CONFIDENTIAL
Portugal at the end of November. Macao was calm.
Meanwhile the situation in
East Timor
It wanted to
President Soares said that Portugal could not accept Indonesia's unilateral occupation of East Timor. find a solution which would guarantee to the population the right of self-determination and the protection of their own
There had been difficult culture, religion and language.
negotiations through the offices of the United Nations Secretary General, but Indonesia had failed to offer adequate guarantees. Portugal could accept any form of self determination but could not agree to allow the present
The Prime Minister took situation to continue unchanged. note.
Situation in Portugal
The financial The balance of
President Soares said that there had been a considerable improvement in Portugal's economic prospects. situation had been brought under control. payments deficit was being reduced and inflation had been
The introduction of VAT had been a brought under 12 per cent. considerable help. Portugal was also receiving valuable
He saw his own financial support from the European Community. role as being to guarantee continued political stability.
yous
Charles Turell
Lickel.
Purell
(CHARLES POWELL)
C. R. Budd, Esq.,
Foreign and Commonwealth Office.
CONFIDENTIAL
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