European Diary, 1977-1981 (51 page)

The question of Euro-MPs' salaries was also settled, after a good deal of misinformed comment, on the basis of the lowest common denominator, i.e. national salaries but European expenses, which will no doubt be a good recipe for organized hypocrisy.

Then we went back to the Charlemagne for a continuation of the Council from 11.45 p.m. until 2 a.m., everybody getting tired though not particularly bad-tempered. We ploughed on through the remainder of the mechanism of the working of the System, actually reaching decisions on most although not quite all points.

I went to bed at 3 o'clock, feeling neither particularly satisfied nor overwhelmingly dismayed. I thought it was all very slow and in danger of losing both momentum and direction.

TUESDAY, 5 DECEMBER.
Brussels.

The European Council began at 10.20 a.m. and proceeded to sit with no proper adjournment but occasional breaks of twenty
minutes or so until 9.20 in the evening. Again, strategic chairmanship was lacking. There were altogether four brief breaks, but no lunch was served at any normal time; eventually cold meat and glasses of wine were brought in at 4.15.

We got on to the concurrent studies issue at a fairly early stage in the morning. We had a quick
tour de table,
but it was not done in any very sensible order. The Danes and the Belgians who came first had nothing much to say. Callaghan had at last to make it clear that he was not coming in to the central mechanism and therefore was in no position to ask for much. The Irish and the Italians asked for a good deal, the Italians probably for rather too much, though I am not certain that this was a major tactical error. They asked for 800 million units of account a year (in interest rate subsidies), but as they could well have expected at least half of that there was something to be said for a high opening bid.

Giscard then made it clear that he was unwilling to contemplate any such sum. He climbed on Callaghan's back to block effectively and decisively the Regional Fund window, because Callaghan made it clear that the British would not give up their 27 per cent share. Giscard then said, ‘Well, that being so, perhaps even without that being so, the French, who were asking for nothing special and who were taking on the full obligations of the System, could not contemplate giving up their share.' But even beyond that, if the Regional Fund were to be increased he would have to ask for a larger French quota, which had always been in his view desirable for France and indeed had been recommended by the Commission in the early days. Therefore there would have to be a renegotiation and that being so it was quite impossible, in view of what the British had said (and in view of what he had said), for there to be any advance at this meeting on that front, and so we might as well stop talking about it.

This, though depressing, had manifest force with two major countries in a blocking position. We were therefore forced to concentrate on the other point, the subsidized loans, with the subsidy bunched in the early years so as to amount to a sizeable initial grant. Schmidt suggested a total, to be divided between Italy and Ireland, of 400 million units of account a year –I think it was over a three-year period that it was then contemplated. Giscard then said he couldn't go over 200 million, so the whole elaborate
construction looked as though it was grinding to a halt. Andreotti and Lynch looked extremely depressed, Andreotti's head sank even further into his body, and poor Jack Lynch was almost on the verge of tears.

Schmidt made a gloomy little speech saying that it all seemed absolutely hopeless and he wasn't sure that it was worthwhile going ahead with EMS at all, Germany would be better off without it in any case. I then intervened for about five minutes saying that so far from anybody being better off without it, the whole Community would be in a disastrous position, far worse off than if we had never launched the scheme. The sense of dismay, disaffection and falling apart would be overwhelming; we would find everything else, from enlargement to handling the directly elected Parliament, much more difficult to deal with. It would be a worse moment than for many years past. Giscard did not like this much because it didn't suit his book, and he said coldly that he did not share the rather dramatic interpretation of the President of the Commission, but I think that most other people thought I was right.

At this stage we had an adjournment. Both the Irish and Italians told me that the expectation of their public opinion was such that they did not think they could possibly go ahead on this basis. Schmidt came up to me in rather a gloomy way, rather agreeing with my cataclysmic speech, and we had a long friendly talk, my saying, ‘Why don't you put greater pressure on Giscard? You and Giscard are the parents of the scheme, you have this special relationship, surely you can do something about it.' ‘No, I can't move him on this,' he said. ‘His internal position is too difficult.' It remains my view, however, that throughout this Council Schmidt did not press Giscard nearly as hard as he ought to have done.

Somewhat at my suggestion, Andreotti asked for a bilateral meeting with Giscard during this adjournment, and told him that his Government might well fall whether they went in on these terms or whether they stayed out, and that therefore one could have a position exactly in line with what I had said about things being at this stage much worse than if we had never started the enterprise; we would have Italy unable to come in but with its delicate political balance gravely upset as a result of the difficult choice presented to it. However, my suggestion of this bilateral was not a good idea. It did not go well, Giscard merely saying that in
view of the Italian position maybe they would be better to take a British point of view and remain outside the mechanism for the time being, which was neither helpful nor, in my view, sensible.

We then resumed and went round the table rather gloomily once again. Schmidt proposed a compromise (he would certainly have gone, as he made clear to me, much further himself) by which we should do 200 million of subsidies
for five years
and that this should be concentrated on the two countries and divided between them according to whatever formula seemed appropriate. He asked me for one and I eventually said that two to Italy and one to Ireland might seem appropriate. This was accepted but we ground on for hour after hour on the total sum. Eventually 200 million for five years stood as the final offer, even though the Italians and Irish were still looking extremely miserable.

The whole issue had in fact become ridiculous, whether looked at from either one side or the other. What was perfectly valid in the French (and ?German) point of view was that the sum we were discussing–the difference between 200 and 400 million units of account shared between Italy and Ireland–was certainly not going to make the difference to the ability of those countries successfully to come into the System and stay there. On the other hand, the contributions required to ease the way in of Italy and Ireland by giving them the cosmetic presentation they said they needed for their public opinion, partly because of the expectations which had been built up (not unreasonably so in view of the bilateral conversations which Andreotti—and Lynch also—had had with Schmidt and Giscard) were quite small from the point of view of the richer countries. It was therefore a narrow schism, unimportant in itself, but with great capacity for damage.

In this rather bad atmosphere we went on to one or two other items. Schmidt judged that we couldn't at this stage have a proper discussion about our agriculture paper, but then got into it backwards by mistake so we half discussed it but without it being properly presented. Giscard then got very difficult about another item, fastening on to a Danish objection to our scheme for introducing the
écu
into agriculture in such a way that it should be neutral from the point of view of the operation of MCAs. He tried to insist on getting in the communiqué a point that no new permanent MCAs should be created; they should be dismantled very quickly
and automatically. We in turn insisted on getting in a balancing sentence about having regard to the agricultural price effects (i.e. this should not be a back-door method of giving a big increase to French farmers) and eventually this was agreed. Giscard, to an extent which was not immediately apparent, was playing for something which could be used later in the Agricultural Council.

Eventually the whole sorry proceedings terminated just before 9.30 p.m. There were little finalspeeches round the table, the Italians and the Irish were sad, the British almost gloating that things had fallen apart, and Giscard singularly maladroit, saying what a splendid symbol the
écu
was in French history and announcing that he was going to have some specially minted for presentation to those present, which fell like a damp suet pudding on the already heavy atmosphere. However, without any actual insults being exchanged (it might in some ways have been better if they had been), we wound up.

Schmidt and I then did the press conference. Helmut was manifestly tired but not as depressed as he ought to have been. He tried to get me to answer most of the questions, which I did, and by some miracle did them rather well, so that he said, ‘I can't think how you remember the detail so well.' whereas I had always thought that the detail of the EMS was exactly what I was weak on. Putting the best face I could on things, I described the result as being ‘a limited success, successful in that we had got something which could be in place on 1 January, but limited because we were not sure that we had more than six members'. I carefully refrained from being more pessimistic than that because I had a slight feeling even then, which was confirmed in one or two talks on the way out, that the Irish and the Italians, though dismayed, might well come round on more mature reflection.

WEDNESDAY, 6 DECEMBER.
Brussels.

Into the Berlaymont for the normal Commission meeting which, luckily, had a short agenda which I was able to complete in the morning. Everybody was a bit gloomy, but there was no disposition to quarrel with the general appraisal of limited success', with slightly more stress on ‘limited' than on ‘success'.

At 6 o'clock there was a ceremony in the Berlaymont for the
presentation of the Prix Bentinck to me (mainly, ironically, for my efforts on the EMS). I made a largely impromptu speech, which was a bit sombre. The prize was nice to have as it is quite valuable and has a certain amount of prestige. We dined—for the prize—with the Camu's at Aalst in a party of about forty, with various notabilities, and speeches after dinner, including a good funny one by Gaston Thorn.

THURSDAY, 7 DECEMBER.
Brussels.

Deep gloom had set in by this morning. I had Ortoli for half an hour before lunch. He was also vastly gloomy, thought we had a great Community crisis ahead of us, and said that he hadn't slept at all during the night. He was agreeable, as he nearly always is, and he made one constructive though minor suggestion that we should have a dinner of the four (in his view) most intelligent Commissioners before we separated for Christmas to try and look at the bleak prospect ahead—the four being him, me, Gundelach and Davignon.

To lunch with COREPER at 1.30, where I gave them a general rundown on what had happened, expressed in fairly mordant terms. Fortunately, this could not last very long because at 3.00 I had to go to the UNICE, i.e. European Employers, Twentieth Anniversary, preside over a panel discussion, and later listen to Schmidt's surprisingly good semi-impromptu forty-five-minute English speech. I then drove with him to the airport for half an hour's private talk. I found him more gloomy than on Tuesday night, and inclined to question whether he had done things right -this is an attractive side of him. ‘I am not sure I arranged it very well, but I don't see quite how I could have done it otherwise. Ought I to have put stronger pressure on Valéry?' ‘Well, I think a bit,' I said. ‘But it's very difficult, you know. I don't think I could have budged him in view of the internal position.' ‘Well, you might have tried harder.'

He had a faint gleam of hope that something more might be done for the Italians and the Irish, and was still regretting that the Regional Fund window had been blocked, and suggesting, remarkably unrealistically I thought, that while there was nothing he could do with Giscard, nothing probably anybody could do with
Giscard, I might be able to move Barre, who might be able to move Giscard. He urged me to telephone Barre, a suggestion which on reflection I discarded, I think rightly, because (i) no indirect approach to Giscard would have worked; and (ii) my information was that Barre was harder on the Regional Fund than Giscard.

FRIDAY, 8 DECEMBER.
Brussels, London and East Hendred.

The Turkish Foreign Minister, Ökcün, came to rue de Praetère at 9.30. Half an hour's talk with him. I had met him before and he seems a nice, agreeable man who likes looking at books but is not tremendously on the ball at any rate so far as his country's economic problems are concerned. He brought a letter from the Prime Minister and required various reassuring remarks from me. London for lunch and doctor. Then to Paddington at 5.00, believing that the new high-speed train which had so impressed me in September would be a good way to escape the rush hour. So it might have been if the wretched thing hadn't broken down between Slough and Taplow, so that it eventually limped into Didcot at 7.17.

As a result of lunching in a London restaurant, being on this long-delayed train and, presumably, appearing on British television a good deal during the previous week, I had a lot of encounters with semi-strangers who were all very sympathetic, but, it emerged after a moment or two's conversation, for the wrong reason. They nearly all began, ‘You must be very disappointed, aren't you?', to which I would say, ‘Yes,' and they would then say, ‘A great pity Britain not coming in,' so that I realized that they thought this was why I was disappointed, whereas it wasn't the reason at all, as I had long since reconciled myself to this foolish and typical British decision, a repetition of the same mistake for the third time in twenty-five years. Why do nations never learn? My disappointment was due to the fact that we appeared to have lost the Irish and Italians and that therefore there was a deep split down the middle of Europe which, with enlargement on the horizon, would undoubtedly mean that we were on a straight road to a two-speed Europe.