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250 million EC citizens can come to UK after 1992. Not so.

Treaty, even as amended by Single European Act, does not give

automatic right of entry to all EC citizens. Treaty lays down

categories of people entitled to free movement.

EC

FRG

West Germany accepts East Germans. No direct comparison. constitution gives all Germans right to settle there, where many

East Germans already have close family connections.

B: VIETNAMESE BOAT PEOPLE

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Well aware of burden on Hong Kong and depth of local feeling. Hong Kong has coped magnificantly with crisis.

We are making progress: Geneva Conference agreed that all refugees would be resettled within three years; agreed to adopt

screening throughout region and that all those screened out must

return to Vietnam.

Clear that voluntary returns along will not solve problem.

Mandatory repatriation very unpalatable, but no viable alternative.

Vital to get first repatriation exercise absolutely right if

substantial programme of mandatory returns is to be established.

Sensitive matter for Vietnam: need their continued cooperation.

Well aware of local pressure to abandon first asylum. But difficult to see how it would work in practice. Can be no question

of letting people drown. Damage to Hong Kong's international

reputation would be immense.

HMG has helped Hong Kong in practical ways: £17m contributed or pledged this year. 2,000 new resettlement places.

CONFIDENTIAL

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