COl^EsCiS OS 11 HAT 1979

BBS Y i f M^fYOWtR laquobull

LiLdios aad Goatleasa of the Press auS iedia It has givea us great pleasure that our f i r s t o f f i c i a l sooting

with a European Icampiax i s with Chuacampllor 3ohaidtlaquo Ho ie a grfcitt friead cf this country tad wo telltgtoae fcia vampry cue indeed 2t io ssot c3 amp

Ejtiev of fampcpoundf our f i r s t aeetiag 1ca X beease Leader cf tho Cousojvatiw r Iv - 7 weat io Boms esO had talks tith Chaaec-ilor Scksifit thou cad It aossaed very e^ey to igto vn the talks wo then hd as t

one had soaehou aanampgSii to s l i p into GoverRregent i a the taeantise You w i l l be f a i r l y aware of tLo hied of subject that wa hampvcopy i a

fact discucaed Of coarse we have a conssoa iutarest i a tho defeaoo of tho Heat and in SATO a have he on able to give Chauodlor Schaidt ova view about the Earopea Cssampaaiiy c j i d you aaturaily K i l l be asare thai we take a very different - zzA I hope very such sore cooperative attitude - thsa has been takes i a the past fev years ever tha development of the Coaasaaiiy Uo pursue our own interests i a i t bat we pursue i t against the baeksreaad of a f i r a belief ia the suecesa of

Thesa i^lfca yre prrt of a contiauiss series They toko place generally about six-coat hly intervale) arid wo slmD hope to be ac-stin^ i a Bora towards the ead of tho year

Sow X will juet ampik Chancellor Schaidt i f he would wish to cake a brief atateaeat to tampo pr-raquo Gj yad ihea as w i l l have c ^ custosary

Ferhaps ti3i before 1 ltio thraquotc I should ligation that Cir Geoffrey t

ampgty-i Rad Eew bull bullbullUhvcf^r have had separate tail alongside the tn^in tfelhlaquo eaid braquosa Lv-jlrcd i a tho ria t c l i s aa woll - vd Lord C-a-rir jampoa ead

Ofaschc bull eapax-ate -eetiuca too -So iio h-vvo twaaa cd to io

i t

a nuaber of b i l a t e r a l uoetinga between other Ministers as well as the plenary cession

How Ilaquo31 as Chancellor Schaidt for the cotBSento which he would like to make

Thank you very such Prise Minister Let D O say that cot only did we highly veins your hospitality

during this stay in London for which wo wish to thank yoi heartily but that we also very highly welcomed thg opportunity to havo thin exchange of views with you and your Ministers co shortly after you assumed office

I cost nay I fool impressed by the spirit of decisioa with which you want to tackle- the questions facing your country and your Government degshyque^tions Khich to oeao largo cr+cnt also concern ourselves

I guess that corso people of the press mdash whether in London or in Uonn shyeight watch rather closely how a Social Sssocratic Gcrsaa Chancellor and a

vConservative British Price llinistcr would get along with each other rd I would just like to t o l l the press that this was not cur problem to the slightest degree hut to people who might ask such questions I would rather like to reassure thea that we got along well with each other Ke have got the eamo type of responsibility in each of our countries for cur corstrics cad wo hava seen - and this did not eore as a Eurnrise - that there are wido fields of understanding and corrxoa interest betwoca us that is to cay between the United Kingdoa and the Federal KcpubHc of Germany

And I wculd like to add that I had the irpression that your personal approaches and nine xo certain prchlcas are net so different fron each other

That is about a l l I would like to B a y in tho opening Prise Minister I guess that tho press will lead us to sons other questions of cuhstonce

3

c^-^L Csas EAU2gtIBI3) (xsispsnEKi m s r i s i o s rn^s)

You raid in your Ksaifesto that the Labour Party had forfeited the trust of our European partners Is you think your rather plain Bpeaking of lest night hts gone cry way to regaining that trust

pIr TTTTC^ I hope so I hops you will look at the speech as a whole We

particularly aaphampsised our total cosQitesxrt to iha ideal of tha European Coissanity Of course thoro are one or two problems to ba sorted cut sad of course we w i l l sort thea outj hut wa w i l l sort the-a out i n a frasampwork of cooperation sad when they aro sorted out the Goaaunity vdll ho ahle to go ahead faster But of course i t i s totally different to put a l l tha emphasis on three points with which wa disagree It i s totally different to do that froa the approach which wo take which is ia a frseavforfc cf cooperation aot only i a tha Coffismaity hut of course we do have very definite views oa defence as v e i l

KJESPZCH (addressed to Chanoollor Schaidt) Could te have your reactiona to SALT 2 and i t s implications for

Asaricaa allies in Europe

Certainly hut i t t r i l l not cose as anything new to you or to the rest of the world

I would like ltusrt to repeat in subaampnoe what I already said four Bsonths 050 e-rly inJanuary at a aeeting cf the Heads of State or Heads of Oovercaeat of iserica United Kingdom Fraaoe end Gersany Wo are i n favour of a quick swift ratification process both i a Hoseow and i n bashington DC Va inagine that the world wight change Eight undorgo a change not f o r the better i f new difficulties f o r the ooaing into force of SALT 2 would arise Tha process lias already lasted long shya l i t t l e bit too long to r-y fe e l i n g mdash sad so i t i s about t i ~ e that this agreement should have been concluded end i t i s about tine that i t i a getting into force Otherwise I would feel that there are cany great disadvantages for the Wast and the iSaai that would arise

3

c^-^L Csas EAU2gtIBI3) (xsispsnEKi m s r i s i o s rn^s)

You raid in your Ksaifesto that the Labour Party had forfeited the trust of our European partners Is you think your rather plain Bpeaking of lest night hts gone cry way to regaining that trust

pIr TTTTC^ I hope so I hops you will look at the speech as a whole We

particularly aaphampsised our total cosQitesxrt to iha ideal of tha European Coissanity Of course thoro are one or two problems to ba sorted cut sad of course we w i l l sort thea outj hut wa w i l l sort the-a out i n a frasampwork of cooperation sad when they aro sorted out the Goaaunity vdll ho ahle to go ahead faster But of course i t i s totally different to put a l l tha emphasis on three points with which wa disagree It i s totally different to do that froa the approach which wo take which is ia a frseavforfc cf cooperation aot only i a tha Coffismaity hut of course we do have very definite views oa defence as v e i l

KJESPZCH (addressed to Chanoollor Schaidt) Could te have your reactiona to SALT 2 and i t s implications for

Asaricaa allies in Europe

Certainly hut i t t r i l l not cose as anything new to you or to the rest of the world

I would like ltusrt to repeat in subaampnoe what I already said four Bsonths 050 e-rly inJanuary at a aeeting cf the Heads of State or Heads of Oovercaeat of iserica United Kingdom Fraaoe end Gersany Wo are i n favour of a quick swift ratification process both i a Hoseow and i n bashington DC Va inagine that the world wight change Eight undorgo a change not f o r the better i f new difficulties f o r the ooaing into force of SALT 2 would arise Tha process lias already lasted long shya l i t t l e bit too long to r-y fe e l i n g mdash sad so i t i s about t i ~ e that this agreement should have been concluded end i t i s about tine that i t i a getting into force Otherwise I would feel that there are cany great disadvantages for the Wast and the iSaai that would arise

4

rT--T- (LIVERPOOL DAILY PCS) Could I ask y o u Priac Kiaioter to give your opinion ea what

Chancellor Schmidtraquobulllaquobull

I graquo sorry The caaeraa are clicking BO much that they obscured your question Could you repeat it

Would you bo liiad enoughf after the heavyweighta hava calc-cd dcr-i9

to giva a your opinion of tlia i n i t i a l l i n g of the SAL1 Treaty - i t i s sot eore mdash and your view on Chancellor Schmidts view on SALT

I thought Chancellor Sohiaidta view was very ouch the view that we have taken that the treaty has taken a long tice to ccae to a conclusion and wo trust i t v i l l ho ratified

Could yoU| Chancellor Schmidtf please whether you found Krslaquo Thatchers Government core conciliatory towards the EDS than the lata Government of Mr Callampghampa

Very dif f i c u l t for you

1 w i l l not try to coopare oonseeutive British Governsenta to each other I will only ray that I had tha feeling that they wore fa i r l y conciliatory

You have been very diploaatiol

Prise Minister havo you discussed anything about the Tokyo Suaait which ic gjing to take place next June anda i f G O 8 what was your r iin topic

He both very ouch lock forward to the Tokyo Sussit It w i l l obviously bo cy f i r s t experience of attending cuoh a suanit We cannot really reach conclusions before the Surcait has taken place

A question to Chancellor Schmidt Would i t be a good thing in your opinion i f Lritain joined the European Monetary Systea - and to lire Thatcher when do you intend to itako up your mind about thia

Shall I answer fi r s t When we have Lad sufficient tine properly to consider the taatter We are naturally coopsrating on those icaue3 and wish to bo cooperative but vo wish to look at a l l aspects of i t and we okall do so and we therefore shsil be ready for the September review of tho cyctcn

( lt i r p deg i Cici cfgt7riff

Lot rae juat add that I an f u l l y satisfied with the attitude in which the Prine Minister and her aides are approaching that question and I think September is a good tino

JTU R0T7I pSJ|MH|Maselaquo|

Congratulations lira Thatcher Juot one question on your very plain speaking lent nights How do you visualize the negotiations on tho Corson Agricultural Policy Is i t a renegotiation or how do you socopy i t

EEOSTE8

These thin^a aro not renegotiations and I think i f you looked st the whole speech Kr Roth you w i l l see that i f circuuotances change cr i f a policy works out in a different way from what vns envisaged then naturally i t evolves and you oust adapt according to the circttza-Jajaoss Eat i t is not a whole throwing out of everything Wa will be very cuch awaro that tho Con^in Agricultural Policy hen bu under strain because of the pricing eeohanisa and particularly because

He both very ouch lock forward to the Tokyo Sussit It w i l l obviously bo cy f i r s t experience of attending cuoh a suanit We cannot really reach conclusions before the Surcait has taken place

A question to Chancellor Schmidt Would i t be a good thing in your opinion i f Lritain joined the European Monetary Systea - and to lire Thatcher when do you intend to itako up your mind about thia

Shall I answer fi r s t When we have Lad sufficient tine properly to consider the taatter We are naturally coopsrating on those icaue3 and wish to bo cooperative but vo wish to look at a l l aspects of i t and we okall do so and we therefore shsil be ready for the September review of tho cyctcn

( lt i r p deg i Cici cfgt7riff

Lot rae juat add that I an f u l l y satisfied with the attitude in which the Prine Minister and her aides are approaching that question and I think September is a good tino

JTU R0T7I pSJ|MH|Maselaquo|

Congratulations lira Thatcher Juot one question on your very plain speaking lent nights How do you visualize the negotiations on tho Corson Agricultural Policy Is i t a renegotiation or how do you socopy i t

EEOSTE8

These thin^a aro not renegotiations and I think i f you looked st the whole speech Kr Roth you w i l l see that i f circuuotances change cr i f a policy works out in a different way from what vns envisaged then naturally i t evolves and you oust adapt according to the circttza-Jajaoss Eat i t is not a whole throwing out of everything Wa will be very cuch awaro that tho Con^in Agricultural Policy hen bu under strain because of the pricing eeohanisa and particularly because

Co

cf the Green Currency aeshaniea iar perhaps we can r-ko s o s i s

progress oa these f i r s t

Jlaquod cay Hear heart (laughter)

Ke uaderaiavi that you give groat importance to ITaO Us re there cny dinouroione of cusgssfc icna to inprova the situation oa the 8oul-h-~ patera flank of the alliance

Va attach a very great deal of importance ta the South-eastern flampak of JIO Yen will he aware thai when positions were slightly different in the house of Colons I used to ask gtbull Calla glean questions about Vur-koy because I was very ouch aware of tho problesa there and we will he as cooperative as we possibly can

OT 3TICj (iSTAi^L) The recent big power Guadaloupa Jui^jit in January organised a

so-called rescue operation for Turkeys ail i n g coenory with Gornany in chargsj but so far thero do net appear to he any positive isoves by tha CATO a l l i e s tJhnt can or i s hciu dene by Turkey raquoe European fricsds to secure eoouorslo cad politi c a l ctability i a turkey especially i n the light cf recent upheavals i n the region

You w i l l bo-aware that tho Intoraaticnal Kbnccary Fund i s thero and is trying to cake sens proposals and that what happened st Guaampaicusa end whet happens as a result of tho discussions with tho International Isnctary Fund nay not ho entirely unrelated

7

I would like to put ft footnote to that I think tho Turkish newapxanrs ouyit not to be too iispatierii oh

that rather cenplex problesu 1 have a conplo of worka aga appointed a personal raprcseutrtive of tho Federal Ck-ncoilor after 2 lad assured at that Guaaaloup3 meeting to take tho load in bringing about tho financial help for Turkey sad that representative laquo a HiniBter called Lsislokeep (phoaraquo) - who io not of cy party but of tho opposition part - he ie a Christian Ecaccrnt - i a tho aeaatiiae not only baa bean talking to Prixe Minister Eoevit and tho other ilinistera but also has boon ialling to 0203 to tho la to jLacrican cad other Ifcstera Covernnonta and we arc really da a process of bringing about something which 2 think would consist of three

or four eloasntst Ifunbor oneit i s obviously necessary that there be consul tat ion

and afterwards agreement between Turkey and the EC and wo have boea helpful co far end I hope wa w i l l bo successful i a oaeothicg out scan obstaoles which were in tho way of that process

la the afteraath of that you w i l l also see that a change of attitude has boea brought about i a private banks who have holdings i a Turkey

Oocoadly parallel to that - and possibly even earlier ~ we are trying to pat together a concerted financial help by GhCD countries esoag which certainly w i l l ho the United States end xrssco tho United DnpicTi sad ay own couatry mdash wo hope a few others a a have been mentioned this isoraiag hat wo are not going to dioolose i t hercj i t is for thejelves to disclcco that laquo tend oa top of that there eight be eoas other countries who can afford financially to be of sect= assistance to join in one fort or ether

luvl then there is the last copylea-sat that of course as is obvious a l l this is only helpful l a orvcr to enable coif-help by the Turkish Goveraacnt end Parliament Soma steps have to be taken by tho Turkish Parlicaeat by tho Turkish Government and 2 aa rather hopeful now 1 was net so hopeful i a January i-hcu wa started the whole thing 2 aa rather hopeful now that wo bring this about ia rather a feu weeks i a the future and that i t w i l l bo settled already before the Tokyo Sunaait which was acatJcuc-d earlier on to that i t right not be necessary to get rack to this ocnplca et the Tokyo nesting

8

0iaisftirsftlaquos jeijofeai

bull a n m (MILT EZXSSRAFH) WANEASUTCUAI

We understand that tho Chinese Leader io costing hero iraquo October possibly going to Bonn eiixi Paris too Ho know the Heat Gensan position on arc sales to China mdash I think i t has been stated several tinsa esd connected rith their relationship with the Soviet Union So we have a new position on the sale of arrrs to China

17o different froa tho position which we have indicated Lord Carringtca

LORD CanHXKOIOH I do uot think thero io any difference at a l l

Ue wore very clear about the position just before the SloOfeioi

you lmotr Ire you talking specifically about the Harriers te wera quits clear just before tho Electica hut we really cannot do everything in tho firac weak Is Prcacis around en tho end Tea Would yea like to add to that

raquocopyoiraquothia was the ri^ht decision

I would like to put a remark to that British answer as regards the articulaticn of the qucotion the pureeing of your question Sir

You coca to have hinted to a uolIlxon C^raas attitude tcruruc tho delivery of vcopons to the Peoples poundcpubiio cf China Shore io no

8

0iaisftirsftlaquos jeijofeai

bull a n m (MILT EZXSSRAFH) WANEASUTCUAI

We understand that tho Chinese Leader io costing hero iraquo October possibly going to Bonn eiixi Paris too Ho know the Heat Gensan position on arc sales to China mdash I think i t has been stated several tinsa esd connected rith their relationship with the Soviet Union So we have a new position on the sale of arrrs to China

17o different froa tho position which we have indicated Lord Carringtca

LORD CanHXKOIOH I do uot think thero io any difference at a l l

Ue wore very clear about the position just before the SloOfeioi

you lmotr Ire you talking specifically about the Harriers te wera quits clear just before tho Electica hut we really cannot do everything in tho firac weak Is Prcacis around en tho end Tea Would yea like to add to that

raquocopyoiraquothia was the ri^ht decision

I would like to put a remark to that British answer as regards the articulaticn of the qucotion the pureeing of your question Sir

You coca to have hinted to a uolIlxon C^raas attitude tcruruc tho delivery of vcopons to the Peoples poundcpubiio cf China Shore io no

9

specifio Corran attitude on this subject other than since about 10 ware or even landers wo have taken tho attitudonot only the present Cabinet but also its predecessors - ws Lave maintained the lino - we havo taken the attitude for Garsaay of delivering military weapons and military hardware only to Alliance partners There have bean r few minor exceptions but since the COa wa have etuck to that lines deliver and f a l l military hardware of Garsasaa produce-ion only to Alliance pare ore which would mean that i f we stick to that line i n tho future which wa intend to do anyway we will have to wait until tha Peoples Bepublio cf China becomes a ILVTO ueaberl

mrrfJJCn (DIE VTLT) Did you diccuos Africa and especially Hhodeaia and were there

any significant differences cf opinion

portal T-- Tyr-gt We of course took tho opportunity to discuss Rhodesia and i n

particular to discuss i t frca tea viewpoint or tho problems which w i l l face us i n this country It was not a meeting for differences of opinion i n any way It was a maeting for getting to know tho views cf one another as a basis for further cooperation i n the future Lord CJarringtcn do yen rich to add anything to that Chancellor Ear Gens char It was not a meeting for diffarenaes of opines gent 1-nan

nsd ladies Us have a lady ever hareI

I wonder i f I could ask hath Prxne Iliniators whether they f c l thai ifestern Europe has been left vulnerable by the SALT 2 agreement fend scceadly what your hepea ore for SALT 3

jit- laquo rgtH^

I think tha ZMH 3 H i l l tgto ono vrliich concsras Europe evca ampcrs cnd wo ecn coaconiret a rather csre on that

10raquo

iy answer to that c-no was i ^ - U c i when I o i l i e r said that we iltould try to be helpful as xernrO L-rcaxdcnt Carters cficr i s to cot ratific-vticn in the American Senate for SALT 2 If we felt to have been bur in cur defcrcs pcsUtro by tbaS a^ouracnt we would certainly not do coraquo

A rtrgti - L3 SAIJ 3 i t in a l i t t l e bit prematura to npsoviete about i t but certainly the United States Administration wil l cons-alt her a l l i e s whether i t is United Kingdcn or Oerrasy ox Franco or oilers to ve will have to wait for that consultation f i r s t before we speculate about i t

uzc cor~L tesc PAEC2AI1A)

Could I ask the Federal Chancellor without wishing to appear indelicate (lid you consider that hro Thatcher would he a soft touch

ISSSTAJSSHSSA - ser acvnsa

fta 1 do not and I guess she would not consider the Gowirs ia to bo a soft touch either

Could 1 eck you whether you think you will ho able to create the crna cert of personal relationahip with lire Thatcher as you did with her predecessor whoa you always referred to at theso occasions as tvici-Ai Jin

C vvrhfT ZWXD

Hell I have no doubt you fcnotf in international politics i t doe3 rot really natter so ruch whether you ere a Republican or a Penooretj uhether you are a Labcur can or the Conservative Loader whether you area Social Porocrat or a Liberal or a Christian Deaoorat whether yen are in France costing froa the Centre P a r i i c 3 or frca other Parties Hhst re Ily decs Eatter is Whether yen are a reliable peron and uhcil cr you have got judgacnt ana that is ny experience after quite a lon^ porici in international politics and I hava no doubt thai on that basis we will be able to poundampt cn with each other rather f i r e

11

Bid you take that so a good reccKaendatien

I K23 interested that obviously tho Chancellor its a Social Democratic leader and in ths Socialist International and you aref of ccuT3Cf tho Ccasorvative Loader

raquofc5m y----p-r vr7i

As you are very Ettfare tho policies which tho Cfeamposllor follow in Qorniaay are not unliko

Deat GO too far

pnrr-s r ~ - y c - i

1 thick vo both believe i a free enterprise Ko both believe i a incentives I asaa i f we could eaalate his tax syatea lm oure everyone hero would stand up cad cheer

poundcnt co too far Pr-ire Sinister and do not spoil ry relations with ny era party pleasef

I would like to add noaethirr just as an eraaple Tou will certainly knew that the French President Valerie Discard d e t a i n s sad1 arc really good personal friends despite the fact that our politi c a l and social backgrounds are obviously very very different mdash i t does not really natter

oc bull - IJU WVM wv-i-i J IC9uilaquofaraquoma j

Chancellor Schmidt tho last tires that thcro was a severe incavace ia o i l prices i a 1973 i t was followed by a very lad recession i a alt-vat every Industrialized country i a the world C l l prices are now taking another seaewhat Similar upward path poundo you think that this w i l l bo followed by a sia i l a r recession If not why not

12

It io dif f i c u l t to speculate because one does not know right now to what extent the priCQ-f or crude o i l is going to ho raised in bull79 bull Go far i f you compare the prices for erode o i l lot us say between April e9 and April e8 i t seers to as that there- baa been aa increase of about 25ypoundlaquo This Eight ba oaintaiaed for tho rest of the year i t night not X do not know It in very d i f f i c u l t to speculate but I will be freak with yen end t e l l you that already the increase i n the f i r s t four conths of this year does concern ne eg regards the general econocio and asnetary cens essences to not so each Britain mdash Britain would in the f i r s t instance indirectly not very auch be affected laquo or the direct consequences for Gems ay who certainly would he mre effected in the firtt instance than Britain because we do not have Horth poundea o i l or natural gas of car own but what I en concern- cheat it the direct impact on tho rather great nuaber of countries who depend on o i l imports who nowadays have to use onemdashthird of their export earnings mid of hard currency i n order to pay for the necessary o i l iaports whilst four or five years ago they needed only about 10gt of their export earnings i a order to pay for their o i l If i a the future they eight have to use aero than s third - lot wo assume 25th 40^ - i t ia obvious that this w i l l cean a strain en their balaaoa of payments a strain on thoir other inporto which so far hava bean possible I can only say that the consequences of this develop v-ut are that e l l of no in a l l countries not just in tho United States have to undertake r^at efforts in order to save energy that we secondly have to undertake a l l cur efforts to open up other courses of energy than just o i l -Thisis a hint not only to nuclear energy but ampllaquoo fur the necessary scientific and technical development of solar energy geothonaal energy He arts in Berraany since a couple of years e-- zpoundl

a lot of budget aoney for these purposes and i t also w i l l neampn that those who do have ccal - like Britain or like Oeraany - w i l l have to taintuna their capacity to produce coal end not just let their pita be closed la the long ran I think whether the prices are roirg up toe steeply or a l i t t l e slower in laquo7y in tho long run anyway i t is obvious that there i s not en nueh o i l in the uorld an there is deraaid for o i l nowadays and wo have to restructure the energy policies rud the technical processes of

I

xv in2 energy in BOS countries cf the world Britain iraquo that rospset i s ruck luckier off than are others i n l^rapa but i t i3 obvicus that even far Britain and other o i l coLSitriesi thsra ccu-r-s a deeads not too far away i a which iLese resauree3 w i l l ho exhausted

Ijjjbu i i _4laquo

Frtsa n n i s t s r 3 i t sensible to nin st ptxtos the EIpoundraquo i a e

Scpioaesr while ths ra^e of inflation i s catr up

I naid we shall have eensilterad ear position by Sapissher ead therefore he prepared to take up a posi-ticn when tho nyctcn i s raaiowad It ia 6aaersaTgtlo to take tins always to canr-idar your position

2 c d like to ask whether thara waa any discission on tho recent siamptesaat fron tha Arch oil^radvcins oe^hriea that the Gossan Uarkut vrcuid have to recognise the Falsa I ira liberation Crganicatiny prinr to laquolaquoay (Uecaesieua between tho o i l prcSue-ers and tha Ceis^aa lasrkei

Bisu i gtlt lt--V ja

ciraquo C4a rot in facta (jet into that aseurit 01 detail

- U-lgt klbdquol^gt)

Ears yos censored notes en the huudlins of terroriera ssX what have you cat to learn f rca each other

I think again we were rat in fact ftattirw into ouch detailed discussions ns that T^is was the f i r s t ceetia and wo tfaro ca really the bread genaral issues which ia not in fact curpricinr

and the federal nepablio of CsrKsay c i terrorita has been czcoxlssEt id I Jr-v o every reason to believe that i t t r i l l rciaain excellent

Yea here spoken Prise Kindstor strongly for tho strengthening of Western defence cf British defence and you are known 1 thick to have eerie ffiizgivinga about detente with the Soviet Unions The Chancellor spoke strongly last ni^ht in favour of detents Could 1 ask the Prise hinioter end the zederal Chancellor i f these views ere to esse eatcnt iaccapatibla

P R 7 Yvv-r-

Set in any way Pat eat o i s fine oo long as i t ia two-^sy era i t happens That ia always the position we havo taken up Cf course yen favour detente but i t has tc he two-way dot onto It cannot be eue wsyf

and they are not in any way different they are part cf the sass strategy Seteat a i f yen possibly can but always froa a position cf strength in rear defence aystsa The Chancellor

Art T5r T A l 5 r TTfl V bullraquo e - - A

i XR r v e-j- ire- A

1 would csre or less sabacriba to aliampt the Prise JUniete caid Let Da rephrase i t in ay wsrdsi cbviously the situation of a divided rvU

cf a divided ocustry in the centre of Lhiropa - incltaiing the heat Csrlia situation - a kes Gomenu rare sensitive about Ehst-tfast relaticna tbsa Eaybe are other Heat European nations Jjut I would strongly assist tho Prise Kinieter in rsy can words by saying that detente which wa regard to bs an overridicgly ncacssary effort in the interests of tho divided German nation ten only hold cat prcspaots for results i f yen start froa a basis

doter anybody tdsa fro attacking you era i f doierreats should f a i l that yen are chic ts totally defend yourself ead that ihcra v i l l he no denbt cheat that If we rain tain that good h-ais which we have Batotaiaed sraquo far alec in the fjture there ao prrpcts for further rssaita i a

15

dstcnto If theoretically speaking soae dsy in tho future the font would f a i l to Esiintoiii that deterrent and dofenco posturo and to rr^i-aiu that balance of military forces the outlook would becous bleak

FX bull _bullbullbull j Kov can we havo juot two roro questions The Champnoollor i s roivi-

to Crford this afternoon to receive a honorary degree and we waraly congratulate his He wi l l be receiving i t fren Harold Iaelillan and i t isray university

vn~vrrr^ (firs GUAPJJIAI)

Following that last point Eight vo aek you end Chancellor Echsidt i f in year diecuesione yen were able to consider the defence of Western Europe faced with the Soviet GS20 and the new generation of aicnilec Did yen reach any general principle cf agrccaeat on hew Britain and Ceraetv in particular can p egress en this and cn the stationing cf countcr-aisoila systems

I think this is really aora a aatte for the future and wa eisuly earrot gtgt you know pull solutions cut of the bat This is a sat to to be considered after the coiuoion ef SALT 2 Chancellor would you like just to rayto add

t bull laquo t L - bull - i

Possibly Prine Kinister we Bight t-eat ion that Secretary of Deforce gtyra and Secretary of Defence Appol wil l mot neat week X think for wore then just onedayf that they have scheduled personal talks

rraquould

aaong thenselvea whiciy dortainly also eabrace tho subject a which wore just now being mentioned Cu the other hand J think anybody is crara of tho nececcsity that the complexity cf the quest ions w-hloh you were hinting to rot only cakes i t necessary but alee the character cf our alliance aakes is accessary that these cuecticus not be solved or publicly articulated just bstvreca two partners cf the alliuae^ bur between a l l of tkea

12

It io dif f i c u l t to speculate because one does not know right now to what extent the priCQ-f or crude o i l is going to ho raised in bull79 bull Go far i f you compare the prices for erode o i l lot us say between April e9 and April e8 i t seers to as that there- baa been aa increase of about 25ypoundlaquo This Eight ba oaintaiaed for tho rest of the year i t night not X do not know It in very d i f f i c u l t to speculate but I will be freak with yen end t e l l you that already the increase i n the f i r s t four conths of this year does concern ne eg regards the general econocio and asnetary cens essences to not so each Britain mdash Britain would in the f i r s t instance indirectly not very auch be affected laquo or the direct consequences for Gems ay who certainly would he mre effected in the firtt instance than Britain because we do not have Horth poundea o i l or natural gas of car own but what I en concern- cheat it the direct impact on tho rather great nuaber of countries who depend on o i l imports who nowadays have to use onemdashthird of their export earnings mid of hard currency i n order to pay for the necessary o i l iaports whilst four or five years ago they needed only about 10gt of their export earnings i a order to pay for their o i l If i a the future they eight have to use aero than s third - lot wo assume 25th 40^ - i t ia obvious that this w i l l cean a strain en their balaaoa of payments a strain on thoir other inporto which so far hava bean possible I can only say that the consequences of this develop v-ut are that e l l of no in a l l countries not just in tho United States have to undertake r^at efforts in order to save energy that we secondly have to undertake a l l cur efforts to open up other courses of energy than just o i l -Thisis a hint not only to nuclear energy but ampllaquoo fur the necessary scientific and technical development of solar energy geothonaal energy He arts in Berraany since a couple of years e-- zpoundl

a lot of budget aoney for these purposes and i t also w i l l neampn that those who do have ccal - like Britain or like Oeraany - w i l l have to taintuna their capacity to produce coal end not just let their pita be closed la the long ran I think whether the prices are roirg up toe steeply or a l i t t l e slower in laquo7y in tho long run anyway i t is obvious that there i s not en nueh o i l in the uorld an there is deraaid for o i l nowadays and wo have to restructure the energy policies rud the technical processes of

I

xv in2 energy in BOS countries cf the world Britain iraquo that rospset i s ruck luckier off than are others i n l^rapa but i t i3 obvicus that even far Britain and other o i l coLSitriesi thsra ccu-r-s a deeads not too far away i a which iLese resauree3 w i l l ho exhausted

Ijjjbu i i _4laquo

Frtsa n n i s t s r 3 i t sensible to nin st ptxtos the EIpoundraquo i a e

Scpioaesr while ths ra^e of inflation i s catr up

I naid we shall have eensilterad ear position by Sapissher ead therefore he prepared to take up a posi-ticn when tho nyctcn i s raaiowad It ia 6aaersaTgtlo to take tins always to canr-idar your position

2 c d like to ask whether thara waa any discission on tho recent siamptesaat fron tha Arch oil^radvcins oe^hriea that the Gossan Uarkut vrcuid have to recognise the Falsa I ira liberation Crganicatiny prinr to laquolaquoay (Uecaesieua between tho o i l prcSue-ers and tha Ceis^aa lasrkei

Bisu i gtlt lt--V ja

ciraquo C4a rot in facta (jet into that aseurit 01 detail

- U-lgt klbdquol^gt)

Ears yos censored notes en the huudlins of terroriera ssX what have you cat to learn f rca each other

I think again we were rat in fact ftattirw into ouch detailed discussions ns that T^is was the f i r s t ceetia and wo tfaro ca really the bread genaral issues which ia not in fact curpricinr

and the federal nepablio of CsrKsay c i terrorita has been czcoxlssEt id I Jr-v o every reason to believe that i t t r i l l rciaain excellent

Yea here spoken Prise Kindstor strongly for tho strengthening of Western defence cf British defence and you are known 1 thick to have eerie ffiizgivinga about detente with the Soviet Unions The Chancellor spoke strongly last ni^ht in favour of detents Could 1 ask the Prise hinioter end the zederal Chancellor i f these views ere to esse eatcnt iaccapatibla

P R 7 Yvv-r-

Set in any way Pat eat o i s fine oo long as i t ia two-^sy era i t happens That ia always the position we havo taken up Cf course yen favour detente but i t has tc he two-way dot onto It cannot be eue wsyf

and they are not in any way different they are part cf the sass strategy Seteat a i f yen possibly can but always froa a position cf strength in rear defence aystsa The Chancellor

Art T5r T A l 5 r TTfl V bullraquo e - - A

i XR r v e-j- ire- A

1 would csre or less sabacriba to aliampt the Prise JUniete caid Let Da rephrase i t in ay wsrdsi cbviously the situation of a divided rvU

cf a divided ocustry in the centre of Lhiropa - incltaiing the heat Csrlia situation - a kes Gomenu rare sensitive about Ehst-tfast relaticna tbsa Eaybe are other Heat European nations Jjut I would strongly assist tho Prise Kinieter in rsy can words by saying that detente which wa regard to bs an overridicgly ncacssary effort in the interests of tho divided German nation ten only hold cat prcspaots for results i f yen start froa a basis

doter anybody tdsa fro attacking you era i f doierreats should f a i l that yen are chic ts totally defend yourself ead that ihcra v i l l he no denbt cheat that If we rain tain that good h-ais which we have Batotaiaed sraquo far alec in the fjture there ao prrpcts for further rssaita i a

15

dstcnto If theoretically speaking soae dsy in tho future the font would f a i l to Esiintoiii that deterrent and dofenco posturo and to rr^i-aiu that balance of military forces the outlook would becous bleak

FX bull _bullbullbull j Kov can we havo juot two roro questions The Champnoollor i s roivi-

to Crford this afternoon to receive a honorary degree and we waraly congratulate his He wi l l be receiving i t fren Harold Iaelillan and i t isray university

vn~vrrr^ (firs GUAPJJIAI)

Following that last point Eight vo aek you end Chancellor Echsidt i f in year diecuesione yen were able to consider the defence of Western Europe faced with the Soviet GS20 and the new generation of aicnilec Did yen reach any general principle cf agrccaeat on hew Britain and Ceraetv in particular can p egress en this and cn the stationing cf countcr-aisoila systems

I think this is really aora a aatte for the future and wa eisuly earrot gtgt you know pull solutions cut of the bat This is a sat to to be considered after the coiuoion ef SALT 2 Chancellor would you like just to rayto add

t bull laquo t L - bull - i

Possibly Prine Kinister we Bight t-eat ion that Secretary of Deforce gtyra and Secretary of Defence Appol wil l mot neat week X think for wore then just onedayf that they have scheduled personal talks

rraquould

aaong thenselvea whiciy dortainly also eabrace tho subject a which wore just now being mentioned Cu the other hand J think anybody is crara of tho nececcsity that the complexity cf the quest ions w-hloh you were hinting to rot only cakes i t necessary but alee the character cf our alliance aakes is accessary that these cuecticus not be solved or publicly articulated just bstvreca two partners cf the alliuae^ bur between a l l of tkea

I

xv in2 energy in BOS countries cf the world Britain iraquo that rospset i s ruck luckier off than are others i n l^rapa but i t i3 obvicus that even far Britain and other o i l coLSitriesi thsra ccu-r-s a deeads not too far away i a which iLese resauree3 w i l l ho exhausted

Ijjjbu i i _4laquo

Frtsa n n i s t s r 3 i t sensible to nin st ptxtos the EIpoundraquo i a e

Scpioaesr while ths ra^e of inflation i s catr up

I naid we shall have eensilterad ear position by Sapissher ead therefore he prepared to take up a posi-ticn when tho nyctcn i s raaiowad It ia 6aaersaTgtlo to take tins always to canr-idar your position

2 c d like to ask whether thara waa any discission on tho recent siamptesaat fron tha Arch oil^radvcins oe^hriea that the Gossan Uarkut vrcuid have to recognise the Falsa I ira liberation Crganicatiny prinr to laquolaquoay (Uecaesieua between tho o i l prcSue-ers and tha Ceis^aa lasrkei

Bisu i gtlt lt--V ja

ciraquo C4a rot in facta (jet into that aseurit 01 detail

- U-lgt klbdquol^gt)

Ears yos censored notes en the huudlins of terroriera ssX what have you cat to learn f rca each other

I think again we were rat in fact ftattirw into ouch detailed discussions ns that T^is was the f i r s t ceetia and wo tfaro ca really the bread genaral issues which ia not in fact curpricinr

and the federal nepablio of CsrKsay c i terrorita has been czcoxlssEt id I Jr-v o every reason to believe that i t t r i l l rciaain excellent

Yea here spoken Prise Kindstor strongly for tho strengthening of Western defence cf British defence and you are known 1 thick to have eerie ffiizgivinga about detente with the Soviet Unions The Chancellor spoke strongly last ni^ht in favour of detents Could 1 ask the Prise hinioter end the zederal Chancellor i f these views ere to esse eatcnt iaccapatibla

P R 7 Yvv-r-

Set in any way Pat eat o i s fine oo long as i t ia two-^sy era i t happens That ia always the position we havo taken up Cf course yen favour detente but i t has tc he two-way dot onto It cannot be eue wsyf

and they are not in any way different they are part cf the sass strategy Seteat a i f yen possibly can but always froa a position cf strength in rear defence aystsa The Chancellor

Art T5r T A l 5 r TTfl V bullraquo e - - A

i XR r v e-j- ire- A

1 would csre or less sabacriba to aliampt the Prise JUniete caid Let Da rephrase i t in ay wsrdsi cbviously the situation of a divided rvU

cf a divided ocustry in the centre of Lhiropa - incltaiing the heat Csrlia situation - a kes Gomenu rare sensitive about Ehst-tfast relaticna tbsa Eaybe are other Heat European nations Jjut I would strongly assist tho Prise Kinieter in rsy can words by saying that detente which wa regard to bs an overridicgly ncacssary effort in the interests of tho divided German nation ten only hold cat prcspaots for results i f yen start froa a basis

doter anybody tdsa fro attacking you era i f doierreats should f a i l that yen are chic ts totally defend yourself ead that ihcra v i l l he no denbt cheat that If we rain tain that good h-ais which we have Batotaiaed sraquo far alec in the fjture there ao prrpcts for further rssaita i a

15

dstcnto If theoretically speaking soae dsy in tho future the font would f a i l to Esiintoiii that deterrent and dofenco posturo and to rr^i-aiu that balance of military forces the outlook would becous bleak

FX bull _bullbullbull j Kov can we havo juot two roro questions The Champnoollor i s roivi-

to Crford this afternoon to receive a honorary degree and we waraly congratulate his He wi l l be receiving i t fren Harold Iaelillan and i t isray university

vn~vrrr^ (firs GUAPJJIAI)

Following that last point Eight vo aek you end Chancellor Echsidt i f in year diecuesione yen were able to consider the defence of Western Europe faced with the Soviet GS20 and the new generation of aicnilec Did yen reach any general principle cf agrccaeat on hew Britain and Ceraetv in particular can p egress en this and cn the stationing cf countcr-aisoila systems

I think this is really aora a aatte for the future and wa eisuly earrot gtgt you know pull solutions cut of the bat This is a sat to to be considered after the coiuoion ef SALT 2 Chancellor would you like just to rayto add

t bull laquo t L - bull - i

Possibly Prine Kinister we Bight t-eat ion that Secretary of Deforce gtyra and Secretary of Defence Appol wil l mot neat week X think for wore then just onedayf that they have scheduled personal talks

rraquould

aaong thenselvea whiciy dortainly also eabrace tho subject a which wore just now being mentioned Cu the other hand J think anybody is crara of tho nececcsity that the complexity cf the quest ions w-hloh you were hinting to rot only cakes i t necessary but alee the character cf our alliance aakes is accessary that these cuecticus not be solved or publicly articulated just bstvreca two partners cf the alliuae^ bur between a l l of tkea

and the federal nepablio of CsrKsay c i terrorita has been czcoxlssEt id I Jr-v o every reason to believe that i t t r i l l rciaain excellent

Yea here spoken Prise Kindstor strongly for tho strengthening of Western defence cf British defence and you are known 1 thick to have eerie ffiizgivinga about detente with the Soviet Unions The Chancellor spoke strongly last ni^ht in favour of detents Could 1 ask the Prise hinioter end the zederal Chancellor i f these views ere to esse eatcnt iaccapatibla

P R 7 Yvv-r-

Set in any way Pat eat o i s fine oo long as i t ia two-^sy era i t happens That ia always the position we havo taken up Cf course yen favour detente but i t has tc he two-way dot onto It cannot be eue wsyf

and they are not in any way different they are part cf the sass strategy Seteat a i f yen possibly can but always froa a position cf strength in rear defence aystsa The Chancellor

Art T5r T A l 5 r TTfl V bullraquo e - - A

i XR r v e-j- ire- A

1 would csre or less sabacriba to aliampt the Prise JUniete caid Let Da rephrase i t in ay wsrdsi cbviously the situation of a divided rvU

cf a divided ocustry in the centre of Lhiropa - incltaiing the heat Csrlia situation - a kes Gomenu rare sensitive about Ehst-tfast relaticna tbsa Eaybe are other Heat European nations Jjut I would strongly assist tho Prise Kinieter in rsy can words by saying that detente which wa regard to bs an overridicgly ncacssary effort in the interests of tho divided German nation ten only hold cat prcspaots for results i f yen start froa a basis

doter anybody tdsa fro attacking you era i f doierreats should f a i l that yen are chic ts totally defend yourself ead that ihcra v i l l he no denbt cheat that If we rain tain that good h-ais which we have Batotaiaed sraquo far alec in the fjture there ao prrpcts for further rssaita i a

15

dstcnto If theoretically speaking soae dsy in tho future the font would f a i l to Esiintoiii that deterrent and dofenco posturo and to rr^i-aiu that balance of military forces the outlook would becous bleak

FX bull _bullbullbull j Kov can we havo juot two roro questions The Champnoollor i s roivi-

to Crford this afternoon to receive a honorary degree and we waraly congratulate his He wi l l be receiving i t fren Harold Iaelillan and i t isray university

vn~vrrr^ (firs GUAPJJIAI)

Following that last point Eight vo aek you end Chancellor Echsidt i f in year diecuesione yen were able to consider the defence of Western Europe faced with the Soviet GS20 and the new generation of aicnilec Did yen reach any general principle cf agrccaeat on hew Britain and Ceraetv in particular can p egress en this and cn the stationing cf countcr-aisoila systems

I think this is really aora a aatte for the future and wa eisuly earrot gtgt you know pull solutions cut of the bat This is a sat to to be considered after the coiuoion ef SALT 2 Chancellor would you like just to rayto add

t bull laquo t L - bull - i

Possibly Prine Kinister we Bight t-eat ion that Secretary of Deforce gtyra and Secretary of Defence Appol wil l mot neat week X think for wore then just onedayf that they have scheduled personal talks

rraquould

aaong thenselvea whiciy dortainly also eabrace tho subject a which wore just now being mentioned Cu the other hand J think anybody is crara of tho nececcsity that the complexity cf the quest ions w-hloh you were hinting to rot only cakes i t necessary but alee the character cf our alliance aakes is accessary that these cuecticus not be solved or publicly articulated just bstvreca two partners cf the alliuae^ bur between a l l of tkea

15

dstcnto If theoretically speaking soae dsy in tho future the font would f a i l to Esiintoiii that deterrent and dofenco posturo and to rr^i-aiu that balance of military forces the outlook would becous bleak

FX bull _bullbullbull j Kov can we havo juot two roro questions The Champnoollor i s roivi-

to Crford this afternoon to receive a honorary degree and we waraly congratulate his He wi l l be receiving i t fren Harold Iaelillan and i t isray university

vn~vrrr^ (firs GUAPJJIAI)

Following that last point Eight vo aek you end Chancellor Echsidt i f in year diecuesione yen were able to consider the defence of Western Europe faced with the Soviet GS20 and the new generation of aicnilec Did yen reach any general principle cf agrccaeat on hew Britain and Ceraetv in particular can p egress en this and cn the stationing cf countcr-aisoila systems

I think this is really aora a aatte for the future and wa eisuly earrot gtgt you know pull solutions cut of the bat This is a sat to to be considered after the coiuoion ef SALT 2 Chancellor would you like just to rayto add

t bull laquo t L - bull - i

Possibly Prine Kinister we Bight t-eat ion that Secretary of Deforce gtyra and Secretary of Defence Appol wil l mot neat week X think for wore then just onedayf that they have scheduled personal talks

rraquould

aaong thenselvea whiciy dortainly also eabrace tho subject a which wore just now being mentioned Cu the other hand J think anybody is crara of tho nececcsity that the complexity cf the quest ions w-hloh you were hinting to rot only cakes i t necessary but alee the character cf our alliance aakes is accessary that these cuecticus not be solved or publicly articulated just bstvreca two partners cf the alliuae^ bur between a l l of tkea

A ft

K

-S 5 U ~ - --a lt bull i i^iiTirtrJ

Ferhaps Ik- Pyra would cenfiro thai ho io sooting 1 think on

Hopdny

ltf C 1 1 Tea IndesJ ordI cvaeh lech forward to itraquo to seating his a r l

have acre than one discussion with hin in the course of aort week

bullbull bull a fc-aC-iTs^--UI

Kaiauo Trine hinistcr era you thinking of seeing President Carter soon either inviting hin hero to Britain or going to Washington are there any outstanding points difference hetweea British and la- policy that you would like to clear up with his

BTne i mdashbullro ei--laquov raquolaquor^- - bull - bullbullbulla-an

iaaodiatoly ha raquohraquo shall of courso cost in Tokyo hat in tho iampacdiste torn Secretary Vaacs is coaihg over to eoe head Carrington Beset week isnt i t

frtgt r bullbullT Tijr rnpoundraquo mdashro -s r 3 ^

IVa he to ocaing over for two days Monday and Tuesday of nest week Vva chall have two days of discussions and I hops w i l l cca sose other Ministers as well

Thank you very naoh iade-ed

bullMM ARM