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CONFIDENTIAL RECORD OF THE P R I M E M I N I S T E R ' S -GISCARD D ' E S T A I N G
Present
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CONVERSATION
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CONFIDENTIAL
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AT 1 1 1 0
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WITH PRESIDENT
M. J a c q u e s M.
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Following up her reference to energy, the Prime Minister
s a i d that t h i s was an issue on which there had been a great deal
of a n a l y s i s but too l i t t l e work on possible s o l u t i o n s ; a great
deal of thought had been devoted to objectives so f a r as
r e l a t i o n s between the consumer and the producer countries
were concerned but very l i t t l e to the methods by which these
could be achieved. The Prime Minister s a i d that i t had been
her p a r t i c u l a r wish to v i s i t a French nuclear plant during her
b r i e f v i s i t because France had been the f i r s t European country
to take fundamental decisions on energy policy, decisions which
would stand her in very good stead in the future.
President Giscard s a i d that France and the United Kingdom had
He would l i k e to speak very
a long history of partnership. frankly about recent developments in t h e i r r e l a t i o n s . With
Jim Callaghan, President Giscard s a i d , he had enjoyed a good and
He had t r i e d to b u i l d on to t h i s a
easy personal r e l a t i o n s h i p . good working r e l a t i o n s h i p but t h i s had not r e a l l y been p o s s i b l e
since the l a s t B r i t i s h Government had shown no i n t e r e s t in
j o i n t action in Europe nor any f a i t h in the European Community.
They had been i n t e r e s t e d only in u n i l a t e r a l advantage. This
had been the experience not only of France but of the other
governments in the Community, even those who might have sympathised,
because of t h e i r S o c i a l i s t b e l i e f s , with a Labour Government.
The r e s u l t had been the formation of a kind of front from which
the UK had been excluded. Despite t h e i r history as a d v e r s a r i e s ,
France and the FRG had formed the habit of working very c l o s e l y
together. President Giscard s a i d that the Germans were easy
people to work with: they were constructive, showed good f a i t h
and kept t h e i r promises. There had been no intention on the
part of France or Germany to exclude Great B r i t a i n from t h e i r
d e l i b e r a t i o n s ; indeed, the FRG had t r i e d very hard to bring
Britain in. But, following a s e r i e s of disappointments, i t
had proved impossible to do t h i s .
President Giscard went on to say that the larger membership
of the Community, soon to grow larger s t i l l , introduced d i f f i c u l t i e s
and complications into i t s work. The smaller Community members
were i n c l i n e d to resent the fact that some decisions were,
i n e v i t a b l y , imposed upon them. The larger members did t h e i r
best to take account of the legitimate pride and i n t e r e s t s of
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the smaller countries: but the fact was that important goals
could only be achieved by those countries which had the means
to do so. President Giscard s a i d that he hoped that the United
Kingdom would now be a more active partner in the Community.
Her contribution was badly needed; she had, for example, a
much wider i n t e r n a t i o n a l experience than the FRG.
The Prime Minister said that there was a very r e a l determination
on the part of the new B r i t i s h Government to play t h e i r f u l l part
in Europe. So f a r as the Anglo-French b i l a t e r a l r e l a t i o n s h i p
was concerned, there were things in common between France and
B r i t a i n which did not e x i s t as between B r i t a i n and the FRG.
This was p a r t i c u l a r l y true in some defence matters, where the
d i v i s i o n of Germany created a d i f f e r e n t dimension in the German
approach. The Prime Minister s a i d that i t was her s p e c i a l wish
that b i l a t e r a l r e l a t i o n s between France and the UK should go
w e l l , not j u s t at the time of major meetings but for twelve
months of the year. President Giscard said that h i s reading
of h i s t o r y and h i s t o r i c a l biography had impressed him with the
very s p e c i a l nature of the Anglo-French r e l a t i o n s h i p : there had
been competition between them for hundreds of years, interspersed
During the nineteenth century,
by close l i n k s and b i t t e r f i g h t s . the r e l a t i o n s h i p had been characterised by suspicion and i r r i t a t i o n .
I t was h i s personal b e l i e f that t h i s period was now over:
neither country was any longer competing with the other for
i n t e r n a t i o n a l supremacy, since the period of empire had come to
Both countries now faced s i m i l a r problems. Against
an end. t h i s background, i t should not be d i f f i c u l t to create an atmosphere
of partnership between France and B r i t a i n .
Commenting further on the B r i t i s h approach to the EEC,
President Giscard r e c a l l e d that the UK had joined the Community
l a t e and had then engaged in a s o - c a l l e d renegotiation; the
r e s u l t had seemed to be that the UK had never been at ease within
the Community. Having entered under s p e c i a l terms, there had
always been a f e e l i n g that the UK was pleading a s p e c i a l case.
/EEC Budget
EEC Budget
The Prime Minister told President Giscard that the present
structure of the Community budget presented the UK with a very
major problem: at the end of the t r a n s i t i o n a l period, the
UK would be making a net contribution of £1500 m i l l i o n .
The Government would l i k e to have some of t h i s money to pay for
domestic tax reductions. The Prime Minister s a i d that she hoped
very much that t h i s question could be given a place on the agenda
for the next meeting of the European Council at Strasbourg.
She had already asked the President of the Commission to e s t a b l i s h
The present s i t u a t i o n was a grave embarrassment to
the f a c t s . the Government's e f f o r t s to push the case for Europe in the UK;
i t was unjust and unreasonable. The UK c e r t a i n l y did not expect
the
to get out of the Community exactly what she put into i t ; Government a l s o expected to improve the UK's economic performance.
The budgetary s i t u a t i o n in 1980, however, would nevertheless be
A constructive discussion at Strasbourg,
acutely d i f f i c u l t . leading to s o l u t i o n s , would be a great help to the Government
i n putting the case for Europe to the B r i t i s h people. The
Prime Minister expressed the view that the problems of the CAP
and those of the Community budget could and should be kept
separate; there was also a c l e a r d i s t i n c t i o n between the CAP
The Prime Minister
as such and the way in which i t was financed. s a i d that, as a committed European, she did not wish t h i s one major
problem to dominate the UK's future discussions with her partners
any longer.
President Giscard said that he understood the Prime Minister's
view. He r e c a l l e d that, in the past, the UK had always supported
higher expenditure by the Community, while asking that she should
pay a smaller share of i t . I t was necessary to adjust in both
directions. The Community's budget was now f a r too l a v i s h ;
i t was absurd that money should be thrown away on a building of
110,000 sq.m. in Brussels. The French Government favoured a
tight budgetary policy for the Community. They also strongly
favoured the "own resources" system of c a l c u l a t i n g the contributions:
import duties paid in Rotterdam should not belong to the Dutch
but to European trade as a whole. France had agreed to a l l o c a t e
1% of VAT revenue to the Community budget but t h i s should be
sufficient.
U
m
i i v L i t IS M L
Turning to the problem of the MCAs, President Giscard s a i d that France was opposed to them and believed that they could be quickly eliminated i f i t were not for the UK and I t a l 1 an ^os^^ioYiW^f 1979 was the l a s t year i n which some of the UK contribution would be refunded: the question was, should t h i s period be extended further? The Prime Minister said that t h i s would be one p o s s i b i l i t y She showed President Giscard the table of figures, from her b r i e f s , s e t t i n g out the UK net contribution i n 1980. President Giscard admitted that there was a problem. The Prime Minister pointed out that a 50% reduction i n the UK's net contribution would be the equivalent of a 2% reduction i n income tax. She went on to say that the MCAs had never been intended to operate as they now did: the UK could produce more food, p a r t i c u l a r l y butter and bacon, very competitively. President Giscard commented that the agreement reached i n Dublin on the c o r r e c t i v e mechanism lasted only u n t i l 1979 and the Prime Minister pointed out that, since i t required three years of balance of payments d e f i c i t , i t would not operate i n any case for the UK, because of North Sea o i l . The Prime Minister s a i d
that, although the Government hoped that the UK's GNP would grow,
i t was nevertheless wrong i n the meantime that, with only 151%
of the Community's GNP, the UK should account for 18% of the
Community's budget.
President Giscard told the Prime Minister that i f tne UK
wished to ask the European Council to include the problem of the
budget i n the agenda for Strasbourg, France would have no reason
to object although, for formal reasons, she would have to consult
the other members. He for h i s part would be prepared to
c i r c u l a t e appropriate proposals for the agenda and would suggest
to the Prime Minister an appropriate formulation on the budget.
He suggested that there should be, at Strasbourg, a general
discussion of the budget l a s t i n g for, say, half an hour, and that
the Council could then i n s t r u c t the President of the Commission
to e s t a b l i s h the f a c t s and analyse the s i t u a t i o n ; then, at t h e i r
next meeting inJDliblin, the Council could draw the necessary
conclusions. The Prime Minister commented that the f a c t s had
already been established: they could be l a i d before the
Strasbourg Council and the Commission could then be asked,
/not for
6
not for f a c t s , but for ideas on how the position could be
corrected. President Giscard s a i d that he could agree to t h i s .
The Council could conclude that a problem existed and ask the
Commission to suggest ways of correcting d i s t o r t i o n s i n the s i t u a t i o n .
I t would be necessary to work c l o s e l y with the Germans and to
have discussions with them behind the scenes.
CAP
President Giscard s a i d that France had earned a bad reputation
so f a r as the CAP was concerned and he wished to change i t .
France was the largest producer of a g r i c u l t u r a l products i n
the Community, although i n some areas such as meat and dairy
products she was not the most competitive. France wished to
compete on f a i r terms. The French Government would, he
repeated, be glad to see the MCAs eliminated but any such move
was blocked by the UK's attitude on the question of a p r i c e freeze.
I t was d i f f i c u l t for any Government to reduce the p r i c e s payable
to t h e i r farmers: Chancellor Schmidt had agreed to reduce the
MCAs provided that there was a nominal increase in p r i c e s at the
same time. An increase of 2%, for example, would reduce
p o s i t i v e MCAs to zero. I t would be possible for the UK to
share t h i s position while opposing any increase i n the p r i c e s
President Giscard s a i d he
of products which were i n surplus. hoped the B r i t i s h Government could reconsider t h e i r attitude on
t h i s matter. France, for her part, had no desire to increase
the surpluses s t i l l further and was, indeed, prepared to
contribute to t h e i r reduction. France was nevertheless
profoundly attached to the p r i n c i p l e of a single market i n
a g r i c u l t u r e and to the maintenance of a b a r r i e r around the
Community against the rest of the world. Although the proposal
was s t i l l c o n f i d e n t i a l and he did not wish the press to learn of
i t , the French Government was thinking of suggesting that a
system should be devised i n which those countries which were
responsible for creating the a g r i c u l t u r a l surpluses should also
be responsible for financing them.
/The
Prime Minister
The Prime Minister pointed out that the UK was quite capable
of engaging in f a i r competition but could not be expected to
compete against subsidised produce. She expected heavy competition
from France and Germany in manufactures, an area in which the
UK was h e r s e l f l e s s e f f i c i e n t , but the UK's e f f i c i e n c y in
a g r i c u l t u r e did not bring a f a i r reward. President Giscard
commented that the UK would encounter problems in endeavouring
to change the s i t u a t i o n - not from France, but from countries
such as the Netherlands, Denmark and Ireland. I f the UK were
to concentrate her e f f o r t s at reform on the problem of
a g r i c u l t u r a l surpluses, she would encounter no adverse reaction
from France; there would, however, be a French reaction i f the
concept of the single market for agriculture were to come under
attack. The organisation of the CAP and the method of financing
i t were d i f f e r e n t questions.
EMS
Turning to the EMS, the Prime Minister noted that the review
of the exchange rate system vould be taking place in three months'
time. The UK had, at present, a high exchange rate for s t e r l i n g ,
not because of the UK's economic performance but because of North
Sea o i l . The Government needed to keep the rate high for the
time being and t h i s would make i t d i f f i c u l t to enter the EMS
s t r a i g h t away. I t might, however, prove possible at the time
of the exchange rate review to swap some of the UK's reserves
for ECUs. In the longer term, the UK was keen to j o i n the
President Giscard
European Monetary System i f t h i s was f e a s i b l e . commented that i t was not necessary for the UK to reach a
f i n a l decision on j o i n i n g the EMS quickly. I t would, however,
be s i g n i f i c a n t i f the UK were to create the conditions for
j o i n i n g ; he recommended a progressive approach to entry, which
would be better than to attempt to move too f a s t .
/At
1215
LOftriDhmlAL At 1215 the Prime Minister and President Giscard were
joined by:
M. The Mr. M.
Raymond Barre
Foreign and Commonwealth Secretary
G. G. Walden
Robin
* * * * * *
Energy and the Tokyo Summit
President Giscard summarised the subjects which he and the
Prime Minister had already covered during t h e i r t e t e - a - t e t e
discussion and said that the Prime Minister had suggested that,
with Lord Carrington and M. Barre, they should discuss the forth
coming Economic Summit in Tokyo and the problem of energy, before
moving on to wider i n t e r n a t i o n a l i s s u e s .
The Prime Minister said that energy was expected to be the
main item on the agenda of the Tokyo Summit. The problem was how
the leading energy users could persuade the leading energy producers
not to r a i s e t h e i r p r i c e s s t i l l further and thereby cause a world
recession. Western objectives were thus quite c l e a r but the methods
by which they might be achieved were very unclear. S p e c i f i c ideas
were needed. The problem was common to many Western countries,
although France had moved further along the road to a solution
than any other country in Europe, through her nuclear programme.
The UK, for her part, had found only a temporary solution in her
North Sea o i l . President Giscard asked how temporary a solution
t h i s was. The Prime Minister s a i d that i t would l a s t for 15 to
20 years. President Giscard commented that t h i s was a help.
The Prime Minister went on to say that the a l t e r n a t i v e s facing some
countries were e i t h e r to go a l l out for nuclear power, or, i f they
were unwilling to do t h i s , to accept a s i g n i f i c a n t reduction in
t h e i r standard of l i v i n g .
The Prime Minister said that she had never attended an Economic
Summit but she had studied t h e i r communiques c l o s e l y : they were
always the same. Meanwhile, the world's economic problems continued
/ and
so
CONHnFMTl&l
and so did the communiques. President Giscard agreed and s a i d
that, although discussions at Economic Summits had become academic,
the f i r s t such meeting, at Rambouillet, had produced useful r e s u l t s
in the form of a s t a b i l i s a t i o n of exchange r a t e s . Unfortunately,
however, p a r t i c i p a t i o n in the Summits had then been enlarged:
t h e i r communiques were now j u s t words. President Giscard agreed
with the Prime Minister that the next Economic Summit should con
centrate on energy. He thought that i t should, despite everything,
be possible to achieve some useful r e s u l t s . He would l i k e to
suggest what these might be.
F i r s t l y , President Giscard said, the Summit could demonstrate
a r e a l determination on the part of the major energy users to
reduce t h e i r consumption. France, for her part, would lower
temperatures in public buildings and impose a c e i l i n g on the
amount of o i l consumed by power s t a t i o n s . These measures could
be discussed at the European Council meeting in Strasbourg.
Secondly, i t was a fact that the operation of the spot market
in o i l produced unacceptable r e s u l t s . The international o i l companies
should be asked to keep out of the spot market during, i n the
f i r s t instance, the month of June. Chancellor Schmidt, i n a recent
discussion with M. Barre, had agreed that t h i s measure should be
taken in order to produce a moderating effect on p r i c e s . I t was a
fact that every Gulf r u l e r had the l a t e s t spot market p r i c e on h i s
desk f i r s t thing every morning.
Thirdly, agreement should be reached on an annual approach
by the major users to the major producers i n order to a s s e s s
whether the savings planned by the users during the coming year,
as well as the production l e v e l s planned by the producers, would
be s u f f f i c i e n t and in phase with each other.
Fourthly, the Summit p a r t i c i p a n t s should discuss a programme
for e x p l o i t i n g a l t e r n a t i v e sources of energy. This was mainly
a problem for the Europeans, since the Americans and Canadians were
already making progress i n t h i s f i e l d . President Giscard added,
/ in
fCNHDENTIAL
in parentheses, that he had j u s t received a report from
M. Francois-Poncet, who was in Washington, to the e f f e c t that
press reports about the U.S. Administration's decision to sub
s i d i s e o i l imports were too p e s s i m i s t i c : President Carter was
in fact working on the introduction of quite d r a s t i c conservation
measures, on a possible approach to the o i l producers and on steps
to s t a b i l i s e the spot market in o i l - p r e c i s e l y those measures
which he was himself advocating. President Giscard s a i d that he
thought that the American approach seemed quite constructive.
Lord Carrington commented that i t was e s s e n t i a l to formulate,
during the European Council meeting in Strasbourg, a European
approach to the Tokyo Summit. The Prime Minister said that, ever
since the Yom Kippur war, the West had managed to absorb s u b s t a n t i a l
increases in the p r i c e of o i l , to the extent that i t would soon
be economic to extract o i l from the t a r sands and shale - t h i s
would require a price of $40 per b a r r e l . A s i t u a t i o n had been
created a year ago in which the West had once again found i t s e l f
with a surplus of o i l but t h i s s i t u a t i o n would not be repeated
because of events in Iran.
Describing the French nuclear power programme, President
Giscard commented that an anti-nuclear demonstration in Loraine
on the previous day had a t t r a c t e d only 500 p a r t i c i p a n t s . France
was currently building ten new nuclear plants: he thought that
i f the Government continued to give a strong, c l e a r l i n e , there
would not be a great deal of public opposition. I t would be
helpful i f both France and the UK were to take a strong and
p o s i t i v e l i n e on nuclear power in Strasbourg. The Federal German
Government found i t s e l f in d i f f i c u l t i e s on nuclear power, l a r g e l y
because of the c o n s t i t u t i o n a l powers of the lander. Germany s t i l l
had no reprocessing plant.
President Giscard went on to say that he f u l l y shared the
Prime Minister's view that the objective should be to a r r i v e at
p r a c t i c a l conclusions, f i r s t in Strasbourg and subsequently in
Tokyo. The Prime Minister s a i d that the B r i t i s h Government was
at present pursuing a policy of requiring power s t a t i o n s in the
UK to s u b s t i t u t e coal for o i l : i f continued, however, t h i s p o l i c y
could a f f e c t the UK's capacity to build up coal stocks, which
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CUnlnUtWHAL
- 11
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Rhodesian
CONFIDENTIAL
- 12
people as a whole. The Conservative Party had therefore sent
observers to assess the v a l i d i t y of the e l e c t i o n s held in Rhodesia
l a s t A p r i l : t h e i r report had shown that, in a l l the circumstances,
the e l e c t i o n s had been both free and f a i r . The l a s t remaining
pre-condition for Rhodesia's return to l e g a l i t y had, therefore,
been broadly s a t i s f i e d . The new Rhodesian constitution was not
perfect but t h i s was a matter for the people of the country.
Looked at from the standpoint of Rhodesia/Zimbabwe, however,
recognition by the UK alone would not amount to very much: what
the country needed was wide i n t e r n a t i o n a l recognition. The new
B r i t i s h Government had therefore decided to build on the recent
e l e c t i o n s and to send an Envoy to meet the Front Line Presidents,
and others, to see i f there was any f l e x i b i l i t y in t h e i r a t t i t u d e
to the recognition i s s u e . Progress would c l e a r l y not be easy but
there were some encouraging signs, including the fact that President
Nyerere seemed, at present, to be l e s s denunciatory of the i n t e r n a l
settlement than, for example, President Kaunda. When the B r i t i s h
Government emissary, Lord Harlech, returned from h i s mission i t would
be p o s s i b l e to make a better assessment of the p o s s i b i l i t y of
bringing Nkomo and Mugabe on the one hand, and Bishop Muzorewa on
the other, c l o s e r together. The timetable, however, was very t i g h t
given the forthcoming Commonwealth Heads of Government meeting in
Lusaka at the beginning of August.
The Prime Minister commented that most of the countries to be
represented in Lusaka could not claim to hold e l e c t i o n s on the
b a s i s of one man, one vote, with a choice between four d i f f e r e n t
p o l i t i c a l p a r t i e s . A more c r u c i a l deadline was, so f a r as the
United Kingdom was concerned, the fact that sanctions against
Rhodesia would lapse in November unless renewed by Parliament. There
was no prospect whatsoever of such a renewal. The Prime Minister
s a i d that she, for her part, was convinced that the t e s t of
a c c e p t a b i l i t y had been s a t i s f a c t o r i l y completed; t h i s was, a f t e r a l l ,
a matter for the people inside Rhodesia to decide. I t was now the
B r i t i s h Government's duty to restore Rhodesia to f u l l independence.
She had found both the United States and the FRG co-operative in their
attitude to t h i s objective.
/President Giscard
President Giscard said that he would be happy to see a more
a c t i v e B r i t i s h policy in A f r i c a . So f a r as South A f r i c a was
concerned, he agreed that sanctions must be avoided. The South
African regime was not, however, acceptable in terms of i t s
i n t e r n a l p o l i c i e s . Everything possible should be done to create
a more democratic approach in South A f r i c a . On Namibia,
President Giscard agreed with Lord Carrington that the plan of
the Five should not be abandoned: i t was a fact that South A f r i c a
Turning to Rhodesia,
had been deceived by the United Nations. President Giscard s a i d that he had never understood the p o l i c y
pursued by the United Kingdom in recent years. He had always
believed that a moderate African Government offered the r i g h t
solution and t h i s would not be achieved without a new commitment
to Rhodesia by the UK. What was required was a solution on the
Kenyan pattern. Continuing pressure from the Front Line Presidents
could only r e s u l t in the i n s t a l l a t i o n of a r a d i c a l regime in
Salisbury and a bloody exodus by the Whites. The a t t i t u d e of the
other African countries would, however, pose serious d i f f i c u l t i e s ;
they had formed a c o l l e c t i v e position and most of thern had l i n k s
with the g u e r r i l l a s . President Giscard commented that the Prime
Minister could face r e a l l y serious problems at the Lusaka meeting
with, for example, Nigeria. The Prime Minister agreed and s a i d
that Nigeria had already taken steps to deprive B r i t i s h firms of
contracts.
President Giscard went on to say that at the Francophone
African Summit meeting at K i g a l i which he had recently attended
he had found the position of many Heads of State and Government
to be moderate towards Rhodesia; they seemed to recognise the
importance of the e l e c t i o n s which had taken place. There was,
however, a problem over timing: the time was not yet r i g h t for
i n t e r n a t i o n a l recognition of the new Government of Zimbabwe/Rhodesia.
The prospects would be better i f Bishop Muzorewa's regime was seen
to adopt progressive i n t e r n a l measures. France, for her part,
would t r y to use her influence h e l p f u l l y : but the UK might be well
advised to move forward step by step.
/
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The Prime Minister
The Prime Minister said that the B r i t i s h Government would
c e r t a i n l y not recognise Bishop Muzorev/a's regime before the
Commonwealth Conference i n Lusaka. The c r i t i c a l time would be
between that Conference and the Parliamentary debate on sanctions
in November. Lord Carrington said that more would be known of the
American a t t i t u d e when President Carter made h i s determination
on the Case/Javits amendment: t h i s would probably be to the e f f e c t
that the settlement was not acceptable as i t stood but could be
made so. There was no r e a l d i s t i n c t i o n between the l i f t i n g of
sanctions, which were imposed by a mandatory UN r e s o l u t i o n , and
recognition of the new regime.
President Giscard repeated that the French Government would do
everything i t could to be helpful on t h i s issue. He pointed out
that the next meeting of the Organisation of African Unity would
take place before the Commonwealth meeting in Lusaka and that the
one could very w e l l have an e f f e c t on the other. The President of
L i b e r i a would be Chairman of the OAU Conference and i t would obviously
be u s e f u l i f the UK were to make contact with him. The best outcome
from the OAU meeting would be the appointment of a Committee to
review the s i t u a t i o n i n Rhodesia, thus postponing any immediate
judgement as to the new regime's l e g a l i t y . In that s i t u a t i o n ,
the UK's hands would s t i l l be free at the time of Lusaka. I f the
OAU Conference adopted a public position, t h i s could only be a negative
one. The Prime Minister agreed and said that the p r i z e f o r the
West i n a peaceful settlement i n Rhodesia would be enormous: a
prosperous Rhodesia would bring great benefit to the whole region.
Defence
The Prime Minister said that the B r i t i s h Government was being
pressed by President Carter to support S a l t I I . The Government
had some worries about i t but had concluded that the consequences of
f a i l u r e by the United States Congress to r a t i f y the Treaty would be
more serious than any shortcomings i n the Treaty i t s e l f . The UK
was concerned about the Soviet SS20 m i s s i l e , to which the Russians
could e a s i l y add a t h i r d stage. The B r i t i s h Government also faced
major decisions- on the replacement of i t s P o l a r i s deterrent and
would have to choose between a new m i s s i l e of that type or c r u i s e
m i s s i l e s . She understood that France would soon have i t s own
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would probably develop the c r u i s e m i s s i l e but without entering
p r i o r commitments on p a r i t y or equilibrium. When the Prime Minister
commented that the Soviet Union had developed a very s i g n i f i c a n t
lead i n medium-range m i s s i l e s , President Giscard s a i d that France
was ahead so f a r as submarine launched m i s s i l e s were concerned.
Lord Carrington said that the need to proceed with the
modernisation of Theatre Nuclear Forces i n p a r a l l e l with SALT I I I
created an added complication, along with domestic p o l i t i c a l
d i f f i c u l t i e s i n the Low Countries. I t was l i k e l y that Belgium,
the Netherlands, and the FRG would i n s i s t on a new s t r a t e g i c arms
l i m i t a t i o n conference as a pre-condition of TNF modernisation, perhaps
even i n advance of SALT I I I . So f a r , the NATO Council had decided
only that there must be a decision on TNF modernisation by the end
of 1979. President Giscard s a i d that i t would be useful to exchange
views on t h i s further. The French Government was at present studying
France's i n t e r e s t i n SALT I I I and i n the development of the French
deterrent a f t e r 1990. The main options under consideration were
c r u i s e m i s s i l e s and mobile launching systems. The necessary
s c i e n t i f i c data would be ready during 1980. President Giscard
went on to say that the French had never had a r e a l discussion of
these matters with the FRG, since they did not wish to imply a
commitment to German s e c u r i t y which would involve France's own
deterrent. I t was impossible not to discuss these problems with
the Germans but equally impossible to have a r e a l d i s c u s s i o n . The
Prime Minister said that she had discussed these matters with
Chancellor Schmidt.
Lord Carrington said that he had some understanding of the West
German view that they could not accept the deployment of medium range systems on German s o i l unless a t h i r d country, i n addition
to the UK, did so too. President Giscard said that he thought that
Belgium would probably accept medium-range systems i n the end,
perhaps for a limited period of time.
Defence Sales to China
President Giscard asked the Prime Minister whether the B r i t i s h
Government had reached a f i n a l decision on the s a l e of Harrier
a i r c r a f t to China. The Prime Minister said that the Government,
for t h e i r part, were ready to s e l l Harriers to the Chinese
/but
17
but some problems had arisen during the commercial negotiations.
In response to the President's question, Lord Carrington s a i d that
the United Kingdom had i t in mind to s e l l something under one
hundred a i r c r a f t along with a licence to manufacture them in China.
President Giscard s a i d that the French Government had taken a
d i f f e r e n t decision since i t regarded the s a l e of arms to China as
a major b i l a t e r a l t e s t of the relations of any country with the
Soviet Union. The French Government was also a l i t t l e apprehensive
of the future a t t i t u d e s of the Chinese m i l i t a r y establishment.
No mood of expansionism was detectable yet, but would the s i t u a t i o n
l a s t ? In view of these factors France had decided to s e l l the
Chinese nothing more than anti-tank weapons.
Vietnamese
Refugees
The Prime Minister told President Giscard that UK merchant
ships i n the Far East were continuing to pick up large numbers of
Vietnamese refugees. There were now over 40,000 refugees in Hong
Kong and the UK had agreed to take another 1,000 from the"Sibonga".
The Government was now faced with the problem of 300 Chinese
children on a B r i t i s h ship off Taiwan whom the Taiwan Government
were refusing to take i n . President Giscard said that France had
already accepted 60,000 Vietnamese and they were coming in at the
rate of 500 a month. The whole problem was in essence one for the
United Nations but the UN was handling i t very i n e f f i c i e n t l y .
President Giscard s a i d that he had noted the Prime Minister's
message to Dr. Waldheim.
The discussion ended at 1310. .