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By Root 2688 0

everything really hinged — everything that is apart from the maintenance of our rebate on which I would not compromise — on the measures to control agriculture spending. The position here was far from satisfactory. I was still unhappy about the ‘agricultural guideline’ being proposed. But even more important was the way in which the Commission’s idea of applying ‘stabilizers’ was to be put into effect. There were basically two possible ways of cutting agricultural subsidies. One was to tax overproduction by means of what — in another piece of Community jargon — was described as a ‘coresponsibility levy’. This might have a place, but it was not the best method. The other way was to apply automatic and cumulative price cuts once a certain level of production was breached. This was the ‘stabilizer’ mechanism. It then fell to be discussed what the ‘minimum quantity’ of any particular commodity would be before the mechanism began to operate — for different agricultural products would require different formulae according to the market in which they were being produced — and what the price cuts should be.

It is also worth adding, however, one other possibility which I never actually advanced as an alternative to either of these routes but which from time to time I considered. This was to revert to a national system of subsidy for agriculture, thus bypassing the whole cumbersome Community apparatus altogether. It would, of course, have required a complete rethink of the regime imposed by the Community and could only have been possible if other countries had wanted to pursue the same approach. The disadvantage would have been that individual countries would have been competing in subsidy and probably our farmers would have lost out in that race to the French and Germans. It would only have been desirable if agriculture had been brought effectively under the GATT — and the difficulty of doing that was to become increasingly evident. But I was definitely attracted to a scheme by which each nation took financial responsibility for writing off surplus agricultural stocks and proposed this, without much success. I also raised with Helmut Kohl, when I saw him just before the Copenhagen Council, whether it might not be better if Germany used nationally financed aids to assist her small farmers — though these must not be used to finance increased production. (I recalled, of course, how he had essentially adopted this approach at an earlier Council.)* But though he took the point nothing came of it. I realized that the only immediate way to rein in Community spending on agriculture was within a Community framework.

My pre-Council meeting with Chancellor Kohl also revealed him to be even more preoccupied than before with his farming vote. He wanted a Community-financed ‘set-aside’ scheme, by which farmers would essentially be paid not to farm efficiently — something which ultimately demonstrated the Mad Hatter economics of the CAP. I was prepared to agree to this, as I told him, as long as we got effective stabilizers as well. I was also very tough with him about the prospect of increases in the Community’s ‘own resources’, on which I knew Chancellor Kohl was willing to see a large increase (ultimately at the expense of the German taxpayer) in order to keep his farmers happy. So by the time the Council opened we knew where we stood.

Once it was clear that the French — principally for electoral reasons — were prepared to back the Germans on a formula for stabilizers which could not conceivably contain agriculture spending, it was evident that no satisfactory conclusion could be reached. Neither I nor Mr Lubbers of the Netherlands would agree to anything on these lines. The Commission added another split by pressing hard for a doubling of the structural funds, which pitted the northern against the southern Europeans. But it was not an acrimonious occasion. It was agreed that a special European Council would be held in Brussels the following February.

There were a number of long faces at the end of the Copenhagen Council. But mine was not