Downing Street Years - Margaret Thatcher [460]
After some two and a half hours of discussion on this subject at Toronto we achieved a broadly satisfactory communiqué. It reaffirmed the Uruguay round commitments and underlined the importance of its ‘Medium Term Meeting’, while avoiding inclusion of what seemed to me the unrealistic United States objective of no agricultural subsidies by the year 2000. What remained to be seen was how the GATT negotiations now actually evolved. Had I been an optimist I might have drawn comfort from the fact that Toronto was the first time that M. Delors praised one of my speeches. But I kept my optimism in check.
DISCUSSION OF EMU
At Toronto I had an hour’s meeting with Chancellor Kohl. Much of it focused on the forthcoming Hanover summit. Chancellor Kohl, supported by the German Finance Ministry and the Bundesbank, seemed ready now to plump for a committee of central bankers rather than academic experts — as the French and Hans-Dietrich Genscher wanted — to report on EMU. This I welcomed. But I restated my unbending hostility to setting up a European Central Bank. By now I was having to recognize that the chance of stopping the committee being set up at all was ebbing away; but I was determined to try to minimize the harm it would do. I also had to recognize that we were saddled with M. Delors as President of the Commission for another two years, since my own favoured candidate, Ruud Lubbers, was not going to stand and the French and Germans supported M. Delors. (In the end I bit the bullet and seconded M. Delors’s reappointment myself.)
The Hanover Council turned out to be a fairly good-humoured if disputatious affair. The most important discussion took place on the first evening over dinner. Jacques Delors introduced the discussion of EMU. Chancellor Kohl suggested that a committee of Central Bank governors with a few outsiders be set up under M. Delors’s chairmanship. In the ensuing discussion most of the heads of government wanted the report to centre on a European Central Bank. Poul Schlüter opposed this and I supported him strongly, quoting from an excellent article by Karl Otto Pöhl, the President of the Bundesbank, to illustrate all the difficulties in the way of such an institution. We succeeded in getting mention of the Central Bank removed. But otherwise there was nothing I could do to stop the committee being set up. The Delors Group was to report back to the June 1989 European Council — that is in a year’s time. I hoped that the Governor of the Bank of England and the sceptical Herr Pöhl would manage to put a spoke in the wheel of this particular vehicle of European integration; unfortunately, as I have already explained, that was not to be.
My problem throughout these discussions of EMU was twofold. First, of course, was the fact that I had so few allies; only Denmark, a small country with plenty of spirit but less weight, was with me. But I was fighting with one hand tied behind my back for another reason. As a ‘future member’ of the EEC, the UK had agreed a communiqué in Paris following a conference of heads of government in October 1972. This reaffirmed ‘the resolve of the member states of the enlarged Community to move irrevocably [towards] Economic and Monetary Union, by confirming all the details of the acts passed by the Council and by the member states’ representatives on 22 March 1971 and 21 March 1972’. Such language may have reflected Ted Heath’s wishes. It certainly did not reflect mine. But there was no point in picking a quarrel which we would have lost. So I preferred to let sleeping dogs lie.
Then, of course, they woke up and started