TNAG-1255-FCO40-1588-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 112

CONFIDENTIAL

deployment has remained commendably firm, but he will at

the time of the Summit be only a few days away from the

important Bundestag debate. The Opposition SPD, feeling

more confident after their recent success in the Hesse

and Bremen Land elections,will either have held or will

be about to hold their special conference which is

expected to come out against deployment, notwithstanding

Helmut Schmidt's role in Government as a main European

author of the dual track decision.

3. For the average German voter, economic problems,

notably unemployment, appear to be the number one

priority. The economy is growing only slowly. What

growth there is can be attributed to the building sector

and private consumption. Although unemployment is

steady, it is expected to rise again in the Spring. OECD

forecast GDP growth for 1984 at 1 3/4% (% in 1983).

Consumer prices rose in 1982 by 5.3% and are expected to

stabilise at around 3% for both 1983 and 1984.

4. Kohl's personal position is strong, although not as

clear cut as it was at the time of the London Summit on

22 April, which fell between his outstanding election

victory on 6 March and the declaration of his

Government's policy in the Bundestag on 4 May. As

problems have arisen, there has been criticism in the

media and elswhere of his 'Chairman of the Board' style

which has conveyed a certain lack of grip and

decisiveness. The Land elections have also shaken the

CDU (in Hesse the CDU vote dropped by 6%). But

CONFIDENTIAL

{