Thwaites E/igneeringCoLtd, LeammgfflnSpa, Engiano- Td: 0926-22471 CQMTlWgWTAL SELLING PRICES: AUSTRIA Sch 15; BELGIUM Fr 28: DENMARK Kf 8 00: FRANCE Ff 4: GERMANY DM 2 0; ITALY l 700; NETHERLANDS FI 2 0; NORWAY Kr S 00: PORTUGAL Eso 45: SPAIN Pis 70; SWHJEN Kr 5JJ0; SWITZERLAND Fr 2.Q: EIRE 20 p; MALTA 20c NEWS SI M M ARY mmi £ ? The -VGA officer with responsibility for’ Fleet Street said he had Withdrawn from attempts to negotiate agreements between the union’s chapels and the com- pany.. Judge Mervyn Davies also ruled that she and her husband roust pay interest an the monej, as well as the Court costs. Aetot’ John* Laurie, Private ; Fraser in BBC TV’s Dad’s , Army, died in hospital, aged 83.
Back Page • KUWAIT has taken a 10 per cent stake in Volkeswagen do Brazil — the West German vehicle manufacturer’s key Brazilian subsidiary — for a sum understood to be $11 am (£49 -23m). Page 28 • BRITISH Shipbuilders may put some of its shipyard sworker on short-time because of a lack of public sector orders, and the effects of the steel strike.
Pago 4 • BRITISH PRINTING Corpora- tion won the lion’s share of a £126ra seven-year contract to produce the TV Times. Page 6 • MOST UK groups with sub- sidiaries in West Germany in- tend to expand production in the country despite dissatisfac- tion with profit margins, a British-German Trade Council study shows.
L&SVtQ- :i 735 + 42 i 5 9 25 8 25 9 9 6 8 12 8 20 6 7 Ranger OH £13 jV + 1 Doornfoniein 696 + 75 Haoma Gold 116 + 28 Jones Mining 23J + 6t Kinross 567 + 37 Kloof Gold £13* + 1 North Kalgurti ■■■ 89+ 9 North West Mining 92+19 Oner Exploration … 90 + 8 Poseidon 193 + 17 President Brand …£1S| + Saint Helena £16} 1} Strata Oil 06 + 28 Vaal Reefs ^272 “ M s FALLS Distillers 19? Rolls-Royce Motor shareholders will be recommended unani- mously by their directors to approve the proposals.- It was widely expected that Vickers would noi make any major moves until it had reached agreem en t with the Government on outstanding compensation due to it from shipbuilding and aerospace nationalisation. Sir Peter Matt hem?, Vickers’ chairman, said yesterday he was hopeful that the compensation issue would be agreed with the Government before long. Vickers oUr announced yester- day that it had completed the deal for the sale of part of its office equipment interests to CIT-Alcatcl.
Vickers stressed that the prime reason for getting together with Rolls-Royce Motors was the need for engineering companies to he higger and stronger so as to compete in international markets. ‘* Mr. Ian Fraser, chairman of Rolls-Royce Motors, said: ~ We have been seeking for some time to broaden the portfolio of our relatively narrow base.” If the merger goes through, it will create a company with a turnover of £55flm, and share- holder funds of £230m. Bat their comments are likely to hoost rathif- than dampen speculation about the pos- sibility of a cut in the Mini- mum Lending Rate in the next couple of months. In a speech to the Carlton Club Sir Geoffrey said: “ Despite the somewhat dis- appointing figures for last month we are getting money supply under control.
It would he wrong for me to talk of dates hut everybody win share my anxiety that the period of readjustment should not be too long drawn out.” Mr. Lawson described recent monetary performance as “ reasonably good ” and said there was 44 increasing confidence and greater room for optimism on tile monetary front than for some time.” The financial climate was also improved by the con- tinuing fall in U.S. interest rates. There is believed to hare been substantial de- mand for the longer-dated of the two stocks offered yester- day — 13 per eenl Treasury 2000 — with the possibility of further demand when deal- ings start this morning.
BP said tile well has been temporarily plugged as “a potential oil producer”— an in- dication that Che discovery is almost certain to be exploited. • One production concept which will be investigated by BP and its partners — Ranger Oil and London and Scottish Marine Oil— will be the in- stallation of a seabed well system, linked by pipeline to Ninian’s southerly platform on block 3/8. The Chevron partnership comprises Chevron ipart of Standard Oil of California), British National Oil Corpora- BY CHRISTINE M OIR SIR HAROLD WILSON’S com- mittee on the financial institu- tions has given the City an almost dean bill of health over both its services to industry and its internal discipline. The report has three major themes: t he su pply of and demand for funds for industry; the balance of statutory and non-statutory regulation: and the increasing dominance of the institutions and the responsibi- lities this entails.
There is ** no case for any sig- nificant shift in the balance of statutory’ and non-statutory ” methods of regulation though some tightening up is needed particularly in bringing out- siders into self-regulatory bodies, it reports. A key section, which may prove one of the report’s enduring contributions, recom- mends that Government, the Bank of England and industry should experiment with issuing index-linked financial instru- ments to balance their inflation- fuelled liabilities.
The most important specific recommendations are: 0 Banks and insurance com- panies should not be nationa- lised: • Pension funds should he regulated by an Act enforcing disclosure and by a Code of Practice drawn up by the Occupational Pensions Board: • Medium- and long-term con- Iracturai savings should all attract the same level of rax relief as life assurance policies: • The building societies’ cartel should be broken up and their composite tax rate benefits abolished;’ • A new super-watchdog should monitor the financial institu- tions and report annually to Parliament: • Institutions should under- write a new long dated .tender issue of gilts because “ the present system is widely regarded as unsatisfactory.” The committee is deeply divided over whether industry needs a new £2bn a year invest- ment institution able to provide funds not otherwise available. Members’ views range from a determined “not only miscon- ceived but a waste of resources ” to Mr. Clive Jenkins’ “far and away the most important proposal in the report.” Otherwise, given the con- flicting ideological standpoints of the 18-strong committee.
there is surprising unanimity in the 518-page report City institutions yesterday were similarly unanimous in agreeing that the report con- tained much food for thought The Bank of England, which itself receives muted criticism, has welcomed some of the broad themes and notes that the recommendations need to be studied carefully but not in isolation.
But he is pleased that the report believes in self-regulation and considers the Restrictiv° Practices Court too narrow a forum for analysing the alterna- tives to the present securities trading system. • Mr. Martin Jacorab, chairman of the- newly-constituted captt*’ markets committee, is intrigue* hv the “ interesting constitu- tional idea ” of a new watchdo” monitoring the self-regulato 1 ^ sector but answerable to Parliament. The National Association of Pension Funds, however, has voiced its opposition to the “ statutory blunderbuss ” pro- posed tn enforce disclosure by its mortbers. • Phillips Petroleum said yesterday it was starting an ex- ploration programme in the Porcupine Basin, off the west coast of Ireland. A well was be- ing drilled 15 miles south-east of ao uncommercial oil discovery made’ in October 1978.
the Minister for Energy and Mones, on Tuesday night when, it is believed, they agreed that the country’s prices would be raised by $2 a barrel.
Two weeks ago Kuwaiti offi- cials announced that they would be raising the price of their reference crude from £29.50 a barrel to $31.50 on July l, in line with the OPEC agreement. The increases could add be- tween SI and $2 a barrel to the average OPEC rate nf just under $32 a barreL Such an increase would raise oil and re- tail prices in the UK by be- tween 1.5p and 3p a gallon but much will depend on whether Saudi Arabia raises Its crude oil rates. has said that the king- dom would not necessarily raise its 528 a barrel marker price before September, although he did not rule out a more imme- diate increase of “ a dollar or so.” CONTENTS U.S. economy: how severe is the recession?
– 22 Economic viewpoint: Samuel Brittan looks at the Wilson Report 23 World Bank: flaws in Third World ■ support ^ 4 Marketing: advertising — there will now be an interlude p Business and the courts: of wigs ana the lega) wonderland 20 -Lombard: the great unasked £64bn question 20 Editorial comment: Wilson Report; Japanese leadership ……………… 22 American M o ws … CorapvniM … 23-30 Share lnforreatie 12-18 Jobs Column 12 Stock Market*: 21 LtMlir Pago 22 London 31 Latum .
Money & Exchng*- 31 UK News: • OvflreM* New* … 3 General 2 PaH’wnent 10 Labour 31 Racing 20 Weather 38 34 34 11 23 20 37 For latest Shore Index ‘phone 01-246 8026 World Trade News 4 INTERIM STATEMENT TruSthousa Forte .. 24 ANNUAL STATOWENTS Advanco Laundries 2s Block lays 27 CliasterfwJd Props. Union Tst … 27 De Vere Hotel* … 27 Hargreaves Grp- — » Kicking Pentecott Z7 Rowan Duffryn 29 Whitbread S PLOT Plan your new premises on a spacious ground-lease site in Mtton Keynes.
Within easy reach of London and Bimmghani, M3tan Keynes is the ideal base far U.K and Europeanbnsiness opera- tions, as many companies have already discovered. Juiie 26 1^)7 : – EUROPEAN NEWS U.S. OFFER DESCRIBED AS ‘DEUBERATECY VAGUE’ Russia rejects Afghanistan proposal BY DAVID SATTER IN MOSCOW THE SOVIET UNION yesterday implicitly rejected President Jimmy Carter’s offer to study transitional arrangements for the withdrawal of Soviet troops and restoration of peace in Afghanistan.
The official news agency Tass described the proposal as ” deliberately vague,” saying its purpose was to give the impres- sion that the United States wanted a settlement while relieving. The Communist party news- paper Pravda accused the U.S. of minimising and distorting Soviet peace proposals while intensifying support for “ counter-revolutionary gangs ” which were “invading.
Afghani- stan from the ‘territory of Pakistan.” At the same time, in a move which may .signal intensified Soviet pressure on .Iran, Pravda criticised the authorities there for allowing the town of Mashad. The weekly New Times said that Soviet troop withdrawals from Afghanistan showed that a political settlement of the crisis was possible but it accused the instigators of the “anti- Afghan fuss ” of intensifying aid to the “counter-revolu- tionaries” and .creating a pile of liqs “taller than the Hindu Kush mountains ” to justify it.
move bad been matched by an ” invigoration ” of hostile activities, including the provision of Anti-aircraft .and anti-tank weapons, fire- arms and ammunition. Tass said the success of the Socialist revolution in Afghani- stan was “ irreversible ” and Pravda promised that Soviet forces would remain in that country until the Afghan Moslem revolt .was supressed.
They bad proved their solidarity and “will continue helping Afghanistan to uphold its freedom and independence, sovereignty and territorial integrity” NATO ministers look for Soviet ‘face saver’ ANKARA — Armed with a dismal appraisal of the effect of strong talk on the Soviet Union, Foreign Ministers of the Western alliance began looking yesterday for concrete diplo- matic and military steps to convince the Russians to with- draw from Afghanistan. The need for action was the dominant theme of the first full meeting of the 15 North Atlantic Treaty Organisation ministerial council since the Soviet invasion last December.
The ministers also were said to be discussing plans, similar to that proposed in Madrid by President Carter, to offer the Soviet Union a face-saving way of withdrawing its troops by installing some kind of “ transitional ” government in Afghanistan. Mr. Edmund Muskie, the U.S. Secretary, of State, called for “a concerted’ and sustained allied response” and said: “We must make unmistakably dear that aggression will bfe firmly opposed.” Herr .Hans Dietrich Genscher, the West German Foreign Minis- ter, met Mr. Muskie to discuss proposals to deploy tactical nuclear missiles in Western Europe in the mid-1980s. Muskie also met Turkish and Greek leaders separately on Tuesday in’ what ‘amounted • to as informal mediation of their long-standing dispute over access to Aegean airspace and waters,’ and control of Cyprus.
A U.S. spokesman said of Mr. Muskie he has “the clear impression both sides seek to settle the problems’ between them.” The Turkish Prime Minister, Mr. Suleyman Demirel. also told the public session that “ special attention should be paid in our defence efforts to the needs of the southern flank;*’ AP Carter supports Spanish bid to join alliance BY OUR MADRID CORRESPONDB4T PRESIDENT CARTER yester- day gave firm but careful en- dorsement to Spanish member- ship of NATO.
-‘ Both in his discussions with Sr. Adolfo Suarez, the Prime Minister,’ and in ‘ bis private meeting wgith Sr. Felipe’ Gonzalez, the Socialist leader. The Spanish Government is anxious for a more equal bi- lateral defence arrangement This could include the reduced use or closure of the main U.S. air base outside Madrid at Torrejon.
ETA, yesterday followed up its threats to the Spanish tourist industry by exploding two bombs in the coastal resorts of Alicante* and Javea. After, an anonymous caller also warned that two further bombs would go off later in the day in the same region, security forces’ evacuated much of a holiday housing estate at Javea.
The bombing campaign of coastal resorts is being con- ducted by the political military wing of ETA, which has sought to stop- short of killing. Management said the pro- ject had become unmanagable because of frequent unofficial strikes, writes Stewart Dalby A new agreement provides for substantial productivity bonuses. Among the main measures announced yesterday is the abolition of the time Runt for forward foreign exchange cover, of purchases of raw materials, which currently varies between six and 12 months. French exporters of consumer goods will henceforth be authorised to open bank account^ abroad in which they can a ccumu late their earnings in any particular country, . While foreign buyers are presently obliged to settle all their payments for purchases of French goods by bank transfers, they have now been authorised to use all other means of pay- ment, including cheques, for amounts up . The threshold below which non- residents can create; individual: companies without authorisa- – tion – has – been- raised, from ■FFr lm to FFr 5m.
— ; .But 1 tile authorities would con- tinue their present policy of exasnniag demands for- franc loans by nonresidents on* case- threshold for import and export whic transactions which must be domiciled in French banks. will be able to •contract franc loans to =’ cover then 1 expenses inside the country and wfil.be afote to credit their nonresident bank accounts with cheques made out by reasde nts up to the .ceiling tif FFr 3MJ00.
most of their wages earned abroad.’ research ■win fall’ TOTAL RESEARCH- expend^ tnre ^h the devdopmeht-of new Hergy s
energy research iotd development ‘dp ; real Yearns .titan -fax 1074: .But Dr. Kerr emphaslsed lfiat flic; mala; cause, of the expected – deeHne In aggregate spending among the DEA countries was ‘• the limitation of the UjS. Although the end of the struggle between the Parlia- ment and – the v Council of Ministers, which share budgetary authority, is deary in sight, there may still be a further period of “ phoney war,” if Euro MPs vote amendments which are being suggested by the Parliament’s budget com- mittee. of ti» -amimitteeV proposals ; would; s necessarily; provoke- strong enough objec- tions from the amncH .tD delay formal adoption, of- the budget by a pariiamMitary vote tomor- row. At the party’s pre-election conference last weekend, it was difficult to see how the motley collection of anti-nuclear activists, women’s libbers and elderly nature lovers could threaten anybody.
If the Greens manage to win the’ 5 per cent needed for parliament- ary representation, it could well be at tee Free Democrats’ expense. The factor which really derided the Ecologists to Mu- test the national elections in October was the party’s per- formance in Baden.
First the Social Democrat campaign in North Rhine West- phalia ‘ drew much of its strength from thfe “ stop Strauss ” slogan. They will be deterred by his com- bative Bavarian manner and his chequered political past Hie Social Democrats won an absolute majority in North Rhine Westphalia on the strength of the ” stop Strauss ” campaign, and there are signs that the Free Democrats will also become sharper towards Herr Strauss.
This wins it support from both radicals and from conservative voters, who are reluctant to see their region transformed by massive con- struction work. more pragmatic wing of the Greens believe this would make h impossible to pay for comprehensive protec- tion of the environment “More- over.
stress ‘ that “capitalist growth policies” Experts divided oyer need for nuclear power BY OUR BONN STAFF DRUB & ALCOHOL ADDICTIONS CHRONIC PAIN Pharmakon is a registered Nursing Home using a drug-free pro- gramme for the treatment of dependency on any drug including alcohol, opiates, tranquilisers. Telephonei Sharpthome (0342) 810333 WEST GERMANY should be- able- to reduce Us oil depen- dency radically in tee coming years and still manage with- out nuclear power., according to a detailed study released by a .Frfeburg-based research in- stitute.
However, other researchers from the IFO Institute have issued a report v ester day suggesting that although the .country must lessen its de- pendence on oil, nuclear power Is unavoidable. U is intended to achieve this by doubling coal output by 1990, by increasing nuclear chei-gy’ and by exploiting alternative energy sources.
This has long been the Bonn Government’s view but It has bad trouble commission- ‘ing hew power stations because of the opposition or local ecological groups. figures Indicate teat the best way to save oil is in the private sector, espec- ially in home heating, which’ accounts for 54 per cent of all light beating od used in the country.
a- conceited switch to public transport as, this year, some ?d per cent of ail petrol Is expected to- be sold to private todfriduala. The Christian Democrats- have calculated that, if retirement at 55 were implemented, tee state’ would have to pay an additional” DM 30bn (£7.25bn) in pensions and benefits., Can -a party* < subject to so many centrifugal foraM, ; really-. -.-if : Chancellor Schmidt 'Secures an absolute majority in October he • will, of course, stay In power ' albeit under increasing presl sure from Ms Left wing. I*itj t •Financial Times Thursday June 26 19S0 OVERSEAS NEWS Thailand's armed forces are no match for the battle-hardened legions of Hanoi, writes David Dodweli in Kuala Lumpur Vietnam’s assault brings threat of wider war EVER SINCE «e 15-day blitz- krieg IS months ago when.
Hanoi, has assured, the world it would ■ always .respe ctr.Tftai land ~s terri- tosfial integrity; .. ■ ‘._ ■: r :’Tbe incursion at sunrise on Monday , morning totally under- mines what tittle, credibility the “Vietnamese… Government had. wider temrotfial aims than simply, flint of occupying Kam- – Even .those who harboured hopes of slow progress ‘towards apolitical settlement now recog- mse that the risk?
Reports from the Thai border are still confused and conflict- ing/- Mr. Nguyen Co Thacb, -Vietnam’s Foreign Minister, said from his beach retreat in : Bali that the Vietnamese army had not crossed into Thailand at •all. ‘ Hut, after the assault, the most important question for the Thai military command is whether the Vietnamese had just com- pleted a limited offensive-— srmflar perhaps to China’s “ lesson ” to Vietnam in May last year, when they wreaked extensive damage to.
It is possible that the Viet- namese aim was simply to pre- empt the Thai Government’s de- cision to begin voluntary re- patriation of Kampucheans liv- ing in the rain-sodden camps inside Thailand. It would certainly he necessary to seal off the border if such an operation was to ‘ mounted, be- cause Khmer Rouge guerrillas in the past have quickly sought refuge in Thailand when faced with Vietnamese, troops The assualr creates a dilemma for the Thais. There is a good reason to believe they wanted to dean up the border before the summer rains make military operations in the area im- possible.
There seem to be few rational reasons for going c i i n * X.-CC- 5 ” *««-’ XX r~” Hlabsx Til 1 LAN B VfffhUfJ: KAMPUCHEA further and mounting a substan- tial invasion.
Similarly, a major attack on Thailand would probably draw the United States, and perhaps even the Association of South- East Asian Nations (ASEAN I — Malaysia. Vietnamese military resources are already stretched, and to expand supply lines to support troops deep in Thailand would prove daunting. It was widely believed lhat the ASEAN ministers were sptit over pro- posals to reach some kind of compromise with the Viet- namese. The attack has pre- empted any chance of appease- frtent, and thrown to the wind any prospect of dissent between the five ASEAN countries.
There is good reason to believe the refugees likely to return to Kanrpucha under the voluntary repatriation scheme were strong Khmer*Rouge supporters. Any Sa Keao refugees who choose not to return are being taken to the nearby Khao-i-Dang camp by Thai military for their own safety. A second cunning, reason for an offensive is that the rainy season, now three weks old, is traditionally the time when con- tending forces in the area reorganise and lick their wounds. The attack not only has the quality of surprise, but it prevents the Khmer Rouge guerrillas inside Kampuchea from recouping and consolidat- ing their positions.
marginally preferable to the genocidal regime run by Pol Pot- The Khmer Rouge forces still inside Kampuchea, said to number just 30.000, are bound to become the focus for dis- affection. They have scant sup- port in the villages, where they continue to maintain control by terror, according to journalists who have recently travelled through western Kampuchea.
Khmers cou7d quickly Sock to their banner as they become more disillusioned with the Heng Samrin regime kept in power by Vietnamese military might While the Kampuchean economy remains in chaos, with i endemic food shortages and | widespread malnutrition and , starvation, there is scant chance of greater sympathy for Heng Samrin or his Vietnamese pay- masters.
There has been a steady trickle of reports of substantial troop movements, and of arms and other military supplies being moved closer to the border. Perhaps the Viet- namese felt they had prompted the Kampuchea-watchers in Bangkok to cry wolf too many times for anyone to read any- thing sinister into the latest troop movements. New Chinese overture to India I Tension in Bahrain follows Shia arrests BY TONY WAUCER IN PEKING CHINA HAS released a con- ciliatory commentary on the : state of Sino-indian relations, -in the’ wake of a visit to Peking this- week by Mr. Eric Gon- salves/ India’s Foreign Secre- tary. Efforts * to improve relations with India are part of of a general diplo- matic offensive which China has jetgaged in recently, to make new- friends or restore ..relationships with old ones. r Mr. Gonsalves left Peking on Tuesday after several rounds of talks with Chinese officials, including Vice-Premier Ji Pengfei and Han Nianlong, Vice-Foreign Minister. Relations were vir- tually suspended for more than a decade after the Si no-Indian border dispute flared into open conflict in 1961, and were only restored to ambassador status jn 1976.
The arrests followed demon- strations during the previous week, ostensibly to mark the i end of 40 days’ mourning far a Shia leader alleged to have been | killed in Iraq.
Its purpose was to publish religious articles and call meet- ings in the mosques during the month of Ramadan which this year is in mid-July, and during Muharram, in which Shias mourn tberr prophet Hussain ad re-enact his death. Dissatisfaction among sections of Bahrain’s Shia population, who make up just over half the total, is not of recent origin although uSnday’s police action may bring it to the surface.
Among other matters, they asked for the release of all poli- tical prisoners, a number of whom have been detained since the dissolution of the National Assembly in 1975. and com- plained of harsh treatment from the police. A man present at the meeting said although they were Shia who regarded Ayatollah Kho- meini as their Imam, they were Arabs who did not wish to be associated with Iran.
Students — both Shia and Sunni — are also said to suffer considerable harrassment from Customs officials when they re- turn from university abroad.
( The Hanoi-backed Govern- ment In Phnom Penh blamed Thailand for the fighting, say- ing it had infiltrated non- Coromunist guerrillas into Kampuchea to fire on border guards, supported by Thai aircraft, artillery and armour. Reuter AP adds from KuaJa Lumpur: Foreign ministers of the five ASEAN nations yesterday denounced Viet- nam’s Incursions Into – Northern Thailand. The ministers made last- minute revisions to prepared speeches to include refer- ences to reports of fighting along the Thaf-Cambodian border.
The conference’s draft communique calls ‘ for a ’political solution to ‘the Cambodian conflict and the immediate and total with- drawal of Vietnamese forces. Unimado n (F.tnnpe) T..fmite d dbose lelford as its base; Now they are expanding into a prestige factory where they will be producing a new, highly precise, lightweight robot-PUMA^ designed to operate on m alongside ( workers. ^ Idford, growth ^ point of the West Midlands, has the space and skilled workforce needed by industry, yet is also set in unspoiled Shropshire countryside* * ^ As an established community, £ s’ Telford has the environment and ^ choice of housing to make it an _/ j attractive place to live and work.
TF2 9NT Telex: 35359 teldevg •Nfad’ »VI m \tii Ihesoace.lhe m if [*•11 1 1 Financial -Times Thuisday^ AMERICAN NEWS WORLD TRADE NEWS Carter’s support drops near previous^lowest point margin By Jorefc Martin, UA Editor, in Washington DWINDLING PUBLIC confi- dence in President Jimmy Car- ter’s management of foreign policy has helped Mr. Ronald Reagan to open a useful’ lead over his likely Democratic rival, according to a major public opinion poll published yester- day. The CSS/ New York Times survey also found about half the population dissatisfied with the Reagan- Carter alternative and more than 40 per cent still disen- chanted after Mr. Anderson’s name was added. Reagan would widen his lead during the summer, before falling back as the- election drew closer and as the public focused more on the Republican candidate’s posi- tion on the issues.
Mr. Anderson, appeared to be- more of a negative reaction to Mr. Carter, than identification with the Stands taken by the other two: the President suc- cessfully made Senator Edward Kennedy the main issue in their struggle for the Democratic Party’s nomination and will try to pull the same trick in the general election. A sober reading of all the current polls suggests that Mr. Carter still faces a tough struggle, especially if his lingering contest with Mr. Kennedy remains bitter and if Mr. Reagan Imposes unity on the Republican Party. A tax cut of this magnitude constitutes some retreat from Mr. Reagan’s earlier advocacy of a more sweeping 30 per cent three-year reduction package advanced by his- more conserva- tive advisers. But the Republican Party needs to show that it is sensi- tive to the human problems created by the economic reces- sion.
– .For his part, Mr. Carter has worked ‘successfully in the past week to avoid being saddled with the more doctrinaire economic solutions advanced by the Kennedy wing of the Demo- cratic Party- The party’s platform com- mittee completed a week of meetings in Washington by voting down a variety of recom- mendations. Mr. Frank Morris, President of the Boston Federal Reserve Bank, is a man who has in the past taken an independent, though not necessarily out- spoken.
Mr. Morris commented to a financial meeting in New York State: “If it weren’t for the psychological aspect of it, we would chuck it overnight.” He also said -that the sharp drop in consumer spending in the lad couple of months has less to do with credit restraint than the huge volume of debt con- sumers had piled up during the past economic boom. Although many independent economists share the view that the programme was too much, too late, it is unusual for a Fed official to voice doubts publicly about the wisdom of the bank’s policies.
Support grows for San Salvador strike BY HUGH O’SHAUGHNESSY THE GENERAL STRIKE called by opponents of the Salvadorean junta was yesterday 95 per cent successful in San Salvador, for- the second day running.. Its effects were more patchy out- side the capital of the troubled Central American republic. In San Salvador, heavily armed troops carried -out inten- sive patrols and manned road blocks.
Colonel Jose Guillermo Garcia, the Defence Minister and a leader of; the extreme right-wing group within the Salvadorean army r meanwhile denied charges that bis troops had been involved ‘ in the ‘ massacre of 600 people last month as they were fleeing to neighbouring Honduras. The accusation of massacre comes at a time when there is speculation that Guatemalan forces may intervene to help the increasingly beleaguered Salvadorean junta.
The mili- tary regime of General Romeo Lucas in Guatemala City has been increasingly nervous since the overthrow a year ago of the government .of President Anastaslo Somoza in Nicaragua, and the installation of a left – wing Administration in Managua. The Senate Energy Committee felt the other plants would be too costly to convert Mr Carter estimated his Bill would, cut U.S. ail consumption by 1m barrels a day. The Senate action, by a vote nf 86-7. came a day after Mr Carter and other Western lead- ers adopted a resolution at the Venice economic summit calling for increased use of coal, nuclear power and other alter- natives to oil.
.-The CGIC has advised policy holders that it jtfili in- ‘ sure a maximum of only 25 per cent of the exporters 1 sales to Zimbabwe -the pre- vious year.
“We’re encourag- ing exporters not to ship goods, until previous ship- ments have been paid for,” a CGIC official said yesterday. “ We don’t want to reduce the volume of exports, but we don’t want to increase our liability at any one rime,” be addecL- Sonth Africa’s export credit guarantee scheme is under- written by the Government, and Che decision to restrict cover for Zimbabwe was taken by a committee wiridi includes senior Government officials.
Politics and commer- cial considerations played a * 50-5Q,” part in the derision, according to the CGIC offitiaL A senior Department of Commerce official said it .was “ rather difficult to comment ” on the decision. Meanwhile, there are indi- cations that South Africa has begun trading with Angola on a fairly regular basis, for the first time since that country’s independence in 1975. the chances of a negotiated, settlement backed by President Jimmy Carter which would end the U.S. probe into alleged damping by all 14 major EEC steel makers .and remove a threat of S2bn-worth of steel- exports to the UJS.
But U.S. officials in Brussels were yesterday making ft plain that few, if any, of the options would be politically appealing to’ the President in an election year.
Broadly, the courses -of action likely to be proposed to President Carter radge from agreeing a number of financial and environmental concessions to US. envinra- mentalist lobby, v ■« ■/; .- , – – An alteriihti^e du.tcomfi ls now believed Brussels to be a Presidential derision jo’ halt the., jnvestigatiprf being carried out .
1 The ;ihargtiisbf “Euro- ; pean dumping new understood tb be established by .the PTC investigation range tip ;’ to – 45 ‘per’ cent,’. Com- petitors, however, feel this may be an exaggeration in the li^it of the sharp fall-off -in overall trade experienced by all British companies since the pre- revolution boom. :– In the first five months of 1980 exports – totalled £L7pm,~ more than double that recorded in the comparable period of the previous year, when the effect of -the revolution’s disturbances was still bejng felt. Hammond said yester- day it did not expect to see any noticeable decrease falfe traffic to Iran a result of the Briti^ GoTOCuntent’s.
Speculation has; been rife for many months that the- political changes Id Algeria after’ the death of President Bonmedienne has meant less emphasis on investments: in the oQ and gas sectors in favour of agriculture – and housing. This would have’ meant that the extremely expensive facilities to be built at Anew- Interalia for the Dutch export order hasbeen shelved indefinitely.
reserves” amounted to 1.7 trillion- cubic: metres – in January with 1.5 trillion fwim imports, • inrtfirimg the’ lOObn from Algeria: . Soviet gas negotiations advance FINANCIAL TIMES REPORTER A GROUP of West European companies has been negotiating with the Soviet Union for the past 18 months about the pur- chase of some 1.4 trillion (million million) cubic feet annually of Siberian natural gas and the financing of a pipeline to transport it from western Siberia. which indude Ruhrgas of West Germany and Neder- landse Gasunie of The Nether- lands, say a top Soviet official hinted that- a ‘decision would be- made this summer. in Paris, the Soviet Union exports roughly ,1m b/d of oil daily to Western – Europe r or about 7 per cesnt to 8 per cept of , the region’s total. .aimirig : duty-free tre a tment:” ^ In’ spite of – the” wide , scope of ■ concessions offered, the Cpm- ) mon IJarket -was criticised .by /■ several poorer nations of givr ing .treatment to 54 Caribbean “Pacific and. The survey, embracing 143 British subsidiaries, seems to reinforce the view that, factors such as high productivity, stable labour relations and market proximity outweigh the import- ance of. Almost three-quarters of the manufacturing subsidiaries questioned plan to broaden production within the, next five years in order to increase their market share. This is a frequent complaint of over- seas investors in Germany who find themselves burdened by high wage tod social benefit costs and generally expensive overheads: • A . the , •- Germto- Ecoaomy, showed that; labour costs to manufacturing industry had risen b^ 124 per cent over, the past decade, from DM9.42 an hour to DM2L14. Quite apart from the implications this has for Germany’s competitive- ness *— only Belgium, Sweden and toe : – – Netherlands ‘ ‘have higher costs, among the Western industrialised ■ nations -—. Thus, more than 60 peri cent of ‘ ‘the ^manu f acturing ‘sub- sidiaries who told the Council tony intended to expand capa- city, expect to create fewer than 20: new ; jobs.v.WJrile : ‘ the .re- spondents probably erred -on the side ‘of : caictfon; this -hone the Itos reflects- the. In a separate ‘ survey iff 187 .British companies, the .British – Gennan .Trade Gciiintel -found an overwhelming majority reported knprpveiji«it;ii sales tod new orders. Bank officials put it down to teething problems to the agency’s controversial “struc- tural adjustment” lending pro gramme, which started this spring. So far, the Bank has made three such structural loans — to Kenya, Bolivia and Turkey — totalling $320 ol It will be in the range of $600m to $800m in the coming 12 months. But It could answer a crucial need: to encourage developing countries to make some painful re- adjustments to their economies, while ‘ at the same time preventing their foreign exchange reserves being bled white to the interim by higher oil prices. Government committed itself to ‘ phasing out rapidly any more import protection than was needed to put export incentives on a better footing, keeping a better record of its publie and private external debt raising interest rates to a higher uniform level, and altering its forward budget planning, to spend more on maintaining such existing public investments as roads and less on new ones. Bank officials say ‘ President Daniel Acap Moi’s Government promised willtogly to do all toese things, setting out its intentions in detailed White Papers. not in the business of engineering political revo- lutions,” *says Mr. Munir Ben* jenk, a Bank ‘ vice-president whose home country, Turkey, •will soon come under ‘scrutiny for its $209m structural loan. Yet the money will be repay- able on the standard terms of around 15 years, or, in the case of a credit from the’ Iriteiv” national Development Associa- tion, the Bazik’s soft loan agency for the . poorest coun- tries, over 50 years., Might recipients just “take -toe money andiron?”- – – The Sank, which has a Triple A bond rating and never a loan default in its history, scoffs at the notion that there might be” any increase to risk. can’t foreclose on a chunk of desert; hut even to the direst situations developing countries take “very seriously their financial respon-, stoflities,*’ commented- one o fficial; – It is, not just -that a defaulters’ would get no more Bank aid -or loans. visa,- if every time yon were slow oja one payment all your ‘ credit sources were : advfeed.- to writing,” Mr. Eugene Rotberg, the Bank’s chief fifotoriai officer, said -wryly, r Nor does the B^nk intend to be a- softer towffi than’ the – International Monetary Fuad.- Its conditions’ ioay be set in slightly woolier and less pro- WMititative targets than toe Fund s. But Bank officials s« littte likelihood of a‘ country tinned, down by the Fund get- ting- a’ Structural adjustment iron across the Washington street at the World Bank“^ – r’Tnifi, talks ‘for just ^stich i ■ loan -to – Tanzania; have not bten . ^39$*> .v’-f. *• • 1″ – ‘ ‘ 4 – Apparently some drivers are taking our claims for the Beta S designedto go from 0 to 60mph in only 8 9 seconds But that’s no excuse for trying to prove it on a Sunday rails, but really there are limits. But there are other things to appreciate .when^eed^u^a^^cOT^^ tinganeye over an instrument panel that wouldn’t look out of place m Concorde And we’re sure you’ll relish sitting back while other drivers castenvious glances at the styling of your Beta Coupe. ■’ NEWS SUMMARY GENERAL BUSINESS reshuffle ahead of election Be^aa Ftixae fiDnister WQfried Martens has helped to prepare Us . Pacific move reacted The future . Page 3 Cyprus reshuffle ; Presideit Kyprianou of Copras re- shuffled Ins Government 10 days before ^ crucial talks -with the 1 Tur- kish’ Qypriot side on a political set- tlement forthjs island. Page 2 • Oxy and Diamond cancel merger OCCTOENTAL Petroleum and Dia- mond Shamrock, two large US. ail industry on- ly hours after “reaching agree- ment* -The initial terms involved a ‘straight one-forone share s wa p in the new conqiany. Section nr LONDON equities hit a record W gh but gilts suffered losses of op to %. Section Ed Gulf ^ attack V Iraq said it attuned two ships in theGulf ckaato Iran’s 00 tenninal at Kharg Islandl; Salvador ‘pfot* . ‘ Napole- on Duarte said , the morder of his chief govemmmrt t^rtupiibn’uives- tigstnf was part ijf a: jdot by jJy> oltra-dght-w&ig Kepo- IsraoU plodfle Israeli leaders pinfeed te biting all the Idack, Jews_ io faxnme-strickmi EthiQpia tO IsraeLPag^ 3 Zaccaro guflty plea • Mr^ John-ZaocarOi-ti»fa^jand of Ms Geraldine Fuiafo, the unsoc-‘ cesful Democratic U5. vice-pres^ dential candidate, admitted charges of scheming, to, dtfrandlin cpimee- tion with a JliSm loan for a New York property deal. STERLING was weaker in London , falling L25 cents against the dollar to ah aftfime low of SL142. to raise new capital to cover higher loan Loss provisions af- ter a sharp drop in property values. British ministers are expected to 1 discuss the matter this week, but the indications last night were that no early decision would be made. markets appeared particularly pes- simistic, with West Texas Interme- diate crude trading at $2560 a bar- rel, a rise of about 30 cents a. barrel. Heating oil prices in Europe showed strong gains, however – a normal response to cold weather. corre^on- to develop space-based weapons is a dents, who were allowed to witness highly expoimve end dangerous ex- the opening of the morning and af- erase which could only increase the temoon sessions said the atm os- prospects for a nuclear war by forc- phere was businesslike if lacking in fog Moscow to either match it or any obvious warmth. strengthen its offensive arsenal The meeting began with no ap- even further, parent change in the basic positions xbe US., on the other hwnH of the two sides. The Americans have indicat- cow would not be prepared to ac- ed, however, that they would be cept the limitation of offensive ready to foil* with the Soviet Union weapons, such as long-range ballis- about an eventual curb on the test- tic missiles and the medium-range fog deployment of space weap- SS-20s targeted on Europe. 1,200 UK miners end strike BY PHILIP BASSETT, LABOUR CORRESPONDENT, IN LONDON THE UK National Coal Board (NCB) last night claimed success for its hopes of a renewed accelera- tion in the number of miners end- ing their strike. Yes- terday was the first full day of oper- ations smrp the Christmas and New Year holiday period. The return was concentrated in four areas – Scotland, the north- east of England, Yorkshire and North Derbyshire. Mr David Archi- bald, NCB board director for the North-east, said the day’s figures were a further step forward “as this strike edges slowly and painfully to- wards its inevitable collapse.” The board’s hopes, however, of a breakthrough In the militant South Wales coalfield failed to materia- lise. The board sent letters individu- ally to Welsh miners yesterday, pressing for a return to work in groups. “What we require before we get back into negotiations,” he said, “is the leadership of the NUM to accept the fact that the cost of coal produc- tion is a factor in whether a mine closes or not” The divide between the two sides was emphasised when, speaking on the same television progr amme , Mr ScargQl retorted: “I cannot see any purpose in riisnnwring anything oth- er than a solution based on the Ran for CoaF – the expansionist plan for the industry drawn up 10 years ago and which the NUM Haimc is being broken by the NCB with its pit clo- sure programme. ■- -7”- 2 Editorial comment….. 10 Emeiuods W ‘ Eurap-ontions– 29 « financial Futures 35 13 Gaid—.. 34 ■% IrrtT Capital Markets 36 ‘ *V-‘ “Vi Letters- – ■ ■ • U ‘ *4’- ’ ligy-,, y ….. 12 ,V7L.;.. Mr Varzi added, however, that Opec was still likely to be forced to cut its official price for light crude from £29 to about S25 a barrel in the coming months. The London stock market, however, dismissed for the day its currency and interest rate fears, and institutional buyers moved in to drive the FT Ordinary share index 14.7 higher to a record close of 955.7. aw ,^ ay ^ ^ sterling prices, and accompanied renewed at SI .1530 by the end of New \ork increases in monev market interest I – n,L: A 4V.A JnllAH • markedly easier at DM 3.13925 partly offset during early US. Mr Shultz and Mr Gromyko, -whose talks lasted a total of about seven hours, divided into a morning a Titf af ternoon session, are concen- trating their efforts on finding a structure for more detailed negotia- tions on arms control problems. The U.S. would prefer separate forums for negotiations on offen- sive and defensive weapons, with “umbrella” talks by high political of- i ficials to link the two sets of nego- I tiations. John Hunt writes: Mrs Margaret Thatcher, the UK Prime Minister, last night underlined her belief that the UJ5. research programme into star wars weapons systems shp nM go ahe ad in spite of Soviet hostility towards it M JACQUES DELORS yesterday took ova- as President of the Euro- pean Commission and pledged to work for the development of foe Eu- ropean Monetary System and the Ecu, the EEC’s own currency unit In his first public appearance as president he said that development would contribute to “a less disorga- nised and erratic international monetary order.” The impression M Delors appar- ently sought to give to about 300 journalists was that of a cautious optimist – no “Euro-pessimism,” as he put it – who wanted to get on with the work in hand: *T am going to avoid befog a showman because I thinV the whole thing would peter out fairly quickly.” Above are 19 floors of 6.000 to 9.000 square feet each, which may be flexibly subdivided And the interior architectural features are simply grand. Washington do not accept Mra- East European regime* remains Rtf start of their, depfaynteot Gromyko, the Soviet Fore ten In 1959. for instance. Minister, stepped from his air- telligrnce by far the must vulnerable was the occawon for the Soviet Star Wars is regard I’d with point in Suviet foreign policy, walkout from arms negotiations , craft here on Sunday, he has whether Moscow had 500 or suspicion as much as a symbol Elsewhere. research into an effective ami- The actual fijure turned out to being expressed by the Krem- ground between the super- as deatabltsing. The one serious Marshal Nikolai Ogarkov, the BY PAUL CHEESERIGHT IN BRUSSELS THE Prime Minister of Belgium. The reshuffle will be followed by a definition or government priorities, probably in February, for the remaining 12 working weeks left to the parliament. The Liberals will be pressing for quick cuts, while the Chris- tian Democrats will want to delay until the end of next year. Polls have shown that, although the coalition itself has gained in public respect, the con- stituent parties within it have been losing ground to Socialists and Ecologists. m space technology — notably capable of reaching the U-S REVENUE – SHARING certifi- research into an effective ami- The actual figure turned out ic cates in the Keban hydro- ■ ballistic missile system — will be just four. strategic halanuce between the Since President Ronald Like (he sale in December of superpowers, which has existed Rea can’s election :n I9S0. Bridge, the issue was handled i large intercontinental ballis- at bottom, he i> no; prepared to totalling $775bn in three years. probably contributed Hr near shares unsold after a fortnight 1 undermines the agreements and Initiative, the so-called Star exercise. Soviet leaders pean settlements agreed with in his attempr to stop his Nato dent Reagans term. ; I The General Directorate for ; Mas Housing and Public Part- ■ nerships says the three-year : certificates should yield about : 40 per cent tax free this year. Europe, succeeded In having gross national product, accord- not happened but cruise and Pershing 2 missiles ing to U.S.’ – ‘ intelligence estimates. IN GENEVA THE GREATEST show on earth — judging hy the cent respectively at the end of j advance billing their terms. Shulu-Gromyko for the talks — visit to Nato country The Government has again | opened yesterday with a selected a project in which SES£em e «. BY LE S LI E COUTT IN BERLIN n ,t, a „ – • Nob however, over Presl- I deni RonaW Reagan’s inteo- CTtas^trophe dest^yiugthe dam | Uon to go with his 01 strategic defence initiative, SS re- ■Snm Star Wars tech- ported to be selling briskly I ** v,as nhotomohel? p _ public-sector enterprises suit- j yxOmaflS EAST GERMANY’S leeder Herr Erich Honecker is to make his first visit to a Nato country this year af- ter Soviet objections forced him to call off a planned trip to West Ger- many last September. Herr Honecker is to visit Italy “in the next few months” according to a report by the East German newsag- ency. Laurent Fabius, the French Prime Minister is expected to visit East Germany in file first part of this year. It was over the noise made by photographers’ Despite the collapse of Herr Ho- necker*s trip to West Germany, re- lations between Bonn and East Ber- lin have survived the dull from Moscow, which con tinue* to P Cfnye West Germany of revanchism. The few reporters privileged to witness the first discussions on nuclear and space disarmament for more than a year between Mr George Shultz and Mr Andrei Gromyko, were so overpowered by the occasion that they conld not even agree on the exact content of a conversation destined to change the course of history. This was not even an original statement, accord- ing to (he news-hound, who wrote the report on behalf or a restricted Press pool allowed into the Soviet Mission (o the United Nations. considerable despair, the privileged reporter signed off with as much enthusiasm as he could master, given the raw material he had to work on. One conld call it fiat or bositiessllJte.” What price a quick agree- ment on ballistic missiles and space-based laser technology in such an atmosphere? East and West Germany have collaborated since then for the first time to discourage East Ger- mans from entering West German embassies in order to get out to the West Six ministers sacked by Kyprianou Simw-shocked j Polish kidnap leader denies full recover at home j responsibility for priest’s death By James Buxton In Rome j A V M. ROME HAD its most peaceful } BY CHRISTOPHER BOBINSKI IN TORUN working Monday for years yes- ] … . But their evidence sug- ln< j U strial dispute which pro- TV struck off the menu at breakfast j By Paul Setta In Pari* Leszek Pekala the third man in FRANCE WAS deprived of its industrial dispute which pro- PRESIDENT Spyros Kyprianou fall of the day before. Jaunch 0 r the early of Cyprus made sweeping Many government offices were Solidarity priest, but carefully Colonel Adam Pietruszka. avoided taking sole rosponsi- also in court charged with in- However, Mr Chmielewski i n r AntmiMS. avoided taking sole rosponsi- also in court charged with in- However, Mr Chmielewski j gramme 0 f Anlcnnc-2. He has yesterday withdrew under i national television ended an alliance with the staffs as the bulk of their; Mr Gregorz Pint row* ti. questioning by tha judge a 1 channel Czechs to balance debt powerful Communist employees decided it was too ; led the three-man group from Piotrowski. had reference pre-trial , The ^riiip by members of the party, Reuter reports from difficult or dangerous to go to : ihe Interior Ministry on their achieved rapid promotion in the evidence to General AVladyslaw : D ro -Communist Cf – T 3nt j and currency reserves Nicosia. Tk- arr i V al of weekday morn*’ isters were dropped, ktclndmc destinations over uncleared ski. He said Prague was consolidating its finan- cial and loan “independence” from the West Mr Potac said Czechoslovakia would this year boost imports from the West of machinery and equip- ment by 14 per cent, ending a curb on these imports as a result of the stringent debt reduction pro- gramme. Mr Potac was c ri ticai of the short- comings in research and develop- ment and said “gravest of all was that innovation was not the main factor in economic growth.” Management planning and con- trol were also termed unsatisfacto- ry and Czechoslovak factories and foreign trade organisations were said to be only slowly adapting to changing conditions on Western markets. Private consumption in Czecho- slovakia this year is to increase by only 22 per cent while the average monthly wage is to rise L8 percent, reaching 2,960 Koruna (£432). ■ repentant tone changed yester- ^ arriva i of weekday morn*’ i),v urhon hp W 9 c fliip«lmnp(t hi* . ‘Innnnct raet^nh’ eehinnt mom ritlPfi th.lt CTlOW And 1 Tnwim in TiAt^h.urPCfam Pnlimf *mnMraV mtfaff fhn bUnfin. WtUT ‘longest-serving cabinet mem- rlties that Sunday’s snow and j Torun in nonh-western Poland, approval given for the kidnap- became quite angry and refused ! « fAr ber, who had held both the heavy frost in Rome were such contrasted with the stammer ping and the possible conse- to answer several questions as 1 hn „ r “l. ‘ ‘ ” Interior and Defence portfolios unusual events that they could , and constant facia! I The management of Antenne-2 L _ _1_ _ _ has rejected union demands for ftir i extra jobs and higher benefits ■ f 0r 5^ working up early pro- cram mes. _ the loot presidential election whe “ the effects on the city SPANISH AND British officials municipal authorities were con- Moran, and Includes experts J experimental early morning Rut heended the aHianr* \a« were equally sensational. that La Linea was not equipped prises local officials, and diplo- r was far more modest than that to invest heavily in runway l Rftrf i pt . ‘^mediate concern is about the Spanish of snow that Rome had ] Foreign s^retarv ’ and Sr traffic conditions as soon as the have discussii > wilt. J appearance after his appoint- Spanish delegation will m*nt last summer to announce, discussions with mayors in i lh e start’ of regular breakfast a jewellery store of DM 2m- to cope with was dwarfed by i Fernando Moran ‘his Soanish 10 – 000 ‘ odd Gibraltar vehicles the Carapo de Gibraltar, the tel ®Ylslon this month. B e ° era l response by ihe national police told AP In Ludwig- the mountains of central *nd i .JJJjL * Gibraltar 8 includinc The talks are to be held on considerable govemmem aid. ‘ was arrested from Rome — people are used | adjoins Gibraltar said yesterday to be led by Sr Francisco 34 per cent of the labour force f* ie,r secure monopoly positions shafen. New Mediterranean Programmes spur Greeks to learn to swim increasingly threatened by President Francois Mitterrand’s ! Prime Minister Andreas Papandreou’s insistence that Greek approval for the enlarge- ment of the F.EC would only follow the implementation of the rn leg rated Mediterranean Programmes which would speed up economic development in the poorer EEC states, may have caused shock and anger among his F.F.C partners — notably Britain and West Germany — and intense frustration in Madrid and Lisbon. Dr Papandreou’s approach today is a far Cry from the days when as leader of the Opposition he preached with- drawal from the Community. This shift partly reflects the internal Greek political balance between Dr Papandreou and President Karamanlis. The latter is a fervent European who considers bringing Greece into the EEC to be one of his major political achievements, and who has made it clear that calling a referendum on with- drawal. According to European Com- mission figures, net receipts soared from Drs 10-lbn (£67m) in 1981, the first year of mem- bership. The improvement in the EEC’s image is partly due to the impact of The financial benefits on the farming areas. As a result, attitudes, particularly in Athens, about the economic realities of access lor* verged on the care- free. It was this new realism which prompted the “ Greek memorandum ” submitted to the Commission by the Papan- dreou Government in thtj spring of 1982. The memorandum was essentially a demand for special funding to improve Greece’s substandard infrastructure and a petition to be allowed io bend Community competition rules in order to protect the weak domestic manufacturing industry and the economy in general from the pressures of accession. The Commission’s response stressed that Brussels could not be expected to shoulder the structural problems afflicting the Greek economy. Over the past three years Athens has also won the right to apply import quotas on a range of products. pari ly because of budgetary stringency, but a iso because i he view is gaining ground that Greece should he rewarded financially only to tin* extent that if ftvfiis Community legal obligations. accord- ing to the Commission, the biggest problem lies in infringe- ments which deliberately serve to keep Greece a closed market, “We are trying to take a balanced view because we appreciate the weaknesses of the Greek economy. But member states such as Britain, which is interested in exporting whisky, simply look at the awful com- plications and says this is horrible.” < 1 monopoly on broadcasting, the • launch last November of Canal , Plus, the private pay-television channel, and the announcement . However, echoing President Mitterrand, he warned that pri- vate television would have to be carefully regulated to avoid a situation like Italy's. A spokesman for the lo- cal state prosecutor's office said left-wing guerrillas of the Red Ar- my Fraction were believed to have- been responsible. h*’R .t-t Suharto introduces new taxes and cuts BY CHfUS 5HERWELL, SOUTH £AST ASIA CORRESPONDENT INDONESIANS face yet another difficult year o£- austerity,. with new ‘taxes anti a sharp decline in real / development pending, under a draft- budget presented to Parliament ’ ‘ -yesterday: – by President Suharto. and gas exporter -in adjusting to slow- world, growth and’ a persistently soft global petroleum jnarket-. ‘ of 22,75 per cent following strong’ upward pres- sure in the money market and a declining Rand fuelled by a falling gold price. The rise in the redisco unt vid prime lending .rates v brings South African,, interest Tates back . The secret airlift io rescue the Jew i from famine-ravaged Ethiopia was halted on Sun- day following worldwide pub- licity about the dramatic operation. During the meeting at Nakxrara in ” southern Lebanon, the 12th so far, both sides repealed the tough positions which- had left the talks on the verge of collapse before the Christmas/New ‘ Year recess. Israel wants the border strip left in the hands of the southern Lebanon militia, a mainly Christian force. Choose with care, as the correct equipment for your needs is all important Far better, to deal with Relcom — The Service Provider and accredited Cellnet retaifer, with.yeaiiof experience inmobile radiocommunication. m Francis Street, London 5W1P 1DH, NW, B. ItakienioCem ■ C It focused relentlessly on the Government’s forced savings scheme, its controversial educa- tion policies, and its housing programme, all of which affected voters’ everyday lives. Singapore’s youthful electorate is not immature: voters knew the PAP would easily return to power and may have used the opportunity to register their feelings about the party’s style rather than its substance. Indeed, as Mr Lee has virtually com- mitted himself to stepping down from the premiership by 1988. the election result means Singa- pore could offer the world a remarkable example of the difficulties a powerful ruler faces in handing over the reins. Mr Lee is thought likely to .become an elected president under a new “ half-way house ” arrangement be first proposed last year. But Mr Lee represents Singa- pore’s past rather than its future, and it is the younger generation of leaders — which now also includes his own 32- year-old son. Brig Gen Lee Hsien Loong — which has the formidable task of clawing back the support the PAP has lost. Mr Goh has already frankly described the election outcome as “pretty scary” and admitted the party misjudged the voters’ mood. He has also said rather pointedly that the younger leaders will need to be con- vinced about any change in the one-man one-vote system and that Singaporeans will have the final say through an election or referendum. It is clear, however, that the PAP will not compromise on the programmes it believes are right, and that while Mr Lee is around it will maintain (he i substance and continuity of its major policies. Whether this is i what the electorate wants re- mains to be seen, and attention will now focus on whether the PAP and a new opposition can learn to live with each other. Under the proposals which he an- nounced yesterday, New Caledonia could become an independent state with access to membership of the United Nations from January next year. Tootal’s clothing businesses now supply the majority of Britain’s top retail chains and department stores. These include Littlewoods, British Home Stores, C & A, Burtons, Next and Debenhams as well as Marks and Spencen The clothes we make look bright and attractive— so does the future. 1985 Reagan rejects ITC ruling on Duracell imports PRESIDENT Ronald Reagan has rejected 3 ruling by the U.S. International Trade Com- mission (ITC) that imports of batteries made by DuraceU’s Belgian subsidiary should be blocked as unfairly traded goods, AP-DJ reports from Washington. In a November 5 ruling, the ITC agreed, issuing a general exclusion order prohibiting further imports. Allowing the ITC ruling to stand could be viewed as a change of policy before that review is complete, the White House argued. Duracell said it was disap- pointed with the President’s decision and said the company was considering what further actions it might be able to take to obtain relief. Hungary shows way in personal computer sales BY LESLIE COUTT IN BERLIN A HUNGARIAN joint slock company is demonstrating that I ho best advice to East Euro- pean countries which want to sell mare effectively to Western markets is io carry out economic reforms which spur business intia lives. The company, founded in 19913. was the first to lease CJ-S. Commodore 64 personal com- puters to Hungarian computer programmers. Spurred on by their share of hard currency profits, the programmers de- veloped video games which were then sold to Novotrade’s UK partner, Andromeda Software. Xbvotrade has also opened Hungary’s first computer pro- grams shop selling to both indi- viduals and companies. Hungary is the only Como- ran country which has en- couraged the domestic produc- tion and importation of per- sonal computers. “The letter we signed with Boeing is subject to final gov- ernment approval and does not compel ns to bay their planes. Boeing and Airbus have been in competition for the order, and for a similar deal with the conutry’s inter- national carrier Air India, for the past 18 months. The air- lines announced last summer that LA had signed up for 12 Boeings and Air India had agreed to purchase six Airbus A-310S. India’s domestic carrier has budgeted about 8600m (£500m) for the aircraft, and bankers from around the world have been flocking to Us Delhi headquarters with offers of loans. The talks are as significant in political terms, as in terms of bilateral trade, which is domi- : nated by the Soviet Union’s | cyclical but currently large need for U.S. grain and by U.S. security restrictions and Soviet contract anxieues concerning purchases of UjS. The Moscow talks are put by j U-S. officials in the context of j recent statements by President ‘ Reagan calling for a wider and ; ** more constructive relation- , ship ’’ with the Soviet Union. I The U.S. side will focus on I increasing U.S. sales of non- Tcam leader: Mr Lionel Olmer, U.S. under secretary for commerce strategic items, such as techno- logy and machinery for the growing, harvesting and proces- sing of food which the Soviet Union badly needs. But the Olmer delegation includes a senior official responsible for administering export controls, which will be explained to the Russians. “At the moment Moscow docs nor seem to know what it can and cannot buy from us,’ said one official in Washington, add- ing that the latest CoCom review had freed some less powerful computers, for example, from controls. Tiie U.S. team is also expected io complain that the Russians have struck U.S. companies off some of their purchasing and contract tender lists. But Soviet officials, led by Mr Vladimir Sushkov, deputy trade minister, are likely to counter that they cannot be expected to con trace for deliveries of L-S. technology and turnkey plants spread over several years, as they did in the 1970s. U.S. companies, like Cater- pillar whose pipe-layer sales to to the Soviet Union were for a time banned by political sanc- tions, and like Internationa! Contact sanctity is an issue in still unresolved renewal of the 1979 Export Administra- tion Act. The Senate version would give blanket protection to existing contracts from poli- tical or “ foreign policy “ seme*, tions. Negotiations to give Moscow most-fa von red- nation tariff status for its goods entering the U.S- market and Export-Import Bank credit broke down 10 years ago on the Congressional requirement that the Soviet Union allow free emigration. Thus, much of the discussion may focus on smaller issues such as U.S. company complaints about difficulties they face with finding office space and hiring personnel in^ Moscow. i £6 66m) Miferso iron ore j scheme appears set for an export boost f oil owing a series ( nf marketing and fund-raising ! missions to Europe, the Middle | East and Asia by Mr Adama | Diallo, the new chairman of the • state-backed enterprise. S The jroject, which involves I Senegalese, French and West 1 German participation, hopes to ‘ capitalise on a predicted world • iron ore shortage in the 1990s. i However, Senegal has found j itself caught in a race with its [ neighbours, such as Guinea and Gabon, which have undertaken I similar projects, and Brazil. The message Mr Diallo has been taking to potential clients is Senegal’s proximity to Europe, the high grade of the country’s iron ore and its politi- cal stability. The Arab Iron and Steel Company has also said it will take up to lm tonnes a year, given the right ore specifica- tions. or the Societe des Mines de Fer du Senegal Oriental, is a joint venture in- volving France’s BRGM. China has been contacted to help finance and build 317km of railway ; between Tambacounda, on the main Dakar-Bamuko line, and Faleme. the Dutch aerospace group, has received a FI 40nr (film) contract to provide the payload module and other equipment for the European remote-sensing satellite (ER5- l>. The ERS-1 will monitor knqs, coastal waters and polar ireas to glean environmental and weather, information, that can be used br offshore, ship- ping and fishing industries. – — IbT A J t *-‘s2* !» *s* AMERICAN NEWS Mexico will repay $130m bond issue By Polar Montagnon, Euromarkets Correspondent, to London MEXICO IS to repay a S130m, 15- year bond issue brought to the mar^ ket with a 17% per cent coupon in March 1982 just before its debt problems became aente- The repayment was necessary because of problems relating to the conditions of the issue which call for the interest rate to be reset ev- ery three years, starting in March this year, according to Sr Angel Gurria, Director of Public Credit To reset the interest rate it would have been necessary to select a cou- pon that would have encouraged in- vestors to hold on to the paper, but this might have also brought exces- sive profits for banks who could fi- nance their holding with a three- year borrowing in the money mar- kets, he said. Mr Richard Burt, Assistant Sec- retary of State European Affairs, told the conservative afternoon newspaper Vradyiri that the War- saw Pact had a total of 34 Soviet, Romanian and Bulgarian divisions, mainly mechanised, lined up against 25 Greek and Turkish divi- sions. “The size and capability of the Pact forces are a tremendous challenge for Al l i an c e defence planners,” he added. Greek-American relations have been strained since Mr Andreas Pa- pandreou, the Socialist Prime Min- ister, came to power three years ago on an anti-American platform. Although MrPapandreou has taken no practical steps to loosen Greek ties with Nato and the West, his rhetorical outbursts against the UB. He stressed Greece’s stra t egic importance to Nato, say- ing “a Warsaw Pact a t tack against Greek territory would have very bad consequences for the Affiance.” Mr Papandreou, who opposed deploy- ment of IIS-made cruise and Pershing n missiles in Western Eu- rope, hopes eventually to make the Balkan countries a nuclear-free zone. • Mr Papandreou, denying he was anti-American, said in New York yesterday that he wanted the Medi- tera ne a n cleared of super power forces. Last summer, Greece signed a long- term SSOOm co-operation deal with the Soviet Union to exploit the bauxite mines of Mount Parnassus. Mr Papandreou also defended his i support of Poland’s military leader, Gen Wojriech JaruzelskL “What would have happened, let ns be honest and direct, if Jaruzelski was not there,” he said. A spokesman for Hagfors Ohser- 1 vatory, run by a branch of Sweden’s | Defence Ministry, said preliminary figures showed there had been 53 I underground endear tests last year, including 16 UJS. Bankers say that the pace of the incoming subscriptions has, however, slowed since the International Monetary Fund a Breed ID days ago to release its Sl.Tbn credit facility to President Raul Alfonso’s government. Leading creditors are battling to draw in subscrip- lions from smaller banks who have held out against making fresh loans and remain particu- larly disappointed by the response from Spanish banks which were expected io contri- bute about $85 m. Senior Argentine officials are erpected to visit Spain within the next two weeks to drum up additional support. Meanwhile, preparations are under way for Argentina to present a request to the Paris Club next Tuesday for a re- scheduling of about $l-8bn in official debts. The President’s remarks were widely interpreted as being addressed to members of the opposition National Action Party as well as at supporters or his own Institutional Revolu- tionary Partv. The nationally televised appearance is seen in Washing- ton as intended both to launch a new drive to sell Mr Reagan’s “Star Wars” plan for space- based defence to the American public and to re-establish rela- tions with the Washington press corps at the start of his second term in the White House. Mr Reagan angered both the White House press corps and his Democratic opponents by virtually suspending formal question-and-answer sessions in the run-up to November’s elections. Like many of his predeces- sors, he has frequently complained that reporters mis- interpret his words and distort his views. In an effort to put that right, the White House is also start- ing its own news service to distribute Mr Reagan’s speeches and announcements “unfiltered” by the media. an electronic mail service, to make the material available to anyone who owns a persona) computer for a small fee. director of the American News- paper Publishers’ Association, said that similar Government attempts in the past had gener- ally foiled BY REGINALD DALE, MR JOHN ZACCARO, the hus- band of Ms Geraldine Ferraro, last year’s unsuccessful Demo- cratic Vice-Presidential candi- date, yesterday pleaded guilty to charges of scheming to de- fraud in connection with a $15,501 (£13m) loan for a New York property deal. Following a deal with the Manhattan District Attorney, Justice George Roberts told the court in New York that in ex- change for the guilty plea he would not send Mr Zaccaro to prison, provided that he com- mitted no further offence before sentencing on February 20. Full text of “Financial Times , 1985, UK, English”
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