CONFIDENTIAL
entry. Mr. Jordan-Moss added that the French feeling seemed to
be that, by possessing a world currency, we could somehow evade
the disciplines to which other countries had to conform. That
this was not the case, was shown clearly enough by the actions
which the Government had had to take over the past year! In
one respect it was understandable that the Six should look
warily on the sterling's international role - sterling financed
about a third of world trade and this naturally made it subject
to substantial confidence movements. But experience had shown
that these were closely related to our domestic balance of pay-
ments, and the answer was to improve the balance of payments as
the Government was now trying to do. As for fears in some
quarters that entry into E.E.C. would lead to a flight of
capital from Britain, he thought it more likely that capital
would flow in rather than out of London as a result of Britain's
entry.
CONFIDENTIAL