CAB129-37 — Page 33

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6.

In the first place, we re-affirm the obligations which the age34 of 9ed under the Conventi chage 34tran Economic Co-operation, the Statute of the Council of Europe, the Brussels Treaty and the bilateral agreement between the United States and United Kingdom.

7.

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In accordance with these obligations, His Majesty's Government have participated fully in 0.E.E.C. and other European bodies and have taken the lead in the elaboration of the practical steps which have been taken, notably the Intra- European Payments Agreements and measures for liberalisation of trade. They have been prepared to go a long way and indeed to take considerable risks in order to promote these and similar measures of co-operation. Proposals may now be put forward which, if they were to be accepted by His Majesty's Governmont, might involve some degree of merging or integration of the United Kingdom economy with the economies of Western European countries. Although no actual proposals have been formulated, or at least communicated to the United Kingdom, we have considered the general principles involved. We must have regard to the position of the United Kingdom as a power with world wide re s ponsibilities for administration and defence and as the leading member of the British Commonwealth and sterling area as well as to the general responsibilities which we have assumed under the Atlantic Pact, and the similar obligations under the Brussels Treaty. Finally, we wish to do nothing which is incompatible with the objectives of the communique issued after the Anglo-American-Canadian economic talks in Washington in September.

8.

In summary, the principal objective of our policy is to reconcile our position as a world power, as a member of the British Commonwealth, and as a member of the European community. We believe that we can effect this reconciliation but that, if we are to do so, we cannot accept obligations in relation to Western Europe which would prevent or restrict the implementation of our responsibilities elsewhere.

9.

In these circumstances if proposals are put forward for closer economic groupings in Europe or otherwise for the lowering of tariffs and the freeing of exchange and other financial controls and restrictions in Europe we will examine them sympathetically. We are in principle in favour of such groupings if their establishment can be proved to be in the general interest of European recovery. But we naturally expect that these proposals should be clearly formulated and discussed with us so that we can judge how they will affect our interests and can define our attitude towards them. The decision whether we could support them generally must depend on their nature and their possible effect on us and on our wider responsibilities. We have neither the desire nor the intention to impede any sound scheme of closer European union.

10.

We believe that this general attitude coincides with that of the United States Government and we hope that we may look to them for their general support. Ends.

11.

We are taking steps to inform Commonwealth Governments of the contents of this message.

12.

We do not, of course, propose to make any formal statement of this kind during the meetings in Paris, though our general attitude will be based on this policy in considering any proposals which may be put forward.