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11. Patricio raised with me briefly the question of WEU enlargement, but ostensibly to ask whether I thought the addition of Spain and Portugal would increase United States suspicions of WEU's activities. I in turn raised with the Portuguese the question of transferring the Jaguar quota to Rover, on which I hope they will now take a sensible and cooperative line (though too late to affect 1986 quotas).
12. The main item of substance which I raised in Lisbon concerned claims for compensation, on which I pressed both Patricio and the Foreign Minister for early progress. As you know, the Portuguese have been dragging their feet, having promised us several months ago that they would let us have early details of a settlement. In addition to the familiar arguments, I told the Foreign Minister that there was a real risk that at least one of our claimants might face early bankruptcy, with the additional risk of publicity which that would entail. I hope very much that there may be some progress to report by the time Mr Thomas receives the Portuguese Political Director, Dr Cotileiro, on 31 March. If not, I hope that Mr Thomas will continue to press him.
13. News of a Sino-Portuguese settlement on Macao was emerging during my visit, although I had little opportunity to discuss it in any detail, since the Foreign Ministry regard Macao as the chasse gardée of the Presidency and the Prime Minister's office. I did nevertheless have a chance to talk to the Prime Minister's Diplomatic Adviser at an Embassy dinner, who confirmed to me that the Portuguese were indeed on the point of reaching a satisfactory settlement for the hand-over of Macao in December 1999. He was not very specific (nor am I very clear) about the precise arrangements reached on nationality, but I made the point that any settlement on Macao would be watched very closely in Hong Kong. I expressed the hope that the respective authorities in Macao and Hong Kong might perhaps be able to exchange views. This seemed to come as a new idea to him, but he undertook to follow it up. He confirmed otherwise that the settlement followed very closely the lines of our Joint Declaration.
14. Another minor flurry also coincided with my visit, namely the visit of the Speaker of the Portuguese Assembly to Estonia, and which was only aborted at the last moment following urgent messages from Lisbon. It was announced in the press on the day of my departure that the Portuguese Ambassador in Moscow is being retired, and that his Minister has been transferred to Benguela!
PUSBSK
CONFIDENTIAL
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