First sign of EEC accord on British budget demands
A first sign of a breakthrough in the EEC budget dispute emerged late last night in Fontainebleau after a day of near sterile negotiations in and around the European summit. The 10 government leaders return to the subject this morning on the basis of a paper prepared for them in the early hours.
Officials worked through the night to put together a new way of assessing how much money Britain should be paid back for its excessive contributions to the Community budget. Their work was based on a scheme hatched over dinner by foreign ministers who had been ordered by the summit itself to try to produce a solution.
Mrs Margaret Thatcher was very cautious about the chances of success, however. “I am not over-optimistic” , she said after learning of the outline of the proposed scheme. But she was pleased that the idea now under consideration did involve creating a new system for the whole Community.
A British spokesman said: “We will still have a hell of a long way to go,” but he added the British intention was still to try for an agreement when the summit resumes this morning.
The plan under consideration would give Britain a payment for this year of about £600m out of an expected £1,400m net contribution this year. From 1985 the new permanent system, which Britain has always wanted, would take over.
This system would give a percentage rebate based on Britain's relative wealth inside the EEC. There would be no automatic initial payment but the size of the rebate would be adjusted each year according to the size of Britain's net contribution and its ability to pay.
Officials refused to reveal any details of the idea after the foreign ministers had given an initial report to the heads of governments last night. Nevertheless, the fact that all countries were able to agree that the idea represents a basis for discussion appeared to be a significant move forward.
In the end, however, British officials made it clear that any agreement would depend on how much money Britain would actually get back out of the system. “We still have not the first idea what that would be,” an official said. “We are still working it out.”
Whatever the outcome, the summit will be forced to make a painful choice. Either the EEC leaders must agree a deal on how the budget is financed or they must prepare to ward off bankruptcy and a likely breakup of the Community.
The foreign ministers were given the task of sorting the problem out after only a half-hour-long discussion in the summit itself. Mrs Thatcher had made a very tough stand, insisting that Britain could only accept a lasting solution which took into account the relative wealth of member states and provided a new system for calculating payments to the budget.
Mr Roland Dumas, the French Minister in charge of the European negotiations, spelled out to the ministers the state of play so far in the four-year-long battle. He described the offer, rejected by Mrs Thatcher in Brussels three months earlier, which would have given Britain the kind of system it was looking for but at a lower figure than Britain was seeking. He also resurrected the idea, also rejected by Britain, of a flat-rate deal over five years, as favoured by West Germany.
He then put forward an idea which had been assembled by France after consultations and agreement with everyone but Britain. This was for a straight rebate this year of £600m, and £643m next year. In subsequent years there would be a rebate of 60 per cent on anything over and above Britain's 1985 contribution.
This “suggestion” , which was never put forward as a formal offer, fell so far short of what Britain was looking for that Mrs Thatcher suggested that it was better for the discussion to continue over dinner at foreign minister level. She was relying on Sir Geoffrey Howe, the Foreign Secretary, to present the British arguments again and bring the discussions back to the basis of the formula reached in Brussels.