Speeches, etc.

Margaret Thatcher

Joint Press Conference with French President (Giscard d’Estaing)

Document type: Speeches, interviews, etc.
Venue: Vickers Cinema, Millbank Tower, central London
Source: Thatcher Archive: COI transcript
Editorial comments: 1100-1130.
Importance ranking: Major
Word count: 4439
Themes: Agriculture, Conservatism, Defence (general), Energy, Trade, European Union (general), European Union Budget, Foreign policy (Middle East), Foreign policy (USA), Foreign policy (Western Europe - non-EU)

Prime Minister

Valéry Giscard d'EstaingMr. President, ladies and gentlemen of the press,

As you know, this is the first bilateral that we have had in this country during the lifetime of this Government. I have previously been over to France to see the President, but this is the return of the regular bilateral arrangement we have with our French friends, during which the President and I have tête-á-tête discussions. We are also accompanied by other Ministers, who have their own bilateral discussions, and then we frequently join together in a plenary session afterwards.

On this occasion, there have been discussions between Foreign Ministers, Finance Ministers, Industry and Energy Ministers, so there was in fact a good deal going on during the one-and-a-half days that the talks have continued.

Now, I understand that it is the custom at the end of these bilateral meetings for there to be statements made by the President and by myself, and I think therefore it is best if we proceed straightway to the statements. The President, after the statements, has another engagement and I will stay to answer questions.

May I therefore invite the President to make the opening statement. [end p1]

President Giscard d'Estaing (English translation)

Thank you, Mrs. Prime Minister. As you reminded us, we have arrived here in London for this Franco-British bilateral visit and it was in 1976 that we decided on these visits and they take place every year regularly now.

Prime Minister, Mr. Barre, has had to apologize. He was unable to come because he had a debate in the French Parliament.

First, I want to tell you in a few words why we have decided to hold these meetings. These meetings are to develop cooperation and friendship between the governments of our two countries. They are regular meetings and they are not organized specially to deal with one particular subject in certain circumstances, and that is why, as you said, several French Ministers have met their British colleagues on this occasion, to be able to speak about certain questions of common interest and for cooperation.

To start with, I wish to say, Mrs. Prime Minister, that we much appreciate the inspiration of the policy followed by your Government, that is to say, the will that you have to conduct an independent and ambitious policy for the U.K. This will on your side and for your Government has been met with sympathy and understanding and even, if necessary, the support of France.

We feel, on the other hand, that the development of the world and the numerous perils which are latent means that it is desirable whenever possible for the EEC countries to act together and reinforces the interest of political cooperation between the UK and France. They are two countries that have great experience of world affairs and expertise in human affairs and therefore it is in their interests to exchange their experience and examine the areas where their cooperation can take place.

We spoke, naturally, of bilateral problems and I believe that in a moment, when we answer questions, speakers will be able to quote all the subjects that have been tackled in industry, on energy and wherever we have action to take or a problem to solve. And then we have had thoughts and exchange of views on the Community's problems. I say “thoughts and exchange of views” , because the Community's problems interest all the Community's countries and therefore we should not try and find solutions between two countries in particular from all those that belong to the Community. [end p2]

On the one hand, we have analyzed those problems and presented the way that we thought they needed to be tackled.

As far as France is concerned, I can say that we feel great understanding for the situation which has been caused to the U.K. due to the implementation of the rules, those that derive from the adherence of the U.K. and from the Dublin Conference in 1975. Certain comments may have suggested that these problems were due to certain of the partners of the U.K., but it is simply due to the application of rules that have been implemented since then, and France finds herself in a situation where they are near balance because in 1979 and 1980 we shall be net contributors to the Community and not simply beneficiaries. Therefore, we have understanding for you that was signified to you in Strasbourg, Mrs. Prime Minister, because we suggested that there should be proposals by the Community to find a solution; but on the other hand, we wish to have understanding from the U.K. so that the solution should be found, still respecting the rules of the Community, and to help all other Community countries to help towards this understanding.

The Community has already had such difficulties and generally speaking, solutions have been found and those difficulties have been overcome. But that was due to two conditions: each had to keep in mind the legitimate interest of all the other partners, because it is a question of Community; and all should respect the principles and logic which dictated the organization of the Community, and those principles and logic are absolutely essential for the development to carry on—and the current situation requires this development more than ever.

These are the remarks that I would make after our discussion and I wish to thank the Prime Minister of Great Britain for their welcome and I have been happy to invite Her Majesty's Government in September next in France, which will be preceded by a meeting at …   . [end p3]

Prime Minister

…   . we shall hope to have the next bilateral meeting in September, in France. In the meantime, may I thank you, Mr. President, for your statement and just add one or two comments of my own to it.

There are really three aspects to these talks.

The first is the bilateral aspect between France and Great Britain and various matters on which we can and have discussed greater cooperation between our two countries, apart from the wider cooperation in which we engage with other countries in our international fora.

The second great area of cooperation is as members of the EEC, and I must make it quite clear to this distinguished audience, as I have always to our Community partners, that this Government is completely committed to membership of the European Economic Community, believing it both to be in Britain's interests to be a member and in the interests of the Community that we too should be a member and should be a very active member—and it is against that background that we consider some of the problems that particularly affect Britain, one of them being at the moment, as the President has pointed out and of which you heard me upon frequently, the problem of our excessive contribution to the Community budget. And the understanding that we had when we entered the Community was that if there should be problems which worked out totally inequitably in regard to us or to any other country, then it would be up to the Community as such to find a solution to those problems, because one cannot in fact have inequity between partners.

I have, of course, put our view very forcefully to the President on our feelings on this issue, because we simply cannot go on paying an amount of £1,000 million a year—which is what it would be next year—as a net contribution to the Community budget, £1,000 million or anything like it, and we do look to finding the way to a solution or a solution itself at Dublin. That, of course, is not necessarily a bilateral issue, but one upon which we have to engage our friends' attention when we have their company and can discuss matters as they affect them and us.

Then, there is of course the third aspect, which is the wider world forum, of which we are both a part and of course we discussed matters such as the Middle East, the problems in Iran and all of these matters which are usually discussed, defence, in têta-á-tête, between the President and myself. [end p4]

I have nothing to add, therefore, to what the President has said. I know that he has another engagement, but if you very kindly address one or two questions to me, then I think he might stay to hear one or two of the answers.

Question

Mr. President—for Week-End World—Britain would like a fair way of dealing with her budgetary problem. One of the easiest solutions would be a cash rebate from the budget to make up the difference between Community expenditure in Britain—only 10%; of the budget—and Britain's share of Community output—which is 16%; of the total—but France seems to be completely opposed to this. Could you please tell us why?

President Giscard

I have already raised the subject earlier and I would like to answer as follows:

This is a problem, a matter for the EEC, and I do not know why certain people like yourselves feel that this is a purely Anglo-French problem. France is in a position which is very clear with respect to the Community. We will receive this year a little less than what we contribute and therefore we are in a position in which we do not benefit, as far as the budget is concerned, from the Community and therefore, as far as we are concerned, we could stay aside from the debate because we are in a position where U.K. feels that it should be, and it is really a problem between the people who receive more and those that pay too much, and France is not in either of these categories. The problem as far as the U.K. is concerned is not one for which France is responsible. It is just the result of the direct implementation of the Community rules. These rules were approved by the U.K. Government at the time when they entered the Common Market and, secondly, at the time of the Dublin Agreement.

The Dublin Agreement was negotiated in 1975 and, in fact, I attended the discussions, and at the time it was presented as a British success and therefore the problem is in fact what is happening now these steps have been implemented and we observe, as the Prime Minister said earlier, that there is indeed a U.K. budgetary contribution which [end p5] is greater than the share of the U.K. in the GNP of the Community. This is not a unique case, because the Federal German Republic is in a similar position. Other countries have been, or will find themselves in such a position and therefore we cannot imagine that the budgetary contributions should be calculated from the share of everybody in the GNP, which would be a completely different system to the one used now, depending on the actual resources of the Community. And this is why we said to Mrs. Thatcher that we have great sympathy and understanding for the difficulties that the U.K. is confronted with by implementing these texts as they stand, but it is a Community matter which they will have to discuss. But there is not a particular responsibility of France. It is a Community problem and it is the Community that will deal with it.

Question (English translation)

Mr. President, are you willing to implement the judgment of the European Court about lamb imports? Isn't that also one of the rules of the Community?

Prime Minister

He is one of our overseas correspondents who is with us through every election, and between elections.

President Giscard

First, I want to remark that it is a little paradoxical. We are not asking on this subject to modify the rules that exist now, which are that of financial contribution …   . the existing rules you must not ask at the same time …   . the integral application of the other rules, but you consider the situation but according to the problems you cannot suit yourself whether you conform to the rule or not.

Concerning the sheep, what is the problem? For agricultural produce in the Community there are marketing organizations. These exist for all products and are based on certain principles that I will remind you. This is the Community's preference: free trade, the support and fixing of a minimum level of price, and an intervention mechanism. This has not been done long ago in the 6 Community, because France was the only [end p6] producer in the Community and there was no reason to create another organization for the Market.

The situation has changed since the entry of U.K. and Ireland, who are also producer countries and therefore France is asking that the Rome Treaty spirit should be applied and that there should be a marketing organization and from that time onwards, naturally, France will apply the Community's rules, but we must know that at the moment the Commission has prepared a text that is going to provide a marketing organization. We are in favour of the text prepared by the Commission and we are waiting for that organization to be decided upon by the Community.

Question (English translation)

Mrs. Prime Minister, is your Government contemplating a reduction of their Community participation by increasing progressively by importing agricultural produce from other parts of the Community?

Prime Minister

As I understand your question, are we contemplating a reduction in our contribution by increasing imports from the Common Market? I think no other country has adapted its trade as quickly as we have during the last few years when we have been members of the Common Market. We import a great deal more from the Common Market now than we used to, and we have increased also our manufacturing imports from the Common Market. The Common Market too has greatly increased its exports to this country, both in agricultural produce and in manufacturing produce. It has found a very good and ready market in this country. I think we have done as much as we can possibly be expected to do by that route.

We now have a very real problem resulting from the application of the existing rules. The view that we take is quite simply this: the result in practical terms is totally inequitable and the inequity is of such a magnitude that it could really not have been foreseen at the time when we made the original arrangement or at the time of the modification in Dublin of the corrective mechanism. It is not a question of which method. There are many methods that you can use to reduce our net contribution which, after all, is a transfer of income from this country to the Community. What is at stake is whether there is the will there to do it: to see the problem, to meet it, and to meet it substantially in full; and that is the argument, not on the technicalities. The technicalities can be adjusted. It is on the will, and that will be the argument at Dublin. I trust I make myself clear. [end p7]

Question

M. President, I know that you are not prepared to discuss details, but could I ask what is your reaction in principle to the British request for a broad balance?

President Giscard

We do not think that what you call a “broad balance” should be a good method. None of our partners of the Community feel that either. We understand that there is a problem concerning the amount of the British contribution and this is due to current circumstances that have shown up the magnitude of this contribution, but it would be a mistake of direction, orientation, for the Community to fix a rule according to which each was going to withdraw out of the Community as much as they put in. This would be a kind of bilateral compensation and everybody would bring in what they would take out.

In a Community, at one time or another there is a policy that brings in more to one particular state or a certain type of production than another, and we cannot ensure everywhere this complete balance between what is brought in and what is taken out. I will remind you that there are many countries that withdraw out of the Community far more than they bring in and France is not criticizing them, because we feel that according to their respective poverty, original problems, it is natural that for a certain period they may profit from Community financing. We understand the problem of the British contribution in current situation but we do not wish to adopt as a lasting principle that of equitable return and I shall listen to one more question and then I shall leave.

Prime Minister

That is the last question to the President. Now would you like to have a go at me?

Question

We understand that yesterday you told the President that half a loaf would not be enough. Is that a literal interpretation of your demand at Dublin? [end p8]

Prime Minister

It is a phrase which I am credited with from time to time. I confirm it: half a loaf would not be enough; it would still leave us with much too big a net contribution to the Community budget. The Community is not a mechanism for transferring resources from one nation to another, and we believe a contribution of that amount would be such a transfer, and we look for a solution in much bigger terms than that. Next question.

Question (Murray, Liverpool Daily Post)

In what both the President and you have explained, it seems to me that you cannot get satisfaction unless you change the basic rules laid down in the Rome Treaty. Would you favour a meeting that would rewrite the Rome Treaty, especially in view of the fact that you will have the Greeks, Portuguese, Spaniards, Turks and God knows whom in the Community within the next few years, so it makes it more unworkable than it is now?

Prime Minister

Well you can in fact get satisfaction by application of a combination of the Community rules, and this is why I never get into the technicalities, because you really just come up against far too much arithmetic and everyone gets blinded by it. It is possible by a combination of different Community rules and principles to get satisfaction for the British case in Dublin. I do not really think the time is now to start talking about rewriting the whole of the Rome Treaty, but I would say that life would not continue, either nationally or internationally, unless one constantly adapted the rules to meet the prevailing circumstances. You will know that one of my predecessors said “Change is the means of conservation” and it would be ridiculous if you did have a particular set of rules which was wholly out of tune and out of joint with the times. So I think no-one ever says that you can never change rules. If you took that view, then the Community would die. Everything has to evolve organically.

Question (English translation)

What would be the position of the United Kingdom if her demands are not met at Dublin and if the European Community only made a token reduction of less than two-thirds what you were expecting? [end p9]

Prime Minister

… isn't enough or anything like enough, and we shall have to go on and on, because we simply cannot pay the contribution with which the present rules—unless they are adapted in accordance with possible applications of the budget, we simply could not go on with anything like the proposed contribution next year, anything like.

Question

Could I ask you whether you consider the conversations of the last two days have contributed in any way to a solution of Britain's problems with regard to the Community?

Prime Minister

It is always very difficult to say whether one particular set of conversations contributes to a particular set of problems. I do think that the successive bilateral talks we have with our various partners in the Community does contribute to a very much greater understanding of the problem. That is to say, when I speak my mind about our problems of the size of the contribution to the budget, it is much more forcible than someone just reading about it in a set of papers, and when we argue about it and debate it we do come to a very much better understanding of how we see it and how our partners see it. What I am really saying, although I am afraid it is saying it to the press, is the spoken word is even more powerful than the written word.

Question (Supplementary)

Do you not consider that the attitude of France in these matters could in some way be decisive at Dublin?

Prime Minister

I think you can say that the attitude of each and every country in budgetary matters could be decisive, but I think it right and proper—and I do put the point to our French friends—that we should not contribute more than France contributes. She, in fact, is a very much richer nation than we are. [end p10]

Question

What would be your behaviour as a member of the Common Market after you get only half a loaf in Dublin?

Prime Minister

I expect from partners an equitable solution, and I will try to play the game by the rules of equity and will go for that all the way, and I hope that we shall get a solution. You will not naturally expect me to expose my hand if we do not get a solution. You might hope for it, but you won't get it!

Question

Did the President yield at all on the lamb issue or is he returning to France as a still impenitent offender against Community law?

Prime Minister

We did in fact discuss the lamb issue. There is, as you know, a decision of the Court and we expressed the hope that France would act in accordance with the decision of the Court, because that is the rule of law of the Community, and if we do not obey the rule of law of the Community, then I think it is very serious for the Community as a whole.

Question

Several news agencies have reported this morning that Zambia has just declared war on Zimbabwe-Rhodesia.

Prime Minister

I am sorry. I am only answering questions this morning about the bilateral talks which we have had between Britain and France. Everyone else is playing the game.

Question

Mrs. Thatcher, you mentioned that you talked about Iran. Could we please have some more details of the discussion? [end p11]

Prime Minister

No, I don't think you can possibly have more details. We are all obviously very concerned indeed about the situation as it affects the United States at the moment, and because it is so sensitive we are naturally very careful about what we say about it, but we have very great sympathy with President Carter in the problem that faces him and the problem which faces his people in Iran at the moment.

Question (John Dickie, Daily Mail)

May I ask you about the discussions you had on the lamb situation? Are you satisfied that the French President is really taking it seriously or do you think he is waiting for the establishment of this marketing organization?

Prime Minister

I answered a question on lamb, and I do not really think I can add to it. We took our complaints to the European Court because we believed what was happening was contrary to the European rules. The European Court made a decision against France and we expect France, in fact, to comply with that decision, and we made that clear.

Question

Prime Minister, if in fact you are offered at Dublin your half a loaf, say £400–£600 million and this is coupled with a pledge to reform shall we say the Common Agricultural Policy, so that it takes a lower proportion of the total EEC budget, would …   . could that be a possibly acceptable compromise for you?

Prime Minister

Well it depends how it acts in 1980–81. Our objective is to have very much more than half a loaf for the year 1980–81 which is our financial year 1980–81, to which the £1,000 million net contribution refers. Actually, the Community year 1980–81 happens to be the calendar year, so we do have just a little bit of time latitude there to get the solution for our financial year. [end p12]

Question

I think I am right in saying—I may be wrong—but in all the answers you have given so far, you have not mentioned the phrase “broad balance” once and I wondered if that was coincidence.

Prime Minister

Well, the phrase “broad balance” was mentioned before. We start off with that objective of a “broad balance” . May I say that if it were going to be gauged purely on GNP per head, we would be entitled to go for more than broad balance, because then we would be going to be a net beneficiary. We would be entitled to ask for that if the ruling were that you should not contribute more than your proportion of GNP. We are not asking for a net penny piece out of the Community; we are asking not to be net contributors, and it is purely accidental that I have not used the phrase “broad balance” . There are, as you realize, a number of countries in the Community who say they do not want broad balance. It so happens that most of those are very substantial net beneficiaries.

Question

Being offered only half a loaf, would you rather reject it than take it?

Prime Minister

I don't reject anything. I just ask for more! (Laughter.) It is a tradition in English literature!

Question

Did you discuss any other bilateral issues, and if so could you list them?

Prime Minister

We discussed various industrial bilateral issues and energy matters and things which affect us both which have to be dealt with by the Community. For example, the synthetic textile industry is very adversely affected at the moment by the preferential oil price allowed to American manufacturers. Now that at the moment is with Davignon in the Community. There are problems also with the pricing of some wool textiles. There [end p13] are problems …   . various matters of possible cooperation like titanium production, for example. You know, we have to have it and our French friends have to have it and, of course, we are always very interested in how their nuclear power programme is going.

Question (Supplementary)

Did you discuss the possibility of selling North Sea oil to our Community partners?

Prime Minister

No. I told them what the facts are. The facts that are that 28%; of our current production of North Sea oil is sold to the Community. That is quite a good proportion. As you know, it is high-grade oil and it pays us better to sell it and to buy back some of the lower-grade crude oil, and we follow world prices. I made it very clear that our action on North Sea oil is that we follow the world prices. We do not lead them. So when Libya and Algeria put their prices up, we naturally went up according to the grade of our oil. But 28%; already goes to the Community as a whole. That is about 50%; of our total exports. I am sorry, percentages are very confusing.

Question

You have probably talked about problems of defence. Have you considered future collaboration in the nuclear field?

Prime Minister

My views are those which I put very strongly in the Luxembourg speech. As you know, France is not formally a part of the NATO Alliance and so does not formally therefore have to take the decision of the theatre nuclear forces which will come up for the NATO Alliance but, you know, she can have a tremendous influence in seeing that others are not too much influenced by President Brezhnev 's speeches which have undoubtedly been designed to stop the Alliance from taking the decisions to modernize.