SECRET
SECRET
Mal ta
(xii)
Option A1 would involve a major row with Mintoff who
would have a case for taking us to the International Court.
It would also be extremely unwelcome to our NATO Allies who
share the larger part of the subsidy which is the counterpart
of the retention of our forces in Malta. The potential cash
costs in terms of redundancy payments, compensation to Malta, etc could at least equal any savings. Provided Option A2 is carried out in accordance with the military Facilities Agreement, it is unlikely to arouse objections from Mintoff, but some of
our NATO Allies, particularly the Italians, would certainly
express concern.
Gibraltar
(xiii) Option A1 is not in practice an option since it might
tempt the Spaniards to attempt a coup de main. Even if it did
not, it would be seen in Gibraltar as implying abandonment by
HMG of their commitments to the people of Gibraltar. A decision
not to retain the dockyard would have a disastrous effect on
Gibraltar's economy and might involve us in aid expenditure to
an equivalent sum. Option A2 involves no change from our
present posture.
The Caribbean and South Atlantic
(xiv) Both Options involve the risks that the Argentinians
will take over the Falkland Islands and that the Guatemalans
will take over Belize while they remain British dependent
territories, but Option A1 makes this virtually certain while
Option A2 provides some limited opportunity for tying to settle
both disputes diplomatically. Apart from the domestic considera-
tions the takeover of these two British dependent territorien
313
SECRET
BARANGAL ACHNERİNER Urinal
SECRET