Received from Joyo:

Sydney Morning Herald 25/02/99

*Old colonist Portugal throws financial lifeline to E Timor

By JILL JOLLIFFE in Lisbon and LOUISE WILLIAMS in Bali

The Portuguese Government is prepared to fund East Timor's entire annual budget during a transition period to self-determination, with agreed help from its European Union partners.

News of Portugal's offer came as the Foreign Minister, Mr Downer, announced agreement by Indonesia to reopen an Australian consulate in East Timor - the first foreign diplomatic post there for more than two decades.

Speaking at talks in Bali between Australian and Indonesian ministers, Mr Downer said the uncertain security in East Timor would determine the timing of the consulate's opening and staff levels.

He is scheduled to meet the Portuguese Foreign Minister, Mr Jaime Gama, at Sesimbra, a fishing village 20 kilometres south of Lisbon, on Saturday.

A spokesman for Mr Gama said Portugal had had a ministerial group examining each area of East Timor's economy to define specific needs.

"We first had hints from the Indonesians last November of their 'bye-bye Timor' option," said the spokesman, Mr Horacio Cesar. "At talks in New York they unexpectedly showed us details of their annual budget, from which we got the idea they wanted to pass the buck."

Mr Gama had been surprised to see that the current budget was "approximately that of a largish Portuguese municipality".

"After all the publicity about how much Indonesia was investing in building roads, hospitals and infrastructures in East Timor, we were surprised to see how small the budget was," Mr Cesar said.

Mr Gama had consulted with the Portuguese Prime Minister, Mr Antonio Guterres, and Finance Minister, Mr Antonio Sousa Franco, over funds available to take over the Indonesian-financed budget. It was agreed that Portugal would foot the entire yearly $US100 million if necessary, but it was hoped other countries might contribute.

"In particular, we hope Indonesia will take some responsibility, and we think Australia, as the regional power closest to Timor, has every interest in averting destabilisation. We would also like to see an American contribution."

As an EU member, Portugal can expect help from Brussels in the financing of East Timor's transition between a hypothetical Indonesian withdrawal - set by President Habibie for no later than January 1, 2000 - and an act of self- determination.

Mr Cesar stressed, however, that Portugal did not see itself as having any future stake in East Timor. "We are prepared to take a leading role in the transition, and accept all responsibilities necessary, but we're not talking about a colonial return."

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