cooperate.

CONFIDENTIAL

Gibraltar's

inclusion in the Single Market for financial services could lead to the risk of EC-wide financial scandal.

government and regulation of financial services in Gibraltar. Contingency plans for freezing

assets, suspending the

constitution and direct rule are under consideration.

12. Cambodia: peace plan breaks down

Delays in implementing the peace plan will add to the costs of our contribution to UNTAC. If the peace plan failed it would be difficult to withdraw UNTAC and we could find ourselves involved in a prolonged civil war through the UN.

The different options (eg going ahead without the Khmer Rouge) are under consideration.

CRISIS SCENARIO

BRITISH INTERESTS

WARNING SIGNS

1.

Mozambique: implementation of

peace agreements likely to be turbulent in run-up to elections to be held by October 1993.

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Minimal though we give a lot of aid.

The Angolan situation: Mozambique could go same way.

ACTION IN HAND OR FOR CONSIDERATION

2.

Egypt:

extremists.

Islamic

The

Islamic trend has been locked out of power by Mubarak and become a focus of opposition.

Major political and commercial interests. Egypt key player in Arab world which provides troops for Six Plus Two. Force for moderation in

peace process.

Increase in communal violence and attacks on security personnel. Extremists have

started to kill tourists.

Considering what advice we could give Egyptians in handling security problems effectively but with sensitivity.

CONFIDENTIAL

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