CONFIDENTIAL

DSR 11C

6. But there can be little doubt that Kohl's main

preoccupation will be INF. The picture is complicated by

the prospect of the junior coalition partner, Genscher's

FDP doing very badly in regional elections in Land Hesse

on 25 Spetember. In the rup-up to this poll, Genscher is

attempting to revive his party's popularity by

demonstrating a flexible conciliatory approach on INF.

r:

7.

On the Community, the debate on the 1984 budget has

started in the Bundestag (Kohl's first major challenge on

the economy since his election). He will be acutely

aware that his plans to reduce public expenditure could

be frustrated by the need to spend more on the Community.

Thus, the German objective in the run-up to Athens is,

like ours, to rein in wasteful Community expenditure.

HANDLING OF THE MEETING

8. After thanking Kohl for his invitation, the Prime

Minister might start with an account of her visit to the

Netherlands and to BFG. On the latter, the Prime

Minister will wish to underline our commitment to

maintain BAOR at 55,000 (our Brusssels Treaty

obligation). Discussion could then move naturally to

defence co-operation. The Summit on 9 November will be

the opportunity for going into more detail on equipment

collaboration but, particularly as the Defence Ministers

of the UK, the FRG and France will have met earlier on

21 September, the Prime Minister could mention our hopes

for co-operation with the Germans on the future combat

aircraft (Brief No ...).

CONFIDENTIAL

19.

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