e x p e n d i t u r e o f v a l u e t o them and t o u s . B u t t h e y w o u l d want t h e Budget t o i n c r e a s e beyond t h e e x i s t i n g 1 % VAT t r a n c h e t o p e r m i t much higher expenditure. Even i f we w a n t e d t h i s , t h e Germans a n d F r e n c h would n o t agree. These s e n t e n c e s ' a l s o l e a d i n t o t h e t h o u g h t t h a t t h e c o r r e c t i n g mechanism now r e q u i r e d may become r e d u n d a n t i n t i m e . This w i l l make i t e a s i e r f o r o t h e r member S t a t e s t o a c c e p t a n d s e l l t h e i d e a . "Meanwhile" i n t h e n e x t sentence i s t h e k e y word. 3. The i d e a o f "a f a i r .balance o f c o s t s and b e n e f i t s " t o a l l member S t a t e s i n t h e n e x t s e n t e n c e i s one w h i c h i s d i f f i c u l t t o a r g u e a g a i n s t b u t w h i c h t h e Danes, D u t c h , B e l g i a n s and F r e n c h a t least w i l l probably not l i k e . I t i s n o t e s s e n t i a l t o u s and c o u l d be g i v e n up a t t h e C o u n c i l i f t h e r e s t o f t h e s e n t e n c e i s r e t a i n e d . T h i s ( t h e i d e a t h a t t h e b u d g e t s h o u l d no l o n g e r h i n d e r member S t a t e s w i t h b e l o w - a v e r a g e GDP per- h e a d i n t h e i r e f f o r t s t o i m p r o v e t h e i r economic p e r f o r m a n c e ) i s t h e e s s e n t i a l i n g r e d i e n t s i n c e i t p o i n t s t h e Commission t o w a r d s e l i m i n a t i n g o u r n e t c o n t r i b u t i o n .
CONFIDENTIAL
CONFIDENTIALANNEX C
VCONFIDENTIAL L I N E T O T A K E ON OUR B U D G E T A R Y 1. POSITION The
T h e a t t a c h e d t a b l e c o n t a i n s t h e C o m m i s s i o n ' a o w n f i g u r e s f o r 1978.
U n i t e d K i n g d o m i s s e v e n t h i n the l i s t o f m e m b e r s t a t e s i n t e r m s of G r o s s D o m e s t i c P r o d u c t p e r h e a d b u t t h e s e f i g u r e s s h o w ( c o l u m n 1) t h a t i n 1978 w e w e r e a l r e a d y t h e l a r g e s t n e t c o n t r i b u t o r to the C o m m u n i t y b u d g e t a t 943m E U A , or 625 m i l l i o n . 2. T h e f i g u r e s i n c o l u m n 3 h a v e been a d j u s t e d t o a t t r i b u t e M C A s t o t h e
i m p o r t i n g c o u n t r y and on t h i s b a s i s we b e c o m e f o u r t h l a r g e s t c o n t r i b u t o r . B u t M C A s c a n n o t be t r e a t e d a s b u d g e t r e c e i p t s b y i m p o r t i n g c o u n t r i e s l i k e the U K a n d I t a l y . They are not consumer subsidies because they serve only
as a p a r t i a l o f f s e t to the c o s t t o u s o f b u y i n g f o o d a t C A P p r i c e s a n d n o t world prices. T h e y a l l o w p r o d u c e r s i n h i g h c o s t c o u n t r i e s to s e l l to l o w
cost c o u n t r i e s w h i l e g e t t i n g the s a m e h i g h r e t u r n as i n t h e i r d o m e s t i c m a r k e t . 3. A s the t a b l e s h o w s , w e b e n e f i t e d i n 1978 f r o m the t r a n s i t i o n a l ( A r t i c l e 131). W i t h o u t t h e m w e s h o u l d h a v e b e e n the l a r g e s t
arrangements net 4.
c o n t r i b u t o r however M C A s are treated (column 6). In 1 9 8 0 , w h e n t h e t r a n s i t i o n a l p e r i o d h a s e n d e d , o u r n e t c o n t r i b u t i o n
w i l l be w e l l o v e r 1 0 0 0 ( 1 5 0 0 m E U A s ) a n d w e s h a l l be f a r a n d a w a y t h e biggest net c o n t r i b u t o r . 5. The p r o b l e m is t w o - f o l d . First, w e p r o v i d e 17^ p e r c e n t o f the wherea. we
Community's income this year,
a n d e x p e c t to p r o v i d e 2 0 p e r c e n t n e x t , Second,
o u r s h a r e o f the C o m m u n i t y ' s G N P i s o n l y a b o u t 15j: p e r c e n t . g e t b a c k i n r e c e i p t s o n l y a b o u t 7j p e r c e n t o f the B u d g e t . 6. T h e m a i n r e a s o n f o r o u r l o w r e c e i p t s is t h e C A P .
It persistently takes
m o r e than 7 0 p e r cent of a g r o w i n g B u d g e t . s m a l l and efficient, the U n i t e d K i n g d o m . Funds, 7.
Because our a g r i c u l t u r e is
less than 5 p e r cent of this e x p e n d i t u r e takes place i n W e do r a t h e r b e t t e r o u t o f the R e g i o n a l a n d S o c i a l
but t o g e t h e r t h e y a c c o u n t f o r o n l y l O p e r c e n t o f the B u d g e t . We and I t a l y
A s a r e s u l t t h e b u d g e t b e a r s n o r e l a t i o n to a b i l i t y t o p a y .
are large c o n t r i b u t o r s , whereas r i c h e r countries like D e n m a r k and B e l g i u m are substantial beneficiaries.
1 CONFIDENTIAL
CqNflDEIMTIALc A CONFIDENTIAL 8. The U n i t e d K i n g d o m accepts that g r e a t e r convergence in e c o n o m i c The new But At
p e r f o r m a n c e i s p r i m a r i l y a m a t t e r of the r i g h t n a t i o n a l p o l i c i e s . G o v e r n m e n t i s d e t e r m i n e d to r e s t o r e t h e U n i t e d K i n g d o m e c o n o m y .
C o m m u n i t y p o l i c i e s should help those e f f o r t s r a t h e r than h i n d e r t h e m . p r e s e n t they d o n o t . 9. for T h e s e i n e q u i t i e s a r e a p r o b l e m f o r the w h o l e C o m m u n i t y , a s w e l l a s the U n i t e d K i n g d o m ; u n t i l they a r e r e m o v e d , the C o m m u n i t y w i l l
r e m a i n unbalanced,
a n d the c o m m i t m e n t s o f G o v e r n m e n t s to E u r o p e w i l l be
h a m p e r e d b y the e f f e c t s on p u b l i c o p i n i o n i n the c o u n t r i e s m o s t a d v e r s e l y affected. I n 1971 the o r i g i n a l S i x r e c o g n i s e d t h a t i f u n a c c e p t a b l e situations
o v e r the B u d g e t / * s h o u l d a r i s e ,
'the v e r y s u r v i v a l o f t h e C o m m u n i t y
w o u l d d e m a n d t h a t the i n s t i t u t i o n s f i n d e q u i t a b l e s o l u t i o n s ' ( C m n d 4 7 1 5 ) . 10. W e a r e n o t a r g u i n g f o r a j u s t e r e t o u r : EEC or p r e c i s e l y w h a t we put i n . ie t h a t w e s h o u l d g e t o u t o f the
N o r that m e m b e r s t a t e s ' net c o n t r i b u t i o n s
r e c e i p t s should p r e c i s e l y r e f l e c t t h e i r p o s i t i o n i n r e l a t i o n to a v e r a g e B u t w e do n o t c o n s i d e r t h a t i t i s r i g h t f o r
C o m m u n i t y G D P per head.
c o u n t r i e s v / i t h b e l o w a v e r a g e G D P p e r h e a d to be n e t c o n t r i b u t o r s to the Budget. 11. We w a n t a n e a r l y s o l u t i o n . I t i s f o r the C o m m i s s i o n to s u g g e s t w a y s The impetus w i l l h a v e to c o m e
i n w h i c h the i m b a l a n c e c a n be* c o r r e c t e d .
f r o m the E u r o p e a n C o u n c i l i n S t r a s b o u r g on 2 1 / 2 2 J u n e .
2
CONFIDENTIAL
NTT TRANSFHPBY
( T O ) MEMBER S T A T E S
IK 1 9 7 8 million cua
1978 Recorded transf ers
-
Ac t u a l2
position MCAs Adjusted transfers
1978
-
Without A r t i c l c 5
151
adjustments Adjusted transfers
1 hRecorded transfers .
MCAs
BELGJ UM/ L u x e m b o u r g
+ + -
380.4 620.4 423.8
-
43.1
+
337.3
+ +
415.4 620.4
1
_
43.1239.1 173-0
+ + -
372.3 381.3 336.6
DN AK EMRF t d c : . . l R e p u b l i c of GENIIANY >>
- 239.1 - 173.0
+ 381.3 596.8
- 213.6
France I r c l ;-.:id Italy Netherlands U n i t e d Kingdom Di r c c T a i d t o Third Countries CHANGE i n C o m m i s s ion's balances v i t h national treasuries
+ + +
82.9 536.2 752.3 220.5 942.5 39.0
-
287.7
- 370. 6 + + + 325.8 333.8 40.7 227.9 39.0
+
47.4
_ 287.7210.4
+ -
240.3 307.4 254.4
- 210.4 + 418.5
+ 517.8 + 672.9 265.4
O O Z 2 |
1i i
+ 418.5179.8
- 179.8 + 714.6
+ 85-6 + 709.3 39.0
-1425.9 + 39.0
+ 714.6
+
393-9
+
393.9
+
393-9
+
393-9
(2 ) (2)D i f f e r e n c e s on *_ exchange r a t e s * ' + 11.1 + 11.1 + 11.1 + 11.1
0
0
0
0
1
0
0
I(1) (2) A t the average exchange rates f o r the y e a r s i n question
1
'
THE n a t i o n a l t r e a s u r i e s m a i n t a i n a c c o u n t s i n t h e name o f t h e C o m m i s s i o n . A l t h o u g h t h e 1 9 7 6 and 1 9 7 7 b u d g e t s w e r e I N BALANCE and e x e c u t e d , t h e b a l a n c e s on t h e s e a c c o u u t s c h a n g e d d u r i n g t h e y e a r . T h e s e b a l a n c e s do n o t e a r n i n t e r e s t and t a n be u s e d by t h e C o m m i s s i o n o n l y to m e e t u p p r o v e d b u d g e t a r y e x p e n d i t u r e . These a r e accounting d i f f e r e n c e s which a r i s e because of the use of average exchange rates.
(3)
C T r I - . - 1(..' ~
i'^LLT-
RCnEi JUNE 14J REUTEE - ITALIAN PREMIER GIULIO RNvREOTTl TODAY CALLED FOR REFORMS Or 7rF. EUROPEAN COMMON HARKtT 5 AGRiC'-4^-'' ^ POLICY AND A FOOST IN FFV^F-.TS F T ' C- -F- E e l rv;.,:-;, < TO HELP BR ITfi1H F N D h:i> 0 ** C 0 u r - R v. MF. RNDREOTTI* WHO W I L L DISCUSS TnESc MATTERS In LONuOK TOMORROW WITH RRir-F MINISTER MARGARE1 fHATCHER* R L S O m i O he BELIEVED THE ELECTION OF TFE NEU PRO-rEUROPEAN BRITISH LEADER WOULD FIVE BRITAIN R_F-F7TFR f;EG0TIfiTI_P0SIT IGf I N HEJEC. TFE OB-VEAR-GLD VETERAN I T A L I A N FfiLITICIAN WILL HAVE iriLKS WITH MRS 7KRTCKER I LONDON TOHORR.ON. fL7 T
' f i
- F
5 F- R C E 5
TO
r.QFI CLJLT-JF E..T
-
MR
r'..>cb -:
OLD REUTEKS.
tjr- < l . ": ], " " " BIGGE5" -'-FT CONTRIBUTORS TO TFE EEC BHILC SmNDING EiFnTr PLACE FOR FER CAPITA if.C0nE.
.' i
HE i ~ r"
I
1
,'
1
"'
k v c ^ T n ri?>>:
iTfiuV ft'wo BRITAIN WERE R L S O THE ONLV NET IMPORTERS O F FOOD/ Like NEAT* CEREALS R N D HIL-K PRODUGTSi I N THE EEC AND FOUND T H A T P R I C C J MCRC MUCH hIGncR F K A N HOSE OUTSIDE THE E E C . ' H E F D D E D . 50 BRj FA] H n pi j r RKC 3 R i - ' * - j L V Fcft'ALISED** H E DE CLAR ED ' ' - GOVERNMENTS H O P E - H A i r E ^ c PROBLEMS F V F F T n E E E C ' ' 5 CONiROVERSIfiL RGRICULTURRL POLICV (CAP) WOULD F E DEALT WITH IK F fCONCRETE RND CONSTRUCTIVE '^m^ A l Tr.E FORTHCOMING EUROPEAN I SUMMIT IN STRASBOURG. ASKED I F nc THOUGHT THE CFF SHOULD BE CHANGED OR_I.E.ITRLV RND BRITAIN SHOULD INSTEAD BE 'COMPENSATED BV BIGGER JtAVKENTS FROM EE-J SGCInL RND K'cGIOftriL FUNDS* M ANDREGTTI CALLED FOR R c u m DfcYcLOrflENJS. APART FROM REFORM OF THE CAP* +OTHER EEC POLICIES SHOULD Be' STRENGTHENED* FIRSTLY"THE REGIDNAR'fi'NlTSOCIAL"-POLICIES BUT ALSO OTHERS^INDiJSJRIAL AND EKERGV POLICIES FOR EXRHPLE. fT
THESE OTHER POLICIES N W EXIST IN EMBRYONIC F.GRH T B U T THEY O ARE JUST AS IMPORTANT I F WE W ' T TO BUILD iiilRUE iCOHMUNITV* + nN THE PRIME MINISTER SHl!>. (THE ONLV MAJOR DIFFERENCE I N ITALIAN AND BRITISH EEC ROLICV IS THAT ITALY FfiVOURS AN INCREASE I N THE EEC BUDGET WHICH WOULD REDUCE THE PROPORTION SPENT ON THE CAP WHILE BRITAIN WANTS TO CUT CAR EXPENDITURE* RELIABLE SOURCES SAID). M RNDREOTTI RLSO SAID THAT MRS THATCHER''5 NEW CONSERVATIVE R GOVERNMENT MOULD GIVE BRITAIN A MORE AUTHORITATIVE VOICE INl
c O K u r c.
'
fine ct'f'OPcnN COKMITMEN1 OF THE NEW BRITISH GOVERNMENT I S BcVGND D."jDi AND FOR THIS I CAN ONLV REJOICE* + HE SAID. I < lb POSSIBLE infti tnlS SINCERE EUROPEAN COMMITMENT WILL OiVc 6REATER RUTHORITV AND'CREDIBILITY* AND ALSO NEGOTIATING STRENGTH* rO oRITISr REPRESENTATIVES. *T
REU c
CONFIDENTIAL
THIS BRIEF 12
DOCUMENT NO 3 1979
IS
THE
PROPERTY
OF
HER
BRITANNIC
MAJESTY'S
GOVERNMENT
JUNE
COPY
NO
VISIT
BY
THE
PRIME
MINISTER
OF
ITALY,
15
JUNE
1979
PROSPECTS
FOR
THE
TOKYO
SUMMIT
Brief
by
the
Foreign
and
Commonwealth
Office
and
Treasury
The
brief in
prepared
for
discussion on 21/22
of
this is Mr
subject
at
the
European total to at
Council
Strasbourg on imported energy
June
attached. Andreotti point of
With is the
I t a l y ' s
dependence disagree Tokyo.
oil
supplies, be the
unlikely
that
should
focal
discussion
FOREIGN
AND
COMMONWEALTH
OFFICE
AND
TREASURY
12
JUNE
1979
CONFIDENTIAL
^,
CONFIDENTIAL
THIS
DOCUMENT
IS
THE
PROPERTY
OF
HER
BRITANNIC
MAJESTY'S
GOVERNMENT COPY NO
EGH(S)(79)10 12 June 1979 EUROPEAN COUNCIL, JUNE THE STRASBOURG
21/22 PROSPECTS Brief by Foreign
1979 TOKYO SUMMIT Office and Treasury
FOR and
Commonwealth
LINE
TO
TAKE APPROACH economic background. this are Inflation year. accelerating. should Specific focus on
GENERAL 1.
D i f f i c u l t targets
growth energy. ENERGY 2.
inappropriate
Discussion
Practical
conclusions
needed.
Energy
the
key by
area. to
Need f u l f i l
for
effective
oil
demand And
restraint in the longer
(particularly term
US) of
IEA/EEC to
commitments.
development
alternatives
o i l .
NORTH/SOUTH 3. After only modest progress at UNCTAD, developing countries will be
ilooking price and for something. The new Their British we problems will be exacerbated will an be by on the oil
rises.
Government's of course
emphasis maintain
trade Aid
investment,
though
shall
effective
Programme. TRADE A. With the for a bulk of the trade be MTNs our of are the the way and to the Trade Pledge prominently. change.
renewed But
year, well
issues on
unlikely need for
feature
there
may
emphasis
structural
MONETARY 5.
QUESTIONS monetary OPEC become situation and relatively funding of calm. their No i n i t i a t i v e s
International for. But will
called
surpluses a problem
counterpart
d e f i c i t s
again.
CONFIDENTIAL/BACKGROUND
CONFIDENTIAL
BACKGROUND Reference COMMUNITY 6. only A: Main Economic Variables
ANGLE Summits are a are sensitive invited. was issue They in the Community much because rancour, allowing Commissioi
Economic some
member
states
have in the to
caused on a
particularly the to President attend for
before of the
agreement European of
reached and
1977
formula of the
Council
President Community their aware
discussion to
matters
related
competence. so that of all
Important Community member GENERAL 7. The
therefore
let
non-participants can claim to be
have
say of
representatives
fully
position
states. APPROACH orientations ie of demand growth p r i o r i t y of management in Germany to agreed and on at than Bonn in On s t i l l US appear
appropriate, needs to give
faster
Japan
which
greatest
reducing seems
i n f l a t i o n . to the at be
present for mos
forecasts of of 1979 at
desired least with -
pattern so
growth is
likely for seen
achieved of
there
l i t t l e
scope
kind Bonn.
realignment for US wi
policies, are less very in
specific 2.6% US
growth (WEP) as
targets, oil
Prospects and with
1980
good. weak. 1979 in In
prices to
work
through as
economy 2.7% 8.
growth
could
f a l l
1.2%
(WEP)
compared
(WEP)
(OECD main 12 to are:
3.1%). industrialised to countries 1978, The France US has begun to was 8.2%
Inflation
the the
accelerate. and for Vo in the 12
months April FRG
September 10.4%. 3.5%,
i n f l a t i o n
months
1978, 2.2 to
corresponding 9.2 to 10%,
figures Italy 12.2
other 14.3%,
countries UK 8.2 to
10.1%.
ENERGY 9. See Brief no 5. Without in any demand restraint to be by consumers 1.5-2 free
world
oil
supply Iranian
shortfall production in 1978
1979
likely
around to be
mbpd It EEC was
(3-4%). around
currently to the
believed
3.5-4 if
mbpd. IEA and
5.6
mbpd fully
prior
revolution.
Even to
countries
implement
demand
restraint
measures
reduce/ u/ _
CONFIDENTIAL
,. J i n 11 i i o n
CONFIDENTIAL
onsumption NORTH/SOUTH 10. UNCTAD by 5% the a useful consensus even if on some gap issues, such as world oil market will remain tight. DIALOGUE V reached and
protectionism fundamental demanded and we by
commodities, of the
the
remains and
wide.on monetary
the syst
reforms the
international countries. inconclusive and will
economic
developing take the
However result be
there too
was
no
acrimony But the
should of The
not
t r a g i c a l l y . by the the to be oil
problems rises. tional at a
the next
LDCs
remain
exacerbated will be
price
major
North/South for UN the
argument 1980s
over (due
Interna adopted LDCs w i l l in and
Development
Strategy of the
and
beyond in
Special specific of
Session targets NIEO.
General
Assembly from the
1980).
The
want
for We
concessions shall of
developed for
countries
pursuit the
the
emphasise both LDCs
the and
need
f l e x i b i l i t y countries.
shared
responsibilities
developed
TRADE 11. Current account but d e f i c i t may of US will in f a l l 1980 owing (216 to slower growth 29.7 decline rise 1980 and
increased b i l l i o n owing again WEP). the to in
exports
rise
again -
b i l l i o n surplus but
1978, w i l l to
1979, oil 1980
210.9 price
b i l l i o n increases b i l l i o n a
1980 and
WEP).
Japanese imports
emergency 23.4 of
likely 28.5
(216.7 will be
1978,
b i l l i o n
1979, and
b i l l i o n
There
better But
balance the and net
surpluses on
d e f i c i t s
among
major
0ECD
countries.
d e f i c i t will
non-Summit from 29.9
0ECD b i l l i o n countries from to
countries 215.3 w i l l (0ECD
(including (WEP), 225.6 231
Protugal and the
Turkey) for
rise
b i l l i o n rise from
d e f i c i t to 240 232.5
non-oil
developing 0ECD
b i l l i o n to
b i l l i o n
(WEP)
figures
figures
b i l l i o n
b i l l i o n ) .
MONETARY 12. IMF No on
QUESTIONS specific i n i t i a t i v e s are contemplated. and among an Bank Work is in on hand in the o
the
Substitution UNCTAD the V
Account forced
Governors
monitoring on
Euro-Markets. the reform of
through
unacceptable system. The
resolution UK voted
international
monetary
against.
FOREIGN 12 JUNE
AND 1979
COMMONWEALTH
OFFICE
AND
HM
TREASURY
CONFIDENTIAL
CONFIDENTIAL
TOKYO SUMMIT ANNEX A
TABLE 1 : GNP/GDP GROWTH 1977 United S t a t e s Canada Japan West Germany France Italy U n i t e d Kingdom Seven m a j o r s 1978 3.9 3.4 5.6 3.4 3.0 2.2 3.0 3.9
% change on p r e v i o u s yea> 1979 2.7 3.4 5.5 3.8 3.3 3.6 0.5 3.3
4.92.7 5.4 2.6 3.1 1.7 1.9
4.0
TABLE 2 : CONSUMER PRICES 1977 United Canada Japan West Germany France Italy U n i t e d Kingdom Seven majors States 1978 7-6 8.9 3.9 2.6 9.2 12.4 8.6 7.0
% change on p r e v i o u s y e a r 1979 9.6 9.4
6.58.0 8.0 3.9 9.3 19.3 16.0
4.23.4 9.8 13.7 12.6 8.4
8.1
CONFIDENTIAL
CONFIDENTIAL
TABLE 3 : BALANCES ON CURRENT ACCOUNT 1977 United S t a t e s Canada Japan West Germany France Italy U n i t e d Kingdom Seven m a j o r s Other OECD T o t a l OECD OPEC Non-oil LDCs -15.3 3.9 10.9 3.6 3.? 2.3 0.8 - 4.8 -20.1 -24.9 26.3 -14.8 1978 -16.0 4-5 16.7 8.8
(3 1979 9.7 5.3 5.4 6.0 3.1 5.1 1.3 1.3 -15.3 -14.0 19.8 -32.5
4.15-7 0.5 15.3 - 9.9 5.4 2.2
-25.6
TABLE 4 : UNEMPLOYMENT RATES* 1977 United S t a t e s Canada Japan '..'est Germany France Italy U n i t e d Kingdom 5.7 7.2 5.8 7.1 8.1 2.0 1978 6.0 8.4 2.2 4.3 6.2 7.2 5.7
% of l a b o u r f o r c e 1979 ( L a t e s t 5.8 ( A p r ) 7.9 ( M a r ) 2.1 ( M a r ) 3.8 ( A p r ) 7.1 ( A p r ) 7-8 (Mar-, n s a ) 5.5 ( A p r ) month)
Rates a r e not comparable between c o u n t r i e s owing t o d i f f e r e n c e s of coverage and d e f i n i t i o n . Seasonally adjusted (except Italy).
CONFIDENTIAL
CONFIDENTIAL
THIS DOCUnENT I S T H E PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENTB R I E F NO. 4 COPY N O . 1
13
JUNE
1979
V I S I T BY PRIME MINISTER OF ITALY 15 JUNE 1979 INTERNATIONAL ENERGY QUESTIONS B r i e f by the F o r e i g n and Commonwealth O f f i c e
P o i n t s t o make OIL 1. and oil ( a ) We must make t h e most o f t h e f o r t h c o m i n g European C o u n c i l Economic Summit t o f i n d a common a p p r o a c h Uo t h e p r e s e n t market s i t u a t i o n ( w h i c h t h e 26 June OP/iC meeting w i l l Italian views; full
;
difficult
probably
make v;or:;o). (b) and
We w o u l d welcome step,
as a f i r s t
t h e European C o u n c i l must e n s u r e t h i s i n t o 1980.
rapid
i m p l e m e n t a t i o n Of t h e March C o u n c i l ' s d e c i s i o n on 5/ i n 1979 and e x t e n d We a r e
demand r e s t r a i n t
l o o k i n g a t ways c f making the March d e c i s i o n more e f f e c t i v e , b u t have not y e r r e a c h e d f i r m conclusions:
/(c)
CONFIDENTIAL
CONFIDENTIAL
(c) ^
s o m e t h i n g must a l s o be done t o ease s p o t m a r k e t t h i s might simply drive
prices. '
We a r e s t u d y i n g t h e F r e n c h p r o p o s a l ' R o t t e r d a m m a r k e t b u t t h i n k i elsewhere. e f f o r t by a l l
f o r p r i c e c o n t r o l s on t h e t h e market concerted
a l t e r n a t i v e would be a s h o r t t e r m
Western consumers t o p e r s u a d e o i l companies t o keep
But h i g h p r i c e s o n l y r e f l e c t supply/ and v;e must t a c k l e t h e r o o t of t h e p r o b l e m ;
o u t of t h e s p o t m a r k e t . demand i m b a l a n c e s , (d) . wish and at
t h e Summit i s t h e r i g h t p l a c e t o i n d i c a t e o u r c o n t i n u e d be a f u l l discussion of this planned question
f o r a more g e n e r a l d i a l o g u e on e n e r g y w i t h t h e p r o d u c e r s , I hope t h e r e w i l l The G i r a u d / Y a m a n i m e e t i n g f o r 28 June may
Tokyo.
result
i n u s e f u l and c o n t i n u i n g t e c h n i c a l c o n t a c t s B u t an E'^C/OPEC d i a l o g u e b y i t s e l f
between OPEC ana
w o u l d n o t be
EEC members. sufficient. some s t a g e ; (e) to
The A m e r i c a n s and Japanese must be i n v o l v e d a t
i n Community e n e r g y p o l i c y t h e UK i n t e n d s t o p l a y a on t h e i r m e r i t s and s e e k i n g policies. c o o r d i n a t i o n o f members'
p o s i t i v e r o l e , d e a l i n g with proposals promote t h e e f f e c t i v e
NUCLEAR MATTERS ? . ( a )Nuclear . power w i l l have a grov/ing r o l e t o p l a y i n meeting
our energy r e q u i r e m e n t s . reactors 5 (b) responsibility
But t h e development o f n u c l e a r ~"
power
c o u l d be hampered by f u r t h e r a n x i e t y a b o u t t h e s a f e t y of n u c l e a r
f o r nuclear safety rests p r i m a r i l y problem, However we s h o u l d
within building
member s t a t e s b u t an i n t e r n a t i o n a l s t u d y o f t h i s on t h e IAEA w o u l d b e u s e f u l . that a i t does n o t e n a b l e moratorium; (c) Nuclear m
take care t o ensure
o p p o n e n t s o f n u c l e a r power t o p r e s s f o r
we welcome t h e i d e a p u t f o r w a r d at t h e March European
Council
t h a t t h e r e s h o u l d be g r e a t e r c o n s u l t a t i o n on n o n - p r o l i f e r a t i o n
developments
i n the
Indian Sub-continent and t h ei n r.he f r a m e w o r k o f
issue n a t u r e of
t o p i c s which
m i g h t be d i s c u s s e d
political
cooperation*
/Background
CONFIDENTIAL
CONFIDENTIAL
Background5. of
[ I n f o r m a t i o n w h i c h c a n f r e e l y be u s e d ] IEA assessment
The l a t e s t
suggests
that, with a
gradual b u i l d
up o f demand r e s t r a i n t b y c o n s u m e r s , t h e r e w i l l be a s h o r t f a l l 0.7 m i l l i o n b a r r e l s p e r day (mbd) ( o r 1%) i n f r e e - w o r l d o i lA
s u p p l i e s i n 1979*
5$ demand r e d u c t i o n t h r o u g h o u t 1980 w o u l d o f stock r e b u i l d i n g next year. The p r e s e n t
a l l o w a modest d e g r e e
p r i c e p o s i t i o n i s u n s t a b l e , w i t h a l l OPEC p r o d u c e r s o t h e r t h a n S a u d i A r a b i a c h a r g i n g p r e m i a above t h e " o f f i c i a l " light Arabian crude. These p r e m i a a r e l i k e l y into theo f f i c i a l price for t o be i n c o r p o r a t e d
p r i c e a t t h e OPEC m e e t i n g i n June, a n d f u r t h e r Contract prices are I n t h e spot market (whic
increases l a t e r i n the year are probable. a l r e a d y o v e r 50$ above l a s t y e a r ' s l e v e l . twice the equivalent o f f i c i a l prices.
a c c o u n t s f o r o n l y 3-5% o f s a l e s ) p r i c e s have r i s e n t o a b o u t
4.
The March E u r o p e a n C o u n c i l a d o p t e d an o i l demand
restraint The
t a r g e t f o r 1979 a m o u n t i n g t o 5 o f e x p e c t e d c o n s u m p t i o n . % UK s h o u l d be a b l e t o meet t h i s t a r g e t . energy savings i n t h e p u b l i c 5. sector.
The measures we have
t a k e n i n c l u d e b u r n i n g c o a l i n p l a c e o f o i l i n power s t a t i o n s , and
The F r e n c h P r e s i d e n c y have p u t f o r w a r d p r o p o s a l s f o r g r e a t e r -High s p o t p r i c e s certainly f o r OPEC p r i c e hawks, but we and o t h e r s ,
c o n t r o l over t h e spot market p r o p o s a l s . p r o v i d e a u s e f u l argument the but (a)
e s p e c i a l l y t h e Germans, a r e s c e p t i c a l a b o u t t h e p o s s i b i l i t y ( o r v a l u e ) o f t r y i n g t o c o n t r o l t h e Rotterdam s p o t market i n O t h e r p o s s i b i l i t i e s w h i c h we a r e . s t u d y i n g t e r m e f f o r t by a l l Western urgently, on w h i c h we have n o t y e t r e c e i v e d c o n c l u s i o n s , i n c l u d e a concerted short consumers t o ave each country fully o i l companies t o s t a y o u t o r t h e s p o t m a r k e t and ( b ) isolation.
persuade the
some k i n d o f v o l u n t a r y a l l o c a t i o n s y s t e m w h i c h implemented t h e a g r e e d 5/>' c u t s .
l e v e l o f o i l i m p o r t s which would a p p l y i f c o u n t r i e s
G.
Recent
i n t e r e s t i n oYP'indod consumer/produceri n order.to s t a b i l i s e CONFIDENTIAL
c o n t a c t s stems called The
initially for
f r o m a o . i u d i communique o f 28 F e b r u a r y , w h i c h the o i l market.
such c o n t a c t s
/European
CONFIDENTIAL
European term and
C o u n c i l i n March welcomed t h e
'-audi s t a t e m e n t .
A
d i a l o g u e w i t h p r o d u c e r s on e n e r g y m a t t e r s w o u l d be t o o u r l o n g
advantage, and t h a t o f o t h e r consumers, b u t we c a n n o t be s u r e
be on o f f e r , o r w h e t h e r i t w o u l d be on terms w h i c h we The e x t e n t t o w h i c h o t h e r p r o d u c e r s ( a n d t h e r e have b e e n some s i g n s The p r o d u c e r s , that W e toinsist our p a r t n e r s c o u l d a c c e p t .
that i t w i l l
support the Saudi c a l l o f second
i s doubtful
t h o u g h t s by t h e S a u d i s t h e m s e l v e s ) .
and p r o b a b l y t h e T h i r d W o r l d t o o , a r e l i k e l y on t h e New I n t e r n a t i o n a l Economic O r d e r .
d i s c u s s i o n o f e n e r g y s h o u l d be o n l y p a r t o f a w i d e r n e g o t i a t i o n The A m e r i c a n s have c o n s i d e r a b l e r e s e r v a t i o n s about producer-consumer c o n t a c t s and
c o n t i n u e t o p i n t h e i r hopes on S a u d i i n f l u e n c e w i t h i n OPEC. chose it t o use i t f o l l o w i n g t h e I s r a e l - E g y p t peace t r e a t y .
b e l i e v e t h e y e x a g g e r a t e c u r r e n t S a u d i i n f l u e n c e even i f t h e S a u d i s Nonetheless, i s important that the i n d u s t r i a l i s e d c o u n t r i e s s h o u l d show
t h e m s e l v e s r e a d y t o r e s p o n d t o any move t o w a r d s a d i a l o g u e b y t h e producers. The F r e n c h P r e s i d e n c y have had c o n t a c t s w i t h t h e t o a m e e t i n g on 28 June between S a u d i s , w h i c h have l e d t o agreement
G i r a u d and B r u n n e r , r e p r e s e n t i n g t h e EEC, and Yamani f o r OPEC, t o pave t h e v/ay f o r l o w - k e y , t e c h n i c a l d i s c u s s i o n s , w i t h t h e minimum o f p u b l i c i t y , f o r energy. on f u t u r e w o r l d s u p p l y and demand f o r e c a s t s b u t any s e n s i b l e of o i l and J a p a n e s e . T h i s w o u l d be a ' u s e f u l b e g i n n i n g ;
d i s c u s s i o n o f w o r l d s u p p l y and demand ( a n d so i n d i r e c t l y , p r i c e s ) must a t some s t a g e i n v o l v e t h e A m e r i c a n s T h e i r v i e w s c a n be s o u g h t a t t h e Summit.
7-
The F r e n c h have a l s o g i v e n p u b l i c s u p p o r t t o M e x i c a n I t i s u s e f u l t h a t an o i l p r o d u c e r has
ideas f o r
a UN e n e r g y f o r u m .
proposed w i d e r d i s c u s s i o n s on e n e r g y p r o b l e m s , b u t we do n o t know what s p e c i f i c o b j e c t i v e s t h e M e x i c a n s OPEC members y e t r e a d y t o a c c e p t w o r l d have i n m i n d , n o r a r e energy d i s c u s s i o n s . initiative For f o r a meeting But i t
o u r p a r t we have e n c o u r a r e d t h e V e n e z u e l a n M e x i c o , Norway and
t h i s summer o f OPEC and non-OPEC o i l p r o d u c e r s i n c l u d i n g ourselver--.,
Canada, w i t h t h e UK a c t i n g as h o s t .materialise.
remains t o be s e e n w h e t h e r t h i s w i l l
/8.
CONFIDENTIAL
CONFIDENTIAL
8. It
[ i n f o r m a t i o n which
should
n o t be d i s c l o s e d ] have had much t i m e , b e f o r e o r questions. They a r e most o f i t f r o m t h e M i d d l e East i n t e r e s t s i n mind, contacts they
i s d o u b t f u l whether t h e I t a l i a n s oil,
after their elections, East. will
t o consider these
h e a v i l y d e p e n d e n t on i m p o r t e d e f f e c t i v e as y e t . they a r e handled With
T h e i r demand r e s t r a i n t measures have n o t been v e r y t h e i r Middle p r o b a b l y be i n f a v o u r o f p r o r i u c e r - c o n s u m e r c a u t i o u s l y and d i s c r e e t l y . provided
NUCLEAR MATTERS 9. The I t a l i a n Government has embarked on a s u b s t a n t i a l a b o u t 1 0 % , t o a b o u t 55%. nuclear
programme
o f 12000 M c a p a c i t y d e s i g n e d W o i l by ^9S^hy
t o r e d u c e i t s dependence I t has a l s o for i t s delayed t o provide fuel
on i m p o r t e d reactors.
i n v e s t e d i n t h e F r e n c h E u r o d i ^ programme But i t s i m p l e m e n t a t i o n
has been s u b s t a n t i a l l y t h e Government
because o f p u b l i c o p i n i o n and t h e r e s i s t a n c e o f r e g i o n a l and l o c a l Government m a t t e r s . safety 10. aspects. Signor A n d r e o t t i may t h e r e f o r e s h a r e t h e view recently E a r l i e r t h i s year appointed a c o m m i t t e e t o l o o k i n t o t h e p r o b l e m s o f t h e programme, and a l s o
expressed
b y Mr S c h m i d t t h a t t h e d e v e l o p m e n t o f n u c l e a r f o r an i n t e r n a t i o n a l t h e concern initiative that
power
c o u l d be hampered b y p u b l i c d o u b t s a b o u t r e a c t o r s a f e t y , a n d welcome his recent proposal safety. on r e a c t o r n o t lead He may a l s o s h a r e t h i s should
t o demands f o r a m o r a t o r i u m 11.
while the study i s i n progress.
The D e p a r t m e n t o f Energy v / i l l be recommending t h a t t h e Prime i n general terms Chancellor Board. c f the non-proliferation o f the o t h e r Schmidt's pending f u r t h e r d i s c u s s i o n , p e r h a p s a t t h e Summit and a t
M i n i s t e r s h o u l d welcome initiative t h e June m e e t i n g
o f t h e IAEA G o v e r n i n g Discussion
12. ' ( N o n - p r o l i f e r a t i o n ) . arrangements i s complicated members t o a n y t h i n g w h i c h
because o f t h e s e n s i t i v i t y
seems to c o n f e r an i n d u s t r i a l o r
/commercial CONFIDENTIAL
CONFIDENTIAL
c o m m e r c i a l advantage on B r i t a i n states. who The most p r o m i s i n g
and France as n u c l e a r weapon The I t a l i a n s , understanding
way forward may l i e i n e s t a p l i s h i n g
f r o m d i s c u s s i o n s may be a better o f n o n - p r o l i f e r a t i o n we concerns.
a d i a l o g u e among t h e N i n e on n o n - p r o l i f e r a t i o n . are anxious n o t t o be e x c l u d e d approach. and s e c u r i t y a t t r a c t e d by t h i s of the p o l i t i c a l By o b t a i n i n g importance
w o u l d hope t o r e d u c e t h e chances t h a t t h e Euratom T r e a t y w i l l be used t o o v e r - r i d e o u r n o n - p r o l i f e r a t i o n
CONFIDENTIAL
CONFIDENTIAL
THIS DOCUMENT I S THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT B R I E F NO 5 13 JUNE 1979 V I S I T BY THE PRIME MINISTER OF ITALY, 15 JUNE 1979 COPY NO 1
REFUGEES FROM INDO-CHINA B r i e f by t h e F o r e i g n and Commonwealth O f f i c e
POINTS TO MAKE | HONG KONG 1. Hong Kong i s a t s a t u r a t i o n p o i n t . Can I t a l y do more t o h e l p
Hong Kong, from where s h e i s so f a r t a k i n g no r e f u g e e s ? CONFERENCE 2. Dr Waldheim welcomes Mrs T h a t c h e r ' s c a l l for a special conference He may
but UNHCR's i d e a s o f p r e l i m i n a r y c o n s u l t a t i o n s l a c k v i s i o n . be c o n s t r a i n e d by h i s own mandate f o r r e f u g e e Dr Waldheim things moving.
r e l i e f and r e s e t t l e m e n t .
should be u s i n g t h e a u t h o r i t y o f h i s own p o s i t i o n t o g e t
3. I t a l y can h e l p by e m p h a s i s i n g t o Dr Waldheim ^ c o n f e r e n c e and by s a y i n g so p u b l i c l y . VIETNAMESE POLICY 4.
i t supports a
U n l e s s V i e t n a m e s e p o l i c y changes, t h e problem w i l l g e t worse. a S o v i e t Deputy
We have l e f t t h e Vietnamese i n no doubt o f what we t h i n k o f t h e i r b e h a v i o u r and have a l s o spoken t o the R u s s i a n s ; F o r e i g n M i n i s t e r h a s j u s t been i n London. d i r e c t l y t h r o u g h i t s Embassy i n H a n o i ? r e p r e s e n t a t i o n s a t a high l e v e l , both j o i n t l y Can I t a l y r e i n f o r c e t h e s e i n t h e Nine, and
5. rest
Vietnam w i l l u s e i t s l i m i t e d agreement w i t h UNHCR ( a c o n t r o l l e d f o r f a m i l y r e u n i f i c a t i o n ) a s a "con t r i c k " t o convince t h e this. o f the w o r l d t h a t i t i s now c o l l a b o r a t i n g f u l l y w i t h t h e We must n o t l e t them g e t away w i t h /ASEAN - 1 - CONFIDENTIAL
emigration
i n t e r n a t i o n a l community.
CONFIDENTIAL
ASEAN 6. The T h a i s and M a l a y s i a n s a r e a t t h e i r w i t s ' end t o cope w i t h The M a l a y s i a n s and I n d o n e s i a n s now r e f u s e t o to land. The R e f u g e e s P r o c e s s i n g C e n t r e , though the refugee f l o o d .
a l l o w more boat people
which may be s e t up on an I n d o n e s i a n i s l a n d i s o n l y a p a l l i a t i v e , every l i t t l e h e l p s . THAI POLICY 7. I am h o r r i f i e d a t t h e T h a i s ' d e c i s i o n t o push thousands o f death.
Cambodians back a c r o s s t h e f r o n t i e r t o m i s e r y and p r o b a b l y T h i s i s a s e p a r a t e problem but we cannot anything t o prevent i t ? BACKGROUND ITALIAN POLICY ignore i t .
Can we do
8.
The I t a l i a n r e s p o n s e
t o t h e Prime M i n i s t e r ' s c a l l f o r a c o n f e r e n c e they w i l l probably go a l o n g w i t h
has been g e n e r a l l y s y m p a t h e t i c ; the m a j o r i t y o f the Nine.
The m a t t e r i s on t h e agenda f o r t h e meeting i n P a r i s on 17-18 June.
M i n i s t e r i a l P o l i t i c a l Co-operation 9.
I t a l y ' s highest p r i o r i t y i n refugees i s as a reception centre
f o r J e w i s h r e f u g e e s from t h e S o v i e t Union, a t t h e r a t e o f 5,000 a month. They have agreed t o t a k e 100 r e f u g e e s from M a l a y s i a and T h a i l a n d
and have s a i d t h e y w i l l c o n s i d e r t a k i n g some from Hong Kong i n any f u r t h e r group. T h e i r c o n t r i b u t i o n s t o UNHCR funds a r e low, b u t
they a r e c o n s i d e r i n g a t o t a l o f about 0.4 m i l l i o n . NUMBER OF REFUGEES 10. About 350,000 a r e a w a i t i n g r e s e t t l e m e n t . The Americans and The
C h i n e s e have a l r e a d y t a k e n over 200,000 each f o r s e t t l e m e n t . F r e n c h have r e c e i v e d 50,000, t h e C a n a d i a n s 9,200. and
15,000 and Hong Kong
The UK had a l r e a d y a c c e p t e d 1,573 Vietnamese by 22 May, Over 51,000 r e f u g e e s a w a i t r e s e t t l e m e n t
350 o t h e r I n d o - C h i n e s e .
i n Hong Kong. CONFIDENTIAL /11.
- 2
CONFIDENTIAL 11. We have a c c e p t e d o v e r 1,000 from t h e M Sibonga ( t o be o f f s e t , V
a s f a r a s p o s s i b l e , a g a i n s t t h e unused p a r t o f a quota o f 1,500 agreed by t h e p r e v i o u s Government). I t h a s been made c l e a r t h a t
f u t u r e s h i p s ' c a s e s w i l l be c o n s i d e r e d on t h e i r m e r i t s , b u t r e f u g e e s from t h e MV Roach Bank w i l l be a c c e p t e d , t a k e them. VIETNAMESE POLICY 12. R e l a t i o n s w i t h C h i n a a r e u n l i k e l y t o improve. Discrimination The i f t h e Taiwanese w i l l n o t
a g a i n s t Vietnam's C h i n e s e m i n o r i t y i s u n l i k e l y t o s t o p . Vietnamese a r e r e s e n t f u l o f f o r e i g n a d v i c e . THE 13. UNHCR-VIETNAM AGREEMENT
The Vietnamese a u t h o r i t i e s a r e c l a i m i n g t h a t arrangements under
an agreement o f 30 May w i t h t h e UN Deputy High Commissioner t o a l l o w " r e f u g e e s " t o l e a v e Vietnam d i r e c t l y t o c o u n t r i e s o f f i n a l s e t t l e m e n t show t h e i r w i l l i n g n e s s t o c o - o p e r a t e w i t h the world community
T h i s p r o p o s a l o n l y c o v e r s t h o s e who a l r e a d y have o f f e r s o f s e t t l e m e n t p l a c e s , b e c a u s e o f l i n k s w i t h r e l a t i v e s a l r e a d y i n t h e USA e t c ; a t p r e s e n t l e v e l s o f o u t f l o w t h e 20,000 t o 30,000 who q u a l i f y about two weeks' flow o f boat THE 14. PRIME MINISTER'S PROPOSAL Dr Waldheim h a s r e a c t e d p o s i t i v e l y , b u t the UNHCR who i s soundings w i t h i n t e r e s t e d governments, i s r e l u c t a n t t o without r e c e i v i n g advance p l e d g e s o f people. ^ equal
conducting
convene t h e c o n f e r e n c e
r e s e t t l e m e n t and f i n a n c i a l the UK.
c o n t r i b u t i o n s from major c o u n t r i e s l i k e
U n l e s s Dr Waldheim c a n be p e r s u a d e d t o t a k e t h e i n i t i a t i v e , w i l l be d e l a y e d , o r w i l l be o f i n s u f f i c i e n t scope.
a conference ASEAN
The Refugee P r o c e s s i n g C e n t r e , i f i t comes about, w i l l be f o r o n l y a maximum o f 10,000 people a l r e a d y a c c e p t e d T h a i l a n d i s h a r d put t o i t t o c o n t a i n t h e l a t e s t across i t s land f r o n t i e r . the Khmer Rouges may k i l l f o r settlement. f l o o d o f Cambodians although
The p o l i c y i s now t o t u r n them back, them. CONFIDENTIAL3
CONFIDENTIAL
BRIEF NO 6
13 JUNE 1979
COPY NO
A
1
THE PRIME MINISTER'S MEETING WITH SIGNOR ANDREOTTI : 15 JUNE 1979 (DEFENSIVE)
AFRICAN QUESTIONS
P o i n t s t o Make Rhodesia [Defensive]
Consultat ions/Timetable 1. to 2.
UK p o l i c y was e x p l a i n e d i n o f f i c i a l June. be e x p e c t e d
level bilateral [21/22
talks June].
on A f r i c a i n Rome o n 7 / 8
F u r t h e r s t e p s on R h o d e s i a n o t
by t i m e o f European C o u n c i l m e e t i n g
Government w i l l d e c i d e
on b e s t way f o r w a r d i n l i g h t o f Lord Harlech visiting Front Line t o meet P a t r i o t i c Front (returning
c o n s u l t a t i o n s now u n d e r way. S t a t e s and N i g e r i a a n d e x p e c t s 28 J u n e ) : may v i s i t Liberia Zaire. Importance
other countries l a t e r . o f Lusaka Commonwealth
Mr Luce t o v i s i t Coast, Meeting.
( h o s t t o OAU Summit i n J u l y ) ,
Senegal, I v o r y
U S Policy
3.
P r e s i d e n t i a l d e t e r m i n a t i o n showed d i f f e r e n c e o f emphasis But s i m i l a r
o v e r R h o d e s i a n e l e c t i o n s a n d Muzorewa Government. p r a c t i c a l a p p r o a c h t o common o b j e c t i v e . Sanctions 4.
E x p i r y o f UK l e g i s l a t i o n i n November. not t o follow
E a r l i e r l i f t i n g by
US w o u l d make i t d i f f i c u l t
suit. /Evacuation
CONFIDENTIAL
CONFIDENTIAL
E v a c u a t i o n o f UK and I t a l i a n 5. Rhodesia
Nationals Each c o u n t r y s h o u l d plan
not about t o c o l l a p s e .
as n e c e s s a r y . Namibia 6. to 7. Mr Luce r e p o r t e d t h a t a l l t h e p a r t i e s a r e s t i l l the o r i g i n a l P r o p o s a l . The r e m a i n i n g We must b u i l d on t h i s . committed
d i f f e r e n c e s c a n be overcome by n e g o t i a t i o n c a n be r e s t o r e d . instance
i f t h e r i g h t atmosphere o f c o n f i d e n c e 8.
The F i v e w i l l resume n e g o t i a t i o n s , i n t h e f i r s t
w i t h t h e South A f r i c a n s , i n t h e n e a r f u t u r e . Background Rhodesia [1. [Not f o r u s e ] June, an British
I n t a l k s w i t h h i s I t a l i a n c o u n t e r p a r t s on 7 / 8 The I t a l i a n s Cooperation
FCO Under S e c r e t a r y gave a f u l l d e s c r i p t i o n o f p r e s e n t views on R h o d e s i a . through P o l i t i c a l m e e t i n g s o f t h e Nine.
a r e kept r e g u l a r l y up t o date There a r e
no s p e c i a l p o i n t s t o r a i s e w i t h S i g n o r A n d r e o t t i . 2. The I t a l i a n s have f a i r l y f r e q u e n t c o n t a c t w i t h Mr Mugabe. (perhaps They
They a r e i n c l i n e d t o sympathise
with the P a t r i o t i c Front
i n p a r t t o a v o i d c l a s h i n g w i t h Communist o p i n i o n a t home). w i l l w i s h t h e UK t o c o n s u l t w i d e l y over R h o d e s i a , an accommodation between i n t e r n a l and e x t e r n a l p a r t i e s .
and t o promote
US P o l i c y 3. I t a l i a n o f f i c i a l s have s a i d t h e y hope t h e US Government w i l l
c o n t i n u e t o be c l o s e l y i n v o l v e d i n e f f o r t s t o f i n d a R h o d e s i a n settlement. /Sanctions
"^CONFIDENTIAL
CONFIDENTIAL
Sanctions 4. S p e c i a l laws were p a s s e d i n I t a l y t o e n f o r c e sanctions.
T h e i r r e p e a l might meet s t r o n g o p p o s i t i o n .
The I t a l i a n Govern
ment would need time t o p r e p a r e t h e ground.] [For use as necessary]
Evacuation 5. T h e r e a r e about 2000 I t a l i a n n a t i o n a l s i n R h o d e s i a . We
have t o l d t h e I t a l i a n Government t h a t we do n o t have c o n t i n g e n c y plans to a s s i s t with t h e i r evacuation. l i k e l y t o be needed i n t h e s h o r t term. the UK's a b i l i t y t o a s s i s t would be l i m i t e d . A mass e v a c u a t i o n i s not Should t h e need arise,
200,000 o r more p o t e n t i a l e v a c u e e s
Present 6. His for
Situation f e e l i n g h i s way, and h a s not y e t t a k e n
Muzorewa i s s t i l l
d e c i s i v e a c t i o n t o promote i n t e r n a l change, eg t o c o n s t i t u t i o n . o f f e r s o f r e c o n c i l i a t i o n w i t h F r o n t L i n e S t a t e s and amnesty g u e r i l l a s n o t t a k e n up. On t h e o t h e r hand ZANU and ZAPU a r e t h e i r Addis Ababa "agreement" does not p r o v i d e integration.
achieving l i t t l e ;
basis for effective
Namibia 7. the the The F o r e i g n M i n i s t e r s o f the F i v e d i s c u s s e d Namibia d u r i n g North A t l a n t i c new i n i t i a t i v e C o u n c i l i n The Hague l a s t month. is still I t was The l i k e The s u b s t a n c e o f
agreed t h a t n e g o t i a t i o n s s h o u l d be resumed.
(12 June) b e i n g d i s c u s s e d .
l i h o o d o f a S e c u r i t y C o u n c i l meeting on 18 June n e c e s s i t a t e s some e a r l y p u b l i c move t o demonstrate t h a t t h e UN p l a n c a n s t i l l be put into effect.
/8.
CONFIDENTIAL
-3
CONFIDENTIAL
8.
The
South A f r i c a n s and
the p o l i t i c a l groups i n Namibia i n h i s R e p o r t of 26 was
have r e j e c t e d Dr Waldheim's p r o p o s a l s February no o u t s i d e and i n s i d e Namibia. Mr and
on the q u e s t i o n of UN m o n i t o r i n g o f SWAPO t r o o p s Luce c o n c l u d e d t h a t t h e r e The F i v e should parties. find alternatives
j u s t i f i c a t i o n f o r g i v i n g up. to r e s t o r e c o n f i d e n c e for Mr Use
to Dr Waldheim's p r o p o s a l s igned [Not 9.
promote a s e r i e s of measures d e s
among the
Luce recommended i n h i s r e p o r t t o the S e c r e t a r y of S t a t e r e p r e French Led Apart from t h e
t h a t the n e g o t i a t i o n s be resumed by a s i n g l e n e g o t i a t o r s e n t i n g the F i v e w i t h a broad mandate. our p a r t n e r s i n the F i v e d i d not a g r e e to t h i s a p p r o a c h .
by the Americans, t h e y have argued f o r a c o n t i n u a t i o n of a They a r e r e l u c t a n t to extend d i s c u s s i o n beyond the two versial 10. i s s u e s i n Dr Waldheim's R e p o r t . of
joint
n e g o t i a t i n g team i n c l u d i n g r e p r e s e n t a t i v e s from a l l f i v e c o u n t r i e s . c o n t r o
I n view of the need to produce some evidence few days i f , t o g e t h e r w i t h the US and
progress we
i n the next
France,
a r e to be on good
ground i n opposing c a l l s f o r s a n c t i o n s i n have agreed to drop our i n s i s t e n c e on The substance f o r the moment.
the S e c u r i t y C o u n c i l we New York Contact
the appointment of a s i n g l e n e g o t i a t o r Group a r e now
(12 June) w o r k i n g on the
of the next round of n e g o t i a t i o n s . 11. South A f r i c a ' s d e s i r e to e s t a b l i s h c l o s e r r e l a t i o n s Conservative Lord a d m i n i s t r a t i o n , w i l l g i v e HMG with
the new
greater
i n f l u e n c e over the South A f r i c a n Government t h a n our i n the F i v e . Five i n launching the new
partners sees
C a r r i n g t o n w i l l p r o b a b l y speak f o r the round o f n e g o t i a t i o n s when he June.]
the South A f r i c a n F o r e i g n M i n i s t e r i n London on 20
F o r e i g n and
Commonwealth O f f i c e
-4-
CONFIDENTIAL
CONFIDENTIAL
M I S DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT
BRIEF N 7 O 13 JUNE 1979
COPY NO
VISIT BY THE PRIME MINISTER OF ITALY [ 1 |j JUNE 1979
BILATERAL QUESTIONS
B r i e f by the Foreign and Commonwealth O f f i c e
( )3
Fuel supplies by Mobil (UK) to I t a l i a n Charter Company, I t a v i a , a t G3twick A i r p o r t
(b)
Police Co-ooeration
(a) 1.
ITA"IA: POINTS TO MAKE (only i f raised) Glad that ITAVIA has managed t o f i n d f u e l so f a r f o r i t s g r e a t l y expanded
1979 charter programme, and hope t h a t the f i r m w i l l continue t o do so. 2. HHG are leaving i t t o the o i l companies t o decide on a l l o c a t i o n and pricir>.< officially.
of the f u e l a v a i l a b l e . The Government cannot therefore intervene
ESSENTIA PACTS (Parar. 3~5 can be used f r e e l y ) 3.. I n 1974 during the 3-day week the I t a l i a n s were the only ones to threaten retaliation against the B r i t i s h Government's r a t i o n i n g cystcm (which affected
rty congress, haa been that the party should e i t h e r a c t u a l l y p a r t i c i p a t e i n government or go i n t o opposition. A majority of C h r i s t i a n Democrats oppose any
/co'iit iion
CONFIDENTIAL
CONFIDENTIAL
coalition with the PCI. J. The noct significant feature:; o f tho r e s u l t s o f the General E l e c t i o n or.
J-M June Were an follows: a) The Communists f e l l bad; a few point:; as had been p r e d i c t e d . This was the f i r s t time they have l o s t ground since the war. But they s t i l l remain above the psychologically important threshold o f J / * O" b) the C h r i s t i a n Democrats held up w e l l , though less w e l l than they expected. Their share o f the vote dropped h a l f a percent; they nevertheless gained 3 seats i n the Senate but l o s t one i n the Chamber of Deputies; c) the S o c i a l i s t s gained several seats but d i d not s u b s t a n t i a l l y improve t h e i r percentage o f the vote; d) s i g n i f i c a n t gains i n terms o f seats were registered only by the smaller p a r t i e s . The Social Democrats, Republicans and L i b e r a l s The Radical ( l e f t - w i n g a n t i - E s t n b l i s l
a l l improved t h e i r p o s i t i o n . ment Party
J won about y,o o f the vote and w i l l now have 18
representatives i n the Chamber against k i n 1976; e) the turnout, a t 89.9/ s the lowest ever recorded i n a postw
war I t a l i a n e l e c t i o n ( v o t i n g i s compulsory). h. These r e s u l t s arc inconclusive. On past form i t w i l l take k to 6
weeks f o r a new government to be formed and i t i s impossible to p r e d i c t i t s eventual form. A change i n the d i r e c t i o n o f I t a l i a n p o l i t i c s can The good showing o f the smaller only be produced i f e i t h e r the C h r i s t i a n Democrats or the Communists can be l e f t unambiguously i n opposition. centre parties, together with the decline i n the Communist vote, could make i t marginally easier t o form a stable c o a l i t i o n o f the centre ( i e i n c l u d i n g the C h r i s t i a n Democrats) l e a v i n g the Communists i n opposition. But such a government would lack a majority without S o c i a l i s t support. The S o c i a l i s t s have not yet declared t h e i r i n t e n t i o n s , but t h e i r leader C r i x i has implied t h i t a c o n d i t i o n o f hi:; support for such a c o a l i t i o n would be the replacement o f Aii'ir':otti as Primu Minister-. There are oth>
/candidate CONFIDENTIAL
CONFIDENTIAL
candidates i n the C h r i s t i a n Democrat leadership who could f i l l Minister.
this
r o l e , including the Party President, P i c c o l i , and F o r l a n i , the Foreign
5.
Signor Andreotti i s expected
to bo the f i r s t to be i n v i t e d , i n duo For the time being he continues i n
course, to form a new government. power on a caretaker basis. 6.
The Elections to the European Parliament took place i n I t a l y on 10 The detailed r e s u l t s are a t Annex C. At 85.9?i the turnout was The
June.
lower than that f o r the general e l e c t i o n the previous week.
r e s u l t s o f the Euro-Elections confirm the trends apparent i n the General E l e c t i o n , p a r t i c u l a r l y the drop i n the Communist vote and the swing towards the smaller p a r t i e s . The f a c t that the C h r i s t i a n Democrats d i d less w e l l than i n the General E l e c t i o n suggests that voters are less a f r a i d than i n the past that f a i l u r e to vote Christian Democrat v / i l l l e t the Communists i n t o government.
THE ECONOMY 7.
The continuing p o l i t i c a l u n c e r t a i n t y means that no serious decisions The economy
on economic p o l i c y are l i k e l y to be taken before the autumn. i n d u s t r i a l production are encouraging.
continues to perform w e l l on the'external f r o n t , and recent figures on But there i s s t i l l considerable unease about the rate o f i n f l a t i o n (now at nearly 14JJ), and the i n d u s t r i a l scene i s g e t t i n g tenser as negotiations on new wage c o n t r a c t s , most o f which s t i l l have to be completed, reach a c r i t i c a l stage. The v i s i t o f an IMF team for routine consultations i n early A p r i l was the occasion f o r some severe warnings about i n f l a t i o n a r y prospects, and there have recently been rumours that I t a l y i s t o seel: a 5US1 b i l l i o n IMF c r e d i t so that the Government can blaiiethe conditions which would be attached t o such a loan for the implementation o f r e s t r i c t i v e p o l i c i e s which i t knows are necessary The Government w i l l o f but which i t would i t s e l f be unable to introduce. n a t i o n a l o i l price increases.
course be p a r t i c u l a r l y worried about the economic impact o f recent i n t e r
Foreign and Coatoonwealth Office < 13 June 1979 CONFIDENTIAL
CONFIDENTIAL
ANNEX A
PERSONALITY NOTES ON SIGNOR ANDREOTTI AND SIGNOR FORLANI
Signor Andreotti 1. Signer G i u l i o A n d r e o t t i i s 60 and i s married with several c h i l d r e n . today.
He i s perhaps the cleverest and coolest p o l i t i c a l loader i n I t a l y he has held o f f i c e i n most governments since 19^7.
A man o f government rather than o f the C h r i s t i a n Democrat Party machine, He has been President of the Council (Prime M i n i s t e r ) f o r 2 long stretches (5 governments) and has presided over c e n t r e - r i g h t and c e n t r e - l e f t c o a l i t i o n s as w e l l as single party C h r i s t i a n Democrat governments. His l a t e s t tenure o f the Premier ship (1976 to present) has been notable f o r h i s s k i l f u l management o f parliamentary a l l i a n c e s , i n v o l v i n g the support o f the I t a l i a n Communist Party, without making serious concessions to the l a t t e r . 2. I n 1978 Sgr A n d r e o t t i won j u s t i f i a b l e praise f o r h i s calm and I n the recent
courageous handling o f the Moro kidnapping and murder.
e l e c t i o n s , he won more preference votes (whereby e l e c t o r s may express a personal preference on p a r t y l i s t s ) than any other parliamentary candidate. But despite these impressive achievements, h i s c r i t i c s , p a r t i c u l a r l y the I t a l i a n S o c i a l i s t Party, are now t r y i n g to unseat him on the grounds that a fresh, more dynamic leader i s required. His changes o f s u r v i v i n g as Prime M i n i s t e r i n the end cannot a t present be regarded as highe