Mr Santer
Ladies and Gentlemen, I would like to introduce the Prime Minister of the United Kingdom, Mrs Margaret Thatcher. We are very proud in Luxembourg to have the honour to receive officially and to welcome heartily the Prime Minister of the United Kingdom here in Luxembourg twice in ten years. It is the first time that the Prime Minister of Great Britain, after three elections, comes to Luxembourg. We had very fruitful discussions here in Luxembourg this morning about several problems in our bilateral relations, though our bilateral relations, which are very good, which are improving, and we have also had this afternoon the illustration, the example of the improvement from our joint ventures in new fields, the technological programmes, like television satellite stations, and so on.
On the other side we had also discussions about our common views about the achievement of the Single Market, the interior market in Europe, tax harmonisation, fiscal harmonisation, and I [end p1] must agree we have no differences in that field at least. In our view we are thinking that the Single Market we have to achieve requests so many other problems that we have not to focus our energies only to fiscal or tax harmonisations.
On the other side of view we are very happy that we have good results in our common ventures and industrial field and so on and we are very confident in the improvement of these bilateral cooperations.
Mrs Thatcher
I can confirm all that the Prime Minister has said. I think you have been with us on the outward and visible things for the greater part of the day. It has been a very happy day. I have enjoyed it enormously and I am very pleased that Mr Santer sent me the invitation to come. I confirm what Mr Santer has said about our talks.
It is not surprising that Luxembourg and Britain should be very much in tune with one another. The peoples of each are very proud of their own identity and we are both, I think, traders and we are both great financial centres.
So it is not surprising that there should be a very great similarity of view and we both talked about some of the Directives that are being considered now in the European Community and we have very similar viewpoints upon them. [end p2]
The point about those Directives is to reduce the constraints for trade and not to add useless extra bureaucratic things which in fact would hinder trade and not release it.
We have just had a very very interesting talk with many of the Bankers, extremely interesting, and I think that they obviously shared the same view and we discussed the economic situation. [end p3]
Question
Could you tell us the points where you disagreed?
Mrs Thatcher
Are you asking for the points where we did agree or disagreed?
Question
Disagreed.
Mrs Thatcher
If it was going to the points where we did agree, we were going to be here for a very long time. I think that we would both like the Trademarks and Patents Office in our respective territories.
Question
On the European subjects, did you agree on every European subject you talked about today? [end p4]
Mr Santer
I must say that we have not made a new definition of the European Community. Time did not allow this situation of course. Luxembourg is a quite different situation than the United Kingdom and at the lunch I said that for us we are in quite different situations because we have our identity but we can only maintain this identity in a broader European Community.
As a very little country as we are, the smallest of the European Community, we are quite aware that we can only survive in a greater Community, that is our behaviour since World War II, I must say, and the history of Luxembourg and the tradition of Luxembourg gives us the example that a little country can only maintain its independence in a broader Community.
That is why we have another situation like the United Kingdom, which … . has the ambition of being a global power. We have not this ambition.
Question
In your speech here in Luxembourg and yesterday in Bruges, you draw the distinction between Europe as you see it and … .?
Mrs Thatcher
Because they tend to talk in generalities. You hear very frequently in European speeches, you must have heard it many times, and I think I am one of the few people who says: “What do you mean by that? What do you mean by European union? What do you mean [end p5] by monetary union? What do you mean by a united states of Europe, what do you mean, what do you mean?” What I find is that people who spend a lot of time talking in those very very general terms are nothing like as far ahead as we are in having agreed and put into practice certain of the Directives in the Single Market.
For example, as I said in the speech, there are a number of countries in Europe who have not yet get free movement of capital and one major country which is trying to say it cannot have free movement of capital unless it has equalisation of capital taxes.
Absolute nonsense, we have got free capital movement, so has Germany, so has Luxembourg, so has Holland without having equalisation of capital taxes. It is absolute nonsense to say that because we have already got it.
Some of those criticising us, who make the very general speeches, the general terms, without ever defining them, are not anything like as far ahead as we are on implementing some of the Directives of the Single Market, indeed because we do not even need the Directive as we are concerned on capital because we are already doing it. We do not even need a Directive on foreign exchange control, we are already doing it. We are already dealing with the ECU, as you know. We already in fact have different currencies in our Reserves. I can go on with several things.
We already, as I said in my speech, allow the Merchant Navies of Europe to ply for trade in our ports. I wish we had reciprocal facilities and so on. [end p6]
So really I am very pleased with the reaction to the speech, it is making people think, because you do not go forward by speeches and generalities, you only go forward by practical steps and if I am bringing them down from broad generalities to what practical steps are you going to take next and discussing those, which is what we have been doing today, some of the practical Directives, then it will have achieved its objective.
Question
(Inaudible.)
Mrs Thatcher
That is not the Community, that is the Council of Europe. Would you like to take that one?
Mr Santer
I must say we have about the cost of the television, we are sharing the same views. I am pleased to say that because here in Luxembourg, as we are launching the first European medium-powered telecommunications satellite we are very interested about liberalisation as borders for television without frontiers, cross-border television. We are worried about convention, or the draft convention for the Council of Europe as we have two provisions at least, the provisions at Article 14 and 17 are worrying us because [end p7] we are quite aware that these Articles would not liberalise the Community, the telecommunications system, but would give to several Member States the possibility to interrupt the programmes.
We are thinking that this is not in the spirit of the Single Act or the achievement of the interior market because television is also part of a service and the judgment of the Court of Justice of the Community in Luxembourg was stated, and therefore, we are thinking that we are in favour of a convention for twenty-one Member States from the Council of Europe, but we cannot accept two different legal markets or communities, one for the Twelve or one for the Twenty-one.
Therefore we are hoping that other Member States would also put some amendments to the draft convention so that we could agree to this convention. [end p8]
Question
Mrs. Thatcher, could I follow that up?
We saw the satellite station today and saw the tremendous power of satellites between so many countries and channels based in Luxembourg all the way around Europe. How worried are you about the dangers about the wrong sort of programmes being beamed to Britain?
Prime Minister
It is alleged by some people that the more programmes you have financed by advertising or subscription, the programmes will become of lower quality. [end p9]
We would not necessarily accept that. You can have subscription programmes actually of much higher quality. There is a very good arts channel at the moment you can get on subscription; there is a news channel; all kinds of channels for special interests you can get on subscription.
But what the Jacques SanterPrime Minister and I are worried about is that it is possible that some channels might wish to come on with pornography, portray violence, portray some of the things which we have managed or should have ousted from some of the videos that you can get via legislation. We believe we have a duty to protect young people from this and to protect people from it.
The picture that comes into your living room is the most powerful form of communication, I think, known on this planet and therefore we seek a code of practice through the Council of Europe that certain things shall not be permitted to be shown and certain kinds of violence or sex shall not be permitted to be shown.
That is what we are after and that, I think, is going to be very necessary and the only way you could enforce it then, if you got one, would be to say to people who advertise: “If you advertise on a channel which has not accepted that code of practice, then you will be committing an offence!” and of course, it would catch your home advertisers; it would not catch others. [end p10]
That is what we are setting out to do and I think that it is very necessary. What the Council of Europe is muddling it up with, if I might use that phase, is saying: “Well, while we are about it, we will put in rules and regulations about when in the programmes you can publish the advertisements anyway such as you cannot have any during one particular programme—you can only have a whole batch in the middle!”
Now, Luxembourg has known how to do advertising since I was a child and we used to listen to Radio Luxembourg. It has known all about advertising. I might say that our television companies are quite accustomed to natural breaks and I think have handled it reasonably well and this is an example of where you do not need a regulation and as I said earlier, that is not really their business, but we do need a regulation on the other standards.
We are therefore in danger of having a different code of practice in the Council of Europe from the ones which we have in the European Community and that is another worry. What we are both after is the standards of violence and no pornography and so on, because the point of having extra television is not to go down market. I reckon there is often a market for the best and there is often a market for television on specialised subjects which, on subscription, people would very much like to have. [end p11]
Question
And are you opposed to the … . European Commission? What is wrong with the European Community as a body for that?
Prime Minister
First, it is only twelve and the footprints you are seeing from those satellites are much wider than the European Community.
We have the Council of Europe, which is twenty-one countries, and therefore we are trying to get that code of practice. We have put up a compromise text to be considered in November and we hope that that would deal with the problem if it is acceptable to them all, but it is far better to get a code of practice, because this all it can be really, a code of practice among the wider number.
Question
… .European Community, in the past year, Prime Minister, there have been a number of issues which you have put firmly your foot down about. You were opposed to … . intergovernmental conference on the Single European Act; you were opposed to doubling structural funds for poorer countries, to name two. On both occasions, you … . the majority gave in and people are now saying well on taxes, on single … . you will do the same. Shall we see that again? [end p12]
Prime Minister
The Single European Act is a very very much smaller Act than they had originally thought, because when we actually got down to what I might call the nitty gritty, that is what was left.
When we had the structural funds, we fought and won on many many other points, particularly on the agricultural surpluses and on the amount of increased money which should be spent which we got down very very considerably, and therefore, having won I think about 95 percent of what we wanted, we were prepared to let more go into the structural funds and do not forget we also, to some extent, ourselves benefit from the structural funds, but you had to release more money than they were intending to do from the agricultural budget, and having got most of that and having also got the financial budgetary arrangements … which were to end it… . continued precisely as they were, then we did extremely well and agreed that we should do the structural funds, but that was a pretty long negotiation.
Question
Can we expect similar … . (inaudible) [end p13]
Prime Minister
As far as taxation is concerned, the taxation directives are done on unanimity. That was one thing we got from the Single Act. We both insisted and so did a number of other countries, that there could only be changes in tax by unanimous agreement of states.
We take a similar view about tax. You cannot just pick out one tax, like Value Added Tax, and say you must harmonise that for the single market. Value Added Tax is only one component of price.
The main components of price are wages, efficiency, national insurance or social security contributions, property taxes and many many other things. If you try to pick out one component of tax and harmonise that, you will upset the balance of everyone's budget because different people have different views about how much you should get from indirect tax and how much you should get from direct tax and the Value Added Tax is but a small component of the price and you cannot harmonise prices. After all, competition is what the single market is all about.
So any changes in tax other than decisions of the Court on the practical application of existing law, can only come by unanimous agreement and I think you will find it is not only myself; I think you will find that there are several—probably rather more than several—members of the Community who would not have this harmonisation tax. It is not necessary for a single market; it in fact would deprive people—sovereign parliaments of their competence over both their fiscal and economic future. [end p14]
Question
Have you decided that you will not vote for harmonisation …
Prime Minister
We shall make up our minds but we have said quite clearly and will continue to say: harmonisation of tax is not necessary for the single market. They have not got it in the United States and they have a single market.
Question
Prime Minister, European Parliament President Lord Plumb said he was born a Briton but would die a European. Will you die a European or will you die fighting Europe?
Prime Minister
I hope to live!
If you read the speech, you might have a look and see what Britain has done for Europe. You might also see that Europe is not the property of the Community. It existed long before the Treaty of Rome.