P.M., Reagan differ over money policies

Press, 1 October 1983, Page 11

P.M., Reagan differ over money policies

NZPA-Reuter Washington A difference on economic policy between Britain and the United States emerged during two hours of talks between the British Prime Minister, Mrs Margaret Thatcher, and President Ronald Reagan yesterday. She siad that she had received little reassurance from Mr Reagan on her concern that big American spending deficits would jeopardise the world’s economic recovery from recession by raising interest rates. “There is a different view of that taken here,” she said, saying that she had told Mr Reagan it was important for American interest rates to be brought down. An American official quoted Mr Reagan as saying that interest rates would fall as a healthy United States recovery cut the Budget deficit by increasing tax revenues.

But Mrs Thatcher said that she wanted the Reagan

Administration to take more action to reduce its Budget deficit. “We believe it would be in their interest. We believe it would be very much in the interests of Europe,” she said.

Mrs Thatcher, one of Mr Reagan’s strongest supporters in policy towards Moscow, again backed his plans to base new American nuclear missiles in Europe while still seeking an arms accord with the Soviet Union. The two leaders reaffirmed their determination to deploy Pershing 2 and cruise missiles unless Moscow agreed to dismantle its nuclear missiles in Europe.

“Our nerve is being tested,” Mrs Thatcher said. “We must not falter now.”

She considered that the deployment of the first missiles in December was now unavoidable. It was clear that Moscow would not accept Mr Reagan's proposal to cancel the plan if all

Soviet missiles in Europe were dismantled, she said. The denunciation by the Soviet President, Mr Yuri Andropov, of Mr Reagan’s latest missile offer was “discouraging and disappointing,” she said. But the West must continue to seek an agreement to keep United States-Soviet missiles in Europe a the lowest possible equal numbers, she said. Britain would be deeply wounded if the United States supported a United Nations resolution against her on the Falklands, she said.

It would also be absolutely wrong for the United Nations to approve a resolution demanding British-Ar-gentine negotiations on sovereignty of the Falklands after what she called Argentina’s bloody invasion of the islands last year. “It would be unthinkable that we should now begin to negotiate the sovereignty of the Falkland Islands with the Argentine,” she said. "We shan’t.”