European Diary, 1977-1981 (22 page)

Clearly Leo himself, though fighting through great vicissitudes of ill-health, motor-car accidents, losing an eye, having lost his wife, God knows what else, had played a decisive part in getting control over public expenditure when he was Second Permanent Secretary in the Treasury charged with this side of things. He had relied not so much on cash limits, though he thought these were important, but even more on a formula which he had evolved with John Hunt,
¹⁹²
by which in Cabinet committees Treasury ministers should not be allowed to be overruled, whatever the majority, without an obligation to go to Cabinet resting upon the minister who wanted to spend, not upon the Treasury; and that if there was no agreement, this immediately unlatched a process by which the exact state of the contingency reserve had to be reviewed and placed before the Cabinet. This he thought made a great difference.

He was also interesting, though unforgiving even in retrospect, about Tony Crosland, who had at times been a still closer friend of Leo's than I was. He had known him very well up to some time in the early 1960s. But, like a lot of people, Leo had been deeply
offended by Tony on a personal basis, and then subsequently, perhaps partly because of this but I don't think principally so, thought that Tony had an appalling responsibility for public expenditure accelerating out of control during the early days of the 1974 Labour Government, mainly because he had always provided the most sophisticated arguments in favour of an open hand at the till. It was in his view a real example of
trahison des clercs.
Leo is still as always very much his own man, rather like a senior Graham Avery, with great intellectual self-confidence, in some ways also not unlike the maligned Douglas Allen, but with substantial differences too.

THURSDAY, 29 SEPTEMBER.
Brussels.

Worked at home on the highly complicated subject of the effect on agriculture of the transfer to the European unit of account, preliminary to an hour-long meeting with Gundelach, in which he explained to me why he did not want to make a move on this for several months. Quite a convincing explanation: the intellectual case was overwhelmingly against him and he had the good sense to admit this and said his reluctance was based purely on a judgement of how the various personalities would react; a good example of how to present a difficult case, and he moved my mind somewhat.

I had Sigrist,
¹⁹³
the German Permanent Representative, to lunch, partly because I felt a little out of touch with the German scene. Good, rather serious, conversation. First, without great shafts of penetrating light, but highly intelligently, he described why the Germans reacted so much to the terrorist threat and the effect on various German alignments and the position of the different parties at this stage. Then a routine exchange about JET and Article 131, and then at the end my expounding to him some of my ideas on economic and monetary union. I wonder how he will report back.

FRIDAY, 30 SEPTEMBER.
Brussels.

A visit from Bill Rodgers, who gave me an advance copy of the public letter which Callaghan had written to the Labour Party on
the eve of its annual conference. On balance quite a good letter, very firm on rejecting any possibility of British withdrawal from the Community and recognizing how damaging the continuing speculation about this was both to the Labour Party and Britain's position in Europe; presenting some good arguments against this, but also concentrating far too much on wanting a loose Community with an absolute ceiling to any significant powers for the Parliament, and welcoming, as it is right to welcome for
other
reasons, the prospect of enlargement on the basis that it would make a loose Community more certain–a very silly view indeed, this. Not too unreasonable a slant on reform of the Common Agricultural Policy, and quite constructive, though very vague, about energy policy.

I saw an agitated Tugendhat at 4.30, who was greatly upset, and with some reason, to discover that, without consultation with him, Gundelach had apparently announced that export sales of Community butter, with restitution, i.e. with huge budgetary costs and the likelihood of extremely adverse public reaction, in Britain at any rate, were likely to be 150,000 tons for the year, not 105,000 tons as had previously been thought. Gundelach was in Paris so there was nothing to do except await his explanations.

MONDAY, 3 OCTOBER.
Brussels.

Màrio Soares, Prime Minister of Portugal, from 11.00 until 12.00. Soares on this occasion more realistic, more self-confident, more impressive than when I had seen him in March. A quite good conversation (in French) with him. He seemed reasonably satisfied with the way the application was being handled and gave a mixed picture of the Portuguese economy.

I pointed out to him the difficulty raised by the Callaghan letter, in which Callaghan got very close to saying that one of the great advantages of enlargement was that it would inevitably mean a looser, less effective, less supranational Community; and that Soares ought to be aware of this because if he aligned himself with this it would inevitably cause an ideological split amongst those who wanted his accession to the Community. He reacted immediately, saying it certainly was not his view at all; the last thing he wanted was to dilute the Community by coming in. He convinced me that he was not just talking for the book by coining the
good aphorism that he was not going to take the trouble of resigning from EFTA (the European Free Trade Association) in order to join what was no more than a glorified EFTA. What he wanted to join was a real political Community with a momentum towards economic and political union.

Crispin back from Washington with the news that the next Summit is not to be until after the Danish presidency is out of the way, and therefore under the German presidency. Thus the big countries will rather skilfully obviate the problem of what they would do with a small country holding the presidency. He also reported on Strauss's feeling following his visit to us, which apparently amounted to his thinking that we had slightly taken the pants off him and that he had given us more than we had given him; but this may be a ploy.

WEDNESDAY, 5 OCTOBER.
Brussels.

Commission meeting, disrupted but agreeably so by the visit of Queen Juliana and Prince Bernhard. Out to the airport to meet them at 10.15. It was a surprisingly cold morning, and I stood rather chillily on the tarmac although they arrived on time, she dressed in her typical comfortable Dutch way, he, stripped of his uniforms by Vredeling (although I do not suppose he would have come in one in any event), dressed in one of his rather flash pepper and salt suits. However, he is an intelligent and, I find, likeable man in spite of the Lockheed affair.
¹⁹⁴
Drove in with both of them to the Berlaymont, it having been made clear by the Dutch authorities that the Prince did not wish, which was the previous plan, to drive with Vredeling and therefore he sat in the front of the car, and the Queen and I sat in the back.

Both of them were very anxious to be agreeable, which I think comes naturally to them. At the Berlaymont they were greeted with flowers for her and a good cheering crowd, mainly of Dutch. They then came up to my room where they expressed great interest in the view, the pictures, everything; the only hiccup being when Umberto, my anglophone Italian
huissier,
brought the coffee in and
she, who hadn't spoken a word of this language to anyone else, suddenly addressed him in Dutch, and asked for some hot water with the coffee. ‘Warm wasser,' she said, or some such words. Poor Umberto was absolutely flummoxed. She presumably assumed that all people in subordinate positions in Belgium were Dutch-speaking. However, when I told her that he was an anglophone Italian she apologized profusely.

In the Commission meeting various members gave
exposés,
including notably Ortoli, who was not on the list but spoke with great passion and enthusiasm, and much impressed the Queen. She was slow to get going and ask questions and Prince Bernhard performed a very useful role in being ready with one or two quite shrewd ones. Then lunch, lasting until nearly 3.30, with nearly all the members of the Commission and turning towards the end into a rather good general discussion: the Queen, idealistic, perhaps a little naïve, but genuinely interested and enquiring; Prince Bernhard quick and intelligent and very agreeable to talk to on a personal plane; and at the end, when I thanked him warmly and privately for having come and said how much he had contributed to the visit, I found him rather moved.

For this successful visit we paid the mild price of not being able to start proper Commission business until 3.30, which meant a wearing five-hour meeting until 8.30. Ortoli was overcome by his oratorical triumph in the morning and indeed another good and striking performance at lunch. On the way back up in the lift, he told me, ‘Elle est une dame très distinguée,' which is not exactly the obvious phrase to use about Queen Juliana. Then when I saw him for an hour the next day and said how splendidly he had spoken the day before and how much he had impressed the Queen, he said sadly, ‘Ah, yes, but that was yesterday. I am on much less good form today.'

FRIDAY, 7 OCTOBER.
Brussels.

A meeting with four or five Commissioners about the enlargement paper we had promised to the Council. Contrary to my hopes and expectations after La Roche, the draft before us was almost useless, with all the edge of the two previous papers taken away. I recalled across forty years a remark of G. D. H. Cole, who, when somebody
had said that a book was very bad, replied that it was not quite as bad as it seemed at first sight; if you only read every other sentence, the text made reasonable sense. This was the case here. However, what the sense was depended whether you started with an even or odd sentence. I announced that Kergorlay
¹⁹⁵
was to rewrite the whole thing, so that it could at least have the coherence of single authorship, as near as possible to the La Roche form, and try to get it through a special Commission on Tuesday, although I alas would be in Japan.

SATURDAY, 8 OCTOBER.
Brussels and Villers-le-Temple.

Breakfast rue de Praetère for James Schlesinger, the United States Energy Secretary, with a great party of officials. A rather sticky occasion–I hate working breakfasts in any case–and I didn't take greatly to Schlesinger. No doubt he is an able man, but I rather dislike his habit of carrying on a conversation by a series of laconic, not very funny, wisecracks, with too much straining after epigram. It was rather like talking to a less witty Ken Galbraith
¹⁹⁶
whom one did not know.

To Villiers-le-Temple for the Belgian ‘Schloss Gymnich' weekend. This wasn't quite Leeds Castle but it took place at a rather attractive hotel called La Commanderie, converted out of a sort of mixture of priory and barracks for Knights Templars. Everyone, except Guiringaud, was there for lunch. David Owen was asked to begin by giving an account of the British position after the Labour Party Conference, which he did in somewhat complacent terms. I then said I thought the Callaghan letter did mark a step forward, although I could not entirely agree with David's view that it had buried the issue in the Labour Party for ever; it had probably buried it for this Parliament, and possibly the next if the Labour Party won, but by no means necessarily with the Labour Party in opposition.

I also thought there were grave dangers in at least one sentence of the letter, that which expressed the view that enlargement was to be welcomed as an almost inevitable weakening of the Community. This provoked others, particularly Genscher and Thorn, to
complain slightly more strongly along the same lines; Genscher said it was very nice of the British not to ask for another renegotiation, implying strongly that if we had that would have been the end; but also committing himself, which was satisfactory, to a view that on the contrary enlargement must mean a strengthening of the Community. However, there was not tremendous pressure upon David.

There was some complaint about Crispin not having distributed to the Little Five the text of the communiqué which had been agreed upon, though not for publication, at the Washington meeting of Summit ‘sherpas', and I defended him vigorously on this, saying that he could not possibly stand out against the unanimous view of the others that there was to be no communication of this, except to the heads of governments represented at the Summit. Inevitably a slightly difficult issue as we are in a way there as the representative of the Little Five, though also, of course, nominally as that of the other four, and if they give us no support for action helpful to the Little Five, it is very difficult for us to know how to strike the balance.

Then a four-hour, more formal session in the afternoon. We opened with an institutional discussion on enlargement, and then I did about a twenty-minute
exposé
on monetary union. This was not at all badly received round the table, notably (as one would expect) by Ireland, Italy, Belgium, Luxembourg, but also by Denmark, Holland and even Genscher for Germany. David Owen was sceptical, but not particularly hostile or indeed particularly informed.

There was a curious flare-up at dinner. We got on to Summitry and the question of future representation, Guiringaud playing this in a relaxed way and also Dohnanyi who had by this time replaced Genscher, partly of course because they knew, as most of the Little Five were beginning to find out, that there was not going to be a Summit during the Danish presidency, but only during the German presidency. This made the question of the representation of the presidency, as opposed to the Commission, fairly academic. On Commission representation, the strong impression which emerged from Guiringaud was that we would not have the same trouble from Giscard next time round. Giscard, he implied, had had enough of the issue.

Then Guiringaud, supported by Dohnanyi, with Forlani giving silent acquiescence, said that he had no objection at all to the
communiqué of the Washington official meeting being distributed to the governments of the Little Five. So I said, ‘Excellent.' Whereupon David got into a most excited state and said he couldn't possibly agree without, as he foolishly put it, the explicit approval of his Prime Minister who took a great interest in these matters. I said that there was no need for anybody to get excited because I only had one copy with me and therefore could not distribute it immediately; and if David wanted to speak to his Prime Minister, that was clearly a matter for him, though if by chance his Prime Minister wished to stop the distribution, it would then be for me to act on my own judgement and responsibility, which indeed I would do. This was what the Little Five wanted to hear, so it somewhat calmed them down.