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· fear of isolation following the WEU's decision to invite

Denmark and Turkey but not Norway as observers to its Ministerial meeting earlier this summer;

revived debate over 'orway's relationship in the EC and with Europe generally;

concern that Norway's response to the Gulf crisis has been unco-ordinated and that she needs to get her act together

quickly on the new challenges of out-of-area defence.

Deputy Foreign Minister Vollebaek told Mr Waldegrave in October that Norway would like to be observers. (We would

support this) but that it was too early to discuss

membership.

23. Nordic assistance for Eastern Europe is mainly focussed

on help for the environment and the promotion of investment.

The Nordic countries have jointly set up a finance

corporation to stimulate participation in environmental schemes in Poland and Hungary. Norway has also supplied

food, environmental and trade aid to Poland and a vocational

training programme for Poland and Hungary.

24. The Kenyans broke relations with Norway on 22 October over the arrest and trial of a Kenyan dissident following his return to Kenya from exile in Norway. The Nordics made a joint demarche to the Kenyan Government in July this year to express concern over the treatment of demonstrators

supporting pluralism in Kenya. A number of demonstrators were killed. Whilst the promotion of democracy and human rights is a major element of Norwegian overseas aid policy,

the Norwegians had not, before July, threatened to cancel an aid programme over a country's poor human rights record. With the break in relations it is likely that Kenya will

lose some $24m of Norwegian aid promised for 1991. -Some

$10m remains unspent this year.

We regard the incident. as

over reaction by the Kenyans to clumsy Norwegian support for

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