Kathleen Sullivan, CBS
Good Morning Prime Minister. If I can start with something that is really a domestic concern which appears to be having international repercussions—the dollar this morning dropped to a post-World War II low against the Japanese yen. Do you feel that the international financial community is sending a signal to George Bush to do something about the budget deficit now and is there some urgency that is felt by the Allies?
Prime Minister
Two things: first, the American economy is strong and performing well and continues to perform well, that I think should be kept in mind by everyone. Secondly, I have not the slightest shadow of doubt that in good time the deficit will be considered in a responsible way and that they will come out with a way to manage it which will take into account a relationship with Congress. [end p1]
I do not think it helps currency if one is constantly commenting on each and every movement. I think it is much better for foreign visitors to look at the underlying strength of the economy which they are visiting.
Kathleen Sullivan, CBS
Yesterday here in Washington, the man who handles the money supply for the United States, Alan Greenspan, said that he is worried that foreign investment in this country will dry up altogether if the budget deficit is not given a matter of urgency?
Prime Minister
I am not quite sure that Alan Greenspanhe said precisely that. I think he said that of course in due course the budget deficit will have to be dealt with and that is just a matter of common sense. I am quite certain that both the new George BushPresident and his advisers and the Treasury team will deal with this matter in their own way but in a responsible way. But I do not think it helps constantly to badger them.
You know inauguration day is not until quite late in January. He certainly is Vice-President. I do not think you constantly have to badger them about this matter. They will come out with their own policy. [end p2]
Kathleen Sullivan, CBS
What do you plan to talk to President-elect Bush about this morning?
Prime Minister
Quite a lot. Yes the world economy will be one thing. Yes, East-West relations will be another. Yes, the Middle East will be another. Yes, of course, arms control will be another. You know, foreign affairs are not nearly as foreign as they used to be because they affect home affairs the whole time and we have far more cooperation globally than we have ever had before.
So it will be very good to have a general look at where the present problems are and what new ones are likely to emerge.
Kathleen Sullivan, CBS
How do you think the United States should now deal with the Soviet Union and the new administration over there with all the advancements that have made with perestroika and glasnost and what kind of advice would you give to George Bush in dealing with General Secretary Gorbachev?
Prime Minister
George Bush is no stranger to General Secretary Gorbachev, nor to the satellite countries and of course he is very familiar with the problems. [end p3]
I think the real question that we ask is how fast can those reforms be expected to go because obviously in a country where people have not been used to taking responsibility or initiative they are somehow bound to be a little bit fearful about doing it and quite a lot of others you know who will not like their privileges taken away from them.
So I do not think we should expect too much too soon. I think the new freedom of speech which they have is something which is quite irreversible and which is an enormous advance. The improvements in the numbers of people who are allowed to leave again is a great factor.
The real thing is how fast can they change their economy over from something totally centrally-controlled and planned, which does not work, because the man and organisation does not exist that could make it work in a country that size, to something where there is much more power in the hands of the ordinary citizens, because that is not only an economic change. Once ordinary citizens have more power, it is a political change as well and we do not know. We think it is a most bold and courageous thing of Mr Gorbachev to do, we think it is in the interests of the Soviet Union and of the wider world that he succeeds. [end p4]
Kathleen Sullivan, CBS
Is it time for the United States to push for a START agreement on strategic arms?
Prime Minister
It is time for the United States to continue negotiating for 50 percent reduction on the START agreement. It is a very complicated negotiation because you have to be careful that you maintain your sureness of defence throughout these very very detailed matters.
Kathleen Sullivan, CBS
What are you going to do without Ronald Reagan in the White House? You are going to miss him I am sure.
Prime Minister
I am going to miss him very much indeed. He has been a tower of strength to the free world.
Kathleen Sullivan, CBS
For you personally?
Prime Minister
Yes, because I knew Ronald Reagan before he was President and he knew me before I was Prime Minister and that is because we both, [end p5] in world affairs, thought the same way. That has been a strength.
But equally I have known George Bush for a very long time. He is no stranger to the things we have been discussing. He has stayed at Chequers with us, he has often been over and talked with us, he has done his own tours to Europe, he was very influential in getting the Cruise deployed and he knows the satellite countries in East-West very well indeed.
So it will be I think quite a continuation of existing policies and of existing confidence.
Kathleen Sullivan, CBS
But you have always been considered an ideological soul-mate, if you will, with President Reagan. Do you feel the same way with President-elect George Bush?
Prime Minister
I think that the policies will continue. I think each and every person has their own style. I have my own style in government, I am sure that George Bush will have his style in government. But I think the broad policies will continue to be the same. [end p6]
Kathleen Sullivan, CBS
There seems to be, when you watch the two of you on Economic Summits, that he has such a rapport with you, how he guides you and touches you sometimes in all the photo opportunities, there almost seems to be a deep friendship that you will continue?
Prime Minister
Oh indeed I am sure it will. Ronald ReaganHe is a marvellous President, a very considerable person and of course we will stay in touch.
Kathleen Sullivan, CBS
So how do you like your new purse?
Prime Minister
How do I like my new …?
Kathleen Sullivan, CBS
The new purse that George Shultz gave you yesterday.
Prime Minister
Oh absolutely marvellous, what a lovely touch, absolutely delightful because in my own office they always say if you cannot find anything or if there is anything that really needs to be kept secret: “Oh we will put it in the Prime Minister's handbag” . [end p7]
Kathleen Sullivan, CBS
Mrs Prime Minister, thank you very much for joining us this morning.