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co-operation from France for instance over the arms seizure at

Le Havre. The UK continued to be concerned about illicit arms

traffic in Europe. Reduction of barriers to movement across

frontiers made security more difficult. Multilateral co-operation was needed. Secure communications systems between police forces needed updating. M. Joxe had said that

he would consider a UK technical paper on this subject.

had explained to Mr Hurd the reasons why France found

consultation about terrorism difficult in the Summit Seven.

He

EUROPEAN COMMUNITY

40.

Mme Lalumiere said she was presenting both sides' views

in Mr Rifkind's absence. On the intergovernmental conference

they had discussed two main themes. On the internal market

Mr Rifkind had seen the "cohesion" proposals by the Commission

as interfering with progress and causing delay by mixing the

issues. France saw the matter in different terms: it was

important to avoid creating more difficulties at Luxembourg,

but France also believed that it would be impossible to create

a full internal market without making some provision for

cohesion. There was also the question what was meant by the

internal market. The British favoured a restrictive

definition limited to free movement for goods and services,

omitting persons (capital had not been mentioned). France gave priority to goods and services but was more flexible on

persons. Differences over this could emerge at the Luxembourg

Council, but there was sufficient area of agreement to make it

possible for these problems to be resolved.

41. On the European Parliament views were largely the same. The two sides accepted the outline proposed by the Presidency. A way should be found for the Parliament to "exert influence" on the Council, thus achieving co-operation, but the last word

would remain with the Council. In the French view some new

machinery was needed, though without fundamental change. Mme Lalumiere thought that with minor adjustments the Presidency's

proposals could be acceptable. Time was short before the Council and much work needed. Close contacts between London

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