CONFIDENTIAL
ix.
/Aid
Turkey reductions in capital aid to Turkey shown in the revised framework. Estimated disbursements of capital aid to Turkey in the current financial year totalled £7.9 million. The revised framework proposed a reduction in capital aid to £5.5 million in 1972/73 and a further reduction to £5 million in the three subsequent years. We had considerable political and defence interests in Turkey. It was a member both of the NATO and CENTO alliances and we enjoyed valuable over-flying rights. It was also relevant that, with effect from the date of our accession to the European Communities (1 January 1973), we should be contributing to the Communities' aid programme in Turkey through the European Investment Bank. The Turks were expe ctimus to it them our share of this Community/over and above our existing bilateral programme as both France and Germany did when the Community programme was first agreed. However, far from there being an overall increase in our total aid to Turkey to take accoount of this new commitment from the beginning of next year, the revised aid framework proposal represented a cut in disbursements, as compared with this year, of 30% Such a cut would not only greatly disappoint the Turks but would not help us project a "good European" image to our partners in the enlarged European Communities. We did not feel we could accept a figure lower than the £6.5 million originally proposed for Turkey next year.
The FCO could not accept the proposed
x. Viet-Nam Were there to be a peace settlement in Viet-Nam we might have to contribute to a substantial aid programme there, in the post-settlement era.
xi. European Development Fund
Doubts were expressed whether the allocation of £5 million in 1975/76 for the EDF would be enough. Mr Smith explained that it was based on the assumption that, although the pledged UK contribution to the EDF might be more, actual disbursements in 1975/76 would be small as this would be the first year in which the UK was a participant in any new Yaounde arrangements.
xii. Zambia Although no allocation of capital aid was shown
in the Framework, it was possible that substantial funds would be required within the Framework period to meet a contingent liability in respect of the Kariba Dam, and in the event of Zambia taking up an carlier British offer to provide £8 million of capital aid.
March 1972
CONFIDENTIAL
D M Kerr (Secretary)