Margaret Thatcher's Fontainebleau Memoir

In June 1984 MT struck the deal that ended her great fight over Britain's budget contribution to the EC. Swaddled in imperial grandeur at the historic palace of Fontainebleau, European leaders painfully brought to birth the famous British rebate - or as the French sarcastically call it, “le chèque Britannique”.

Returning home in some satisfaction, MT wrote down her memories of the event.

Origin of the memoir

Politics for dinner at Fontainebleau: MT's annotated menu

Looking inward was not MT's favourite way of spending time, so why did she set aside a number of hours to give us her version of the budget settlement - time likely taken out of a quiet weekend at Chequers?

The writing of her earlier Falklands memoir at Easter 1983 was probably one influence. Was she thinking of a future book to be written in retirement? Very possibly she was, and maybe not just of a book or books by her. The experience of studying her own Falklands files before testifying to the Franks Committee had taught her that the official record was in many ways a thin source, unrevealing of the story as she saw (or felt it) at the time. The best corrective would be to put her version on paper, as close to the events as she could manage. Fontainebleau was far less fraught an experience than the Falklands, of course, and the memoir correspondingly much lower-key, and shorter.

MT also had a particular concern about the historical record in this case, which she explained in answer to a direct question why she had written about Fontainebleau. Throughout the European Council she had seen her Foreign Secretary, Sir Geoffrey Howe, making detailed notes for the FCO files, a traditional chore for Foreign Secretaries at European Councils in fact, because officials are not permitted to be present themeselves except for short periods, and there are no formal minutes. She decided on this occasion to produce her own account so as to ensure that this major event in British diplomatic history should not be known solely in the Foreign Office version. The memoir registers an element of mistrust - towards the institution certainly, and perhaps the man.

The memoir as history

As things worked out, the happy outcome of Fontainebleau from the British point of view removed the prospect of a future battle of words on the topic, domestically at least. The FCO version of Fontainebleau, online at this site, is a much lengthier document than hers, significantly fuller than the usual British record of European Councils, and while you cannot wholly acquit its authors of feeling pleased with themselves, it would be fair to say they had reason to be, as did she. In fact the FCO seems to have been genuinely admiring of their Prime Minister on this occasion. Nor does MT particularly swipe at them in her account. Aside from a remark implying that foreign ministers were lazy after dinner on the first evening, not directed at any one of them in particular, she gives credit to officials for their good work over the long night in crafting the compromise which prevailed on the second and final day.

But Fontainebleau has given rise to a small war of words, all the same, because the budget settlement is an event not forgotten in France. Its effects have been long lasting financially if nothing else, France emerging for the first time as a significant net contribuitor to the EC/EU directly and permanently as a result. In other words they, as well as the Germans, wrote "le chèque", or a good chunk of it. A version has emerged from the Mitterrand side that is completely at odds with the Thatcher memoir (and its Foreign Office stablemate), presenting the outcome as a defeat, indeed a humiliation for MT. How does the Thatcher version - indeed the British version - stand up?

Publicly at the time the Mitterrand government presented the outcome as a good one for all sides, not to be seen as victory or defeat. MT went along with that approach, not overselling what had been achieved. She had, indeed, made a compromise and defended the agreement in those terms, for example in her press conference at the end of the Council where she described it modestly as "a satisfactory result", "good for Britain and good for the Community". She was aware that she might face some criticism on her return home for giving too much ground and actively presented the agreement as opening the way to progress on other fronts, such as enlargement and completion of the single market. Nor was this merely presentation. Her memoir ends with a striking passage. After reflecting that future arguments about Community budgetary discipline were likely to be at odds of 9:1, she consoles herself:

But at least now we can reaasess our European strategy. So much will depend upon its cohesion in the coming years.

She had some way to travel before arriving at the Bruges speech of 1988, and still further to the position she took on the Maastricht Treaty in 1991.

The main source of the later French critique of Fontainebleau is Jacques Attali, one of Mitterrand's closest advisers and author of Verbatim, a three volume memoir of his presidency in diary form, quoting many documents, which was published in 1993. (The relevant section is in volume one, pp658-61.) On this account, MT asked for a 90 per cent refund, but was faced down by Mitterrand and Kohl in bilateral meetings and forced to accept the French best offer of 65 per cent - later slightly upped to 66, with a take it or leave it ultimatum ("C'est à prendre ou à laisser"). According to Attali:

François Mitterrand la revoit: elle craque comme du verre, au bord des larmes. Elle veut conclure, sur n'importe quoi. Étonnant spectacle.

[François Mitterrand saw her again: she broke like glass, on the edge of tears. She wanted a settlement, no matter what. Astonishing spectacle.]

By 2009 the story had changed a bit. Interviewed by the BBC for a programme on the 25th anniversary of the Council, Attali has MT asking for twice what she finally got, and actually bursting into tears in front of Mitterrand. He sums up the episode:

It was an embarrassing begging for a tip. ... and then we give them half the tip that she was requesting and we went on to very more serious issues.

He described the whole British rebate as "a silly agreement" and "a mistake" - though one made originally by Mitterrand's predecessor as French President, Giscard d'Estaing, who did a deal in 1980 to give Britain three years of ad hoc refunds. "But after that it was impossible to give up".

Perhaps it is no surprise that memories and records on the British side do not bear this version out. Not all French participants would accept it either. Ironically while MT wrote to deny the Foreign Office a monopoly in the archives, their record helpfully corroborates hers. Quite plainly she never asked for nor expected a 90 per cent refund on any of the various measures used, still less twice what she got. Twice would have been 133 per cent on the measure used, and well over 100 per cent on any of them. In fact she declined to give a figure to the meeting, the FCO tells us, and British briefing documents show that on the measure that was eventually adopted - the so-called VAT share/expenditure gap - she settled within four percentage points of our best hope, about 70 per cent, a difference of 0.01 per cent of British GDP. (For the technically-minded, our bottom line, agreed in London the week before the Council was a base figure for 1983 between 1000m and 1250m ecu; we got 1081.) Nor is it credible that she was presented with a final ultimatum by Mitterrand. That two thirds was his best offer was something she already knew the previous day, because she had been sent word to that effect following lunch between the Cabinet Secretary and a Mitterrand adviser named Attali. There was no attempt to corner her, quite wisely. She almost certainly went into the final day's meetings already decided to accept, bolstered by the effective staff work done by officials on both sides overnight.

Fontainebleau made the system of refunds a treaty commitment, unchangeable without British agreement, meeting MT's requirement that the solution last as long as the problem. If it was a mistake from the French point of view, it was a very much worse one than Giscard's three year ad hoc arrangement. Of course, Mitterrand did not settle out of a sense of duty to his predecessor's policy. He did so because the Community was running out of money. The only way of increasing its resources was by treaty change, which required British assent, and the price of that assent was the rebate. Rebates have since proliferated, incidentally, because Fontaineableau conceded the principle that there was a general entitlement to budget 'correction' where a state is paying too high a share. There are correction mechanisms now to compensate Germany, the Netherlands, Austria, and Sweden, as well as Britain.

Finally, there was a second front at Fontainebleau, of which Attali does not speak but which was a crucial part of the story: a Franco-German argument about le chèque. British diplomats heard something on this topic from Hans Tietmeyer, then head of the German Finance Ministry, who complained that Kohl had made 'disastrous' concessions at a breakfast meeting with Mitterrand on the second morning of the Council. The Germans managed to retrieve something later in the day, but the Foreign Office records show that we suspected French policy was to make a settlement with us as far as possible at German expense. The memoir shows that MT had some sympathy for Kohl's domestic difficulties and did her best to ease them. Plainly though it was not her job to save him from the French. Nor was it French policy on this occasion to declare victory over the Germans.

As for the scene with MT begging for her tip and in tears (or not), is comment necessary? Perhaps in one respect. Mitterrand let MT know on the first day of the summit that his bottom line was 66 per cent, but when he met her on the second he insisted on 65. Why did he do that? Why the gap?

One may guess. By holding out the prospect of a higher number, but then denying it in face to face conversation, Mitterrand all but guaranteed that MT would fight for the last one per cent. Win or lose, the final sum would be well within the margin the British delegation had allowed itself for an acceptable outcome, but he knew she was never one to dodge a battle. And fight she did, in full session in front of the other leaders. This was the begging-for-a-tip moment, and it was a French set-up. MT got the money, and the sum was significant, but she was made to dance for it.

In her thank you letters after the Council, MT warmly acknowledged Kohl's help in reaching a settlement. She was similarly obliging to the Dutch PM, Ruud Lubbers. Mitterrand received thanks for having hosted the event, but nothing more.

1883/1984: Life & literature

The Hôtellerie du Bas-Bréau - "Stevenson's House"

Fontainebleau provided the grandest possible setting for the Council, chosen presumably to inspire policies of equivalent grandeur. There was even a medal struck to commemorate the event, handed to each leader; MT kept hers carefully among mementoes at home, a campaign honour. One side depicts the elegant horseshoe staircase at Fontainebleau where Napoleon said farewell to his troops before going into exile on Elba in 1814.

The budget settlement did indeed resolve a major question. But the venue for some of the most important business, including the summit dinner after which the foreign ministers dawdled, was much more modest than the chateau. It was a charming small hotel in the woods nearby, where MT and the British delegation were staying, the Hôtellerie du Bas-Bréau at Barbizon. There was symbolism in that location too, though of a different kind. MT did not much notice the place, beyond thinking it was probably very expensive. She gets the name wrong in her memoir.

A century before, in 1883, a young British author had spent the summer there writing what became one of the world's greatest adventure stories. The 1984 European Council is hardly likely to figure in modern tourist guides to Fontainebleau, but his name is sufficiently famous still to feature on the name sign of the hotel.

The plot of the book is a simple one. An old-fashioned ship with a strangely assorted crew sails on a long voyage in search of treasure. Great things are hoped for, or spoken of, but the enterprise does not progress as planned. The loot is found, probably more than enough for everyone, but there is a falling out. The good guys win in the end, but they have a lot of trouble with their shipmates who prove to be shockingly unreliable - pirates in fact.

MT memoir of the Fontainebleau European Council

FCO record of the Council

Key documents on Fontainebleau

European Commission European Union public finance, 4th edition (2008)

2009 BBC interview with Jacques Attali

Next page - MT's memoir of Chernenko's funeral

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