[Questioner]
Prime Minister, I'd like to talk first about Afghanistan. What hopes do you have for the success of the initiative which has been launched over the last ten days?
PM
Of course, we always hope. We just can't leave Afghanistan as it is. The occupation of Afghanistan by the Soviet Union is totally unacceptable. If we take that view, we have to try to resolve it. Lord Carrington 's been working on these proposals for some time. He's got the agreement of Europe that it should be a European initiative, and he's going to Moscow to talk about it. And I just hope that we shall make some contribution to solving this problem and try to do something to secure the withdrawal of Soviet troops from Afghanistan.
Questioner
What effect do you think this initiative will have on East/West relations generally? Do you think there will be an overall improvement?
PM
If we could secure the withdrawal of Soviet troops from Afghanistan there would indeed be a very big improvement in relations between the Soviet Union and the Western nations, and many of us would welcome such an improvement.
Questioner
On the economy of Europe, you met President Mitterrand for your first private meeting this morning. Is it not true that his economic approach differs fundamentally from your own and this could make life difficult given the overall state of the European economy?
PM
I think the objectives are the same. We both have an unemployment problem; we both have an inflation problem. Apart from that, he has very different circumstances from those which I have, e.g., he has a very very small budget deficit. For years France has followed a very orthodox classical financial policy. This puts them in a very strong position now. We, as you know, have had a very big budget deficit for a very long time. The last time our budget was balanced was 1970. Since then, through good times and bad we've had a big budget deficit. That very much constrains [end p1] any action we could take in relation to the budget deficit. Mr. Mitterrand made it very clear, even when he's done everything he intends to do the size of his budget deficit will only be 3%; of gross domestic product. Mine is already 4½%;.
Questioner
On unemployment, do you think that the British approach to solving unemployment is now moving further out on a limb away from the way other countries are dealing with it in Europe?
PM
Good heavens no. I would say that there was a greater agreement to the viewpoint that we have taken than there was to any other viewpoint. But that agreement emerges from the fact that each of us have to decide how best to achieve our objectives. And I think most countries thought they would be better able to achieve the objective of reducing unemployment by tackling inflation than the other way round.
Questioner
On the Middle East, again getting back to your meeting with Mr. Mitterrand, he has made it plain that he believes more in the Camp David approach to a solution in the Middle East than in the EEC initiative launched in Venice last year. Does this mean that we're seeing the beginning of the end of the EEC initiative?
PM
No I don't think so, and I think it's a difference of words rather than of substance. The difference is this there are words at the beginning of the Venice Communique which refer to a comprehensive settlement. Now I don't think any of us ever thought we could settle everything in the Middle East. If you go further down the Venice Communique, it realises that central to a peaceful settlement is the Palestinian problem. You'll only solve the Palestinian problem if each side accepts the rights of the other at the outset. And Mr. Mitterrand and I are absolutely one in accepting that Israel must have the right to exist as a nation behind secure borders and the borders must be defensible. We agree that. We equally agree that the Palestinian people also have legitimate rights. Now that is just exactly what the Venice Communique said. We always intended the Venice Communique to be complementary to the Camp David process, and we would be the first [end p2] to say there'd be no final settlement of the Middle Eastern problem without the United States taking a pre-eminent role. We can help.
Questioner
Tomorrow Britain takes over the Presidency of the Common Market for six months. What, apart from the Afghanistan initiative, do you think will be the priorities in the running of the Common Market for those six months?
PM
We've got a number of things to do. First, we've got the big problem of how to restructure how the Community is financed. I don't know whether we'll complete it during our period, but we'll go as far as we can. We must have a settlement that's equitable to all partners. That's very important. Secondly, we really must make strenuous efforts to get a Common Fisheries Policy. It's vital for fishermen in the UK, for France, for Germany, for Denmark. We had hoped to get it settled before the French election, but we were not able to do so. So those are really very very important. And in foreign affairs we have the Afghanistan initiative, and we must help over the Middle East. I think we must also take further the process of enlargement. It's important for all of us to keep Spain and Portugal within the sphere of democracy, and we believe that we can help to do that by enlarging the European Community to include Spain and Portugal. There are problems with trade with Japan which it's better that we resolve on a Community-wide basis. We are tackling our problems with steel on the Community-wide basis, and also a very important thing as far as the UK is concerned, there is not yet a Common Market on services like insurance and air fares. We in Britain are particularly good at those things, and we want a policy to make it as easy to move round Europe securing insurance contracts as it is to move around on matters connected with industrial trade.
Questioner
Will you be doing anything during this period to alter the British public's perception of the EEC, a perception which at present seems to be very jaundiced?
PM
I think we'll have to get out more information. There's a tremendous amount of misunderstanding about Europe. [end p3] That's our fault.—But in the end, you know, the enormous achievement of Europe is this—we've had a very very long period of peace between the countries of the Community. That surely is the most important thing of all. And I'm eternally grateful that Mark Thatchermy son didn't have to go and fight a war in Europe as Denis Thatchermy husband had to. Surely that is the greatest achievement, and surely that is why we must overcome all the other problems to see that that peace continues.
Questioner
Thank you very much.