TNAG-1148-FCO40-1428-Effect-on-Hong-Kong-of-the-Portuguese-and-Spanish-accession--1982 — Page 15

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3.

Mr Hannay replied that it would be as well if

In

the Portuguese did not look for rapid progress on the

question of the inclusion of the escudo in the

calculation of the ECU since there were protracted

discussions underway in the Monetary Committee.

reply to a question Dr Marta said that the Portuguese,

did not intend to join the exchange rate mechanism when

they acceded but would, like the UK, keep the matter

under review. Meanwhile they were trying to travel

alongside. Mr Hannay said that as regards Japan, he

could understand why the Portuguese wished to have a

longer list, but it would not be easy to agree and he

could not offer much hope for compromise in Portugal's

favour. It was important that the Community should

have a common policy towards the Japanese rather than

continuing national restrictions, as in the case of

Italy and France. The Portuguese should stick to their

guns on VAT zero-rating. The UK would continue to

support the Portuguese case firmly and it really was

only the French, and to a much lesser degree the

Germans, who were standing out against the Commission

proposals. If the Portuguese indicated a willingness

to compromise too soon, then they would find that their

list of foodstuffs would be progressively whittled

down.

For that reason, it was in their best interest

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