The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997

1992Prime Minister (1990-1997)

Mr Major’s Commons Statement on Economic Summit and CSCE – 13 July 1992

Below is the text of Mr Major’s statement in the House of Commons on the Economic Summit and Commission on Security and Cooperation in Europe (CSCE) made on the 13th July 1992.


The Prime Minister (Mr. John Major) : With permission, Madam Speaker, I shall make a statement about the economic summit in Munich and the summit of the conference on security and co-operation in Europe in Helsinki last week. I represented the United Kingdom at the economic summit, with my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer. The Foreign Secretary also attended the Helsinki summit.

The economic summit met against the background of a world economy that is still sluggish. The difficulty of achieving non-inflationary growth was uppermost in our discussions. We would all like to see faster growth. Recovery has been slower in coming than anyone anticipated but the conclusions, which are in the Library of the House, record both our desire for stronger sustainable growth and our view that it can be achieved only through sound monetary and fiscal policies. Unless we get inflation down and keep it down there will be no lasting growth.

The single biggest contribution that can be made to recovery throughout the world is a GATT settlement. A settlement would give a sharp non-inflationary boost to the world economy. The OECD has concluded that it would be equivalent to a $195 billion gain in annual incomes. More than $90 billion of that would accrue to developing and former communist countries. It would boost the economic transformation of eastern Europe and the former Soviet Union, encourage developing countries to persevere with their reforms, and check protectionism in world trade.

A GATT settlement is essential, and I make no apology for having put it high on the agenda at Munich and insisting that it was discussed in detail. In the light of this year’s reform of the common agricultural policy, the remaining gap between the European Community and the United States on the crucial agricultural issues is a small one. I believe that it can be bridged and the communique contains a firm commitment to a result this year.

At the economic summit last year I pledged to attend the Rio conference and urged others to do the same. On my return, I suggested an eight-point follow-up action plan. That plan, which is set out in the conclusions, was accepted by the G7.

We also had a meeting with President Yeltsin, days after Russia had reached an agreement with the International Monetary Fund. The imminence of the Munich meeting undoubtedly helped to clinch that agreement. It opens the way for the IMF to release the first $1 billion credit tranche. That, in turn, opens the way to a debt-rescheduling agreement. I was able to announce that the United Kingdom is ready to make available $500 million of export credit cover for the former Soviet Union.

Russia faces massive difficulties. Inflation is running at well over 150 per cent., the fiscal deficit is rising and will be well over 10 per cent. Of GDP for the rest of this year, and the pace of reform has slowed down in several areas. Translating reforms on paper into reforms in operation is proving difficult. President Yeltsin assured us of his determination to put renewed impetus behind the reform programme. With the IMF programme in place it will be easier to monitor progress and to propose remedies, but none of us should underestimate the huge nature of his task : it is literally unparalleled and we all have a stake in his success. The United Kingdom has urged for some time that the Munich summit should take an initiative on the safety of nuclear power stations in the former Soviet Union and eastern Europe. Members of the Community pledged themselves at Lisbon to provide significant resources. The G7 agreed on an action programme and to create a fund to supplement existing bilateral efforts to ensure a co-ordinated and targeted approach.

The political declaration adopted at Munich underlines, in respect of the former Soviet Union, the general theme of help for self-help. It calls for a resolution of the northern territories dispute. The declaration also calls for the indefinite extension of the non-proliferation treaty at the 1995 extension conference and underlines the need, in the face of the growing demands on them, to strengthen both the United Nations and the CSCE.

The CSCE played a crucial role in the 1970s, setting human rights standards which the communist world could not ignore. The role of the CSCE in monitoring human rights, especially minority rights, remains. The CSCE must also take on new roles as well. At last week’s meeting we agreed a number of new roles for the CSCE covering : the earlier warning of political conflicts ; the need for a new mechanism to improve the peaceful settlement of disputes; the establishment of a high commissioner for national minorities ; and the CSCE role in peacekeeping.

No mechanisms can provide solutions if people are not willing to use them. It will take more than one or two conferences to resolve many of the ethnic conflicts that were frozen under communist rule and which are now coming aggressively to life again. But progress was made at that meeting, for example, on the issue of troop withdrawal from the Baltic states and on the handling of Yugoslavia. The overall priority in Yugoslavia is to try to get the parties to negotiate. In that task, Lord Carrington’s efforts are of crucial importance, and were underlined and endorsed at the Helsinki meeting. In the short term, our priority is the provision of humanitarian relief to Sarajevo and beyond. Britain already has 300 medical personnel as part of the UN force in Croatia. We have so far flown 28 humanitarian flights to Sarajevo. HMS Avenger will take part in an operation to monitor sanctions, jointly agreed at Helsinki by NATO and the Western European Union. The feasibility of establishing a land corridor to Sarajevo under UN auspices is being explored. If such an operation were feasible, Britain would be prepared to consider providing air cover for it. We would not supply ground troops.

Everyone who has seen the recent news reports has been shocked and moved by the suffering children in Sarajevo. At the end of last week, we told the United Nations High Commissioner for Refugees that we stood ready to evacuate children from Sarajevo to the United Kingdom for medical treatment, or to send medical teams to Yugoslavia to provide treatment on the spot.

If it is possible to treat the children on the spot, near to their families, with people around them who speak their language and in relatively familiar surroundings, that is obviously the best way. We have told the International Red Cross that we are willing to fly out medical personnel at very short notice if needed. I hope to meet the United Nations High Commissioner for Refugees in London later this week to see what further action is needed.