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1995 - Mr Major’s Joint Press Conference with the Italian Prime Minister

Below is the text of Mr Major’s joint press conference with the Italian Prime Minister, Mr Lamberto Dini, held in Florence on Wednesday 6th December 1995.


PRIME MINISTER DINI:

[Indistinct] and I guess that it also brings to mind other historical periods [indistinct] Prime Minister Major and his Ministers for having accepted to come here to Florence for this encounter prior to the European Union Madrid Council. Of course we are full of gratitude to the Mayor for having made it possible to host these encounters here in this beautiful Palace.

I must say, to begin with, that these talks have helped to reinforce and strengthen the ties of friendship that exist between our countries, they are historical indeed and long-standing and both have helped to strengthen the personal ties and the friendship that exist between myself and Prime Minister Major, as well as the other Ministers.

We have chosen to have these encounters here in Florence because it shows how strong these ties are. In fact for those of you who are not familiar with this beautiful city and who have had a chance to get to know it will know quite well that there are numerous distinguished British statesmen and guests who have come here in fact throughout the previous and current century. I must say that this is a special sign therefore of the friendship between our two countries.

The aim of this meeting was to have an exchange of views and to compare our opinions on the [indistinct] with regard to the problems and issues that Europe is faced with. As I was saying earlier, of course we are going to have our Madrid European Council meeting and there are other meetings which have been scheduled of course at the European level throughout 1996 and in the future as well. There are numerous points of convergence vis a vis the issues that we have been dealing with together.

The agenda that has been planned for the Madrid Summit meeting is very rich indeed and very significant and the Heads of Government will of course be discussing the timetable for the European Monetary Union. Of course there don't seem to be major differences between our countries with regard to the future whereby we will be able to create a [indistinct] European Monetary Union and especially with regard to the fact that in terms of this timetable, again we don't wish to advance our decision to go into Stage Three before the spring of 1998, as was originally scheduled.

There is another point of convergence with regard to these approaches and that is that in consideration of our spring 1998 meeting [indistinct] will pass over to the Stage Three, to stay free of the European Monetary Union, while we both believe that we must very carefully analyse and assess the potential and likely effects at Community level of a division or split amongst European member states and those of course that may join and become members in 1999. This is what has been scheduled and hopefully we will be able to follow this timetable, others will be left out unfortunately.

We have indicated some of these risks and some of these consequences, which of course will have implications at Parliamentary level, and I think that the risks which will arise pursuant to this division of course will have an impact on the global economic stability. We agree that the consequences or the effect of this split or separation, division as it were, the effects on the economy as well as the political risks that are involved are paramount and hence we must be very careful assessing all these issues.

There is another concern that we will be discussing in Madrid and this issue has to do with subsidiarity. In other words, at Community level, it will be necessary to restrict some of the functions which cannot be executed at national or local level.

And I would say that there is a feeling that we basically share in our countries, and in other countries as well, a feeling according to [indistinct] the implementation of the single market, perhaps there have been some excesses in Community regulations in regulatory decisions which of course always aim at positive results, ie, reviewing possible distortions that exist in terms of business competition so as to be able to take them on at the same level. The regulations of that have been adopted, perhaps there have been some excesses, and we have now come to the understanding that these are all aspects that have to be reviewed, especially so as to avoid creating constraints in the future that are not necessary.

I would say that the Community must be able to do what the countries cannot do themselves without becoming concerned with other issues, as I said, which can be easily regulated and handled at national level and at local level as well of course.

There are other subjects which of course will be analysed and examined in the course of the Madrid Council meeting, and this includes of course the situation in former Yugoslavia. And we have been discussing this issue not only because our countries will be operating in that area, in that theatre, the peacekeeping forces following the Dayton agreement but also because all the actions that are going to have to be taken and the efforts and commitment are going to be so huge for our countries, for European countries especially but others as well, in terms of the reconstruction of those geographical areas in the former State of Yugoslavia. So this is a financial commitment as well as being an humanitarian one. In Yugoslavia there will be Italian troops, together with British contingents, and of course this is one of the subjects that we have been discussing together.

I would also like to add some additional comments. I stressed to Prime Minister Major how much importance Italy attaches to the results of the Barcelona Conference in terms of the strengthening and consolidation of Mediterranean ties, and I think that in this connection as well there is a total and full understanding and agreement as to the need to try to bring together and to bring closer other countries in the other flanks of the Mediterranean area during the Italian Presidency, so initiatives will be taken, as has already been expressed in the parliament, so as to be able to comply with the Barcelona declaration. This is one of the objectives which we think top priority should be attached to.

We were talking about the subject of subsidiarity. I would say that we are in full agreement as to the fact that the governments need to make special efforts so as to be able to bring Europe closer to its citizenry and I think that this should be seen in [indistinct] of the Intergovernmental Conference which will be initiated in the spring of 1996. And I would also like to emphasise the fact that Prime Minister Major has expressed his agreement and his willingness to support the possibility of initiating this conference in Italy during the Italian Presidency more or less at the time that has been scheduled, ie, the beginning of the spring.

And I would say therefore that in this connection we are once again in full agreement. I was talking about the fact that Europe has to be brought closer to its citizens on the citizenry. The Intergovernmental Conference will be discussing and reviewing major issues that have to do with the transformation of the European Union, ie what was referred to as the two pillars, the second and third pillars of the Maastricht Treaty. And I would say that this is an issue that is closely related to the enlargement of the European Union and I would say that from this point of view we are in full agreement as to the fact that we need to review and assess the implications of this enlargement and extension of the Community, even before it will begin talks and negotiations with these countries. In fact there are issues that have to be dealt with, there are actions that have to be taken above and beyond the reforms relative to the operations and functioning of the institutions, we are also going to have to review and revise some of the common policies. These policies of course also have economic and financial repercussions for our country as well as for all the other European Union member states. And these consequences and implications and modifications that may be necessary vis a vis these policies are going to have to be carefully assessed and weighed and examined and therefore decided upon before even beginning this negotiation.

I think that those of you who follow this carefully realise that there is going to be a direct influence on the own resources of the Community and the Community budget and the contributions that the member states are going to have to make. In other words what the taxpayers are going to have to be putting into this. I would say therefore that these are paramount issues and concerns and, as I said, we are in full agreement on the fact that we have to have a very in depth analysis of all these issues before taking any specific decisions as to the enlargement of the Community.

The Intergovernmental Conference will have a mandate which will be redefined at the conference at Madrid and it will then be further developed by our Foreign Ministers, the two pillars of common foreign policy, defence on the one hand and domestic security and judicial issues on the other hand will of course require very careful examination and there are different viewpoints regarding these issues. I think therefore that once again we are going to have to try to strike an even balance between the prerogatives and functions at Community level. This is going to have to be done at an intergovernmental level and of course there are other issues at Community level and the Community government, ie, the Commission, will be empowered as it were to take initiatives so as to pursue these assessments.

The third pillar, as I was saying earlier, has to do with the domestic security and judicial affairs and in this connection would say that the fight against organised crime requires the full and global cooperation amongst all countries, ie, the European Union countries, and this is going to be important in terms of the fight against drug trafficking. With regard to this issue I must say we have had an exchange of views and Prime Minister Major did make some suggestions in an attempt to try to prevent the flow of drugs, the trafficking of drugs, before it even gets to our continent, in other words we try to block it at its point of origin, and I would ask Prime Minister Major perhaps to take this up during his comments.

These are the main subjects and issues that we wanted to brief you on and these are therefore the issues that we have been dealing with in the course of our talks and encounters. There are other problems that have been tackled by the Foreign Ministers during the course of their talks, and by the Defence Ministers. As you can see, they are all present, they are all here with us this afternoon. But at any rate I would say that these are the prominent or main issues that we have been focusing our attention on and that I wanted to report to you and bring to your attention.

PRIME MINISTER:

Prime Minister, thank you. I think you have set out a very comprehensive account of many of the matters that we have been discussing over the last few hours.

I would like firstly, if I may, to thank you, Prime Minister, and the Mayor of Florence for your hospitality in this remarkable and historic city. Over the years I have attended summits in many glamorous places. I cannot recall any quite so beautiful as this. If the central heating lacks something, the decor most certainly doesn't. And my colleagues and I have been delighted to be here on this occasion.

This summit I think comes at an important time both for Italy and for the United Kingdom as we prepare for our respective Presidencies of the European Union, in the case of Italy, and the Western European Union in the case of the United Kingdom. And what I think has been demonstrated very clearly in our discussions, not only mine but those of our colleagues, the Foreign and Defence Ministers, is the real warmth and common ground that exists in the relationship at the moment between the United Kingdom and Italy.

The Prime Minister set out many areas of agreement. There is one I would like to touch upon that has been very apparent over the last two or three years, and that is to take the opportunity of being in Italy to express my thanks to the Italian government for their help and splendid hospitality to United Kingdom forces who have been operating in Bosnia, but operating on many occasions out of Italy. It has been a joint endeavour, it has been a vital role for both countries but the generosity and hospitality that has been shown to British troops is something that we very deeply appreciate and will not forget.

We have had on this occasion the opportunity, with Foreign and Defence Ministers, to have a productive range of discussions over a whole series of issues. We agreed on the importance of a European Union that looks outwards, that deals with subsidiarity and deregulation. And I think we share the hope, as far as subsidiarity is concerned, that we might be able to enshrine that principle in whatever treaty emerges from the Intergovernmental Conference that lies ahead of us - a European Union that looks both to the east and to the south for enlargement, that looks across the Atlantic to our relationship with the North American States and looks to our partners around the world.

We discussed the prospects and importance of promoting and encouraging trade, growth, prosperity, security. And in many ways that has been one of the key things of the summit. We agreed to work closely to enhance the competitiveness of European business. The Prime Minister and I share the view that Europe has to be competitive, not just one country with another in Europe, but each European country with countries in the Pacific Basin, in Japan, in the United States and elsewhere.

And with that in mind we discussed deregulation, the simplification of procedures, the deregulation of regulatory reform and removing many of the burdens on small and medium sized business that both of us believe have been over-imposed over the dears both perhaps at European level and in some cases at national level as well.

We look forward to the Intergovernmental Conference and the events that would follow it. We agreed that the conference that lies just ahead has to be seen not as an entity on its own, but in the context of the other important challenges that will face Europe over the next five to ten years. For that reason we felt it should concentrate on practical, realistic measures and the detail of how those measures might be carried out.

We confirmed our commitment to enlargement, I see two principal themes of discussion on enlargement at Madrid next week: firstly, we should underline the need for a full analysis of the implications of enlargement, a full analysis of the implications for reform of European Union policies such as the Common Agricultural Policy, so that enlargement, to which we are committed and to which we have given our word to other countries, can be prepared on a sound and sustainable basis; and that secondly that we should ask, without delay, the Commission to proceed with work on preparing their formal opinions on the candidates for membership so that accession negotiations can start, with the benefit of that information, with at least some candidates and with minimum delay after the end of the Intergovernmental Conference.

We had an extremely useful series of exchange of views on economic and monetary union. The Prime Minister set out for you some of those views a few moments ago. Both of us look at the prospects of the European Union proceeding with monetary union and the possibility, perhaps probability, that only a minority of states would go ahead upon the present Maastricht timetable. And we believe that we need to examine the implications for the whole European Union of a split in which only a minority of states might go ahead with a single currency and in the first instance a majority of European states would not be able to go ahead. And we think that is very probable at the present juncture and that we should examine what the implications of that might be for ail members of the European Union - what are the implications for the exchange markets, for the single market, for the relationship between those within the single currency and those beyond the single currency? And these are important practical matters that we believe need to be examined and considered so that decisions in future can be taken with the advantage of having had those matters properly examined. There are great implications with that, it will be a new departure for the European Union and we need to have a proper examination of what that means.

We discussed and recognised the need for reform of the Common Agricultural Policy and the structural funds and that too needs to be carefully examined and I suspect we will reflect those concerns in our approach to the Madrid European Council in a week or so.

The Prime Minister touched upon some ideas I put to him about dealing with the drugs problem, and I briefed the Prime Minister on an initiative I shall be proposing with others for the Madrid Council. What I would like the European Union to do is to examine effective help to small Caribbean states in the east Caribbean to cut off the trans-shipment of drugs from Latin America, via the east Caribbean, to northern Europe. It is one of the great routes of drugs to northern Europe, it is a problem that every Western European country faces, it is one we all feel immensely strongly about and I will have some proposals to put, with others, to the European Council about how collectively and bilaterally we might assist the eastern Caribbean countries in blocking off that large supply of drugs from the east Caribbean before it comes through to pollute the lives of so very many people in Western Europe. And the Prime Minister was very supportive in these proposals and we will seek to take them forward at the Madrid Council at the end of next week.

We will be working very closely with Italy to strengthen the European Union's relationship with its Mediterranean neighbours, we recognise the great importance of that and we share the views that the Prime Minister set out a moment or so ago. We would like to see a promotion of stability and further economic prosperity in the Mediterranean region, building on the work that was done, and the relationships that were forged at the recent Barcelona conference.

We both I think would like to strengthen further the European Union's relations with Turkey and I hope that the Customs Union between the European Union and Turkey will be ratified by the European Parliament later on this month.

We believe it is important to continue to work for a settlement to the situation in Cyprus and that is something we British feel passionately about. We have had troops in Cyprus for 29 years, the time for a settlement is long past and I think we will be looking to see what can be done to promote an end to that intercommunal dispute that has gone on for far too long.

We discussed also the very important UK/Italian initiative on cooperation with central European associates and we would both wish to involve the central Europeans even more closely in European Union governmental work on foreign affairs and on justice and home affairs.

We agreed that we wanted to see effective follow-up on key elements in the new transatlantic agenda that was discussed at the European Union/United States summit in Madrid a few days ago, and in particular the proposals on trade, including the study on reducing or eliminating barriers to transatlantic trade and of course to increase cooperation there also against drugs and against crime.

We discussed, and so did our Defence Ministers, our growing defence relationship. There are, we think, many areas where we can work together during our respective European Union and Western European Union Presidencies. I would like our British Western European Union Presidency to focus on what I suppose you might call operational practicalities. We need to strengthen the Western European Union and improve its ability actually to do things in the peacekeeping and humanitarian areas. And I hope very much that we will enjoy the support of Italy and their important contribution in this enterprise.

I mentioned a moment ago the appreciation we feel for the outstanding host nation support we have received from Italy as a NATO force involved in Bosnia. The Prime Minister and I also discussed developments in former Yugoslavia following the Dayton peace agreement and our respective contributions to the Peace Implementation Force in Bosnia. Both of our two countries, in separate ways, are going to have a crucial part to play in implementation of the Bosnia peace agreements and we will be holding an international conference on this in London later this week that Malcolm Rifkind, the British Foreign Secretary, will chair. We think it is vital not only for Bosnia, but for European security and the transatlantic alliance, that the difficult task of implementation should be a success and we hope to set out the guidelines for that at next week's conference.

And finally, Lamberto, if I may, just a further word of personal thanks for the warmth of your reception here in Florence and for the openness of the discussions that we have been able to have at Prime Ministerial level and also at Foreign Secretary and Defence level. I look forward to pursuing some of our joint interests at Madrid this week. I think it has been an extraordinarily useful summit and I am very grateful for your invitation and delighted to have been here today.


QUESTIONS AND ANSWERS

QUESTION (AP Dow Jones):

Prime Minister Dini, yesterday, you said with some considerable force Italy could bring its deficit-to-GDP ratio to 3% a little sooner than 1997 in order to make the new criteria. Given that Italy and other countries as well - Belgium and others - don't make the criteria on other items, why should Italy be asked to make such a sacrifice ifs any event?

PRIME MINISTER DINI:

I indicated to Parliament what the effort was that would be required in 1997 on the side of budgetary policy if Italy was to qualify in terms of the ratio of deficit to GDP, to bring it down to 3%. That was the purpose of my presentation yesterday. No decision has to be taken on this point yet. It will be part of the preparation of the 1997 budget and the document that comes out in the middle of 1996.

I don't think there is a single country that questions that criteria must be respected in order to qualify for Phase 3 by 1999 so what is said is subject to an element of appreciation and of judgement on the part of governments. What is written in the Maastricht Treaty Protocol is the reduction in the debt-to-GDP ratio that must be continuing over a period of time. That contains an element of discretion and therefore at this point in time it is difficult to say that, say, The Netherlands, Ireland or Belgium would not qualify on the basis of the last criteria; they must all qualify in terms of deficit-to-GDP ratio. That is right.

QUESTION (Matt Fry, BBC):

Prime Minister Major, you sound quite ecstatic today. Have you found a new friend in Lamberto Dino regarding any misgivings about monetary union and what will this friendship, if indeed it does exist, signal to Germany and France?

PRIME MINISTER MAJOR:

I don't know quite what you mean by ecstatic. I have repeated what I have said on a number of occasions in the past about the matters that needed to be examined.

European Monetary Union, when and if it proceeds, will be very important for the whole of Europe; very important for those countries that may be part of a single currency and it will be very important for those countries that are not part of a single currency. It will affect everybody, whether they take part in it or not and what I have said repeatedly for a long time is that we have to examine not just the Maastricht criteria and whether individual countries will meet it but what the implications will be for the whole of the European Union of some countries proceeding and other countries not. That is a novel proposition.

We have never seen anything in the European Union that will be quite like the development of monetary union with a minority going ahead and very probably, on present projections, a majority not going ahead and what I have been saying is we have to consider what that means. What does it mean for the relationship between the countries in the inner core and the countries outside? What it will mean on the foreign exchange markets? What it will mean for Structural Funds and the Common Agricultural Policy? What will it mean for the voting habits of the countries within the inner core and the countries outside?

Those are questions the answers to which have not yet been examined properly at European level and what I have been saying and what I think the Prime Minister said as well to you a few moments ago is that we should examine those matters and see what they would mean because whether any individual country goes ahead or does not go ahead, the answer to those questions is very important for the whole working of the European Union and above all, of course, there is the question of whether those countries not in the first tranche would be able subsequently,  if you will forgive the jargon - to converge and join later or whether the practicalities would mean that many countries would diverge and not be able to join later and that becomes especially important when you think at the same time we are going to be looking at enlargement and a number of other institutional changes.

QUESTION:

Isn't that slowing it down?

PRIME MINISTER MAJOR:

With respect, it isn't a question of slowing it down or speeding it up. If this proceeds - when this proceeds - it has got to be right. If it isn't right, there will be chaos and difficulty right across Europe. That is the point that I have made consistently over many years to my European partners.

Predominantly economically, one has to be certain what the implications of this quite novel procedure of moving to a single currency might be and the question is much more important than the way you put it - is it to slow it down or whatever? The question is to make sure that Europe realises what the implications of proceeding are and in particular what the implications of only a minority of members proceeding might be as things may change but as we meet today, the working assumption would be that less than half of the European Union would in fact meet the Maastricht criteria and be able to proceed by the date of 1 January 1999.

PRIME MINISTER DINI:

If I may, I would like to add a few words on this;

First of all, we have two years ahead of us to study the problems in depth. Secondly, the matter has been raised by Prime Minister Major and also by myself in Majorca and we had a first exchange of views on the consequences of having a split in our European Community in regard to the Union when we come to it. Today, we have gone more in depth into analysing the areas that need to be looked into.

I myself mentioned some of these things yesterday in my statement to Parliament ahead of this meeting which shows we were thinking on parallel lines even before this meeting.

QUESTION:

Gentlemen, can it be said that you see yourselves as allies in a movement against what would be destabilising for Europe?

PRIME MINISTER MAJOR:

I think we are allies in examining in detail the implications of what is proposed so that everyone is aware of what those implications are. I think to that extent certainly we are allies. We are not battling against our European colleagues. What we are trying to do is to examine very practical matters that follow from the decisions that previously have been taken and the decisions that lie immediately ahead.

PRIME MINISTER DINI:

I quite frankly expect that all our colleagues and the ministers of finance of the Union will agree that the studies and analysis that we have mentioned are indispensable before going ahead because the implications may be strong and important for both countries that could be in as well as those that could be out of the Union.

QUESTION:

In the meeting with Gonzalez, you said [inaudible].

PRIME MINISTER DINI:

I am still of the same opinion [indistinct] in the last 24 hours. I think we are moving in the right direction of good government continuity during the first six-month period of 1996 being assured.

QUESTION (Jon Hibbs - Daily Telegraph):

Mr. Major, can I just refer you to the Joint Declaration on the future of the Western European Union, paragraph 3, where it talks about allowing a growing cohesion [indistinct] the need for political, economic and military instruments as part of a common foreign and security policy?

How does this square with the remarks that the Secretary of State for Defence made in Paris yesterday about the folly of merging the European Union and the WEU and what do you think your Eurosceptic backbenchers are likely to make of these moves?

PRIME MINISTER MAJOR:

I will answer you and the Defence Secretary may wish to add something; I will certainly give him the opportunity.

I think there are two points here. The first is the extent to which we can continue to cooperate in the Western European Union using the Western European Union as the European arm of NATO and that is our policy. What is not our policy and what the Defence Secretary will have said yesterday is to let the Western European Union fall under the direct aegis of the European Union and the European Council; that is emphatically not our policy. Our policy is to promote cooperation and cohesion within the Western European Union and to ensure that it becomes the European arm of NATO and the reason we take that view is of course there is a different membership between the Western European Union and the European Union itself and in the European Union there are a number of nations that are neutral.

Our position has been quite clear: NATO has primacy; NATO must remain having primacy and we do not see NATO being supplanted, short-term or long-term, by the European Union or by the Western European Union becoming subordinate to the European Union so what we are talking about here is continued cohesion and development of the Western European Union as the arm of NATO, not as a part of the European Union and I think you will find that is what the Defence Secretary was saying yesterday.

QUESTION:

Two questions, one to the Italian Prime Minister and one to the British Prime Minister, the first one to the Italian Prime Minister Dini.

Today, the exchange markets did well and the stock market too. Do you think that this was due to your declaration yesterday in Parliament that this manoeuvre to stabilise the [inaudible].

PRIME MINISTER DINI:

[Inaudible] rapidly to my declaration which might be a target or objective for 1997. I rather think that beyond fluctuations we witness every day in the exchange markets trend is that probably markets are having a more relaxed view as to the political prospects for our country.

PRIME MINISTER MAJOR:

As for the consequences of monetary union, one of the themes underlying our discussion is that it is very difficult to foresee with certainty what the consequences of monetary union may be without the work that we have been asking to be carried out that has not yet been carried out. It is perhaps rather surprising that many of the questions that we have identified, which have been around for a long time, have not yet been the subject of detailed study within the European Union but for one reason or another they have not and we are now pressing that they should have such a study and when that is done it might be possible to answer your question with greater credibility as to the impact of it in due course but at the moment I think the answer from anybody, whomsoever they might be, would be an opinion and not a certainty and I would prefer to wait for the work.

PRIME MINISTER DINI:

I would add with regard to the strike in France,- I think, as we learned from our own bitter experience in the past and recently, when a government imposes a decision having wide implications for all the citizens is a time which has now gone. It is not possible to do that any more and making decisions which are necessary in the interest of a nation is something requiring dialogue and discussion, not imposition.

I think that also countries with a strongly centralised government the power in the hands of the President in France is not complete and full. This is a teaching for them and for all of the others. You know what we did in Italy especially as to the reform of the social security system and you know how we did work on that occasion.

QUESTION (French News Agency):

Mr. Major, what do you think about Mr. Dini's proposal of a simplified mechanism with regard to European Monetary Union?

Prime Minister Dini, I would like to know whether you made that proposal because you are afraid that Italy will not be able to participate in the third stage of the monetary union.

PRIME MINISTER MAJOR:

A number of suggestions have been put forward already as to what mechanism might exist to maintain some comparability between those countries inside a single currency and those countries outside. Clearly, for the working of the single market, it is attractive that the value of currencies does not bounce all over the place and that people follow sensible economic policies.

I don't, to be blunt, think it practicable to go down the route of artificial fines for countries that do not meet particular criteria. I know that has been suggested, I do not agree with that approach. What I do think is a practical approach is to look at the sort of criteria that we have all agreed in the past are sensible economic criteria on their own merit - the Maastricht criteria we set out, they could have been different but they are an indication of that - and I think providing there is agreement between governments to follow that sort of sensible economic policy, we will continue to get convergence over a period of time and I think that is the right way to do it. I don't think that can be artificially imposed.

To take matters a little further, I would be quite sceptical - very sceptical - of the suggestion of a new form of exchange rate mechanism outside the single currency. I think there are many disadvantages to that; I won't enumerate them all now for we do not have enough time for me to do that but I don't think that that would be a credible way forward and we are going to have to look at setting the right sort of economic targets and let governments follow sensible economic policies to ensure that those targets are met and that seems to me the most desirable way to try and reach the convergence that is firstly desirable in its own right and secondly, important for the satisfactory working of the single market.

PRIME MINISTER DINI:

What I suggested did not differ significantly or greatly from what Prime Minister Major just said and certainly the suggestion I made was not out of fear that Italy may be out because we will need some sort of consultative body or arrangement to make sure that the countries that are out pursue sound policies, policies of convergence, without of course thinking of a change to the mechanism that would be dead once monetary union is created. The fact remains that if not all of the member countries of the Union join the monetary union from the start, it might have adverse consequences and also instability of exchange rates so we should make sure that we have something in place as to the countries who are out so that they can work closely towards convergence following sound policies and therefore trying to ensure a reasonable degree of exchange rate relationship between the monetary union and the currencies that will remain temporarily out.

QUESTION:

At this point, there are different forces meeting in Rome from the different political parties so as to try and pursue a common foreign policy. In fact, we are devoting tomorrow to the European issue and I think that the [inaudible] party is also trying to establish May as an electoral deadline. Do you think if you go to May, it would ensure this kind of continuity that is so desirable?

PRIME MINISTER DINI:

This is something that I desired without having really expressed it clearly in Parliament. In other words, if the political forces succeed in striking an agreement as to the European policies - and this of course basically refers to foreign policy - then I think that this would be a very important sign of political maturity because foreign policy needs to be less out of the divisions as much as possible. We are talking about a policy which needs to have bipartisan support.

There are talks under way which are very positive I must say. I also think that it is positive that following yesterday's discussions we are having these meetings so as to try to come to an agreement as to what the parties believe to be an appropriate date to be suggested at a later time to the Head of State for elections to take place. This is of course an opportunity to ensure government continuity throughout the Italian Presidency of the European Union and I think therefore that this is a very positive approach.

QUESTION:

Prime Minister Dini and Prime Minister Major, you mentioned that your countries [indistinct] of the European Union and the Western European Union during the delicate implementation of the peacekeeping force in Bosnia. Did you discuss any specific aspects of cooperation between your two countries to that extent?

The second question is addressed to Prime Minister Dini, it has to do with the [indistinct] decree. Minister Fantozzi said that for Italians there were going to be new taxes. Would you like to comment?

PRIME MINISTER MAJOR:

What we were really looking at were the general problems and the size of commitment that the United Kingdom and Italy would both separately make to the peace implementation force and we were really casting our minds forward to the peace implementation conference that the Foreign Secretary will chair in London early next week so there isn't really much more to say than that.

PRIME MINISTER DINI:

With regard to the [indistinct] decree, I guess I should say that it is seen as a new tax hike by journalists, by the writers of headlines, but I don't think that this is very appropriate. In fact, the [indistinct] decree contains certain tax measures but this was already provided for in the Finance Act and therefore it is an integral part of the 1996 Finance Act. Hence, it isn't a novel element, it is something that has already been done and if there are tax measures that need to be taken for 1996, they will be disclosed or announced through a decree at the end of the year. [Indistinct] I don't think that we should be frightened by this. It isn't question of a strong tax hike but some necessary adjustments.

QUESTION:

Prime Minister, it seems to us that the outcome of the debate could refer to the continuity of the government throughout the Italian Presidency. Do you think that a change in the present coalition would change the European debate?

PRIME MINISTER DINI:

I think that it is too early to answer the question that you are rightly posing today. I think that perhaps we should await the time of discussions and contacts that will be pursued before giving you a definitive or conclusive response. These are all possibilities. The outcomes that you are implying are possible but as I say, it is too soon what will exactly happen.

QUESTION:

This morning, there was discussion on the Mancuso affair. Do you think that you should comment on the appointment of a new Justice Minister?

PRIME MINISTER DINI:

I think that in respect of the court, since you do not know what the final decision will be, we should await that decision before proceeding further. I think the court has made a ruling according to which the work of the government and governmental initiative and the initiative of the head of state were totally justified and warranted and therefore this ruling clarifies once and for all what Parliament's possibilities are in terms of giving a vote of no confidence. As I said, this refers to the immediate replacement of a minister who no longer received a vote of confidence from Parliament. I think that the constitutional court therefore has fully acknowledged the work carried out by myself and by the Head of State and I must say I am fully satisfied with this outcome. I think that we will continue therefore with the necessary verification and I am going to have to once again address Parliament and meet with the Head of State so as to express the fact that I have executed my mandate and in terms of the future horizons, we certainly won't leave Italy without a minister of [indistinct] and justice and of course it is going to be somebody who is knowledgeable on these issues.

QUESTION:

Do you already have a name in mind?

PRIME MINISTER:

No, I must say I don't yet.