Downing Street Years - Margaret Thatcher [452]
Indeed, the first three European Councils of my second term were very much of the traditional mould, dominated by finance and agriculture: and their outcome was equally traditional — a British victory on points. But from then on the Community environment in which I had to operate became increasingly alien and frequently poisonous. The disputes were no longer about tactical or temporary issues but about the whole future direction of the Community and its relations with the wider world changing so fast outside it. The Franco-German axis became more evident; and with the unification of Germany that relationship became still more lop-sided, with German dominance increasingly pronounced.
The Franco-German federalist project was wholeheartedly supported by a variety of different elements within the Community — by poorer southern countries who expected a substantial pay-off in exchange for its accomplishment; by northern businesses which hoped to foist their own high costs on to their competitors; by socialists because of the scope it offered for state intervention; by Christian Democrats whose political tradition was firmly corporatist; and, of course, by the Commission which saw itself as the nucleus of a supranational government. In the face of these powerful forces I sought for allies within the Community and sometimes found them; and so my strategic retreat in the face of majorities I could not block was also punctuated by tactical victories.
Ultimately, however, there was no option but to stake out a radically different position from the direction in which most of the Community seemed intent on going, to raise the flag of national sovereignty, free trade and free enterprise — and fight. Isolated I might be in the European Community — but taking the wider perspective, the federalists were the real isolationists, clinging grimly to a half-Europe when Europe as a whole was being liberated; toying with protectionism when truly global markets were emerging; obsessed with schemes of centralization when the greatest attempt at centralization — the Soviet Union — was on the point of collapse. If there was ever an idea whose time had come and gone it was surely that of the artificial mega-state. I was, therefore, convinced not just that I was right about the way forward for Europe, but confident that if the Government and Party I led kept their nerve we would be vindicated by intellectual developments and international events.
FINANCE AND FARMING
After the 1987 general election I was in just the mood to force the Community to live up to its previous protestations of virtue. For all the talk of financial rectitude at and since the Fontainebleau Council of 1984, there had still been no effective budget discipline and no binding limits on spending under the CAP. The rebate I had won had limited our net contribution from rising to a totally unacceptable level; but several of our Community partners now wanted to cut or eliminate it. There was a large Community budget deficit which was starting to concentrate minds. But from the Commission it had provoked the traditional answer to any financial problem — an increase in the Community’s ‘own resources’. They wanted to increase that sum not just to the 1.6 per cent of VAT which we had agreed at Fontainebleau might happen in 1988, but to 1.4 per cent of Community countries’ GNP (equivalent to 2.2 per cent of VAT receipts). There was also on the table a pretty blatantly protectionist proposal, strongly supported by the French, for an Oils and Fats tax. This was, it is true, to be matched by measures to control spending on agriculture where huge sums were going on storing and disposing of surpluses, and to improve budget discipline. But these were not tough enough. Moreover, the Commission was still trying to whittle away at what I had secured at Fontainebleau by proposing to change our rebate mechanism. And M. Delors also wanted to double the structural funds (that is, spending on Community regional and social policy). This