SECRET
When we sounded other Governments last year about
arrangements in the wake of the decision to float sterling,
there was a general consensus that the discussions should
best be postponed until after we had refixed. (This
consensus is reflected in the message which the Chancellor
sent to his colleagues in October 1972). If we seek to
discuss with them now the content of new agreements, we
might find ourselves not only up against real technical and tactical problems. We might also be arousing suspicioas
on the part of our partners as to why we thought we coule dispense with agreements between the expiry of the present
Agreements and the entry into force - on a date about which
we could not be precise of new ones. It seems to me at
least possible that our partners will not wish to engage
in serious negotiation on the content of an Agreement
to come into force at an uncertain time and in uncertain
circumstances. We, for our part, will have disclosed the
content of the Agreement we wish to negotiate; and, depond!
on whether that content seems attractive or otherwise to
our partners, they may well make their reserve dispositions
accordingly.
4.
I wonder therefore whether it is necessary to accept
either of the options which the Chancellor lists. Could
we not reasonably say to our sterling partners that the
monetary uncertainties are so great that it is not possible
for us to put firm proposals to them at this stage about
arrangements after the expiry of the Agreements?