FROM THE OFFICE OF PUBLIC AFFAIRS

Count Otto Lambsdorff and I have had a very useful meeting. We are getting down to the final phase of these long and difficult negotiations, and he was kind enough to come here and tell me what he and his colleagues have been doing in Germany to help bring them to a successful conclusion.

May I say first that we would not have been able to get this far without the active engagement of the German government, and especially of Chancellor Schroeder. I want to express my appreciation to him for all he has done and all he is doing.

Our progress continues. We have now reached agreement on the issue of lawsuits against German companies brought in U.S. courts that we all believe should satisfy the legitimate concerns of German companies seeking legal closure in American courts in return for contributing to the German Foundation Initiative. Because my Government believes that the Foundation Initiative provides the fairest and most expeditious way of compensating elderly survivors, we also believe that action at the federal, state or local level which are inconsistent with legal closure would be harmful to the process we are trying to create.

The one barrier to success in these negotiations is the question of the amount of money which will be made available to accomplish the work of the Foundation Initiative. I have repeatedly urged all participants to be flexible in this regard. I am pleased to report that the plaintiffs' attorneys and the German Government are demonstrating that flexibility.

As a group, plaintiffs' attorneys have substantially reduced their original demand. I have reason to believe they are willing to show continued flexibility.

The German offer currently consists of DM 4 billion from German industry and DM 2 billion from the government. The government, despite its considerable current budget difficulties, has indicated to me through Count Lambsdorff that is considering a higher total German offer that would be accomplished through an increase in the government's share of the contribution.

All of this represents significant movement toward agreement on the last remaining issue. It is now incumbent upon the German companies to follow the lead of their government and show their own flexibility.

Our next round of negotiations is scheduled for Bonn November 16 and 17. We discussed today the type of negotiating structure that will best facilitate significant progress at this session. Our goal remains to agree on a suitable figure and to conclude these negotiations as soon as possible.