Prime Minister
Ladies and Gentlemen. This has been an important European Council, important above all because of the background of major and rapid developments in Eastern Europe to which the Community has to respond. But let me take you through the four main issues which the Council has discussed.
First, the Single Market. It is this which represents the most important contribution which the Community makes to the prosperity of each of us and of course the greatest attraction to the countries of Eastern Europe.
Britain has throughout been in the forefront in working for successful completion of the Common Market in 1992 and in implementing the various agreements and directives.
This Council has given a further important impetus to that work, in particular by agreeing on the priorities for future work: investment services, public procurement, testing and certification, further work on road transport, air transport and shipping. [end p1]
We particularly welcome the recent agreements which opened the way to cheaper air fares and removal of some of the restrictions on lorries which mean that our lorries can now pick up loads across Europe.
I am particularly pleased that the idea which I and the Douglas HurdForeign Secretary put forward of a major package of Internal Market decisions to be taken before Christmas has been endorsed.
The second main subject—economic and monetary union—you will be aware of the conclusions reached. There is the necessary majority to start an inter-governmental conference at the very end of 1990 to consider what should follow Stage 1 of the Delors Report. No time limit is set for its work and it will consider not just the Delors proposals but other contributions, including of course the British paper.
It is no secret that we are not convinced that an IGC is either timely or necessary. But clearly a majority of Member States favour it and we shall of course play a full part in its work.
I made very clear that Britain cannot accept the Delors Stage 2 and 3 proposals and this is not just the Government's view, but that of all the main Parties in Parliament. We are not prepared to see Parliament's powers in the crucial areas of economic and financial matters diminished. [end p2]
And I detect a growing awareness in the Community of the difficulty of these issues, of the need for thorough preparation by ECOFIN and Central Bank Governors and of the importance of gaining experience of the operation of Stage 1, which is a massive reform programme, before we move on to other stages. This will be subject to much further discussion and anyone who predicts the outcome at this stage will be very rash.
And the third main subject—the Social Charter—which we nearly discussed in the dark, I do not think I need say a great deal about that. As you know, the United Kingdom does not support it so it has been endorsed by only eleven Member States.
It has no operational significance. The Commission will bring forward individual proposals and they will be treated on their merits. We think that some of them are unnecessary. Some of them we believe would cause unemployment rather than create jobs and they are in many cases matters for Member States rather than for the Community as a whole.
I think it is a pity myself that we could not get a Charter that stuck to general principles and that all could have endorsed. But as M. Delors said in London last week, “the outcome is not a tragedy” .
And the fourth subject, and most important in terms of operational significance, we confirmed the decisions we reached at the meeting on 18 November in Paris on help for reform in Eastern Europe. [end p3]
The Community and its Member States have a very important role to play here in cooperation with other members of OECD. I believe that our response is positive and measures up the needs of Eastern Europe although the situation is developing very fast.
Britain's ideas for closer association between the Community and individual countries of Eastern Europe will be followed up. The question of borders is not on the agenda and we confirmed that we all continue to be bound by the Helsinki Final Act and by the various Four Power agreements on Berlin.
The Four Powers are incidentally keeping closely in touch on developments and we are of course fully consulting with the Federal German Government.
So in conclusion, what emerges most strongly from this meeting is the degree to which the Community and the twelve Member States, not least because of 1992, can act as the driving force in the development of the whole of Europe at a turning point in the continent's history.
Despite our disagreements on some points, that is the real message of Strasbourg and it is a very positive one. The Community should be an example of how free and democratic nations can work ever more closely together while remaining open to the outside world. That is the way in which Britain wants the European Community to develop and this Council encourages us to believe that that is how it will develop and Britain, I assure you, will play a very full part. [end p4]
Question (John Dickie, Daily Mail)
Are you not worried at being portrayed as somewhat out of step with the rest of Europe and being shown to be dragging your feet and almost brought kicking, but not screaming, into line in the end?
Prime Minister
No, it is a bit of hysterical, John DickieJohn, is it not? No, the fact was in the Single Act everyone looked up when it was said that Denmark and Britain are way ahead with implementation, way ahead with implementation, in the Single Act.
So in things we can do in practical terms we have been driving away. And when it came to the Social Charter there were a number of people there who agreed it on the basis that it was not an operational document, could never be an operational document, it was only a solemn declaration. They failed in fact to observe that there was an action plan with it, an action plan which had not been debated, and there was an attempt to get the action plan into the Communique in the sense that they were trying to persuade us to give effect to it. No-one would agree to that, no-one. The directives must come forward in the ordinary way and be considered individually. [end p5]
And on the EMU, we are again way ahead of other people in Stage 1 of Delors in many things except the Exchange Rate Mechanism. Others have to catch up with us in some things and I think that there is a good deal of concern about what may follow Stage 1 and I think a lot of difficulties will be seen when the preparatory work is done on the way ahead.
Question (Karl Wilsing, German TV)
Do you have any comment on the declaration which reaffirms the right for German unity?
Prime Minister
I was about to say no I had no comment on it and then I was about to point out something.
The sentence I was going to call your attention to was: “We seek the strengthening of the state of peace in Europe in which the German people will regain its unity through free self-determination” . That, as you know, comes from the NATO document which we have always endorsed. The NATO document says: “We seek the state of peace in Europe in which the German people will regain its unity through free self-determination” .
So the only difference is the phrase “the strengthening of the state of peace” . That comes from NATO. The new sentences after that say that that must take place in the light of all of the other alliances and agreements. [end p6]
In other words, it goes on to say: “This process should take place peacefully and democratically, in full respect of the relevant agreements and Treaties” —that is the Warsaw Pact and NATO— “and of all the principles defined by the Helsinki Final Act” . You know the two main ones on borders are that we should not violate one another's borders and there could only be any change in those borders through peaceful means. “In a context of dialogue and East West cooperation this also has to be placed in the perspective of European integration” .
So it was a very very carefully drafted section and we spent a long time on it. So it is the origin of the NATO undertaking as set in the context of all our existing agreements and alliances, none of which can be ignored, all of which must be taken into account which is a more positive way of putting it.
Question (Bulgarian TV)
Do you see any difference between the changes in Bulgaria and the other Eastern European countries and do you have a specific policy on Bulgaria?
Prime Minister
There cannot be a specific policy on Bulgaria, our general policy to all States in Eastern Europe is that we seek reform, to be a full democratic State in the full meaning of that term, that is to say with plural political parties and the accompanying economic reform. [end p7]
So far Bulgaria, as you know, has had some changes but the course of action has been rather different than the others but we do not know what will happen. But the objective is democracy for all the East European States, plus economic reform.
Question (Jim Riddell, Irish TV)
How would you characterise your meeting with the Taoiseach, Mr Haughey, and did he raise with you the case of the Birmingham Six, of which he says he wants a review?
Prime Minister
The meeting was friendly, as it usually is, constructive. There is a small communique which I am sure you have. He did raise the matter of the Birmingham Six. As you know, I referred him to the Hearing of the Court of Appeal had already reheard and I have nothing further therefore to add on that matter.
Question (Robin Oakley)
As you held out to Eastern Europe the advantages of true democracy, do you share with Chancellor Kohl the view that the time has come to increase the powers of the European Parliament, a Parliament elected by 300 million people? And also in the Eastern European context, do you remain opposed to the European bank idea? [end p8]
Prime Minister
The European Development Bank, no we were not opposed to the idea, we were not opposed to it in principle at Paris. We are not opposed to the idea and you will see quite a good deal about it in the Communique. It is not exclusively of members of Europe as far as the depositors are concerned. We hope to attract quite a number of OECD members who will put their deposits in. But the majority shareholding would be held by members of the European Community. I think that a good deal of work has still to be done upon it, as you would imagine.
On the European Parliament, to me the real true democratic accountability is through national Parliaments. The Council of Ministers is the appropriate decision-making body. Each of those Council of Ministers is directly democratically accountable to their own national Parliament, a democratic accountability that you will see working very effectively on Tuesday in our Parliament when I have to make a statement on this Council. And after that, for the sake of those who have different Parliaments, I shall have to stay there for about an hour being thoroughly cross-eximained and questioned on every aspect of what happened here.
That is more effective democratic accountability than the kind of debate you get in the European Parliament and it is that kind of democratic accountability that we wish to be strengthened and I think that you will find some reference to that in the Communique. [end p9]
Question
Prime Minister, have you got any comment on a poll in today's “Daily Telegraph” which suggests that your policies on Europe have become markedly less popular since June?
Prime Minister
No comment at all. I have not seen it.
Question (Same Man)
Well, do you think there is a message on Europe which you are failing to get across at the moment, if I can put it another way?
Prime Minister
I must tell you that an astonishing number in Europe seem to have seen my David Dimbleby interview, particularly the European bit, and were very pleased with it. I am so sad you were not! [end p10]
Question (Daily Mirror)
Following up on that question, can I take a slightly different tack and suggest that in your tone today and in the sort of noises we have been hearing coming out of the meetings, you were actually taking a slightly more conciliatory tone with your European partners?
Prime Minister
Constructive, as always and relevant. Constructive and relevant are our comments always.
Richard Ingham
Prime Minister, given your well-known opposition to calling the inter-governmental conference, what hope can you now hold out for changing the apparently unstoppable forward movement of the Delors Plan for which there seems to be considerable popularity among the eleven other states?
Prime Minister
As you know, Stages 2 and 3 have not been under the microscope as they should have been and as they will be now.
Secondly, that is not the only document which will be considered. Ours, on a much more evolutionary approach which does not require an inter-governmental conference, will also be considered and there may well be others as well, we do not know. [end p11] So there is absolutely no presumption that Stages 2 and 3 of Delors will go through as now and I think there will be a great deal of questioning it will have to go through and it would not surprise me if they came up with something different.
Barry Dunsmore (ABC News)
Prime Minister, in spite of his personal reassurances to you later in a telephone call, did you find that President Bush 's call for acceleration of European integration so that it could serve as a magnet to Eastern Europe weakened your position here in Strasbourg this week?
Prime Minister
Not in any way. How could it, when the definition of “Community integration” is in fact the Single Market and when we are leading on the Single Market? So the question contains a contradiction in terms. We are leading on the Single Market.
I might say we are pretty well ahead with Delors Stage 1 in many things. We are leading on those practical things: freedom of capital movement; abolition of foreign exchange controls; our state aids are a good deal less than those of either Italy, France or Germany; we have not yet joined the Exchange Rate Mechanism—as you know the conditions have been laid down for that—and as you know, we and Denmark are in the lead on the number of directives which have been implemented, so when it comes to practical measures of getting on with the job, we are ahead and not behind. [end p12]
Charles Grant (The Economist)
At some point over the next year, the Council will have to decide on the precise agenda for the coming inter-governmental conference. Can we take it, from what you have said already, that Britain will oppose broadening-out the agenda from EMU to broader institutional changes unrelated to EMU and the general reform of the Community's institutions?
Prime Minister
No, I do not think you should take it that way at all. One has experience of inter-governmental conferences. They seldom stay on one particular narrow thing and I doubt very much whether this will be any exception to that. Once you hold an inter-governmental conference, it tends to deal with more than one particular thing and people will find other things to raise which could be dealt with while that is in session. That may be particularly so of this one because the impression was given that it will take years and years—not by me, but by others, by the François MitterrandPresident!
Christopher Monckton (Evening Standard)
Prime Minister, at the end of the evolutionary progress towards Economic and Monetary Union, what shape do you see for the currency or currencies of Europe? Do you see a parallel currency emerging and if so, is it going to be a hard ECU which is based on a basket of commodities or a soft one based on a basket of currencies? [end p13]
Prime Minister
I would not prophesy. You do not need either a single currency or an inter-governmental conference in order to have economic and monetary union. You know who I shall quote in support of that view; it is none other than Karl Otto Pöhl. So if your objective is economic union and monetary union and we are tied to the progressive realisation of that objective, you need neither a single currency nor a central bank, you need monetary and economic cooperation, so I would not jump to any conclusions except that I am prepared to have a closer monetary and economic cooperation, which is a fundamental part of our joining the Community.
David Buchan (Financial Times)
Prime Minister, talking of Mr. Pöhl, most of the push for monetary union and a central bank comes from those countries who have been in the ERM for ten years or so and have grown very restive or pretty restive with de facto German domination of the EMS.
Do you think that had Britain been in it for the past ten years that the UK and yourself would have grown equally restive with this German domination of this system?
Prime Minister
I do not know; we have not been and so one could not judge, but there is a certain sort of contradiction, you know, to that view. [end p14]
The fact is that people say the point about being in the ERM is it has helped some of them to keep down inflation. The only reason it has helped them to keep down inflation is because that is the absolute priority of the Bundesbank and of the German people. Their history was that they knew and experienced inflation—hyper-inflation—and they are more fearful of it than anything else and therefore not only the Bundesbank but the full cooperation of the German people in keeping down inflation takes place.
That is given as the main reason for joining the ERM, but the moment you go from that rigid and valuable discipline of the German Bank and people to in fact mixing it up with other disciplines, other views, other “let us have a bit of inflation here or there” of other economies, you lose the very thing which leads you to want to join an exchange rate mechanism which is getting inflation down.
If its main advantage is to keep inflation down and the next step is one which may put inflation up, it is going to be very very interesting and will have to be worked out.