CONFIDENTIAL

Germans that we too believe in realistic détente. Ministers

will want to discuss recent developments on East/West

rélations, including the pipeline.

(e) Defence and Security

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The change of Government in Bonnay gives us a valuable opportunity to set on a new footing bilateral coordination of the broad lines of defence policy, both nuclear and conventional, and to review the

opportunities for equipment collaboration. This will take place against a background of strains within the: Alliance, rapidly accelerating equipment costs, budgetary constraints and the consequent need to make .better use of existing resources. We shall need to

reassure the Germans of our commitment to the Central Front, Falklands commitments notwithstanding, and to underline the importance of sticking to the 'dual track' decision on INF.

STRATEGY AND TACTICS

6. The most pressing UK aim will be to put over to the new German team, and particularly to Dr Kohl, our case on the Community Budget. But, before discussing this, or indeed any other international issues, it might be politic to devote a little time to discussing lessons from HMG's experience of the last 3 and a half years and the situation facing the Federal Government. It would also be appropriate

to express admiration for the confident start which he has made and particularly for his determination to give top priority to getting the domestic economy back on the right

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