B
10. At the Guadeloupe Summit Chancellor Schmidt was
persuaded to take the lead in organising immediate financial
assistance for Turkey provided she first reached agreement
with the IMF. President Carter and Chancellor Schmidt have
expressed disappointment with the previous Government's
intention to offer only £7.5 million. Ministers have agreed
that we should double this to £15 million but no announcement
has yet been made. Japan has indicated that she will only
match the lowest of the contributions made by the Guadeloupe
four. Latest OECD forecasts put the Turkish external financing
gap for 1979 at $1.8 billion. Of this, no more than 8600
million is likely to come from the IMF and the commercial
banks, leaving at least 81.2 billion to be found from other
sources. So far the Americans have promised $200 million
($100 million in economic assistance, $50 million in military
assistance and 850 million in export credits), the Germans
$100 million in a commodity loan, which is likely to be
increased, and the French $68 million (one third loan and two
thirds export credits). The Swedes have promised $10 million.
Other potential donors are tending to wait on the UK.
FAR EASTERN
17 May 1979
DEPARTMENT
CONFIDENTIAL
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