8094 THE WHITE HOUSE WASHINGTON MEMORANDUM OF CONVERSATION SUBJECT Meeting with President Gorbachev of the USSR U PARTICIPANTS The President James A Baker III Secretary of State Brent Scowcroft Assistant to the President for National Security Affairs notetaker Peter Afanasenko Interpreter Mikhail Gorbachev President of the USSR Boris Pankin Minister of Foreign Affairs Anatoly Chernyayev Foreign Affairs Adviser to the President Pavel Palashchenko Interpreter DATE TIME AND PLACE October 29 Madrid 1991 1 20 - 2 45pm President Gorbachev Let's spend a couple of minutes over how to organize these talks I have two or three days myself U As do I • U President Gorbachev I suggest a couple of areas First on the Middle East Conference I have a couple of problems We need to talk in detail on our internal situation Not only on the economic situation but what we are doing now J 81 President Bush This is fine why don't you start $ We can't cover everything but PrPsid n Gorbachev On the Conference I will be brief It proves again the kind of cooperation we have been able to achieve over the past couple of years Some ask whether it is worth it now to cooperate with the Soviet Union and what Gorbachev represents I must note here your balanced attitudes on this question kB' I think we still have much work to do together The assets we have deployed together over che past period make us see that cooperation is preferable Through our efforts especiallv Baker's we now have a beginning for this unprecedented Conference My impression is that we must be cautious and that the participants will doubt a need from time to time to continue - CP-E'f Declassify on OADR DECLASSIFIED PER E O 12958 I AS A AENDEOS' -'l o Y t lJAlJ -of µ -F j I JCJ nc1Not that we should work instead of themr but we are facilitators of the process We should given them a chance to work for themselves -t5 I spoke with the President of Cyprus He hopes you and I will find a way to solve that Cyprus problem This was my first meeting with him He seems a serious man j 'f President Bush He's a very good man but then the Turks pulled back JS- We hoped for progress Pr h v He said that now that we are working together we should remember that the Cyprus situation was created by force and should be solved not by force but by 6'otiations In other situations we have not put up with force In Yugoslavia the situation is of much concern They seem unable to engage in a political process despite assistance by all I don't know if you have considered raising this in the UNSC Maybe we should think about it £1 President Bush · Some believe this is an internal matter and that the UN should stay out J 8 J President Gorbachev External intervention is inadmissible taking a principled stand would be useful kB'f But President Bush The Security Council did pass a resolution not too long ago Now there is no effective central government President Bush We're open-minded Let's keep talking ycur talk with the leaders offer any hope J 21 Did P esiaent Gorbachev They went back with promises of cease fire and good offices -Bf The UN S-did impose an arms embargo seems to be effective -r- J This is after the Paris CSCE conference President Yes and it ecedent for this to happen The EC is not united on this issue $ Yes Some were hasty in saying there is no more Yugoslavia That is not helpful Maybe we should have aaditional excnanges on this CSCE may not be able to continue if we can't deal iLh this -5' t _ u L '- m IO ' May I say a word about the Conference We appreciate your role especially with Syria and the Palestinians We must continue to work together with the Syrians to attend the _ ___ - 3 multilateral conference and ensure that the Palestinians not mess things up If we are to succeed we must stay together -kS PresidPnt Gorbachev I agree Should we react to the terrorist act We'll get a question f 8 General Scowcroft We have to understand it first Presider t Gorbachev So we could do that and say it is an attempt to scuttle the conference J S' President Bush I see two problems We need to encourage Syria to participate in the organization of a multilateral meeting The other is the site for the follow-on conference The Arabs want Madrid Israel wants everything to be done in the region We need a compromise formulation Pres nt Gorbachev Today we can focus on this in the talk with Shamir We shouldn't focus solely on this or the issue of multilateral talks We need a balance 15 r But we either need to start in four days or we might not start at all Rhetoric in this conference will be extreme 21 Pn s i dent Gorbachev Settlemem s It is a question of Golan 242 and the President 1 1sh These are all tough issues chink ane• v I will say all must President Gorbachev There will be nothing new in my remarks Shall we rrvY1e to t i e second t opic _k81 fresii ent Bush Are you coming to c he Reagan Library opening on November 3 U - t Gorbachev man U I got a letter L om him He is a charming Now abou-r our domestic problems and where we are On the surface much is happening The question is how to end the crisis The only way is to accelera e reform -- market-based political and economic freedom -5 Tl1e 'e mllSt be a single w arket Awareness of this is growing The centr l q iest on is the fut 1re of our st ate After August there is a running debate and statements by reporters of declarations of independence whic h didn't change anything They are - st a nrP 1 - r-ii from which to take steps to voluntary a so iar ion' 1 -• Ev So 'lB re2 cted to Russian statements about fro 1tiers That spurred suppc rt for separacisi mcvemen s and talk about a Russian E1npire It tia s a bitter dispute® k8f '5EeREf It was difficult to reach a stage of a joint statement by 10 but the process is now launched The treaty has been signed in the form developed by avlinsky Some have said it represents a return to the center but cooperation requires some sort of collaboration µif' Ukraine said it will shortly sign the economic treaty We worked with Yeltsin on the draft union treaty and have sent it to the republics It calls for a unitary state not a free commonwealth It will have central institutions and foundations It will have control over areas of energy transport communications and Rand D We have responses from most of the republics Nazarbayev suggests the center be stronger and others agree Yeltsin has comments but the process seems to be on its way The State Council will meet on November 11 to discuss it Yeltsin is under severe pressure by those who support a different concept People who think Russia should shed other republics and go ahead alone Yeltsin understands what that would mean Russia then would be in a period of upheaval and other republics would be in a state of chaos Other regimes would rise--even Yeltsin could be jettisoned Yeltsin understands but he is easily swayed His speech had two parts On the economy he stuck to our agreed approach although on some questions he was a bit rash That's not too dangerous because he follows a path to economic reform So that is a positive part of the speech It was a dramatic and brave decision -- not his usual populism It is difficult for him but he did it I spoke to him yesterday and said I would support that positive part of the speech fef But the rest of the speech was worrisome Although he reaffirmed support for the Union he retreated on some issues in the union treaty He also made some rash statements on issues of great importance Still I will give him support because he is pushing reform j 'Y President Bush Does Yeltsin's Russia want to take over the center We can't see over the horizon kS'f That is a direct question That was when I returned from the Crimea That worried the and the democrats It took a big effort on my part to hold the line That process was stopped I helped Yeltsin to get out of his box by accepting the decisions he made during the coup His present situation is not entirely calculated Today a new union gives form to Russian leadership of the republics They can't accept direct Russian direction Most republics support a center He and I had a good understanding about this and his speech was somewhat disappointing If he goes to separatism that would be a disaster for all f'5 -- My view is we will find an optimum solution for the economic and political treaties I am working with each republic on this A crucial time for us and the West is approaching What kind of Soviet Union is wanted You need to take a clear stand and put forward a program of support Yavlinsky called last night He told me that the G-7 had done careful work and would report to their heads to make final decisions I request you to take the initiative and accept that decision What is it $370 million in cash needed today One billion financial credits expected from Saudi Arabia and Korea Finally $2 5 billion is needed for standby in case of need and to deal with dangers in this critical situation You all understand what is hannPnlna that the implications But now this seems to be a brake terday they did sign a MOU on foreign debt 'IL al point kB If' Let me be ve position has been support for exclusively -- and you In K which was sharply criticized nationalism We maintain cor behind your back Many worrj meant and how good the erect j 7· Our law requires certificati good signs of intent to refo are desperate How we can g our view we can do something to participate since they ha less we have to deal with Gworse than expected So we assurance the republics are involved u know my -ugh not to that effect eckless 1d others -- not sin speech 3S The G-7 saw reditworthiness on't know yet In d the republics for something e situation is t need additional Presiden Gorbachev The MOU is just that The republics have recognized the debt and declared responsibility for it They authorize the central bank to do it in their behalf and all will provide for servicing the debt and its obligations Let me be very frank $10-$15 billion is not much for us and repayment is not a serious problem If the current crisis escalated then we -- you and us -- will pay much more later You mention the demands of Congress and Treasury In ·a routine situation that is sensible But in this crisis situation routine deci9 -ons are not possible Political decisions are required -5 That is why I asked you about the possibility of a reactionary coup Another new element is my situation at home It is not like yours for which I am grateful But the Democrats forget foreign affairs and focus on Chicago etc Congress says how can you certify the credit We must put it on the line as a medical and agricultural credit I can't say what your need is -- only you can I can tell you what I can do now $1 5 billion for the winter while you sort out the union-republic situation If that is insulting to you I will go back and consult and see what might be done But if you want something now I can do this for two reasons it is agriculture and the republics are now involved so credit is better It is something we can start with But if that puts you in trouble at home maybe we should just defer But I can't do more right now 81 President Gorbachev We have two problems The food crisis exists and we hope for $3 5 billion before the new harvest Second we need decisions regarding the work of the G-7 experts ¢ President Bush What is the second U President Gorbachev The G-7 agreed about the current debt payout situation $370 million cash to continue faster action by Saudi Arabia and Korea for$ 1 billion and last $2 5 billion standby We will invite the IMF and the World Bank to supervise our activities in the use of our credits The G-7 representatives have all the necessary data The main G-7 worry was the need for a MOU of joint responsibility for foreign debt and a judicial person to be responsible for it That has been done The President is talking about $1 5 billion -$165 million in grants $250 million in credits now and $1 billion in 60 days The President says that is what the U S can do now It doesn't get into project aid like food processing etc People can't eat projects This is really all we can do now J B'f We want stability You remember our telling you in June of a possible Pavlov Coup We heard disturbing reports on this speech last Friday he describes them We went to Russian officials and questioned this We think we had some effect So we are doing what we can If we knew where the speech does not accord with your union agreement maybe we could help you on that J S i President G rbachev They all want to show they can handle with contacts with the U S It is a messy situation I think we can handle it I am confident but it won't be easy That is why I am so insistent in raising the aid issue now A' SJ We will talk to our G-7 counterparts when I get back Presiden Gorba hev On Arms Control we can say we examined the issues On aid why don't we say we had a full discussion of all aspects of the current situation and we will continue after we have heard a report from the G-7 deputies -k5 End of Conversation sEeREf