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In total long range strategic nuclear missiles and bombers the Soviet Union leads by 2, to 2 , The Government plans a three-part package of measures — financial aid for agriculture, youth employ- ment and other job creation measures, and tax increases. The Radicals, however, are urging incomes policy initia- tives, which neither the Gov- ernment nor the SPP will contemplate at this stage.

The SPP is opposed to any tax increases. The setback to the produo don and prices disciplines governing steel appears to be only temporary. A special session of the council is now being scheduled to meet here on May 26 following a plea by Viscount Etienne Davignon, the Industry Commissioner, that steelmakers cannot afford to wait until the June 8 council meeting. There will need to be con- siderable behind-the-scenes negotiations between officials of the EEC member states, however.

If the Hay 26 coun- cil is to succeed.

There is unresolved ten- sion between the Netherlands and West Germany over the re-di vision of quotas awarded to ' Hoogovens and Hoesdx befrre their cross-frontier Estel partnership was dis- solved. A FEW months before the expiry date of its year-old statute. Projects for the next couple of years indude FFr m of modernisation work on stations, 50 new car porks and 10, baggage- carts. Film sessions will be intro- duced on certain lines, and the SNCF plans to increase car- and-train services and car-hire and bicycle-hire facilities. Half fares will be.

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Egged on by the keen M Charles Fiterman, the - Com- munist Transport Minister, the SNCF has decided not -to wait until' the fateful date of December 31, when it ends its existence as a 51 per cent state- owned company. The Government; which will be left with per cent of an officially defunct concern, still has to draw up a new legal and financial framework to take effect from the start of next year.

The gap over the year from July 1 is tons equivalent to neariy 40 per cent of the planned budget deficit of FFr 95bn for But they directly concern toe government, which contributes to them, sets the level of bene- fits and is preoccupied with the impact of the deficit bn public finances as a whole. The solution that the govern- ment proposed for to finance the FFr 12bn deficit was a combination of a once-for-all tax and a state-backed loan.

Otherwise, the major contribu- tors to tbe fund are industry and employees other than civil servants. With rising unemployment and early retirement schemes, the fund's. In these circumstances, M. Jean Auroux Minister of Em- ployment, yesterday tossed the ball back into the court of the employers and unions who manage toe fund and asked them to come up with pro- posals.

Both ore reluctant to increase their contributions. The alternative to raising new revenues is to cut existing unemployment benefits, which runs against the political beliefe of the Socialist party. But French benefits are high by British standards: a. The difficulties of finding a temporary solution have led to demands for an overhaul of the system.

But this -touches on the proposed reform of Social Security payments, which has also become a burning political issue. M Hallier said he had been through a "nightmare.

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His reappearance came a Httle more than a day after toe final deadline set in a message put out last week in toe name of the so-called French Revolu- tionary Brigades. Tbe demands of this previously unheard-of right-wing group included, the dismissal of five cabinet ministers. The Belgian Foreign Minister hopes that his tour, which will also include Israel, may lead- to a new EEC initiative on the Middle East which would build upon - the Community's dele- brated Venice Declaration of June calling for Palestinian self-determination.

During visits In. Saudi Arabia and Kuwait at toe end of last week, Mr Tin demans was forced to realise how much the expectations of. Saudi leaders pointed oat that he was the fourth EEC President in office to be. A similar meeting last autumn broke up in disarray even before the ' Fahd plan was discussed -because hard-line members of toe League objected to its implicit recognition of Israel. He has just received economic forecasts for which, on the one hand, are not encouraging enough to help him much with toe elec- torate at home.

With his Left-Liberal coalition in Bonn under growing strain and a key provincial election coming up in Hesse in toe autumn, there is nothing that could strengthen Herr Schmidt's position better than a strong economic upswing and a marked decrease in the number of un- employed.

In principle, as toe country's leading economic research in- stitutes made clear in their spring report released on Mon- day, toe conditions for this posi- tive trend seem to exist. In- terest rates while still high by German standards have been gradually falling, thanks both to toe cut in toe current account deficit and the declining infla- tion rate, which have helped boost confidence in the Deutsche Mark and thus dis- courage capital outflows. Yet; infuriatingly for Herr Schmidt, business investment remains weak, the economy flaccid and unemployment high.

Last autumn the economic in- stitutes were saying 'they ex- pected the economy to grow in real terms after allowing for inflation this year, by 1 per cent, and unemployment to average -some 1. Now they say real growth of only 0.


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True, the rate of inflation may wen be down to little more than 4 per cent by toe autumn months, but it is unemployment which remains the top domestic issue. DU 5bn surplus this year.


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  6. This figure is not large in itself, but it' is emerging; be- cause of a huge visible trade surplus of close to DM. BObn, which more than makes up for the big sums Germans spend on holidays abroad and the pay- ments foreign workers here make to their. Already, last year, the German, trade surplus with several part- ner countries — most notably France — was almost embar- rassingly large.

    This year it could become, a political irritant not quickly ' to be removed simply by revaluing the now under-valued D-mark.

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    It te a similar tale on the price increase front '' With an average inflation, rate of 4 J5 per cent expected this year. The total cost for the delivery of aircraft up to the year will be SKr The contract has to be accepted by the Government and finally approved by Parliament at the beginning of June. The opposition Social Democrat Party, which is well- placed to return to office after the general election next September, may not accept the contract The Social Democrats are in- fluenced by reservations voiced by General Nils Skald, the army commander.

    He expressed doubt whether the JAS has the development potential needed for an -aircraft which will be in service long after the turn of the century.


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    Gen Dick Sternberg; the air force commander, however, claims, that the JAS fulfills all toe specifications of the Swedish air force. The West-German response is that its public sector deficit is already too high for comfort, and -that a cut in the expected U. TSrV i'! The - controls replace the four-month price freeze which lapsed at the end of April.

    A Government-established prices board has recommended a com- plex system of controls, ranging from basic essentials to less regularly traded items. The shift reflects a 30 per cent fall in the volume of exports to their lowest level since , and a 25 per cent increase in the volume of im- ports. Exports totalled XfiSOzn. Although tobacco exports are expected to rise at least 25 to 30 per cent and maize earn- ings should double, cotton and sugar exports will be affected by drought and -poor world prices, while mineral exports will be hit by the international recession.

    Britain was in second place, followed by West Ger- many and the U. The Swapd rejection means that the first phase of the intended three-phase negotia- tions being undertaken by the Western contact group — Britain. France, the -U. If Go Hear triumphs as expected, there is unlikely to be any major change in foreign or economic. The remaining 94 MPs to make up the member house will be directly appointed by the President, with most of them 75 allocated to the armed forces, which are not allowed to vote in an election.

    Wan Li and Yao Yilin. Eleven other Vice f Premiers have lost their posi- tions as part of a bureaucratic shake-up. Most of the former Vice Premiers have been appointed State Councillors and will act as advisers to the Government, hut without direct responsibility for administration. Both Yu and Kang have been appointed Stale Councillors. The number of ministries and commissions under the State Council. China's Cabinet, has been reduced from 52 to The restructuring of the administration has been dealt with in two stages.

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    The State Economic Commis- sion which is responsible for monitoring important sectors of the economy has had its fune- tions significantly broadened. It will take over the Agricultural Commission and Energy Commission among others. The Economic Commission will be headed by Zhang Jinefu. Through mergers, abolition and the re-naming of some Ministries, one machine- building Ministry survives.

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    This year — about the same as the shortfall. The Standing Committee approved total revenue for the year of lI0. This unique piece of collaboration between Britain and India was of special interest to Marshal Dimitri Ustinov, the Soviet Defence Minister, when he visited Bangalore, in the southern state of Karnataka. As he was being shown round by Mr B. Kapur, chairman of the government-owned com- pany.

    Jaguars and the indigenously produced Ajeet fighters can be seen cheek by jowl. To this impressive display of international fighters may soon he added the French-designed Mirage Executives at Hindustan Aeronautics are arguing strongly that India should take up this option, expensive as if may be. This is based on the view that India should develop its own indigenous capacity to manu- facture any foreign defence item purchased for the armed forces. Since its establishment by the British in as an overhaul factory. The company is divided into six major centres which between them manufacture and overhaul MiGs.

    Jaguars, helicopters, and Indian fighters as well as a full range of auxiliary equipment. The first fighter aircraft it made was the Gnat under licence from Holland, since merged with Hawker Riddele y. It now makes 10 different aircraft at II factories spread over six states throughout India, employ- ing 40, people. In addition it has developed a complete range of design, manufacture, main- tenance and avionics The Indian Government has also just approved full produc- tion of a new.

    Bidders for This project include British Aerospace. Saab- Scania of Sweden and Dassault of France. Ttvo other major projects are envisaged. The first is a light transport aircraft to succeed the British Aerospace designed BAe Spain and the Soviet Union.

    There are also plans for a new light helicopter which would double as troop earner and gunship. Final offers have been invited from Aerospatiale of France a rtf. In the immediate future Hindustan Aeronautics will almost certainly start manufac- uring the MiG ground-attack aircraft already in service with the air force.