this document is the property op her britannic majesty's...

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THIS DOCUMENT IS THE PROPERTY OP HER BRITANNIC MAJESTYS GOVERNMENT EHG(S)(79)2 COPY NO J 14 June 1979

EUROPEAN COUNCIL STRASBOURG 2122 JUNE 1979

STEERING BRIEF

Bri e f by the Foreign and Commonwealth Office

ORGANISATION 1 The f i r s t European Council t h i s year was held i n Paris on 1213 March the t h i r d w i l l be i n Dublin on 2930 November Normally one meeting a year i s held i n Brussels But the French argued successfully that the second meeting t h i s year should be i n Strasbourg where the new d i r e c t l y elected European Parliament w i l l be meeting f o r the f i r s t time on 17 July

2 The timetable of events i s at Annex A

3 European Councils have been held regularly since December 1974 Their procedures a mixture of informal and formal discussions are described i n Brief No 3

4 Each country i s represented by i t s Head of Government ( i n the case of France by i t s Head of State) and Foreign Minister and the Commission by Mr Jenkins and M O r t o l i Brief No gives b r i e f personality notes and points f o r b i l a t e r a l encounters with each

AGENDA AND DOCUMENTATION

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- 2 -AGENDA AND DOCUMENTATION 5 There i s no f o r m a l agenda and i n t h e o r y each Head o f Government i s f r e e t o r a i s e new s u b j e c t s The o r d e r o f b u s i n e s s i s f i n a l l y d e t e r m i n e d a t t h e m e e t i n g _ i t s e l f At t h e F o r e i g n M i n i s t e r s C o u n c i l on 12 June a l t h o u g h t h e French a v o i d e d f i n a l l y c o m m i t t i n g P r e s i d e n t G i s c a r d t h e r e was g e n e r a l agreement on t h e f o l l o w i n g o r d e r

(1) D i r e c t e l e c t i o n s t o t h e European Assembly

(2) The economic and s o c i a l s i t u a t i o n i n t h e Community

(3) The European Monetary System

( 4 ) Energy

(5) Convergence

(6 ) S o c i a l problems ( i n c l u d i n g wo^k^^sharing)

(7) The Commission r e p o r t on t h e s t r u c t u r e o f t h e Community i n 1990

( 8 ) Any Other B u s i n e s s i n c l u d i n g d i s c u s s i o n o f economic r e l a t i o n s w i t h Japan

P r o s p e c t s f o r t h e Tokyo Summit does n o t appear as a s e p a r a t e i t e m The P r e s i d e n c y envisage d i s c u s s i o n o f many i t e m s e s p e c i a l l y energy b e i n g t r e a t e d i n t h a t p e r s p e c t i v e

6 mdashThy f u l l u w i n g djuumeriis a r e IkeLy t o be b e f o r e t h e C o u n c i l

C O N F I D E N T I A L ( d )

Following replaces paragraph 6 of the Steering Brief

ft) GUM TOT AT I ON FOR THE EUROPEAN COUNCIL 1 The f o l l o w i n g documents are l i k e l y to be before the Co u n c i l

( a ) I n t e r n a t i o n a l Energy S i t u a t i o n ( i ) Memorandum from the Presidency on energy ( Reference A

to B r i e f No lfgt)gt

( i i ) The Commission paper on the cur r e n t s i t u a t i o n i n the energy s e c t o r ^Reference B to B r i e f No 4fi i

(b) BudgetConvergence Note by Finance M i n i s t e r s covering a report by the Permanent R e p r e s e n t a t i v e s Committee on convergence of economic performance (Reference B to B r i e f No S)

( c ) Economic and S o c i a l S i t u a t i o n A Commission paper e n t i t l e d Economic s i t u a t i o n and p o l i c i e s (Reference A to B r i e f No 6)

(d) S o c i a l Problems Commission paper on worksharing and i t s economic and s o c i a l i m p l i c a t i o n s (Reference B to B r i e f No 8 )

( e ) EECJapan ^ _ r ^ ^ J ^ 2

A Commission paper (Reference A to B r i e f No W)

( f ) S t r u c t u r a l Developments i n the 1980s shyA

A Commission paper (Reference A to B r i e f No bull )

UK OBJECTIVES 7 ( a ) To get agreement t h a t a c t i o n should be taken to remedy the UK i n e q u i t a b l e net Budget c o n t r i b u t i o n

(b) To c o n t r i b u t e to a common p o s i t i o n of the Community on energy f o r Tokyo

( c ) To avoid a commitment on worksharing without t a k i n g the l e a d

(d) To agree a l i n e on Japan

OBJECTIVES OF

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OBJECTIVES OF OTHER GOVERNMENTS 8 A l l Member S t a t e s w i l l f o l l o w P r e s i d e n t G i s c a r d s l e a d i n r e g a r d i n g energy as t h e p r i n c i p a l i t e m o f t h e agenda Some may seek t o use i t t o c u r t a i l d i s c u s s i o n o f t h e Community Budget Even t h o s e who agree t h a t i n s t r u c t i o n s about t h e Budget s h o u l d be g i v e n t o t h e Commission w i l l t r y t o ensure t h a t i t s t e r m s o f r e f e r e n c e concede as l i t t l e as p o s s i b l e o f t h e UK case

9 Other Heads o f Government w i l l be l o o k i n g f o r w a r d t o h e a r i n g a t f i r s t hand t h e Governments a t t i t u d e t o t h e Community so as t o judge whether t h e Governments European c o n v i c t i o n s a r e genuine r a t h e r t h a n a t a c t i c t o secure n e g o t i a t i n g advantage They w i l l be i n t e r e s t e d i n p a r t i c u l a r i n what c o n t r i b u t i o n we make t o t h e energy i t e m on t h e agenda

TACTICS 10 U n l e s s t h e Community Budget i s p r o p e r l y d i s c u s s e d on t h e f i r s t day i t w i l l be e x t r e m e l y d i f f i c u l t t o get agreement on s a t i s f a c t o r y d e c i s i o n s ^ b y t h e end of the_ C o u n c i l The o v e r n i g h t o f f i c i a l w o r k i n g group can o n l y t a k e up p o i n t s made a t t h e j f o u n c i l i t s e l f I t i s t h e r e f o r e n e c e s s a r y f o r t h e Prime M i n i s t e r t o g e t t h e C o u n c i l t o t a c k l e t h e Budget problem on t h e f i r s t day The b e s t t a c t i c w i l l p r o b a b l y be f o r t h e Prime M i n i s t e r t o make a g e n e r a l s t a t e m e n t o f HMGs o v e r a l 1 approach t o t h e Community e a r l y on when she c o u l d a l s o make c l e a r h e r w i s h f o r t h e C o u n c i l t o t a k e t h e Budget i t e m b e f o r e d i n n e r ( s p e a k i n g n o t e t o be s u b m i t t e d s e p a r a t e l y ) A l t e r n a t i v e l y i t may be possib 1 e t o g e t G i s c a r d t o agree beforehand t o s a t i s f a c t o r y h a n d l i n g o f t h e i t e m on t h e s e l i n e s

fffiSUME OF BRIEFS

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RESUME OF BRIEFS

ITEMS DEFINITELY FOR DISCUSSION S - FcUurZ

DIRECT ELECTIONS ( B r i e f No a ) 1 1 The French have proposed t h a t t h e C o u n c i l m i g h t mark t h e event by some k i n d o f c o u r t e s y d e c l a r a t i o n We have no o b j e c t i o n i n p r i n c i p l e p r o v i d e d i t i s i n g e n e r a l t e r m s I t i s j u s t p o s s i b l e t h a t t h e French w i l l a l s o seek t o r a i s e o t h e r aspects eg t h e powers o f t h e P a r l i a m e n t i t s r e l a t i o n s w i t h o t h e r Community i n s t i t u t i o n s and i t s s i t e (one o f i t s w o r k i n g p l a c e s i s S t r a s b o u r g ) But none o f the s e m e r i t s s u b s t a n t i v e d i s c u s s i o n by t h e European C o u n c i l on t h i s o c c a s i o n

ECONOMIC SITUATION I N THE COMMUNITY ( B r i e f No 6)

12 T h i s r e v i e w o f t h e c u r r e n t economic s i t u a t i o n p r o v i d e s t h e o p p o r t u n i t y t o e x p l a i n t h e new Governments economic p o l i c y e s p e c i a l l y f o l l o w i n g t h e UK Budget

EUROPEAN MONETARY SYSTEM ( B r i e f No 7) 13 The Governor o f t h e Bank o f France w i l l r e p o r t T h i s w i l l p r o v i d e an o p p o r t u n i t y f o r o t h e r Member S t a t e s t o d i s c u s s t h e i r e x p e r i e n c e o f EMS so f a r They w i l l want t o hear t h e Prime M i n i s t e r s account o f t h e UK a t t i t u d e t o p a r t i c i p a t i o n i n t h e exchange^rate_mechanism on t h i s i t w i l l be enough t o r e s t a t e t h e commitment t o r e c o n s i d e r t h e UK p o s i t i o n when t h e mechanism i s r e v i e w e d i n September and meanwhile t o t a k e p a r t i n o t h e r aspects o f t h e system I f t h e q u e s t i o n o f EMS i n t e r e s t r a t e s u b s i d i e s i s n o t s e t t l ed a t t h e Finance C o u n c i l on 1_8 June t h e Prime M i n i s t e r may come under p r e s s u r e t o m o d i f y t h e UK st a n c e The b r i e f recommends he r t o r e s i s t except as t h e p r i c e f o r s e c u r i n g a m a j o r b e n e f i t elsewhere

INTERNATIONAL ENERGY

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INTERNATIONAL ENERGY SITUATION ( B r i e f No 14 We s h a l l wish to p r e s s f o r e f f e c t i v e Community a c t i o n on demand r e s t r a i n t to get the Council to put on record f o r the Tokyo Summit the Communitys w i l l i n g n e s s to d i s c u s s energy questions with OPEC and more immediately to agree on the dangers both f o r Europe and f o r OPEC of f u r t h e r major o i l p r i c e r i s e s There may be proposals f o r d i s c r e e t approaches by the Community to OPEC c o u n t r i e s before t h e i r Geneva meeting these may not achieve much but we need not oppose them I t i s l i k e l y t h a t some other Member S t a t e s w i l l make proposals f o r d i r e c t a c t i o n by Governments on o i l supply or p r i c e s I t remains [ a s at 14 June] to be decided by UK M i n i s t e r s what our

bull

a t t i t u d e should be to such proposals and whether or not we should pre-empt them by proposals of our own We b e l i e v e the key l i e s i n reducing demand

BUDGETCONVERGENCE ( B r i e f No amp 15 The March European Council i n v i t e d the Council and Commission to examine i n depth how the Community could make a g r e a t e r c o n t r i b u t i o n by means of a l l i t s p o l i c i e s taken as a whole to a c h i e v i n g g r e a t e r convergence of the economies of Member S t a t e s and to reduce the d i s p a r i t i e s between them Work on the problem has continued at o f f i c i a l l e v e l But i t has been c l e a r f o r some time that progress can only be made at the p o l i t i c a l l e v e l The Finance Council w i l l d i s c u s s the question at i t s meeting on 18 June and the b r i e f may need r e v i s i o n i n the l i g h t of i t s c o n c l u s i o n s Our o b j e c t i v e i s to get agreed an i n s t r u c t i o n on the l i n e s of Annex B from the European Council to the Commission to propose s o l u t i o n s by the end of September i n time f o r d e c i s i o n s to be taken at the November Council i n Dublin F u r t h e r handling of the question by the Commission and Member S t a t e s w i l l depend on the wording of t h i s i n s t r u c t i o n Unless the European Council g i v e s the r i g h t guidance f o r f u t u r e work we s h a l l not get the a c t i o n we want

EMPLOYMENT AND

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EMPLOYMENT AND SOCIAL POLICY ( B r i e f No 8 ) 16 The European Council i s l i k e l y to d i s c u s s the Communitys r o l e i n t a c k l i n g unemployment and the involvement of the tra d e unions i n Community b u s i n e s s The Presidency may wish to include a s e c t i o n on t h i s i n t h e i r statement a f t e r the meeting but as the Commission report i s an i n t e r i m one i t i s not expected t h a t the Council w i l l be faced with any d i f f i c u l t d e c i s i o n s We could express w i l l i n g n e s s to consid e r proposals f o r Community a c t i o n which could have a p r a c t i c a l e f f e c t on employment whether by concerted macro-economic action^on growth or by use of Community f i n a n c i a l instruments i n c l u d i n g the S o c i a l Fund T h i s might i n v o l v e measures such as wj^rksjiainng or v o c a t i o n a l t r a i n i n g (under c o n s i d e r a t i o n ) I n i t i a t i v e s which are i n f l a t i o n a r y or impair i n d u s t r i a l e f f i c i e n c y such as some schemes f o r workshy

s h a r i n g d i s c u s s e d at recent meetings of the Finance and S o c i a l A f f a i r s Councils would not be acceptable but other c o u n t r i e s w i l l

bull^ have o b j e c t i o n s too We are ready to take part c o n s t r u c t i v e l y i n d i s c u s s i o n of expected Commission proposals but the economic i m p l i c a t i o n s of worksharing measures should be f u l l y s t u d i e d i n the Economic P o l i c y Committee to which they have been remitted by the Finance Council And we may need to note that we cannot support measures incompatible with our p o l i c y of c u t t i n g domestic expenditure and t a x e s

STRUCTURE OF COMMUNITY IN 1990 ( B r i e f No M) 17 The December 1978 European Council asked the Commission to provide f o r i t s second meeting i n 1979 ( i e t h i s Council) a study of s t r u c t u r a l development prospects u n t i l 1990 T h i s study should a s s e s s the consequences of s t r u c t u r a l changes f o r the economic and s o c i a l s i t u a t i o n i n the Community The Commission report i s not yet a v a i l a b l e A b r i e f w i l l be prepared as soon as p o s s i b l e D i s c u s s i o n i s l i k e l y to be of a very general nature l e a d i n g to no immediate d e c i s i o n s

PROSPECTS FOR

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PROSPECTS FOR THE TOKYO SUMMIT (Brief No W) 18 There i s no separate item but the smaller Member States l i k e to express views which w i l l be taken into account by the President of the European Council and the President of the Commission who represent the Community as such at Tokyo Otherwise they f e e l l e f t out There w i l l be general agreement that the energy s i t u a t i o n i s complicating an already uncertain int e r n a t i o n a l economic s i t u a t i o n and that t h i s should be the main subject f o r discussion and decision at Tokyo UNCTAD V having reached only a l i m i t e d measure of agreement - and with the developing countries facing growing balance of payments problems because of the o i l price rises - the Tokyo Summit i s also l i k e l y to have to address i t s e l f to the NorthSouth dialogue

EECJAPAN (Brief No 9 ) 19 The Japanese_run a persistent surplus i n t h e i r trade with the EEC ($64 b i l l i o n i n 1978 up 11$ on 1 9 7 7 ) The March European Council expressed concern about t h i s Despite the narrowing of t h e i r overall surplus i n the early months of t h i s year the qurplus with the Community has not gone down I n any case the reduction i n t h e i r o v e r a l l surplus i s unTikely to be more than temporary as the recent depreciation of the Yen w i l l lead to an increase i n Japanese exports We want to see the Japanese increase t h e i r imports of Community manufactures and bring about long-term s t r u c t u r a l change which w i l l lead to a l a s t i n g reduction i n t h e i r current account balance We are content that the Community (acting through the Commission) should play a role i n negotiations with the Japanese on economic as well as purely trade questions

ITEMS WHICH MAY

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ITEMS WHICH MAY COME UP

POLITICAL COOPERATION SUBJECTS ( B r i e f No ) 20 Given t h a t F o r e i g n M i n i s t e r s w i l l have had a f u l l m e e t i n g i n P o l i t i c a l C o o p e r a t i o n on 1_8 June no se p a r a t e M i n i s t e r i a l m e e t i n g i s planned f o r t h e margins o f t h e European C o u n c i l But t h e r e may w e l l be i n f o r m a 1 d i s c u s s i o n o f t o p i c s o f c u r r e n t i n t e r e s t B r i e f i n g i s p r o v i d e d on t h e M i d d l e E a s t A f r i c a t h e Viet-Nam r e f u g e e problem and P r e s i d e n t Giscards p r o p o s a l f o r a EuroArabAfro Summit

COMMON AGRICULTURAL POLICY ( B r i e f No W) 21 The A g r i c u l t u r e C o u n c i l i s t o meet t o d i s c u s s f a r m p r i c e s f o r 197980 i n t h e same week as t h e European C o u n c i l b e g i n n i n g on 18 June The UK may be alo n e ( e x c e p t f o r p o s s i b l e s u p p o r t f r o m I t a l y ) i n s u p p o r t i n g t h e Commissions p r o p o s a l s f o r a p r i c e f r e e z e I f no agreement i s reached t h e s u b j e c t may be r a i s e d a t t h e European C o u n c i l we may be pressed by t h e French i n p a r t i c u l a r t o m o d i f y our p o s i t i o n and G i s c a r d m i g h t t r y t o make a l i n k w i t h t h e Budget i t e m Separate b r i e f i n g w i l l be s u b m i t t e d i f necessary

COMMON FISHERIES POLICY ( B r i e f No ^ ) 22 We do n o t want an e a r l y m e e t i n g o f t h e F i s h e r i e s C o u n c i l b u t i f t h e m e e t i n g planned f o r 25 June t a k e s p l a c e we hope a f r e s h s t a r t w i l l be made t o c o n s i d e r t h e i s s u e s i n a b e t t e r s p i r i t though s u b s t a n t i v e p r o g r e s s i s n o t l i k e l y b e f o r e t h e Autumn

ECONOMIC AID FOR TURKEY ( B r i e f No W) 23 At t h e OECD p l e d g i n g m e e t i n g on 30 May t h e Turks were promised access t o $145 b i l l i o n made up o f $662 m i l l i o n i n g r a n t s o r l o a n s ($30 m i l l i o n f rom t h e UK) $2 45 m i l l i o n i n medium-term e x p o r t c r e d i t s $400 m i l l i o n f rom t h e commercial banks and $150 m i l l i o n f r o m t h e World Bank a l l s u b j e c t t o t h e i r r e a c h i n g an agreement w i t h t h e IMF on a s t a b i l i s a t i o n p r o g r a m m e

These f i g u r e s

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These f i g u r e s do n o t i n c l u d e EEC a i d w h i c h amounts t o $400 m i l l i o n under t h e T h i r d F i n a n c i a l P r o t o c o l between now and 1981 and $100 m i l l i o n under emergency a s s i s t a n c e The r e s u l t s o f t h e 0ECD m e e t i n g s h o u l d make d i s c u s s i o n o f Turkey a t t h e European C o u n c i l unnecessary even th o u g h t h e T u r k s have i n e v i t a b l y expressed d i s s a t i s f a c t i o n p a r t i c u l a r l y about IMF c o n d i t i o n a l i t y

THREE WISE MEN ( B r i e f No W) 2 4 U n l i k e l y t o come up except p o s s i b l y i n t h e margins o f t h e C o u n c i l I f i t does t h e Prime M i n i s t e r need say no more t h a n t h a t we a t t a c h i m p o r t a n c e t o t h e i r work and l o o k f o r w a r d t o t h e i r r e p o r t due i n October She w i l l be s e e i n g t h e Wise Men on 16 J u l y

ENLARGEMENT ( B r i e f No 10) W^ ^ 25 W i t h t h e Greek a c c e s s i o n t r e a t y s i g n e d t h e Community w i l l t u r n i t s a t t e n t i o n t o t h e n e g o t i a t i o n s w i t h P o r t u g a l and Spain Those w i t h P o r t u g a l are u n l i k e l y t o t h r o w up any r e a l l y d i f f i c u l t problems though P o r t u g a l may w e l l r e q u i r e s u b s t a n t i a l a i d o v e r a l o n g p e r i o d N e g o t i a t i o n s w i t h S p a in w i l l i n v o l v e more s e r i o u s c o n f l i c t s o f i n t e r e s t Both c o u l d f i n a l l y j o i n on 1 January 1983 two y e a r s a f t e r Greece

26 The French under p r e s s u r e f r o m t h e i r f a r m e r s have slowed down t h e Spanish n e g o t i a t i o n s d u r i n g t h e i r P r e s i d e n c y I t seems t h e y accept t h a t t h e r e s h o u l d now be a speeding up But t h e y may be p r e p a r i n g t o l a u n c h a b i d f o r some form o f Community compensation f o r t h e b o r d e r r e g i o n s o f France t o m i t i g a t e t h e expected e f f e c t s on them o f Spanish membershipj

LOME RENEGOTIATION SIZE OF THE NEW EUROPEAN DEVELOPMENT FUND ( B r i e f No f | ) R^- X

127 P r e s i d e n t G i s c a r d may a so r a i s e t h e s u b j e c t o f t h e h i a t u s i n t h e r e n e g o t i a t i o n o f t h e Lome Convention caused by ACP r e j e c t i o n o f t h e Communitys o f f e r on t h e s i z e o f t h e new European Development Fund (EDF) D u r i n g t h e 2426 May EECACP B r u s s e l s Conference i t was accepted by a l l on t h e EEC s i d e

t h a t t h e r e

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- 11 shy

t h a t t h e r e c o u l d be no i n c r e a s e on t h e maximum f i g u r e o f 4540 mua (pound2951 ra) agreed by EEC M i n i s t e r s d u r i n g t h e Conference At t h e 12 June F o r e i g n A f f a i r s C o u n c i l however t h e French P r e s i d e n c y p u t f o r w a r d a somewhat r e - a r r a n g e d v e r s i o n o f t h e Communitys o f f e r i n v o l v i n g i n t e r a l i a an i n c r e a s e o f 200 muaon t h e 4540 f i g u r e They envisaged a l s o a h i g h e r UK share o f t h i s f i g u r e t h a n we can ac c e p t D i s c u s s i o n s a re c o n t i n u i n g b u t a s o l u t i o n may n o t emerge b e f o r e t h e European C o u n c i l

NUCLEAR ENERGYEURATOM ( B r i e f No 3copy) 28 We do n o t expect n u c l e a r m a t t e r s t o be r a i s e d a t t h e C o u n c i l But i f t h e French r a i s e n o n - p r o l i f e r a t i o n o r Euratom t h e Prime M i n i s t e r c o u l d express s u p p o r t f o r t h e i d e a o f a p o l i t i c a l d i a l o g u e on n o n - p r o l i f e r a t i o n t o p i c s among t h e Nine and f o r t h e view t h a t t h e r e l e v a n t p r o v i s i o n s o f t h e Euratom T r e a t y s h o u l d c o r r e s p o n d more c l o s e l y t o t h e a c t u a l arrangements f o r n u c l e a r t r a d e

FOREIGN AND COMMONWEALTH OFFICE 14 June 1979

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ANNEX A

EUROPEAN COUNCIL STRASBOURG 2122 JUNE 1979

P r o v i s i o n a l Programme ( s u b j e c t t o Pre s i d e n c y c o n f i r m a t i o n )

The Prime M i n i s t e r and t h e S e c r e t a r y o f S t a t e w i l l s t a y a t t h e Grand H o t e l P l a c e de l a Care S t r a s b o u r g The programme w i l l be as f o l l o w s -

Thursday 21 June

1300 Lunch f o r t h e Heads o f Government M i n i s t e r s f o r F o r e i g n A f f a i r s Mr Je n k i n s and M O r t o l i ( H o t e l de l a P r e f e c t u r e 19 Rue B r i i 1 e )

( B u f f e t l u n c h f o r o t h e r members o f t h e dei e g a t i o n a t t h e Cercle M i l i t a i r e P lace B r o g l i a )

1500-1830 Formal s e s s i o n ( H o t e l de V i l l e Place B r o g l i e )

2000 D i n n e r f o r Heads o f Government and Mr J e n k i n s (Chateau des Rohan Place du Chateau)

Separate d i n n e r f o r F o r e i g n M i n i s t e r s and M O r t o l i ( P a v i l i o n de 1 O r a n g e r i e )

A f t e r d i n n e r I n f o r m a l t a l k s among Heads o f Government

P r e s i d e n c y have no p l a n s f o r i n f o r m a l t a l k s among F o r e i g n M i n i s t e r s who w i l l be f r e e t o c o n t i n u e any d i s c u s s i o n s begun a t d i n n e r a t t h e i r d i s c r e t i o n

F r i d a y

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1300

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F r i d a y 22 June

0930-1230 Formal s e s s i o n resumes (Hotel de V i l l e )

1230 Presidency p r e s s conference

Optional b u f f e t lunch a v a i l a b l e f o r Heads of GovernmentForeign M i n i s t e r s and o f f i c i a l s s e p a r a t e l y ( t h i s i s a contingency arrangement by the Presidency i n case the formal s e s s i o n o v e r r u n s )

Note 1 Simultaneous translation w i l l be provided at formal sessions whispered interpretation as necessary at meals andl informal sessions

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