TNAG-1297-FCO40-1652-Visit-by-Sir-Geoffrey-Howe--Secretary-of-State-for-Foreign-a-1984 — Page 197

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Both of these developments would be viewed in the context of progress towards economic and monetary union. But let me make absolutely clear that we have given no undertakings as to how fast or by what means these developments could or should be brought about. These would be matters for discussion after our entry, when we should be a full member of the Community with all the rights of a member. As I emphasised at the Press conference following my meeting with President Pompidou and in the statement to the House, both President Pompidou and myself agreed that no country's vital interests would be over-ruled by other members. We have made clear the three conditions which any proposal for reducing the official sterling balances would have to satisfy: notably, of course, the protection of the interests of balance holders and the avoidance of unacceptable burdens on our balance of payments.

Progress towards economic and monetary union and the future of sterling in an enlarged Community do involve enormously complex problems. It has to be considered, for example, what alternative asset would be generally acceptable for sterling holders, what arrangements would be needed for holders to acquire such an asset, and what form and maturity of corresponding liability might be undertaken by us. These are not matters to which the Community has clear and agreed answers. They would need a great deal of discussion, both within the enlarged Community and with others concerned. It would be impossible to settle these problems in the context of these negotiations. It is an advantage to us, not a weakness, that they are now left for discussion after our accession, when we should contribute as members of the enlarged Community to the processes of discussion and decision-making.

First,

Two things have happened in our discussions with the Six. . the Six have become clearer about the size and complexity of the problems to be dealt with in this area. Secondly, they have accepted that, if we become members of the Community, we shall be ready to discuss the whole subject in a fully Community spirit, without preconceptions or prejudices about how to deal with the problems. That is why we are not asked for and have not entered into any specific undertakings or commitments on methods or timetables, and that is why my right hon. and learned Friend's [the Chancellor of the Duchy of Lancaster] statement of our position has been accepted as disposing of the whole question in the context of the negotiations.”

128. In the Government's view, it will be to the advantage of the United Kingdom as well as of the others concerned if in due course arrangements, which meet the conditions stated, can be worked out for the official sterling balances. The prospect of doing this will be enhanced by our membership of the Community.

CAPITAL MOVEMENTS

129. The Treaty of Rome provides for the progressive abolition of restrictions on movements of capital between member countries, and the Directives made under it have applied this to most of the main categories, though some restrictions still continue.

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