Robert Carvel (Interviewer)
Prime Minister, what do you see as the major economic problems facing the industrialised world at this stage?
Prime Minister
I really think there are three, and they are all joined together. One is inflation—we're all suffering from it—some more than others, but all to some extent. The other is the sharply increasing price of oil. When we went to Tokyo last year for the Economic Summit we were worried about it then, it was fourteen dollars a barrel, now it's thirty dollars a barrel. And that really means we are spending so much on oil that we haven't enough to spend on other things, and therefore it leads to the third problem which is a world recession. Those three effect us all in the industrialised world and they hit even harder at those in the lesser development world.
Interviewer
Has Britain any distinctive part to play in seeking a solution to these problems?
Prime Minister
I think they have a distinctive part in a number of ways. First, because of the British Commonwealth we're historically close to a lot of the lesser developed countries. [end p1] Secondly, we are a pretty important part of Europe as well. And third, I think we might have a unique point. We're just as concerned about the price of oil as anyone else. Nevertheless, it doesn't effect us quite so much because we're an oil producing country, in so far as our own resources are concerned. We've only just about got enough for ourselves, but therefore we can look at it very much from the view point of how it's effecting all the other countries in the world, and we know that if it effects them badly then that will effect us too. But it does give us a slightly different view point.
Interviewer
At Venice you'll be discussing Political as well as Economic matters, won't you? Since the last summit at Tokyo that you mentioned, the international outlook has got a lot more menacing hasn't it? We've seen Afghanistan, we've seen the Iran crisis. What may develop from Venice?
Prime Minister
I think it's always good for people who believe in the western way of life—the democratic way of life—to get together to consert their reaction to the invade of Afghanistan, and to the Communist world. And I think once a year is about right. [end p2] You see that means we in Europe—talk quite frequently—but we don't talk as often to President Carter—and there's Japan at the other side of the world, and of course Canada, next to the United States. What I think the mistake is to expect enormous pronouncements to come out of these summits, what they are really for is for world leaders to talk to one an other, and to get a common approach to the problems and know how important it is to stick together. Of course, we shall talk about the immediate problem—which is there seems no end in sight to the rise in energy prices—but it's very much as part of the political problem, although we talk about economic problems, economic problems are caused by politics. You remember the first increase in the price of oil was because of the Middle Eastern war. The second sharp increase arose because of trouble in Iran. So, if you get the politics right, you're much more likely to get the economics right.
Interviewer
Turning to the Middle East, the European leaders made a declaration when you were in Venice only last week, which envisaged a role for the Palestine Liberation Organisation in a Middle East peace [end p3] settlement. This wasn't altogether universally welcomed in the world. Do you think that in some way the European leaders have been cutting across President Carter 's initiative, the Camp David approach?
Prime Minister
Can I take the last point first? Certainly not. We did not begin to discuss any role for Europe in the Middle East while the Camp David process was still very, very active—and you remember that certain things were supposed to have been attained by May 26th. So we wouldn't touch it until May 26th had passed. And then at Luxembourg we assembled, we said no we're not going to talk about it, we'll wait till Venice, because that's after May 26th. Now President Carter managed to arrange for some further discussions since May the 26th deadline, and those will continue. So we decided that any role we played must be complimentary and we hope helpful to what he's doing. Certainly I believe Europe, because gain of historical ties in the region, has a special role, but I do beg anyone to look at that communique in its entirety. First, it said if there's to be a settlement everyone must renounce [end p4] force or terrorism as a way of achieving a settlement. Secondly it said that binding on both sides are, Israel's side—a recognition that the Palestinian people have legitimate rights—and on the Palestinian side recognition of Israel's right to live securely and safely within recognised borders. And if those aren't recognised, there'll be no settlement. With regard to your second point, the PLO, it's said that there will really be no satisfactory comprehensive settlement unless the PLO is associated with it. And I think that is just a matter of fact, whatever your opinion is about it, I think it is in this world a matter of fact. But, there'll be no settlement unless they all renounce force, and recognise the rights of one an other.