CAB128-94_A1b — Page 207

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NFIDEN

to enable the International Monetary Fund (IMF) to reach agreement with both Poland and Hungary by the end of the year. It would not be possible to provide financial help for Poland without a proper IMF agreement. Financial help should in general be dependent on the prior achievement of real progress towards democracy: Chancellor Kohl had specifically assented to this proposition in respect of East Germany.

Continuing, the PRIME MINISTER said that she had then turned the discussion towards the form of economic and trade co-operation

at the EC should establish with Eastern Europe. These points been reflected in her speech at the Lord Mayor's Banquet on November and in her statements in the House of Commons. The had a range of agreements with East European countries inging trade agreements, trade and co-operation agreements and association agreements. The EC should consider the forms of agreement for East European countries which were best adapted to their particular needs. President Mitterrand suggested that some Eastern European countries should be allowed to participate in EC programes of which membership was not confined to EC member states! This could include EUREKA and ERASMUS. The Prime Minister had suggested that the EC needed to take a clear decision by the of this year on how the question of

enlargement show be handled. Turkey had put in its application two

ago but had been given no reply.

then Austria had applied. final decision at the

with the effects of

on preparations for the

Since

It was not necessary to take a sent time. But the EC was now coping cent expansion and was concentrating

le Market in 1992. It was perfectly tenable for the EC to take the position that, until these important issues had been resolved, it would not be possible to consider further enlargemen

In

Continuing, the PRIME MINISTER say that towards the end of the dinner President Mitterrand had faised the question of a new European Development Bank. She had pointed out that the East European countries already had substantial debt obligations. They needed grants rather than more loans. The IMF itself would make available loans on preferential terms. Moreover, the European Investment Bank already had sufficient funds to finance new projects. The problem was finding suitable projects. the discussion Heads of Government had agreed that the proposal should be looked at in more detail. However, at his press conference, President Mitterrand had reported that all EC Heads of Government had agreed to the scheme in priciple,

In fact, Britain, West Germany and the Netherlands had not committed themselves to the proposal. At his press conference President Mitterrand had also announced that the EC Heads overment had decided that the question of European borders should not be put on the agenda, and had reaffirmed their confidence and other Western institutions. After the Dinner the Minister had spoken to the Irish Prime Minister, Mr Charles Haughey, about the need to deny any refuge to the Provision

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