As you know, I have been having talks at Camp David with President Bush. Also there were Mr. Eagleburger and General Scowcroft, our Sir Antony AclandAmbassador, the American Ambassador to London, Henry Catto, as well as my two aides.
We spoke for about two-and-a-half hours before lunch, covering this morning in particular all matters East-West, in the Soviet Union and in Eastern Europe and in relation to the talks which are coming up with Mr. Gorbachev and how we saw things and the way ahead and a general very thorough review.
We then had lunch—just myself with President and Mrs. Bush—and talks continued and then we reassembled after lunch and did further matters: more details on the arms control talks and several regional matters—Afghanistan, Argentina, Middle East, Cambodia. I think if you say it, we talked about it. It was really a very thorough regional tour of events, India, Pakistan, and then we also talked about the European Community, hoping that it would be thoroughly outward-looking in its nature. We also discussed the [end p1] Vietnamese boat people, Hong Kong, Latin America, Central America, China of course, Southern Africa and Cyprus. I told you, if it was important we discussed it. It was very relaxed, very valuable and I think it best now if I just open up to your questions. [end p2]
Madam Prime Minister, there seems to have been a singular slowdown in the euphoria over Mr. Gorbachev within the Soviet Union itself. He is going to be facing a tough winter. Some experts say that there might be attempts to get rid of him; others are saying that Mr. Gorbachev, under the pressure of events within the Soviet Union itself, may have to crack down in a Tiananmen Square-like development within the Soviet Bloc.
The question is: if this does occur, if either Gorbachev is overthrown or there is a crackdown within the Soviet Union, have we in the West not gone a bit too far in undermining our own military potential if there is a shift in the Soviet Union to a more militant view towards the West, either with or without Mr. Gorbachev?
That is half a dozen premises before your question. Let us have a look at it!
You say “a slowdown of euphoria in the Soviet Union” . I think it is a greater dawning of realism, that it was easier to bring about glasnost and political reform than it is to bring about economic reform on a Western model, particularly as the Soviet Union has never known a period of economic freedom and therefore has no experience of any kind in that direction to retrieve and it is going to take much longer to bring about that economic reform than had been anticipated. So it is not a slowing down of euphoria—it is a greater realism and an assessment of the enormous magnitude of the task. [end p3]
You then went on to ask if we thought Mr. Gorbachev was firmly in the saddle. I think he is very firmly in the saddle and I do not see any rival. I have seen him now about six times and the last occasion on which I saw him was soon after the Nationalities Plenum and he was very confident and fully in command and we had very very lively discussions.
I believe, with regard to your other comment, that he will get through. I think the achievements in the Soviet Union in loosening up for greater freedom are already enormous and you can sense a change in atmosphere.
You then went on to ask had we in fact reduced our defences too much. No, we have not. NATO is still intact. We had the NATO meeting, you will recall, last May; we all signed the communique and we agreed on the arms control reductions that were to be negotiated. The negotiations are going well in Vienna—that is on conventional weapons. The START talks between the Soviet Union and the United States continue; I believe there is a good chance of getting a conclusion on both of those next year and, of course, the chemical weapons continue.
When those talks have been completed, it will take quite a time for the agreements to be implemented and agreement does not mean that the whole matter is then complete; it is a long period of implementation and verification.
I think that completes the questions you asked. [end p4]
Question (Hungarian News Agency)
Madam Prime Minister, I was wondering whether the question of my small country, Hungary, came up in the talks this morning and what did you talk about, if you could share this with us?
I was also wondering how Great Britain sees at the present stage the evolution in Hungary and whether you are going to support the French initiative towards Eastern Europe for a Development Bank?
Of course, we could not have talked about East-West relations without talking about Hungary and the massive strides that have taken place, the movement towards a multi-party and really genuine democracy—not one-party in any way—which is one of the first countries to move towards multi-party democracy. Of course, Poland was the other.
Hungary is, as you know, receiving a certain amount of help and that will continue. We were very conscious, when we spoke about it at the Economic Summit earlier, that although the emphasis at that time seemed to be on Poland, we were equally mindful of Hungary's need for help and were giving that same help.
With regard to a European Investment Bank, the matter is being considered in detail but it is my very very strong impression that it is not more loans that either Poland or Hungary need—indeed, you could say that she already has as many loans as she can [end p5] possibly afford to repay and indeed, may need rescheduling. So it is not necessarily the kind of loan you would get from a European Investment Bank that is needed.
There is already a European Investment Bank, as you know, which can lend out money. There is no shortage of money to lend; the difficulty is to find credit-worthy projects to which to lend.
A European Development Bank will be considered further. I doubt myself whether the need for that is urgent. I think the greatest need is to complete the IMF negotiations and then see what other help will be forthcoming both from the IMF and from the World Bank. [end p6]
Speaking of economic relief, was the question of debt moratorium or interest rate relief discussed and can you also shed some light on why you are meeting with the Federal Reserve Chairman, Mr Greenspan, this afternoon, are those the topics you are going to be addressing?
I usually do see Mr Greenspan when I come to Washington, I have the greatest possible admiration for him and the way in which he has handled monetary matters in the United States.
On the question of debt moratorium, with regard for example to Poland we have already rescheduled the debts due this year. She could not possibly have repaid them. I am not quite certain how other countries have done it but we ourselves have rescheduled to a five year period of grace with regard to monies due this year and then repayment after that and I expect that we shall have to reschedule next year's debts. [end p7]
We very much hope that the IMF agreement will be through by the end of the year because we know it is urgent and then more fundamental arrangements can be made and drawings can be available from the IMF.
But a debt moratorium, no, you do have usually debt rescheduling through the Paris Club and of course the arrangements with the commercial banks are for them to make.
On conventional forces, both Secretary Cheney and the President have talked about CFE2 quite explicitly in the last week and also you said in your interviews this morning that you did not envisage the US making serious immediate cuts in defence spending but Secretary Cheney has talked about cuts in fiscal 1991 which begins next October. I wonder if you have any comment and whether you discussed CFE2 with the President at Camp David today?
We discussed both CFE, as I have indicated, the talks in Vienna, and what Mr Cheney had said. Mr Cheney, as I understand it, proposed cuts of 5 percent, not to take effect at the beginning of next year but in the 1991 year.
I think that the main reason is the difficulties which the United States is having with her own budget deficit, difficulties which we in my country do not have because as you know we have a budget surplus. We have done things differently for a long time in that respect. [end p8]
I am quite certain that neither Mr Cheney nor the George BushPresident would see reductions in defence which in any way meant that we could not properly safeguard freedom and could not properly take our full part—the United States take its full part—in NATO in accordance with agreements we have already made.
Now CFE1 is proving quite complicated to negotiate and it may be that certain parts of the negotiation, for example, as you know there are arguments about combat aircraft, whether you define aircraft according to their role or according to their capability. We say they should be defined according to their capability; the Soviet Union according to the role which they have assigned to them.
Now it may be that some of those things would be left over to be completed after the end of CFE1 but it will take quite a long time to implement CFE1 and if we deal with those things that are left over I think that that will be as far as we should go until we have started to implement those things and also then have assessed the better what is happening both in East Europe and in the Soviet Union.
I am quite certain we must always safeguard our freedom and justice and we must always do it within the NATO framework.
Question (Chris Ogden, Time Magazine)
You know Mr Gorbachev better than any other Western leader and you played a significant role in the US/Soviet relationship during the Reagan Administration, you also know President Bush [end p9] very well. How would you expect President Bush 's relationship with Mr Gorbachev to differ from President Reagan 's and how is your own role in this equation likely to differ?
I do not think that the quality of the relationship between the United States and the Soviet Union will vary because I think now it is events which have taken over. But events have been shaped by the West being staunch in defence of her values and engaging completely in the battle of ideas and it being proved to the whole world that the Western system brings both personal dignity and personal prosperity and national prosperity. That is the quality of the relationship.
The style might differ a little, as the style between any two people differ but I am quite certain the relationship will be a very good one and I am quite certain that any results which eventually emerge will be sound and long-term.
I do not expect this particular meeting to be an occasion for many decisions. I think it will be an occasion for talking through matters with a view to reaching significant decisions at the next meeting.
You asked me about my role. Well, I get around quite a bit and we have developed an excellent system of talking things through both with the George BushPresident of the United States and with Mr Gorbachev and with all our European colleagues. I think the degree of consultation, but consultation is not really quite a sufficient [end p10] word, it really is talking things through and arguing things through because we are very conscious of what we are doing now will last for many years, will shape events for many years, and it is only through detailed discussion that I believe you come to the right conclusions and take all factors into account.
That is now the habit of Heads of Government in these matters and it is a good one and I am very grateful for it.
Presumably at some point during your discussions with the President today you were made aware of today's sudden developments in Czechoslovakia. Could you describe firstly how you learned and secondly what your and the President's reaction was and more importantly what you think today's developments and the rest of the surprising news from the Eastern bloc this year means to the necessity of NATO to be configured the way it is now?
The events had been foreshadowed and so it was not a particularly great surprise. But may I just say this? We have great hopes that Czechoslovakia will also become a democracy but the wish is not the deed and it does take quite a long time to get all of the democratic structures into place, and they must be genuine structures, not just a facade, a genuine multi-party democracy, free secret ballots and the full establishment of the government backed up by what I would call a Western-style rule of law. [end p11]
It has always struck me that one of the most fundamental differences between the Western way of life and the Communist system has been that in the Communist system, whatever grievance you may have, whatever harassment you may have suffered or persecution, there is nowhere to which you can really go to complain and get redress.
They do not have or understand a rule of law of the kind which we understand which is that governments are bound by the law and that you must have completely independent courts, impartially administered, in order to see that that law is upheld. And that is just as much a part of a democratic system of the actual votes for people who will represent you in Parliament.
On the question of NATO, NATO is absolutely vital. We agreed precisely on the comprehensive strategy at our last meeting in May and that agreement holds until it is changed by NATO. But do not disarm too fast. Every single step on disarmament has to be agreed with the Soviet Union so that neither their security nor our security is in jeopardy and that is absolutely vital.
At the Paris discussions last Saturday night we agreed that the security arrangements should continue to be made through NATO and the Warsaw Pact. You must keep that structure. You might have heard me say on television this morning the greater the magnitude of the change you are trying to make, the more important it is that changes are made against a stable security background. [end p12]
Question (Geoff Smith, Washington Post)
I take it from your remarks that you would prefer to see the matter of aircraft put aside for the moment and perhaps dealt with at a later agreement, could you expand on that if that is a correct understanding of your position?
It is not that I would prefer to see it put aside, the question is whether it can be solved in time for the conclusion of CFE1 and if all of the rest is agreed then it may well be that they will put that aside. It is not that I would prefer to, I would myself prefer to see everything dealt with at the same time. But I do know that that is a particular matter which has caused problems.
Question (Mr Smith)
You would find it acceptable for it to be set aside if it had to be?
I think, if I might say so, you are splitting hairs. I would prefer for everything to be dealt with with CFE1 but I do not think that that particular thing should necessarily hold up other agreements. I would prefer it and if the matter can also be dealt with then I would be very pleased indeed. [end p13]
Question (George Jones, Daily Telegraph)
On American television this morning you said you would stay Leader of the Conservative Party as long as people wanted you to do so. One of your senior backbenchers, Sir Anthony Meyer, has now said that he will challenge you and force the first election for your leadership in fourteen years. What is your reaction to that please?
I shall just carry on with the job next in hand, as I have always done, as I am doing now.
I wonder if you could tell us what specific advice you gave to President Bush today about his meeting with Mr Gorbachev and if there is anything about the way the meeting is developing that alarms you at all?
I would not presume to give the George BushPresident advice, we talk things through and try to see what is the best way forward. I do not think that there will be a great deal of difficulty or sudden surprises about this meeting. I think it is very important for Mr Gorbachev that the meeting is held and I think it is also important that it is successful. I do not see problems and I do not expect great unusual pronouncements from this meeting. [end p14]
You spoke of your admiration for Mr Alan Greenspan. Would you expect your admiration for Mr Greenspan to be translated into an admiration for the idea of a central bank that is independent of the government which I believe the former Chancellor of the Exchequer, Mr Nigel Lawson, now favours also?
I would hope from your voice that you have already read the debate in the House of Commons on that matter and will therefore know that there is no way in which such an independent central bank, to have direction over economic matters, including budgetary matters, could be accepted by the British House of Commons and that viewpoint was evident from all sides of the House of Commons, no matter what the party political affiliation, which answer I think answers your question.
Incidentally, quite different from an independent central bank of one nation, a central bank of twelve nations, not accountable democratically to anyone would not suit the House of Commons.
Exactly what did you discuss on Central America with President Bush and how do you see the problem now faced in El Salvador and the refusal of the government to negotiate? [end p15]
We obviously have interests, both of us, in matters in the Argentine and as you know there were recently discussions between our United Nations Ambassador over restoring trading relations with the Argentine in Madrid and those discussions went very well.
With El Salvador, I think what has happened is absolutely tragic. President Cristiani was democratically elected. All of a sudden you get a very strong left-wing guerilla attack, clearly backed up with a large amount of weaponry and some terrible tragedies happening during that time, a massive number of deaths and also the tragedy with regard to the priests and I understand that that matter is being fully inquired into.
Question (Peter Gregson, Reuters)
You mention that you discussed with President Bush the question of Vietnamese boat people which is one that is obviously worrying Hong Kong, a British Crown colony, very much indeed and the American attitude is against the forcible repatriation of those people. Could you tell me how that discussion went?
I can only tell you that I told President Bush what I have said in the House of Commons many many times. Insofar as the Vietnamese boat people are genuine refugees, and some 13,000 of them are, they will not of course be sent back. Insofar as they are not genuine refugees, they are in fact really illegal immigrants and so far some of them have gone back, some of them have gone [end p16] back voluntarily, we have monitored what has happened very carefully, we understand that they have been well treated and that therefore we shall have in fact to proceed by sending some other of the Vietnamese boat people back. Hong Kong simply cannot go on taking them and they will have to be repatriated, as are other illegal immigrants. Indeed we repatriate something like 35,000 illegal Chinese immigrants who come across the border every year and we could not possibly take them in Hong Kong so they have to be put back across the border.
So the same thing will have to happen with those Vietnamese boat people who are not refugees and we will monitor the position very very carefully indeed and hope to have the cooperation of the United Nations High Commissioner for Refugees.
Question (Los Angeles Times)
I wondered if you think the discussion of Pentagon budget cuts now will send the wrong signal to Mr Gorbachev and possibly upset the arms negotiations on conventional forces?
I do not think they will upset those as I understand that the proposed cut is a figure of 5 percent of the 1991 budget. I think that you could expect that there would be a number of cuts coming by virtue of the conventional force reductions. [end p17]
It is the conventional force reductions which of course are the ones that will yield the most savings. It is the conventional forces which are the most expensive ones. I am quite certain that neither Mr Cheney nor President Bush would do anything which would fundamentally undermine the defence position.