CAB128-94_A1b — Page 192

CONFIDENTIAL

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Representative had certified that the elections were free and fair. Although Namibia was entering a period of continuing difficulty, the outcome of the elections had been as favourable as might have been hoped for Western interests.

The Cabinet -

Took note.

ONFIDENTIAL

COMMUNITY

AFFAIRS

Economic and

Finance Council 13 November

Even so,

THE CHANCELLOR OF THE EXCHEQUER said that the Economic and Face Council on 13 November had had a crowded agenda. Two legal texts needed to launch Stage One of Economic and Monetary Union had been agreed without much difficulty and on a satisfactory basis. He had then presented the United Kingdom's paper on what should follow Stage One, and there had been lengthy discussion on that and on the Delors Report. It had been genekal agreed that the paper raised important issues which merited proper consideration. The German, Dutch and Luxembourg Ministers had spoken in favour of a measured and cautious approacHerr Waigel, in particular, had warned against trying to the roof before the foundations were in place. Even so, there seemed to be a general expectation on the part of other Ministers hat the European Council in December would call an Intervemental Conference to consider Treaty change. It had been

It had been agreed that the United Kingdom's paper would be on the table atat meeting, along with the Delors Report and the Report from officials setting out a list of questions to be addressed: bad, however, been obliged to intervene to prevent the French airman concluding that the Council had agreed to give the two latter documents superior status. The fact that, in the recent House of Commons debate, members of the opposition parties ad also uniformly spoken out Wad also uniformly spoken out against the Delors prescription f achieving economic and monetary union appeared, from conversations outside the Council, to have been registered by the advisers of other Ministers.

The Council had adopted satisfactory conclusions on the abolition of fiscal frontiers. The destination principle for applying VAT would be retained, but the importance of avoiding burdens on industry had been accepted. There was ample opposition to wording suggested by the Presidene on the need to harmonise rates of VAT. Limits on travellers lances were to be abolished by 1993 subject to possible derogations for certain member states with high tax rates: but the who would need further discussion.

subject

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CONFIDENTIAL

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