Prime Minister
Signor FanfaniPrime Minister, Ladies and Gentlemen,
I have greatly valued this opportunity of a talk with Senator Fanfani at the outset of what we all recognize will be a crucial year for both the Community and for the Alliance. It is the first time I personally have had the pleasure of welcoming Senator Fanfani to London and he is of course accompanied by Signor Columbo and by a whole team of Ministers whom we have welcomed to talks at No. 10. It is not, of course, the first time he has been to No. 10 Downing Street; he was here, taking part in talks with Prime Minister Harold Macmillan during his time in office.
Our discussions have covered a wide range of subjects but, in particular, as you would expect, we have talked about East-West relations, especially in the context of the deployment of Cruise missiles, and we both remain absolutely firm in our support of the 1979 NATO Dual Track Decision.
We both warmly welcome President Reagan 's speech of 22 February. I think you perhaps will have noticed it and its significant content, but I have not previously referred to it. [end p1]
President Reagan, there, made it clear that the zero option is not a take-it-or-leave-it offer, and he further made it clear that Ambassador Nitze in Geneva has instructions to explore any solution consistent with the Alliance's principles of balance, that is equality between the United States and the Soviet Union; exclusion of British and French nuclear systems; and the third principle, extremely important, of proper verification. That, I think, was a very interesting clarification and, indeed, advance on the previous position.
Should, however, the Geneva talks fail to produce agreement on the zero option, we shall both—both Italy and the United Kingdom—fulfil our commitments to begin to deploy Cruise missiles. This, we believe, will be absolutely essential to the maintenance of the security of Western Europe.
We also discussed Community matters and we agreed that following the recent success on the common fisheries policy, the Community must now make a real and urgent effort to find a lasting solution to its financial problems.
We also agreed on the need to develop an agricultural policy aimed at curbing Community surpluses of agricultural products.
We found that we had much in common in our attitude to the ways in which the Community should develop, for example, by ensuring that the Regional Fund should give [end p2] greater priority to areas of greatest need and by developing the Community internal market.
We agreed that important ideas for the future of the Community such as these could helpfully be discussed at the forthcoming session of the European Council.
Now, in the context of Community trade, we are both very conscious of the need to preserve the open trading system and we recognize it is now under greater pressure than at any time during the Community's history. We stress that if open trading is to be preserved, those who in practice are operating protectionism must remove their barriers.
We hope that we shall be able to go ahead this summer with the joint development of the EH 101 helicopter. It is extremely important to both of us.
We also recognize the need for early Community agreement on a satisfactory future work programme for a Community Scientific Research Centre at Ispra (phon.) in Italy.
Senator Fanfani and I discussed our approach to the Williamsburg Economic Summit. It is an extremely important summit. We all know that it is significant in demonstrating the unity of the Western Alliance and significant in that people are looking to it to give a hope of economic recovery.
Ladies and Gentlemen, this has been a very warm and friendly bilateral meeting and Senator Fanfani and I want [end p3] to enrich British-Italian understanding and to broaden the scope of existing bilateral contacts, and to that end, we have given our backing to a proposal for a British-Italian Round Table to be held in 1983. You will be familiar with other arrangements we have, such as the Königsburg [sic] arrangement and also a Bordeaux Council arrangement. To those, we wish to add this very significant Anglo-Italian Round Table and our officials will now look at practical details. We hope the Round Table can become a forum in which people with a common interest in British and Italian affairs can periodically meet and exchange views. We have in mind politicians, businessmen, academics, even journalists, anyone who is experienced can bring a fresh and constructive contribution to our relations. Altogether a very happy Summit and we look forward to future meetings.
I will now ask the Prime Minister to make his comments on the meeting. Prime Minister.
Signor Fanfani (in Italian)
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Question (BBC)
Prime Minister, could you tell us whether you are slightly anxious that in meetings such as today's with Signor Fanfani, you yourself may begin to lose credibility if your Government goes on losing deposits at bye-elections?
Prime Minister
Oh, no! That is a very artificial question, isn't it? I am absolutely delighted that the militant aspect of the Labour Party has been roundly and soundly defeated, but the problem is one for them, not for me. I did not really cherish any secret ambition of actually winning Bermondsey!
Question (in Italian)
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Prime Minister
I think it is to you, Prime Minister, first. I will have a go later!
Signor Fanfani (in Italian)
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Prime Minister
Do you want me to reply as well, or are you satisfied with that? Right, I will reply briefly!
Resources. The resources, of course, at the moment are sufficient provided one finds a solution to the problem [end p5] of not producing surpluses. The expense on the European Budget at the moment is caused because we produce so many surpluses which then have to be stored and sold off at cheap prices. If we solve the problem, we do not produce surpluses at that rate, then the Budget will be sufficiently large. The Budget, as you will be aware, has its own buoyancy, because as you get expansion so the money which comes in both from the VAT and from the levies will indeed expand.
Secondly, on the Ispra and Supersara (phon.). Supersara is only about 15–20%; of the Ispra programme and I think there have been fears, quite unfounded, that Ispra scientific centre might close or something like that. We have tried to allay those fears. Supersara is a special thing on its own, as the Prime Minister has indicated. The important thing is that Ispra continues with a programme that is important for the whole of the European Community and particularly the scientific members of the European Community.
On Cruise, I do not think there is anything I can add. The Dual Track Decision in December 1979 was taken, of course, before the zero option. The zero option is absolutely the best goal. We shall keep it as a goal. If we are not able to attain that goal, we wish to have something else based on balanced numbers, verifiable, and of course, the British and French deterrents are last-resort deterrent and [end p6] and they are minimal for being a last-resort deterrent and they are not land-based Cruise missiles, nor land-based missiles, so they cannot possibly come into the INF negotiations. All right? Right, let us go on to the next question!
Question
I wonder if I could ask both Prime Ministers if they could let us know when they hope to sign an agreement and to complete the necessary parliamentary procedures in order to allow development of the EH 101 and secondly, if Signor Fanfani could let us know whether he raised the question of Britain improving its relations with Latin-America in general and specifically, whether he asked for negotiations between the British Government and Argentina?
Signor Fanfani (in Italian)
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Prime Minister
There is nothing I can add on the helicopter.
The Prime Minister and I did not mention Argentina. I think there might have been a brief reference to it between Signor Colombo and our Francis PymForeign Secretary. May I make it perfectly clear that it is not we who are holding up more friendly relations with Argentina and, of course, we have—and have always had—good relations with many [end p7] countries in Latin America, and we are keen to develop those.
Joe Lewis
Question for Mrs. Thatcher. Both countries are contributing to the multinational force in the Lebanon. Did you discuss the increased role of the multinational force with regard to President Reagan 's proposals made earlier during the week? Second, did you review the results of the Palestine Liberation Organization's conference held during the last few days and does the result of that particular conference enable you now to meet a PLO representative should they come to London?
Prime Minister
With regard to the Lebanon, as you know, we have a small force in the Lebanon, something under a hundred. It is there for three months. We did not together, Signor Fanfani and I, discuss the role of that force in Lebanon.
With regard to the conference of the Palestine National Council Conference, we are not able to receive officially—myself or the Francis PymForeign Secretary—a PLO representative. We never have, but as you know, we hope to receive the delegation of Arab States. I believe they are scheduled to come now on March 18. They will, I believe, be bringing a representative of the Palestinian [end p8] people, who is not a member of the PLO.
Question
Do you see, Mrs. Thatcher, as you met King Hussein earlier this week, any role for King Hussein to play in President Reagan 's proposal before any progress is made in Lebanon, as far as the question of withdrawals is concerned?
Prime Minister
Well, obviously, there is a very big role for King Hussein to play. The timing of that role is a matter for discussion between a number of countries, but especially a matter for discussion between several of us and the United States. We all hope that you will soon begin to see negotiations and successful negotiations for the withdrawal of foreign forces from Lebanon and, may I make it quite clear from the viewpoint of this Government, we believe that there should be no further Israeli settlements on the West Bank; and that also is an extremely important factor, as you will understand.
We also, in our discussions on this subject, recognized the urgency of this problem. There does seem an opportunity to go ahead. We are making progress on these matters in the next few weeks. I hope very much that that opportunity will be taken. Signor Fanfani, would you like to add to that? [end p9]
Mason (Associated Press)
Prime Minister Fanfani, there has been considerable discussion here in Britain about a dual key control for Cruise missiles. What is your position on control of the missiles that you will be taking?
Senator Fanfani (In Italian)
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Prime Minister
The arrangements we have, of course, were published long ago. They are the same arrangements as were made between Mr. Churchill and Mr. Truman. They are arrangements for joint decision. Not joint consultation merely, but joint decision. I am satisfied that those arrangements would be effective. Joint decision on use of the bases or the missiles would, of course, be dual control. Got it? Good! Excellent! Worth asking the question! Thank you very much!
Question (In Italian)
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Prime Minister
Senator Fanfani and I did not mention that, but I can, of course, nevertheless answer your question. The rule that we have in Britain is that Government does not [end p10] control in any way the price of petroleum. There is what is called a participation agreement, in that if we buy from the North Sea oil companies, we have to buy at market price. You are well aware that the glut of oil had led to a significant fall in the open market price of petroleum products, both South Arabian crude and the more refined petroleum products. Therefore, we have to follow the market price and have to judge the market price. We therefore, in our judgment of the market price, said we thought that it was $30.50 a barrel, and that is our judgment of the market price at that time. Others came in with a lower price. This is not a price fixed by Government in this country in any way, but one that arises because we, by virtue of agreement made a long time ago, can purchase oil under a participation agreement from the North Sea oil companies at the market price. I cannot get out a crystal ball and tell you what will happen to the market price of oil. I can only say to you that I think a modest fall in the price of oil is good for the prospects of recovery. I can equally say that if you get very sudden changes, either rises or falls, that does induce uncertainty and that is bad for trade. So that I hope, whatever decisions are taken by OPEC, of which we are not a member, they will not result—nor the open market prices—they will not result in sudden changes in the price. A modest fall, yes, but not too sudden! [end p11]
Senator Fanfani (In Italian)
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Peter Barnard (Reuters)
There has been a feeling that some members of the Italian Government—I am addressing this to Senator Fanfani—would like to see a substantial depreciation of the Italian Lira within the European monetary system in any forthcoming realignment. I would like to ask Senator Fanfani what are his views on that and whether there was any discussion between the two sides on a possible EMS realignment.
Senator Fanfani (In Italian)
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Question (In Italian)
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Senator Fanfani (In Italian)
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Prime Minister
Can I answer very briefly. We are in favour of enlargement by including Spain and Portugal, although a number of problems have still to be sorted out before that enlargement occurs. We believe that enlargement would both entrench and enhance democracy in Europe and enlarge [end p12] the area of stability. That of itself is good both for Europe and for the whole of the Western World.
With regard to political cooperation, that of course does not stem from the treaties which is of course the European Economic Community. It is a separate committee. We cooperate on political cooperation because we wish to and I believe that, too, is valuable. It enables us both to discuss and to see one another frequently and to try to take a common line, and if I might just remind colleagues here, it was most helpful to Britain of course during the problems that we had with Argentina and demonstrated in a very practical way the value of both political cooperation which could lead to effective action. Thank you. Next question.
Question
Was there any discussion today in any form at any of the talks of the position of the former Italian royal family?
Prime Minister
No, we were not discussing that matter.
Question
A question for Signor Fanfani. Has the Italian Government made any firm decision on its contribution to the forces in Lebanon and how long are you prepared to have forces remaining in Lebanon? [end p13]
Senator Fanfani (in Italian)
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Prime Minister
You seem to be struggling for questions today!
Question (in Italian)
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Prime Minister
Normally, the moves are made at the negotiating table, which you would expect. President Reagan and, of course, Vice President Bush, when he was in Europe, made it perfectly clear that the zero option was not a take-it-or-leave-it option. Undoubtedly, it is the best option, but there are other possibilities I am afraid which would still mean retaining some of the SS20s and also would mean deploying Cruise and Pershings. The place to make practical and detailed propositions—it is no earthly good just talking in general concepts; they have to be translated into practicable propositions which are verifiable—is at the conference table at Geneva and President Reagan has instructed Ambassador Lipsen to explore any useful options, but Geneva is the place. Is that clear? Good! Right! Last question!
Question
I just wanted to ask Signor Fanfani whether any member of the Italian Delegation visited King Umberto in hospital in London and will the Italian Government allow the king to visit Italy? [end p14]
Prime Minister
Well now, this did not arise from our meeting, but I leave it to you!
Senator Fanfani (In Italian)
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Prime Minister
Gentlemen, thank you very much for coming!