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negotiate confidence building measures of real military

significance.

6. Together with the United Kingdom's partners, y Government

have played a constructive role in the search for acceptable

solutions to international problems which have placed East-West

relations under strain. Acting on behalf of the Ten member

states of the European Community, they have presented proposals

for a Conference on Afghanistan designed to enable Afghanistan

to resume its independent and non-aligned status.

7. On

1 July the United Kingdom assumed the Presidency

of the Council of Ministers of the European Community for a

period of six months. In fulfilling the duties of this role,

been secting as in the preceding period, my Government have/ sought to play

a constructive part in the work of the Community and in

European political cooperation.

Discussions have begun on the

review of the development of Community policies and the

operation of the budget to which member states committed

themselves on 30 May 1980. The Community reached agreement on

a satisfactory settlement on agricultural prices for the

current financial year and on important measures safeguarding

the future of the steel industry. My Government have continued

to work for the conclusion of a revised common fisheries policy

which will protect the interests of our fishing industry.

My

Government welcomed the accession of Greece to the European

Community on

1 January this year.

8. My Government, together with the other members of the

European Community have continued to work for a negotiated

peace in the Arab-Israel conflict acceptable to all parties.

The statement made at Venice by the Heads of State and

Government of the European Community on 13 June 1980 has

remained the basis for these pace efforts.

CONFIDENTIAL

19.

The

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