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appropriate guarantees.

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He was keenly aware of the presentational difficulties. A decision would be needed very soon on the timing of the first repatriation, which was likely to take place after the visit of the Prince of Wales to Hong Kong from 7 to 13 November, and the Prime Minister's visit to the United States on 23/24 November. The second issue concerned the pace of democratisation of

political system in Hong Kong. Work on this aspect was continuing, but was not yet ripe for decision. On the third issue, citizenship and nationality, a joint Foreign and Commonwealth Office and Home Office team had just and returned from Hong Kong. The Home Secretary and he were now preparing a set of measures which would fulfil the public commitments made by Ministers. Although these issues did not require immediate solutions, he felt it right to warn colleagues that difficult decisions would be required before the end of the year.

The Cabinet

Cabin

Took note.

CONF

COMMUNITY

AFFAIRS

Economic and Monetary Union

4.

THE CHANCELLOR OF THE EXCHEQUER said that he proposed to release at 11.30 am Paper on the Government's approach

to Economic and Monetary Union as an alternative to the proposals in the Delors Report He would be setting out the issues fully in a speech to the House of Commons later in the day and the Paper itself would be laid before Parliament. Copies of the Paper and the Press Notice would be immediately available for colleagues. A summary of key points would also be circulated. It was crucial that colleagues took every opportunity picly to support the Paper as a serious and constructive approach: it was not, as some would argue, a delaying tactic. The Government shared the views of some other Member States as regards the objectives that should be pursued (such as the stability of exchange rates and the avoidance of inflation) but the United Kingdom's approach was evolutionary (in securing those objectives. At the end of Stage 1 it was inconsistent and unacceptable, as Delors proposed, that a liberal and market-led framework should be succeeded by a wholly prescriptive approach.

In discussion, it was emphasised that it was most important that all Ministers should speak in identical terms, least because commentators were scrutinising every wore for inconsistencies. Although a critique, the Paper was not attack on the Delors ideas: it set out an alternative approach which required serious consideration.

3

As had be

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