TNAG-0752-FCO40-956-Future-of-Hong-Kong-1979 — Page 146

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whether Communist influence in Portugal forced the Government

to offer to give Macao back. When the offer was not made, the

Chinese would breathe a sigh of relief. He hoped that Dr Sa

Machado would keep in touch on this question and consult before

any major decision was made, Portugal should not feel under

any pressure to offer Macao back - quite the reverse.

Machado agreed to consult.

Compensation

Ir Sa

11. Dr Owen said that the only other bilateral problem was the

old but nevertheless troublsome issue of compensation.

Within

Steady

They were

He had

some elements of British society it was used as a wedge between

Britain and Portugal. On merit there was no doubt about the

entitlement of the Britons involved to full compensation.

progress towards settling this issue would be most helpful.

Dr Sa Machado replied that Portugal had accepted the case for

compensation and had passed a law providing for it.

now waiting for the required secondary legislation.

expected the problem to be solved by the end of this month.

had recently had a formal commitment from the Minister of Finance

that everything would be solved. It was not only Briton but also

Brazil, West Germany, France, Spain and Switzerland which had

outstanding compensation claims. It had been decided at a recent

Council of Ministers meeting that all should be solved within

Dr Oren said he would te surprised and delighted

3 months.

He

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/if