LETTER TO WILLIAM H. WEBSTER FROM DONALD GREGG

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90G01353R001500220001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 23, 2016
• Document Release Date: August 21, 2012
• Sequence Number: 1
• Publication Date: November 29, 1988
• Content Type: LETTER

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STAT
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November 29, 1988
The Honorable William H. Webster
Director
Central Intelligence Agency
Washington, D. C. 20505
The Vice President has asked me to forward to you a
copy of the memorandum covering his meeting with Prime Minister
Thatcher. It was prepared by Ambassador Price and has been sent
to Secretary Shultz.
The Vice President will personally brief Brent
Scowcroft, but the memorandum is being held very closely.
Sincerely,
Donald P. Gregg
Assistant to the Vice President
for National Security Affairs
UNCLASSIFIED fi-SENSITIVEATTACHMENT
DECL: OADR
OVP/NSA Control Copy # /' of Z copies ( DC1
EXEC
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SUYI:K 5r;N51T1Vr; tit5J4 /1b
United States Department of State
Washington, D.C. 20520
November 25, 1988
SECRET/SENSITIVE
MEMORANDUM FOR DONALD P. GREGG
OFFICE OF THE VICE PRESIDENT
Subject: Vice President's Meeting with Prime Minister
Thatcher
Per our conversation, I am attaching a draft memorandum
of conversation between the Vice President and Prime Minister
Thatcher for your clearance.
Melvyn Levitsk
Executive Secretary
London 25133 (NODIS)
SECRET/SENSITIVE
DECL: OADR
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S/S-O
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DESTRUCTION TO THE DIRECTOR, S/S-I, ROOM
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EXECUTIVE SECRETARY
DEPARTMENT OF STATE
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ACTION NODS-00
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pis?0
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-------------=----012220 251842Z /43 44
0 251619Z NOV 88
FM AMEMBASSY LONDON
TO SECSTATE WASHDC IMMEDIATE 2207
S E C R E T LONDON 25133
E. 0. 12356: DECL: OADR
TAGS: PREL, OVIP (THATCHER, MARGARET), US, UK
SUBJECT: THATCHER-BUSH BREAKFAST MEETING, NOVEMBER 17
1. S-ENTIRE TEXT
2. SUMMARY. AT THEIR NOVEMBER 17 BREAKFAST MEETING,
PRESIDENT-ELECT BUSH AND PRIME MINISTER THATCHER
DISCUSSED A RANGE OF ISSUES: THE U.S. ECONOMY; EAST/
WEST RELATIONS, INCLUDING ARMS CONTROL; A POSSIBLE NATO
SUMMIT AND ITS RELATIONSHIP TO SNF MODERNIZATION;
DEVELOPMENTS IN EASTERN EUROPE AND POLICY ON LENDING TO
THE EAST; THE CW CHALLENGE; SDI; LATIN AMERICA;
ENVIRONMENTAL ISSUES; SOUTHERN AFRICA; THE MIDDLE EAST;,
CAMBODIA; AND THE GATT MID-TERM REVIEW. THE MEETING WAS
RELAXED AND BUSINESSLIKE. END SUMMARY.
3. ON NOVEMBER 17, VICE PRESIDENT BUSH HOSTED PRIME
MINISTER THATCHER FOR A WORKING. BREAKFAST AT HIS
'RESIDENCE, BEGINNING AT 8:45. THE PRESIDENT-ELECT WAS
ACCOMPANIED BY VICE PRESIDENT-ELECT QUAYLE, SECRETARY OF
STATE-DESIGNATE BAKER, AND AMBASSADOR PRICE. MRS.
THATCHER WAS ACCOMPANIED BY CHARLES POWELL (HER PRIVATE
SECRETARY FOR FOREIGN AFFAIRS) AND AMBASSADOR ACLAND.
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4. THE MEETING WAS RELAXED AND BUSINESSLIKE. THATCHER
BEGAN BY WARMLY CONGRATULATING VICE PRESIDENT BUSH ON
THE PERSONAL TRIUMPH OF HIS ELECTION VICTORY. THEY
COMPARED NOTES ABOUT CAMPAIGN PRACTICES AND DISCUSSED
THE MEDIA'S PERCEPTION THAT HIS CAMPAIGN HAD BEEN
NEGATIVE. THE VICE PRESIDENT SPOKE ABOUT MEDIA ATTEMPTS
TO CREATE THE IMPRESSION THERE WOULD BE HOSTILITY
BETWEEN CONGRESS AND HIS ADMINISTRATION. THIS SIMPLY IS
NOT TRUE -- HE AND SENATOR OUAYLE HAVE SERVED ON THE
HILL, AND MR. BAKER HAD A LOT OF EXPERIENCE THERE. THEY
WILL WORK TOGETHER WITH CONGRESS, NOT IN OPPOSITION.
THE U.S. ECONOMY
5. THATCHER NOTED THAT SHE HAD MET NOVEMBER 16 WITH
FEDERAL RESERVE BOARD CHAIRMAN GREENSPAN. HE DESCRIBED
THE ECONOMY AS FUNDAMENTALLY HEALTHY, AND HE SAW NO SIGN
OF A RECESSION. HE SAID THE BUDGET DEFICIT IS A SERIOUS
PROBLEM BUT- NOT ONE THAT CAN BE SOLVED OVERNIGHT.
THATCHER AGREED WITH GREENSPAN' S STATEMENT ABOUT THE
DEFICIT, BUT SAID THERE IS NOT A LOT OF TIME FOR THE
U. S. TO DEAL REALISTICALLY WITH ITS DEFICIT PROBLEM.
6. THE VICE PRESIDENT AGREED THAT THE DEFICIT IS
EXTREMELY IMPORTANT, AND HE INTENDS TO REDUCE IT. THE
PRESIDENT WILL SUBMIT ONE MORE BUDGET BEFORE LEAVING
OFFICE. THE VICE PRESIDENT IS DISCUSSING IT WITH HIM
NOW. MR. BUSH ADDED THAT HE HAD TALKED TO MANY MEMBERS
OF CONGRESS, AND IS CONVINCED.THAT CONGRESS WILL NOT BE
HOSTILE TO HIS EFFORTS TO DEAL WITH THE DEFICIT.
EAST-WEST RE-L-AT I ONS/ARMS CONTROL
7. THE PRESIDENT-ELECT SAID HE WILL CONTINUE TO WORK TO
IMPROVE EAST/WEST RELATIONS. HE IS UNPERSUADED-THAT ALL
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IS HARMONIOUS WITH THE SOVIET UNION; HIS APPROACH WILL
BE WARY BUT FORTHCOMING. HE IS COMMITTED TO FURTHER
PROGRESS ON ARMS CONTROL WITH THE SOVIETS. THERE WILL
BE NO.HAIRPIN TURNS. HE WILL NEVER NEGOTIATE ON BRITISH
AND FRENCH NUCLEAR FORCES. THE VICE PRESIDENT SAID HE
HAD MADE CLEAR TO THE SOVIETS HE WILL NOT BE READY TO
TALK IN DEPTH WHEN HE SEES GORBACHEV IN DECEMBER. IT
WILL NOT BE A SUMMIT.
8. BEFORE THERE IS A REAL SUMMIT, MR. BUSH SAID HE WILL
SEND MR. BAKER TO CONSULT WITH NATO LEADERS AND THEN
MEET WITH SHEVARDNADZE TO PREPARE THE GROUND. THE VICE
PRESIDENT SAID HE WOULD AGREE TO A SUMMIT WHEN IT IS
CLEAR THAT REAL PROGRESS COULD BE MADE. HE IS NOT
INTERESTED IN A MEETING THAT IS ALL GLAMOR AND NO
SUBSTANCE. HE PARTICULARLY VALUES MRS. THATCHER'S
UNDERSTANDING AND LEADERSHIP ON EAST/WEST ISSUES AND
WILL WANT TO CONSULT CLOSELY WITH HER.
9. THE PRIME MINISTER AND VICE PRESIDENT AGREED THAT
THE CHANGES UNDERWAY IN THE SOVIET UNION ARE
UNPRECEDENTED BUT THAT IT IS A TWO-EDGED SWORD, WITH
UNCERTAINTIES AS WELL AS OPPORTUNITIES FOR THE WEST.
SHE SA1D THE PICTURE HAS CHANGED DRAMATICALLY, BUT THE
REST IS HOW FAR REFORMS WILL REALLY BE IMPLEMENTED.
GORBACHEV WILL ENCOUNTER CONSIDERABLE DIFFICULTIES. SHE
SAID WE SHOULD SUPPORT HIM IN HIS EFFORTS WHILE KEEPING
OUR DEFENSES STRONG. SHE AND THE VICE PRESIDENT AGREED
THAT THE MOST CRITICAL AREA FOR GORBACHEV IS AGRICULTURE.
WITHOUT BEING SPECIFIC, THATCHER SAID WE SHOULD
"SUPPORT" GORBACHEV IN THE AREA OF AGRICULTURAL REFORM.
10. MR. BUSH NOTED THAT HE CONSIDERS CONSULTATIONS WITH
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THE ALLIES TO BE ONE OF THE MAJOR ACHIEVEMENTS OF THE
REAGAN ADMINISTRATION, AND IT WILL BE CONTINUED UNDER
HIS PRESIDENCY. THATCHER THANKED HIM FOR THIS FIRM
STATEMENT. SHE SAID WE MUST SHOW THE WARSAW PACT THAT
NATO IS UNITED. SYG WOERNER HAD SUGGESTED TO HER THAT
THE JUNE NAC IN LONDON BE A NATO SUMMIT. SHE COULD SEE
ADVANTAGES TO THIS. IT IS CRUCIAL TO PUSH THROUGH
DECISIONS ON MODERNIZING NATO'S SHORT-RANGE NUCLEAR
WEAPONS. IT WILL BE EASIER TO DO THIS WITH KOHL IN THE
GERMAN CHAIR THAN GENSCHER. KOHL IS SOLID AND KNOWS
MODERNIZATION IS NEEDED, BUT GENSCHER CANNOT BE TRUSTED
AND EXERTS INFLUENCE FAR BEYOND HIS LIMITED POLITICAL
BASE. SHE ASKED THE VICE PRESIDENT TO REFLECT ON THE
IDEA. HE ASKED WHEN THE ECONOMIC SUMMIT WOULD BE HELD.
THATCHER SAID JULY 14 IN PARIS. SHE CONCLUDED THAT A
NATO SUMMIT WAS "A MOVEABLE FEAST" WHICH COULD BE
ARRANGED TO MEET HIS CONVENIENCE.
11. MR. BUSH SAID THERE IS ENORMOUS POTENTIAL FOR
CHANGE IN EASTERN EUROPE. THATCHER BRIEFLY RECOUNTED
HER RECENT VISIT TO POLAND, WHICH IS IN A MESS. IT WILL
BE VERY HARD FOR THE GOVERNMENT TO CHANGE THE ECONOMIC
SYSTEM WITHOUT REFORMING THE POLITICAL SYSTEM IN ORDER
TO GAIN POPULAR SUPPORT. SHE IS OPPOSED TO AN IMF
STANDBY AGREEMENT FOR POLAND. MR. BUSH SAID HE DOES NOT
THINK MUCH OF RAKOWSKI, BUT HAS MORE SYMPATHY FOR
JARUZELSKI. THATCHER CONCURRED.
12. MR. BAKER EXPRESSED HIS CONCERN THAT THE WEST NOT
MAKE COMMERCIAL LOANS TO THE USSR THAT ARE NOT TIED TO
SPECIFIC PROJECTS. HE RECALLED THE DISCUSSION OF THIS
AT THE TORONTO ECONOMIC SUMMIT, AND SAID THE WEST SHOULD
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HAVE A CONCERTED APPROACH. HE ALSO VOICED CONCERN OVER
THE LONGER-TERM IMPACT OF MASSIVE LENDING TO THE SOVIETS
AND THEIR ABILITY TO PAY BACK THE LOANS SHOULD
GORBACHEV'S REFORMS FAIL. HE CITED THE POSSIBILITY OF
THE USSR (AND OTHER EAST BLOC COUNTRIES) SUPPLANTING
LDC' S AS AN ECONOMIC PROBLEM FOR THE WEST'S BANKS. MR.
BAKER ADDED THAT PARTICULAR ATTENTION NEEDS TO BE PAID
TO THE LENDING PRACTICES OF THE FRG AND JAPAN.
13. THE PRIME MINISTER REITERATED HER WELL-KNOWN VIEWS
ABOUT THE WEST NOT PAYING FOR THE USSR'S MISGUIDED
ECONOMIC POLICIES. SHE ADDED THAT THERE SHOULD NOT BE
ANY "MARSHALL PLAN" FOR THE USSR. WHEN ASKED ABOUT THE
RECENT ONE BILLION POUND UK COMMERCIAL LINE OF CREDIT TO
THE USSR, SHE SAID IT IS A COMMERCIAL LOAN AND CERTAINLY
MET THE OECD GUIDELINES ON LENDING TO THE SOVIETS.
14. SHE SAID WE SHOULD ALSO BE WARY OF RUSHING TO HELP
THE GOVERNMENTS OF EASTERN EUROPE. IF WE MAKE IT TOO
EASY FOR THEM, THEY WILL SIMPLY CARRY ON AS THEY HAVE.
IT IS IMPORTANT TO TIE FINANCIAL AND ECONOMIC HELP TO
REAL POLITICAL AND ECONOMIC REFORM.
CHEMI CAL WEAPONS (CW)
15. THE VICE PRESIDENT STRESSED HIS PERSONAL INTEREST
IN MOVING.AHEAD ON A CW BAN. HE WILL DO NOTHING TO TAKE
HMG BY SURPRISE. HE RECALLED EARLIER DISCUSSIONS WITH
THATCHER IN WHICH SHE HAD EXPRESSED HER RESERVATIONS
ABOUT VERIFICATION. HE IS CONCERNED AB-OUT PROLIFERATION
OF CW CAPABIL.I_TIES TO COUNTRIES LIKE LIBYA. THATCHER
SECONDED MR. BUSH'S CONCERNS ABOUT PROLIFERATION. SHE
EXPRESSED DEEP MISGIVINGS ABOUT THE
SOVIETS' ROLE. HER CONCERNS ABOUT VERIFICATION REMAIN,
AND GORBACHEV'S DECEITFULNESS OVER SOVIET STOCKPILES HAS
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FURTHER RAISED HER SUSPICIONS. SHE IS THINKING OVER'HOW
TO TACKLE HIM ON THIS IN DECEMBER.
IN1of r
16. SHE ADDED THAT WE MUST FIND A WAY WITHOUT
COMPROMISING SOURCES TO INFORM OUR PUBLICS ABOUT THE CW
CAPABILITY OF COUNTRIES LIKE LIBYA AND SYRIA. THEY NEED
TO BE AWAKENED TO THE DANGER, INCLUDING THE FACT THAT
THE WEST LACKS AN EFFECTIVE CW DETERRENT. SENATOR
DUAYLE SAID IT WOULD BE RELATIVELY EASY FOR THE U.S. 10
DEVELOP ONE, BUT THE EUROPEANS WILL NOT AGREE TO DEPLOY
IT. BOTH SIDES AGREED THAT FURTHER BILATERAL
CONSULTATIONS ARE NEEDED.
17. MR. BUSH RECOUNTED THE SIGNIFICANT ADVANCES MADE IN
SDI TECHNOLOGY IN A SHORT TIME AND THE CHANGES IN
ARCHITECTURE THAT WILL ENABLE A SYSTEM TO BE FIELDED AT
A MUCH LOWER COST THAN ORIGINALLY PROJECTED. MRS.
THATCHER EXPRESSED HER FIRM SUPPORT FOR SDI RESEARCH.
IT IS'VITAL FOR THE WEST TO KEEP THE TECHNOLOGICAL
EDGE. SHE RECALLED THAT THE SOVIETS HAVE BEEN DOING SDI
RESEARCH SINCE THE 1960S AND ALREADY HAVE THE WORLD'S
ONLY FUNCTIONING ABM SYSTEM, WHICH THEY ARE CONSTANTLY
IMPROVING. SHE DREW AN ANALOGY TO THE NAZI EFFORTS TO
DEVELOP AN ATOMIC BOMB DURING WORLD WAR II, AND ASKED
RHETORICALLY WHERE THE ALLIES WOULD HAVE BEEN IF THEY
HAD AGREED TO FOREGO DEVELOPMENT OF THE A-BOMB.
LATIN AMERICA..
18. THE VICE PRESIDENT AND SECRETARY-DESIGNATE BAKER
TOLD MRS. THATCHER IN CONFIDENCE THAT THEY WILL MEET
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WITH THE NEW PRESIDENT OF MEXICO BEFORE HE TAKES
OFFICE. TOPICS ARE TO INCLUDE REFORM OF THE MEXICAN
ECONOMY, NARCOTICS SUPPRESSION, MEXICO'S SUPPORT FOR
CUBA AND NICARAGUA, AND THE SITUATION IN CENTRAL AMERICA.
19. MRS. THATCHER SPECULATED ABOUT THE PURPOSE OF
GORBACHEV'S VISIT TO CUBA. HE MIGHT BE PLANNING TO
REDUCE SOVIET INVESTMENT OF POLITICAL CAPITAL IN CUBA
AND CENTRAL AMERICA. MR. BUSH SAID HE WOULD HAPPILY PAY
GORBACHEV'S FARE IF THAT WAS THE CASE. IT WOULD BE A
MAJOR BREAKTHROUGH TO HAVE A MORE MODERATE CUBA.
20. THE VICE PRESIDENT EXPRESSED INTEREST IN AN
INTERNATIONAL CONFERENCE ON ENVIRONMENTAL ISSUES,
PARTICULARLY THE "GREENHOUSE" PROBLEM. THE PRIME
MINISTER DID NOT COMMENT DIRECTLY ON THE VICE
PRESIDENT'S-REMARKS, BUT EXPRESSED CONCERN OVER A FRENCH
PROPOSAL FOR A DECLARATION AT THE NEXT ECONOMIC SUMMIT
THAT EVERYONE WAS ENTITLED TO A "PROPER HUMAN
ENVIRONMENT." SHE ASKED WHAT THIS MEANS. HOW COULD YOU
ACHIEVE SUCH A THING FOR EVERYONE ON EARTH WHEN NATURAL
CONDITIONS ARE SO DIFFERENT WORLDWIDE?
21. THE PRIME MINISTER WELCOMED RECENT PROGRESS IN THE
ANGOLA/NAMIBIA NEGOTIATIONS. SHE SUGGESTED THAT THE
REASON FOR TH-E- SOVIETS' RECENTLY MORE HELPFUL APPROACH
IS THEIR NEED TO STOP POURING SCARCE FUNDS DOWN THIS
NON-PRODUCTIVE HOLE.
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WEST TO PRESSURE BOTHA. SHE REITERATED HER WELL-KNOWN
OPPOSITION TO SANCTIONS AND CITED THE GERMANS AS A
PARTICULAR PROBLEM WITHIN THE EC DUE TO THEIR "GUILTY
CONSCIENCE." MR. BUSH AGREED SANCTIONS ARE NOT THE WAY
TO DEAL WITH PRETORIA AND POINTED TO INCREASING U.S.
PUBLIC AND MEDIA AWARENESS THAT SANCTIONS ARE NOT THE
ANSWER -- EVEN THOUGH SOME INFLUENTIAL AMERICANS
CONTINUE TO TREAT THIS ISSUE EMOTIONALLY.
23. THATCHER SAID IT WOULD BE VERY IMPORTANT TO LAUNCH
A FRESH DRIVE EARLY IN HIS' ADMINISTRATION TO MOVE MIDDLE
EAST PEACE EFFORTS FORWARD. THE VICE PRESIDENT AGREED;
THE QUESTION IS HOW. WE SHOULD NOT READ TOO MUCH INTO
THE PNC STATEMENT; THERE IS A LOT OF BACKING AND HEDGING.
THATCHER SAID THE PNC DECISION ON UN RESOLUTION 242 IS
NOT PERFECT BUT IT IS A STEP FORWARD AND SOMETHING TO
BUILD UPON. IN A WAY IT JUSTIFIES HU.SSEIN'S ATTEMPT TO
MAKE THE PLO ADOPT MORE REALISTIC ATTITUDES. BUT THERE
ARE MANY DANGERS IN THE AREA, ABOVE ALL MISSILE AND CW
PROLIFERATION, AND WE MUST DO SOMETHING. THE VICE
PRESIDENT SAID THE AREA IS A POWDER KEG. HE ADDED THAT
WE SHOULD NOT GIVE UP ON HUSSEIN. THE NORMALIZATION OF
UK-IRANIAN RELATIONS WAS TOUCHED UPON AS WAS THE
INCREASED BRITISH PRESENCE IN IRAQ.
24. THATCHER SAID SHE IS SKEPTICAL ABOUT EARLY PROGRESS.
SIHANOUK IS AN IRREPRESSIBLE BALLOON OF WORDS BUT NOT
MUCH ELSE. SHE THINKS THE SOVIETS GENUINELY WANT THE
VIETNAMESE OUT OF CAMBODIA IN ORDER TO USE RESOURCES NOW
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GOING TO AID HANOI FOR MORE PRODUCTIVE ENDS IN THE USSR.
25. THATCHER SAID IT IS VERY IMPORTANT TO MAKE THE
MONTREAL GATT MID-TERM REVIEW SUCCEED. SHE AND THE VICE
PRESIDENT AGREED THAT AGRICULTURAL REFORM IS THE KEY
ISSUE FOR THE URUGUAY ROUND. SHE SAID THE UK WILL TRY
TO GET THE OTHER EUROPEAN GOVERNMENTS TO TAKE REASONABLE
POSITIONS ON AGRICULTURE, BUT REMARKED THAT IT WILL BE
FAR TOUGHER TO GET THE CONTINENTALS TO AGREE TO FURTHER
AGRICULTURAL REFORM THAN THE UK. THE`VICE PRESIDENT
SAID HE DOES NOT THINK THAT THE PRESIDENT'S PROPOSAL TO
GET RID OF ALL AGRICULTURAL SUBSIDIES BY THE YEAR 2000
CAN BE ACCOMPLISHED, AND IT MAY NEED TO BE RECONSIDERED.
I' CGUH G
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