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maltatoday, SUNDAY, 9 FEBRUARY 2014 15 Cabinet Papers "there might be some virtue in align- ing ourselves more closely with the white members of the commonwealth by using the form 'by the Grace of God, Elisabeth the second, Queen of the United Kingdom, Malta and her other realms and territories, head of the commonwealth'." While the second formula was used in 1964, after 1965 Malta opted for the first formula which put Malta in the same league of all former colo- nies. The issue of the queen's role re- emerged when the government was discussing the issue of the decimali- sation of the currency in 1969. On that occasion the Minister of Finance raised the "fundamental question" on whether the government wishes to retain the effigy of the queen on the currency or whether to do away with such effigy altogether. The minister recommended that the queen's ef- figy should be retained on coins and removed from notes which should contain "effigies more representative of Malta's history and culture". Deci- malisation was finally enacted by the Mintoff administration in September 1971. Coming to terms with communist China Taking a stand against communist China's membership in the United Nations, a seat than occupied by Tai- wan, "would portray Malta as being unduly reactionary in the interna- tional sphere" Borg Olivier warned, in his role as foreign minister on 25 March 1965. The memorandum raised the question on whether Malta should vigorously champion the cause of the Republic of Chinam which was established on the island of Taiwan after Mao Zedong's successful revo- lution on the mainland. Borg Olivier immediately pointed out that "this is a lost cause" and that communist China's representation in the United Nations was not a question of 'if' but of 'when'. Malta's attitude at that time was to give tacit recognition to nationalist China at the expense of communist China. But in the memorandum, Borg Olivier pushed for a revision of this policy by pointing out that countries like Nigeria had managed to give rec- ognition to both Chinas. He pointed out that Malta's independence had in fact been recognized by both Chinas. The Maltese government was very hesitant to accept an offer by Taiwan to have its ambassador to Madrid ac- credited as ambassador to Malta. Still, Borg Olivier felt that the is- sue could not be shelved forever. He pointed out that abstaining in any forthcoming vote on China's seat in the UN was "undignified" and by keeping silent Malta risked losing sympathy on both sides. Instead Borg Olivier argued that Malta should ad- vocate a 'two Chinas' policy, through which both governments should be accepted in the UN as separate enti- ties. He also expressed readiness in accepting communist China's claim to a seat in the Security Council while Taiwan would take its place in the General Assembly. Yet an aide memoire issued in 1967 suggests that Malta continued to support Taiwan's cause to the extent that Malta was promised 9,000 tonnes of sugar in gratitude for the full support given in the United Nations. Malta only recognised the People's Republic of China in 1972. A memorandum presented to Cabi- net in 1966 reveals that the govern- ment was at pains to refuse overtures of friendship from the Soviet Union, which was demanding diplomatic representation in Malta. The demand was reiterated in a letter attached to a gift to the Prime Minister, on the oc- casion of the launching of the space craft Luna 9. "So far Malta has been able to hold off the Soviet Union on what can only be described as very implausible reasons," the report states. It warns that "any more rebuffs to the Soviet Union might provoke hostility" and notes that Malta was alone in not having any diplomatic relations with the USSR. It also states that relations with the Soviet Union were inevitable "whatever the internal political diffi- culties in taking such a step". While acknowledging the "danger in receiving aid from the USSR", West- ern states "should not take Malta too much for granted". The Borg Olivier administration al- so advocated an attitude "of complete neutrality in the dispute between the Arab world and Israel," as evidenced by a memo issued in November 1964. Making NATO pay Cabinet memos reveal a strained relationship between the Borg Ol- ivier government and NATO to the extent that the continued presence of NATO headquarters in Malta is de- scribed as a 'political liability' in view of the organisation's reluctance to ad- mit Malta as a full member or to assist Malta economically. According to the memorandum penned by Borg Olivier in 1965 "the withdrawal of NATO from Malta is an option which deserves consid- eration". The memorandum does not mince words in saying that "Malta is not enjoying any material ben- efits from the presence of HAFMED (Headquarters Allied Forces Medi- terranean)". A memo issued in 1967 reveals that the US military was making substan- tial use of Malta's flight information zone. Movements by US war planes accounted for 26% of all flight move- ments. At the time civilian flights ac- counted for 44% of movements while British military planes accounted for 30%. Malta had agreed to share Air Traffic Control costs with Britain on a pro rata basis. Borg Olivier now ar- gued that the "US government should contribute a share towards the cost of this important service" by paying £43,736. Membership in the EEC Malta was considering the introduc- tion of a consumption tax similar to VAT to make up for loss in revenue in customs duties as a result of an asso- ciation agreement with the European Economic Community, which was regarded by the Borg Olivier govern- ment as a first step towards member- ship in the EEC. In 1967 Malta asked for the com- mencement of negotiations with the European Economic Community (EEC). The government's intention was clearly that "initial relations should eventually develop in to full participation in the EEC. But a gov- ernment memo reveals certain reluc- tance on the part of the EEC consid- ering eventual full membership. "It is highly unlikely that the EEC countries could do more than write in the pre- amble to the agreement some words which would not exclude Malta's eventual membership". Moreover, another memo admits that "though politically it may be desirable for Malta to negotiate an agreement leading to full member- ship there are serious economic dif- ficulties... a country still in its tran- sitional stage cannot assume such burden with impunity". While the EEC had accepted to re- duce tariffs on Maltese goods by 70% immediately, Malta had also agreed to reduce import tariffs by 35% in the first five years and to 0% in the next five years. A report by Economic Planning Division made it clear that a purchase tax had to be introduced. The report excluded the introduction "there might be some virtue in align- ing ourselves more closely with the gued that the "US government should tance on the part of the EEC consid- ering eventual full membership. "It is Swinging 60s: Fro m Gonzi to NATO Two Chinas: Borg Olivier had no choice but to recognise the communist reality of the People's Republic of China Scenes from the 1960s: Malta captured in a calender from 1966