Prime Minister
Ladies and Gentlemen, we welcome Signor Cossiga to London. This is the second of the bilateral sessions that we have had, the first one being when I went to see him in Rome in the Autumn. We have very few bilateral problems, so we have concentrated our talks first on the Community, because Signor Cossiga is of course President of the Community for the current six months, and you will not be surprised to learn that those discussions have been spent in large part on the problem of the Community budget as it affects Britain.
You will be aware that at the Dublin meeting, Signor Cossiga very kindly took on the duty of trying to solve this problem between the several nations and deciding whether it would be right to call an earlier meeting of the European Ministers specifically to deal with this problem. He therefore will be contacting a number of other Prime Ministers in the Community before deciding whether it would be appropriate to call an early meeting. We have, in fact, decided that there would be no point in it unless there is a real prospect of agreement. This has taken up a considerable part of our time and we have also discussed other measures, obviously which affect the Community, the Common Agricultural Policy, and many others. [end p1]
We then went on to the problems affecting the wider world, especially as Signor Cossiga has just returned from a visit to the United States where he has had the opportunity of discussing these matters with President Carter, and we have agreed that we must coordinate effectively the response to any international problem between the Community and the United States, because the United States is the final guarantor of European security.
These are the two matters which have taken up the greater part of the time, and we shall of course be continuing further talks over lunch.
I therefore will now hand over to Signor Cossiga for him to say what he wishes, and then we will, in our usual way, try to answer your questions. Signor Cossiga. [end p2]
Signor Cossiga (as translated by interpreter)
I came to London first as part of the regular contacts between the Italian Republic and the Government of the U.K. which are based on the long and friendly relationships which have existed between the two countries, our common membership of NATO, our common membership of Western Europe and our common belonging to the Western World. I came here also as President of the Council of Ministers of a country which has for the time being the presidency of the European Community.
The first problem which we discussed … which I had discussed with Mrs. Thatcher … fits into the framework of the mandate which the European Council at Dublin entrusted to me, that of trying to find out if, among the other countries of the Community, there exist the conditions for an early countries of the Community, there exist the conditions for an early meeting of the European Council which would discuss and resolve the particular problem which the United Kingdom has within the European Community at the moment.
I said to Mrs. Thatcher that we are giving great consideration to the British problem and that our role will not simply be that of merely noting positions, but that we shall do all we can to bring together the divergent positions.
I said to Mrs. Thatcher that as we believe that the situation in which the United Kingdom at present finds herself is the result of certain distortions in European Community policy, and that we believe that if we do not want other countries to find themselves sooner or later in the same situation as the United Kingdom, we certainly must all together take the road towards a change in the whole political philosophy of the European Community, which must be a real economic community and also a real political community. [end p3]
Mrs. Thatcher described to me the particular position in which the United Kingdom finds herself as a net contributor to the Community. We believe that it is very important to exert every effort to resolve this problem together with our partners. We believe it important for the future of the Community. Also, we believe it extremely important for the general political working of the European Community and which the European Community must have at this moment.
I would like to add one thing; just one thing; a few more words.
We have also examined the present world and European situation. I set out the Italian Government's opinions which have as their basis first maintaining the security of the Western countries and among them the countries of Europe. (Note: The interpreter's voice is completely drowned here.) [end p4]
Question
Prime Minister, do you feel any closer to getting the £1,000 million reduction in Britain's Common Market membership bill than you did in Dublin?
Prime Minister
Well, I think just a little bit closer, because in Dublin we were offered a certain amount, something like some 500 million units of account, which to us is £350 million, which was not nearly enough. But we were offered something more than that; we were offered a way to solve the problem, and that way consisted of three things: first, to reduce the contributions&em;and that was the way we were offered&em;but also to increase the receipts in this country and we have in fact put up a whole list of things to the Community which we believe would help us to have very considerably increased receipts which would go a very long way to solve the problem. The third thing is one of the things which Signor Cossiga and I have been discussing this morning: in the longer run, we shall have to reduce the proportion of the budget spent on the Common Agricultural Policy. We cannot wait for that reduction to occur; it would take too long, and our problem is immediate.
We have therefore been discussing the immediate problem and how best we can solve it, and Signor Cossiga has very kindly taken on the duty of trying to find a settlement satisfactory to us all.
So a little bit nearer; but you know, no woman is ever satisfied until she has got cash in hand!
Question
When will that be, Prime Minister? [end p5]
Prime Minister
Well, just a little bit. You will have to wait a little bit longer. I learn a lot of patience in this job.
Question
Under your second heading “increased receipts”, would these have to be matched by British public spending in the way that Commissioner Redeling (phon.) seems to want us to match anything he gives to the steel industry?
Prime Minister
The receipts are usually in respect of such matters like&em;well we call them infrastructure&em;roads, regional matters, things like investment on new coal seams. They in fact largely substitute for expenditure that is already being made or would have to be made. For example, Commissioner Redeling referred to the redundancies in steel. I think I answered the question in the House of Commons yesterday: that since 1973 we have put in 100 applications to the Commission for help under a redundancy and readaptation scheme. The whole British Steel Corporation redundancy programme went into the Commission in December and, indeed, Commissioner Redeling has already made decisions on some of those, for example, Shotton was to receive £7.7 million from that fund.
But in large measure, it would be substituting for expenditure that we have, or would have, very soon to make. Hence the reduction in public expenditure here. [end p6]
Question
Mr. Cossiga, where do you go from here? What follows?
Signor Cossiga
It is my intention to have a meeting with the President of the Commission, Mr. Jenkins, so that I can get some information on the ideas that the Commission has for the solution of this problem. The the Foreign Minister and, if necessary, I also, will start our travels through European countries in order to find out the positions of the individual countries about the usefulness of an early calling of the European Council, but not only to set out their positions, but to work in such a way that this meeting will be successful.
Question
There appear to be considerable differences in the positions of the various countries of Europe vis-a-vis the problem of the expansionist policies of the Soviet Union. Do you see the possibility of reaching a mutual position (sic. agreement?) between the positions of Britain for example and the positions of countries such as France?
Prime Minister
We are trying, obviously, to find a more coordinated response and a greater measure of agreement, because that is in the interests of each and every country in Europe and also in the interest of the Atlantic Alliance. We agree that we have not yet got a perfect mechanism for quickly responding to these things, but I think since the invasion in Afghanistan occurred and since we have had a number of meetings, the response is gradually coming closer together. Of course, in an [end p7] association of free countries, there will be differences of emphasis. That is a characteristic of freedom&em;a characteristic unknown in the Warsaw Pact countries.
I am sure that Signor Cossiga would also like to answer that question.
Signor Cossiga
I would like to say that I agreed with Mrs. Thatcher on the necessity to improve the mechanism of consultation of the European countries in the face of the general problems, especially in moments of crisis, and we have agreed that it is necessary to look for and find appropriate mechanisms to have consultation in good time between the European countries and the United States, a thing which I believe necessary for a strategy towards world peace and security.
Question (Financial Times)
Perhaps Signor Cossiga could explain what perspective he sees for any agreement in a European policy towards the Olympics and for other such measures.
Signor Cossiga
It is known that some countries of the European Atlantic Community have decided and taken up a position, others have not taken up such a position. I believe that in this regard it is very important to try to narrow the differences between countries and in particular to agree that eventually possible differences such as style and manner between the different countries should not become misunderstood as differences of opinion as regards the important events which are taking place in the world today. [end p8]
Question
Signor Cossiga, please. Would the Prime Minister encourage an independent European initiative in the Middle East, particularly after May 26th, once the deadline for the autonomy talks expires? And would the Prime Minister comment on a speech made by the former British Prime Minister, Mr. Heath, in the Commons the other day when he urged the EEC to abandon publicly President Sadat as the only means to regain the friendship of anti-Camp David Arab countries?
Signor Cossiga
Was he asking me whether we should abandon President Sadat?
Prime Minister
We did not in fact discuss that particular matter this morning and we are not giving a general press conference, but about matters which we discussed today.
Signor Cossiga
If you wish, I could reply to that question, because I think it is a serious matter.
I believe that the Italian position and exactly the same position has been expressed many times by the European Community unanimously. We believe it important…we believe President Sadat's initiative was extremely important, but we do not believe that the peace reached between Israel and Egypt can, by itself, finally resolve the Middle East problem. So, it is an important fact, but we believe that other steps will be necessary so that we shall reach a final solution. I am not in agreement with what has been said by Mr. Heath according to the report given me. [end p9]
Question
We have been speaking about the Olympics and the attitudes…what were the attitudes which you adopted on this problem?
Signor Cossiga
We did not speak about the Olympics because our talks are not yet finished.
Question
Going back to the question of the budget. One suggestion to help Britain, that has come out of Brussels recently, has been an oil import tax which would work to our benefit as a major oil producer. First of all, did you discuss such an oil import tax with Signor Cossiga during your talks and secondly, what is your reaction to the idea in general?
Prime Minister
First, we did not discuss an oil import tax during our talks. We have mainly discussed the way of improving the receipts in Britain from the Common Market. We have not really examined the idea of an oil import tax anything like sufficiently to comment on it, but judging by the way in which maybe the Common Agricultural Policy duties work, I do not think it is a very very happy example! The idea, the idea generally, is that we could sell our oil into Europe and it would pay a subsidy on that oil and the subsidy would be attributed, not to the importer but to the exporter. It is not really, I think, a very good idea. [end p10]
Question
(inaudible)
Prime Minister
I am not very happy about it at all. I prefer the more traditional methods that we have proposed about increasing the receipts from the budget, rather than a totally new mechanism. We do not know how it would work. All of those mechanisms tend to introduce unwarrantable distortions on the market which they affect, and I do not think that the augury of the way in which the CAP distortions have worked is a very happy one to introduce into oil.
Trevor McDonald (ITN)
I wonder whether you could tell us whether you feel in any way disappointed at not getting, as you described in Dublin, a very early summit to discuss this question of Britain's budget contributions. It now looks as if there is not going to be a summit in February as you hoped, and after the tour of the Lord Privy Seal to the EEC capitals, one thought that some progress might have been made toward that end.
Do you feel in any way disappointed at this apparent lack of progress?
Prime Minister
I am a little disappointed. Things are going much much too slowly for my liking. We have lived with this problem for some time and we know just exactly how it affects us and how very deeply British people feel about it. We got some way at Dublin and I had hoped that [end p11] we would get an early summit. We still do not know whether we shall, but I do believe it would be fatal to have another early summit unless we were a very long way towards agreement. There is no point in going to a special summit just to argue again among ourselves. One needs to get the negotiations almost to completion and the completion to be at the next summit.
So, yes, patience is not one of my most obvious characteristics, but I am trying hard to learn it now!
Signor Cossiga
On the possibility of an early meeting of the European Council we cannot actually be prophets in this.
Question
(first part of question inaudible).…or is the problem in abeyance because of the Afghanistan and maybe Iran is becoming a different situation?
Prime Minister
We hope to carry on over lunch, in particular with discussions over Iran. The response to the East-West Afghanistan situation took the greater part of our time today, because it is one which really affects the whole of the relations between East and West. We are carrying on over a working lunch afterwards.
Question (The Times)
Signor Cossiga…to detente for a moment. You have talked about mechanisms and organisms for helping greater consultation between [end p12] America and Europe. Could you be a bit more specific about what sort of ideas you have for these organisms and mechanisms that might be new?
Signor Cossiga
We have spoken of this subject but we wanted to make our discussions useful, a useful cutting edge. The problem of the mechanism of consultation between European countries and America is not something which we can decide between ourselves and so I do not think it would be useful at this stage to give you what sort of ideas we discussed. I am sorry that I have to give a disappointing answer to you in particular Mr. Nicols.
Prime Minister
We clearly have not got it right yet. What we do not want to do is just to multiply the number of fora in which these things are discussed. There are already several. There is the Community forum; there is the NATO forum; but somehow we have not yet got full and complete consultation between ourselves and the United States on these sudden matters which arise and which demand a united response, and we must devote our attention to that now.
Question
On the same subject, can you give us an idea of what you plan to do in order to put the suggestions which have been raised to the other partners? [end p13]
Prime Minister
We plan to consider it further before we deluge you with preliminary conclusions. You know, the great thing is not necessarily to go into print before you have got something to say. Sometimes, I know it is not a rule universally held:
Question
Is it not right that in the light of the deteriorating international situation there should be some progress towards integration within the EEC in the economy and also in matters such as defence and international politics? Could I have the opinion of both Prime Ministers?
Signor Cossiga
I believe that European countries already have systems of political and economic consultation and politico-military consultation systems which are good for any contingency. We want to take initiatives for our security and for detente and we want to find mechanisms for greater consultation, but using those which we have already.
Prime Minister
Can I just perhaps take a slightly different angle so that we do not just always say the same thing. I think that what the questioner was partly trying to indicate was that we really ought to solve our problems in Europe, namely the one such as the budget, to put us in the better position to be united to respond to these great world events. I would agree; so does Signor Cossiga. And that is why we regard the solution to Britain's budget problem as really rather urgent. [end p14] As Signor Cossiga, who is too modest to tell you, was saying this morning we really ought not to be wholly occupied with these problems and the problems of butter and other surpluses, while we really have these very great world problems such as the intentions of the Soviet Union not only towards Afghanistan but beyond. So we would agree that we ought to sort out our own internal European problems, to put Europe as a whole into a position the better able as an entity to respond to these events.
We do, of course, get in touch with one another very rapidly, both in Europe and across the Atlantic, when we get these great events happening, and you will remember that President Carter sent across Mr. Warren Christopher, and we held a meeting in London, and that did take place very quickly; but we do feel that we should have a more established procedure for doing it. We must not in any way be without one again. The position was perhaps aggravated by the fact that this matter happened over the Christmas period but, of course, that is one of the occasions which people may use, knowing that it is not one of the times when the Western world is quite so much politically on duty.
Question
Could the Prime Minister spell out a little more precisely what mechanisms for increasing receipts have been discussed with the Italian Prime Minister?
Prime Minister
I can. Yes, of course, but they are basically ones which are what are called “communautaire”, that is, they are basically structural measures of one sort or another. It can be more expenditure towards [end p15] roads, particularly in the regions. It can be more expenditure on such things as opening up new coal seams. It can be more expenditure on such things as urban development in difficult areas. It can be more expenditure on such things as running down industries which are much too large for present-day needs, such as steel and such as ship-building. It can be measures, in fact, to improve and increase nuclear power. All of these things require very heavy expenditure. All of them are already receiving very heavy expenditure, so they are very properly suitable for greater receipts from the Community. There is one that I have not mentioned, which I should have done: we do have expenditures, for obvious reasons, in Ulster, and that too, being both a regional problem and a rather special problem, would be one in which we would hope to receive some help.
Question (in Italian)
Prime Minister, so far as I understand you came out of the Dublin summit with a thread of hope. Time is now going on a little. Are you not afraid we must soon reach a solution? Is it not better to reach a solution which may be a little delayed but is very good, rather than one right away? My question is: do you hope that a solution will be found during the time of the Italian Presidency or are you looking ahead or do you think that a solution to the British problem of the budget will last longer than that? In other words, do we have to take counter measures right away or can we have a sort of delay.…? [end p16]
Prime Minister
Now, as I understand it, and my translation is not very good, I am being asked would it not be better to delay just a little and get the right solution, and do we expect to get the solution during the Italian presidency.
Let me put it this way: Britain has been paying increased contributions over a period of some 5 years. If I put it in terms of pounds I hope you will understand. 5 years ago we were paying about £13 million to the Community budget. It has gone up steadily over the years and we are now paying, this year already, something like £950 million net contribution to the Community. Next year £1,000 million net contribution, the following year more. That is greater than our whole aid contribution to the Third World. It does not make sense and the amount of it is deeply resented in Britain, because next year it will make us the biggest net contributor to the Community.
So the problem is urgent. It is urgent for solution in the financial year which for us is April 1980 to April 1981. We cannot wait beyond that time. We must have a substantial resolution of the problem during that year and there really is quite a lot of time to get it right, but if anyone thinks it is better to use the argument with me “Look, delay to get the right decision!” my answer must be “I cannot afford to delay and I want the right decision anyway!” and I believe that Signor Cossiga is every bit as anxious as I am to find a resolution to this problem and will endeavour to do so. It is not that he is on Britain's side; he is, in fact, President of the Community and therefore regards himself as having the duty to resolve the problem between Community members. [end p17]
Question
I want to ask Mrs. Thatcher if you don't think that in a paradoxical way the situation has become even worse after the Dublin meeting, because just after the Dublin meeting you had this quarrel with France over meat which showed in a way that there was no good will on the other part?
Prime Minister
No, the situation is not the worse since Dublin. Indeed, we are actively trying to pursue the line which was laid down at Dublin with regard to solving the problem.
With regard to sheep meat, of course we are working towards a sheep meat regime. I am sorry. I hate this jargon used by the Community. We are working towards solving the lamb and mutton problem. That will, I believe, be solved, but the method which has been proposed to solve it at the moment would involve new high intervention costs and that I think is neither wise nor acceptable.
No, I don't believe the position is any worse. I think people have a much better idea of how great the burden is on Britain; how unfair it is; and I believe they accept that it must be solved. What we have to do now is to put figures to their intention to solve it, and that of course is more difficult.
Question (La Stampa)
I was wondering if Mrs. Thatcher or Mr. Cossiga can tell us if any figures were discussed in your meetings yesterday and today. [end p18]
Prime Minister
We have not got down to specific figures which would actually sort it out. That has to be done in conjunction with the Commission and by Signor Cossiga contacting the Heads of Government of other states.
Question (La Republica)
I would like to ask Mrs. Thatcher what, in detail, in concrete, do you want to do? (Confusion with headsets)
Prime Minister
You want to ask me in detail about the budget. Me? Well I just want a solution.
Question
No, that is not the question. I have not put my question yet. I would like to ask Mrs. Thatcher&em;speaking in concrete and in&dubellip; (new headset)&dubellip;
I would like to ask Mrs. Thatcher what thing, exactly in concrete and in detail, do you mean when you talk about an effective response from the West to the Soviet Union after the invasion of Afghanistan and I would like to ask Signor Cossiga what he means in the same terms when he speaks of a global response on the part of the West.
Prime Minister
An effective response to (sic) the West. First, it must be united and we have not clearly got everything sort out. And secondly, it must be clear to the Soviet Union that she cannot embark upon invasions of this kind without the cost to her being very great indeed. [end p19] Now, we have got some way, because Europe has supported the United States in what President Carter has said about not selling grain to the Soviet Union. We have agreed to set up a committee further to see how we can restrict the sales of technology to Soviet Russia. That has to be done to COCON (phon.) We will consider that but it is important that something effective comes out of that consideration.
Thirdly, we in Britain feel very strongly indeed that sales of subsidized butter, sugar and beef should not go from the Community to the Soviet Union. There is not yet a unanimous view about this but such subsidized sales, grossly below the cost at which we have to pay in this country, cause great resentment here at any time and would cause particular resentment now after Afghanistan.
Now those are three things that we are working on.
You know our view about the Olympics. They are that a country like the Soviet Union would always use them not for reasons of sport, but for reasons of political propaganda, as did Germany in 1936, so we have made our views on that very clear.
Finally, the most effective response can only really, in the last resort, be shown by one's determination to keep up defence. Now, it was I think a very great step forward in NATO in December when we agreed to the modernization of theatre nuclear forces. The attempts that the Soviet Union had been making propagandawise to prevent that decision from being made were not successful.
So we still have some way to go on the agreements on the COCON and on how much food, if any, Europe sells to Soviet Russia at a highly subsidized price, but we have got some way in coordinating an effective response. Signor Cossiga. [end p20]
Signor Cossiga
As regards a global response, what I mean is a response which, based on solidarity between the United States of America and Europe, will lead to the proper reinforcement of our security, to non-abandonment of the process of detente, but detente must be understood by both sides as an effective instrument towards peace, effective detente on the basis of a true balance of forces and detente is incompatible with the policy of what the Soviet Union has already done. We want a global response so that the Soviet Union and the Warsaw Pact countries will have no doubt either on our will to defend our own independence or on our will to continue looking for peace or on our view that only a real balance of forces can lead to one or the other objective.
Question (‘Unita’)
(microphone not working) &dubellip;and I believe at least at that level, economic counter measures, almost all the political forces in West Germany, including the Opposition parties, exclude any economic counter measures and they exclude them in particular on the part of Germany. How do you think that it is possible to reconcile your position with that of the German Parliament in order to coordinate a European reply?
Prime Minister
I hope that I might be able to persuade them that we are right and they are not quite right. The fact is that the Soviet Union could grow really all her own grain. She used to be the granary of the world. [end p21] She could, in fact, provide far more of her own technology. The reason she does neither is because she puts such a colossal proportion of her effort into armaments. A tremendous proportion of her research and development goes into armaments research and development. As she is re-arming way beyond the level needed for defence, I think it is most unwise to assist her to do that by supplying to her things which she could very well supply herself. I have taken this view for some time, but I think when we had the invasion of an independent country, a non-aligned country, on her borders, it is even more imperative that we put that view into practice. She could do it herself, but she is choosing not to, because of the massive proportion of her income she is pouring into re-arming.
Signor Cossiga
My opinion on the invasion of Afghanistan is exactly the opinion which l'Unita gave; that is to say, it is something which simply cannot be justified. On the basis of this, the measures which must be adopted are measures which certainly will not make the Soviet Union fall into the error of believing itself attacked by European countries, by the United States, but measures which will stop the Soviet Union from falling into the error of believing that it can continue to carry on with this policy of creating facts without any sort of reaction, effective reaction, on the part of the countries of the West. I absolutely share the view expressed by the newspaper which this correspondent represents. [end p22]
Question (Neopolitan Journal “Rome” (in Italian)
I would like to ask Mrs. Thatcher this: how do Italy and Great Britain see together the problem of the attitude of the two countries is exactly the same as regards the possibility of exchanging agricultural policy and the regional policy, or do you have different points of view on these questions?
Prime Minister
We both accept that it is important to reduce the proportion of the budget which goes to supporting the Common Agricultural Policy. We both accept that that would take some time to achieve, but it nevertheless has to be achieved, because it really does not make sense to put more and more of the budget towards going to create surpluses which are not needed. So on the broad strategic line we are agreed.
Question
Did you discuss the British hostages still being held in Signor Cossiga's constituency of Sardinia?
Prime Minister
We only ever discuss matters, general terrorist matters, and matters relating to the level of crime, not specific cases.
Signor Cossiga
I took the opportunity to thank once again Mrs. Thatcher. May I take this opportunity for the help which the people and Government of the United Kingdom have given us in the most difficult moments of terrorism in our country.