FM VISIT EUROPE-PRAGUE
WED 19 SEP 90 19:0.
FG.02
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Accession to the EEC
6.
Dr Antall referred to his recent visits to Brussels and to Rome, where Mr Delors and Mr Andreotti had expressed support for Hungary's wish to negotiate an Association
Agreement by 1 January 1992, leading to eventual full membership.
7.
The Prime Minister said that Britain had taken the lead during the negotiation of the current Trade and Economic Cooperation Agreement and in proposing Association Agreements for the re-emerging democracies of Central and Eastern Europe. Consistent with this approach, we would do our level best to see negotiations begin as soon as possible on an Association Agreement and for them to be concluded within the time scale that Hungary wanted. We would give our support to
Hungary's vision of that Association Agreement being a step on the road, eventually, to full membership.
Attitude of British Banks
8. Dr Antall wondered whether there was anything that the Prime Minister could do to encourage British banks towards a greater involvement in lending to Hungary: the downgrading by the Bank of England of Hungary's credit rating at the beginning of this year had seriously reduced British banks' willingness to participate in loans.
9.
The Prime Minister took note of what Dr Antall had said. It was a complicated question, which revolved around the provisions that British banks were required, on prudential grounds, to make with respect to their lending to any heavily indebted country. She would look into the matter on her
return.
COCOM Liberalisation
10. In response to Dr Antall's request for greater liberalisation, the Prime Minister said that the COCOM list had already been reduced by almost two-thirds. Britain had no doubt about Hungary's good faith. But what now remained on the COCOM list contained some very sensitive technology, and we needed to be very careful at present. However, we would be willing to look at any specific items if Hungary wished to put them forward.
Hong Kong
11. Dr Antall referred to recent sensationalised press reports concerning the possibility of Hong Kong citizens being offered Hungarian passports.
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