European Diary, 1977-1981 (33 page)

A farewell lunch to the Chinese Ambassador, Huan Hsiang. A party of six: he and his Counsellor, Crispin, Roy Denman and Franz Froschmaier, Haferkamp's
Chef de Cabinet.
The Ambassador spoke very good English, having been in London for some time, and was quick and indeed funny; therefore an agreeable and probably worthwhile occasion. Back to the office for a short time before motoring to Bonn with Etienne Reuter for my 5.30 meeting with Schmidt, which started five minutes late and went on until 7.20.

This was a dramatic meeting. After a normal session with
photographers and almost as soon as we were alone, Schmidt plunged in, almost blurting things out. What he broadly said was: ‘You may be shocked, you may be surprised at what I intend to do, but as soon as the French elections are over, probably at Copenhagen
³⁵
- assuming that the French elections go all right and that there aren't any Communists in the Government—then I shall propose, in response to the dollar problem, a major step towards monetary union; to mobilize and put all our currency reserves into a common pool, if other people will agree to do the same, and to form a European monetary bloc. There will be great risks', he added, ‘if it all goes wrong, then maybe the Community will fall apart. Do you think it is worthwhile?'

I of course said, ‘Yes, certainly,' and we then discussed in considerable detail how it should be managed, what the currency should be called, whether the European unit of account should be used, etc., the detail he supplied showing that he was serious about what he was saying. I asked him what degree of secrecy he wanted preserved, and he said, ‘A great deal, I have discussed it with nobody except Emminger of the Bundesbank and the new Minister of Finance [Matthöfer]. There may be a lot of opposition here; there probably will be. I am not sure whether I can get away with it, but I am prepared to try. Do you think there is a chance of the British moving?' I said, ‘Maybe; doubtful; I am not sure.'

I also assured him that I would not inform the Commission at this stage. He particularly asked me not to tell Ortoli or Haferkamp, at least until he had had a chance to consult Giscard. I asked him what he thought would be the position if, as seemed to me quite likely, there was a confused result after the French election. He said he would be guided by the advice of Giscard. He still had great faith in Giscard, as indeed he said he had in Barre. He would not necessarily mind having Communists in the Italian Government, but he could not go ahead with this with Communists in the French Government. He spoke reasonably warmly about Callaghan, much more critically than I had ever heard him about Healey, whom he thought showed an excessive, almost nauseating, eagerness for eating his own words without the slightest sense of shame, and, more importantly, with deep hostility towards Carter, whose behaviour
over the dollar was intolerable, whose behaviour over the neutron bomb was vacillating, whose behaviour in the Middle East was ineffective, whose behaviour in the Horn of Africa was weak, etc. etc.

The anti-Americanism –or anti-Carterism, because Schmidt is basically pro-American—was in a way worrying, although if the dollar crisis is such an
amorce
for economic and monetary union, I am prepared, up to a point, to go along with it. At the same time he was anxious to stress that if we made such a move there might be suspicion that Europe was becoming inward-looking and therefore it should be an additional reason for our taking a liberal attitude on trade questions at Geneva and, he added, for not pressing the Japanese too hard.

He was gloomy, as usual, about German politics. ‘Oh, things have gone pretty badly, with the near defeat over the anti-terrorist bill,' and this was having a bad effect on the standing of the Government, with a real danger that it might be left as a lame-duck administration. He asked how much progress I thought we could make at Copenhagen. I said a certain amount; that Jørgensen would certainly be anxious to be helpful, but that we should probably not envisage getting a major commitment tied up there, but should rather see Copenhagen as a very important stage towards the following European Council under the German presidency at the beginning of July, which he had decided to hold in Bremen.

On the Western Economic Summit later in July, he expressed scepticism as to whether Carter would come. I told him that I disagreed with this. I thought Carter would come and I thought that the Summit could be extremely important but could take place in appallingly difficult circumstances with, if we made the worst of a series of assumptions, confrontation between Europe and Japan, virtual breakdown of the multinational trade negotiations, great weakness and uncertainty in France and a further and more intensive dollar crisis.

Rather typically he brightened up at this catalogue of gloom and agreed that this was an additional reason for having a strong Community front. We parted on very friendly terms; indeed he gave me a medal on the way out, but not by premeditation and just one of his own collection, i.e. a spontaneous present and not a decoration! After the meeting, with Etienne to the Königshof Hotel
where I needed a quick drink to help me digest all this, and then back to Brussels by 10 o'clock, where Laura and Crispin came to a late supper and I rather excitedly informed them of this great turn-up for the book.

WEDNESDAY, 1 MARCH.
Brussels.

I was sufficiently exhilarated by my Schmidt meeting to attempt a run in the Bois at 8.15. A great mistake for my ankle. A long Commission morning from 10.10 to 1.25, and then off to the depths of Uccle for an Australian Embassy lunch for Garland,
³⁶
their new Trade Minister, to whom I was determined to be agreeable in order to try and put relations on to a better personal footing. I did not find this too difficult as he is an agreeable man.

Resumed Commission meeting from 3.45 until 7 o'clock. A fairly wearing Commission day, particularly as my ankle was being extremely tiresome. In the morning we had quite a difficult one and a half hours on enlargement. In the afternoon we had Ortoli being fairly blatantly nationalist on the French demand that we should freeze their MCAs despite the pre-election fluctuations of the franc. He insisted that we waited until 7 o'clock for a report from Gundelach, who was seeing the French Minister of Agriculture (who had descended on him in the Berlaymont).

Back to rue de Praetère just before 8.00 to let (Dr) Ann Phillips have another go at my ankle. Marietta Tree,
³⁷
who was staying, brought three of her ‘collaborators' for a drink, and then at 8.30, everybody overlapping with everybody else, we had a dinner party for her with Hintons (the US Ambassador to the Community), Dillons (Irish Permanent Representative) and Perlots. It became like an opera scene with too many people doing different things on the stage at the same time.

THURSDAY, 2 MARCH.
Brussels and Edinburgh.

10.40 plane to London. In the VIP lounge at London Airport I met, by accident, Douglas Wass, the Permanent Secretary of the
Treasury, and Bill Ryrie, now Economic Minister in Washington and my old private secretary at the end of my time at the Treasury, and had quite an interesting exchange of views with them. They were very concerned to know what Schmidt was thinking about monetary questions and I was forced to give them a somewhat guarded reply. 11.40 shuttle to Edinburgh. Lunch with the Scottish Development Council in the North British Hotel. Then a fairly hectic hour of TV and radio interviews. To the university to deliver my Montague Burton Professorial Lecture at 5.15. It wasn't a great lecture, but the audience was extremely good. The lecture theatre was packed with six or seven hundred people. Then a large reception and finally a university dinner. An agreeable conversation with old Lord Cameron, the Scottish Judge, on one side, about Scottish and English legal systems, etc., and with the acting Principal, on the other (the Principal had died six weeks before), about American twentieth-century history. John Mackintosh
³⁸
was also present. The dinner was notable for the fact that it was in a room surrounded by about eight very well-lit Raeburn portraits; he paints heads much better than hands.

FRIDAY, 3 MARCH.
Edinburgh, Newcastle and East Hendred.

A good train journey along the East Lothian coast and down through Berwick-on-Tweed to Newcastle at 11.45. Then to the Northumbrian Water Authority offices for a presentation of the Kielder Water Scheme, a huge enterprise, costing in total over £100m, with a very big Community contribution, both from the European Investment Bank and the Regional Fund. After lunch with them, which Geoffrey Rippon attended, helicopted for an hour up into the North Tyne valley over the area to be flooded and down to a point on the long pipeline which they are driving between the Tyne and Tees valleys. Back to Newcastle at 4 o'clock to open the Newcastle Polytechnic Library. Ted Short, now Lord Glenamara,
³⁹
was there—the first time that I had seen him since we
ceased to be together in the Cabinet. An odd but nice man. 6.30 plane to London, and to East Hendred.

SUNDAY, 5 MARCH.
East Hendred.

To London for a
Weekend World
programme with Brian Walden: a preliminary film and then half an hour's interview with him on economic and monetary union. Lunched late with the Gilmours at Isleworth, and returned to East Hendred through a spectacular evening light at 5.30.

MONDAY, 6 MARCH.
East Hendred and Vancouver.

Met Crispin, Noël and other officials at London Airport for the noon plane to Calgary and Vancouver. Nearly two hours late taking off. However, we flew almost the whole eight hours and twenty minutes from London to Calgary (over Iceland and Greenland) in clear light, sunshine and snow, and Air Canada gave us the best food I have had in a plane for a year or more.

Then a disagreeable hour's flight from Calgary to Vancouver. A complete change of weather when we got to the continental divide: great thick swirling clouds going up to 40,000 feet, above our height at any rate, and down on to the Rockies and right down to the coast at Vancouver. So we arrived on a dark, oppressive, rainy afternoon, and experienced no change in the weather while we were in Vancouver. At the airport I was rather surprisingly asked for a TV interview in French.

To the Four Seasons Hotel, where we were magnificently installed on the top floor and from where the view would have been splendid had the cloud not been so obfuscating. Then a brief and perfectly agreeable dinner given by the British Columbian Government. Afterwards, however, I became gloomily aware that the trip was going to be dominated, and maybe rather ruined, by the question of a non-visit to francophone Canada. The Canadian Government were resolved that we should not go anywhere inside the Province of Quebec because they thought that Lévesque
⁴⁰
would turn up and make some sort of inflammatory separatist speech, perhaps even asking for admission to the Community!

The Canadians had also been difficult about passing on my messages to him in reply to his several messages to me. However, what had been agreed was that they would ask him to come and see me in Ottawa, but it seemed fairly unlikely that he would do this and there had already been some rather adverse criticism in the francophone press, which was a little over-zealously relayed to me that night by Heidenreich, ex-Messerschmidt pilot and high-quality Community representative in Ottawa.

The Quebec problem was the reason we were in Vancouver and why we were to go subsequently to Halifax. The natural pattern for a short official visit to Canada is Ottawa, Montreal and Toronto. If Montreal was out, Toronto was out too, and we had to have the two balancing and much longer arms of Vancouver and Halifax.

TUESDAY, 7 MARCH.
Vancouver and Ottawa.

At 9.30 I had a meeting with most of the British Columbian ministers. Then a harbour tour in a very smart launch. In good weather it would have been excellent. If it had only stopped raining, which apparently it rarely does, Vancouver would have appeared a very striking place.

At 12.30 to a lunch organized by the Vancouver Board of Trade in the Vancouver Hotel, one of those green-tiled semi-skyscraper railway hotels which cover Canada. A good audience of 200/250. Left at 4.15 to fly to Ottawa by a Canadian Government plane, which enabled them to give a free ride not only to our party, which was large enough, but to most of the West Coast politicians who wanted to go to Ottawa. As a result there was animated conversation over dinner about Canadian politics, which are by no means without interest. Ottawa, with a three-hour time change, just after midnight. It was a cold, moonlit night, temperature about 15°F, and we drove five or seven miles along a hard frozen canal, through great piles of snow to the Canadian Government guest house at 7 Rideau Gate, a colonial-style house, well and agreeably furnished.

WEDNESDAY, 8 MARCH.
Ottawa.

On a sparkling, freezing morning I went to the Parliament building—I am rather impressed by the official buildings in Ottawa—and saw Trudeau alone at 9.45 for about an hour. I had last seen him at the Summit, having before that not seen him for eight or nine years since he came to East Hendred soon after taking office. We talked mainly about his internal politics: he certainly intends to have an election in the summer and, I would judge, is quite reasonably confident of winning it;
⁴¹
about Quebec separatist problems; and about prospects for the Summit.

His relations with the Carter administration are obviously good, much better than Ottawa/Washington relations have been for some time past, and this is a consideration which has to be taken into account in all Community dealings with him. He was rather shocked that I had been sent to Vancouver. He half-apologized for this and also expressed some scepticism as to whether it was necessary to keep me out of Quebec. However on balance, he said, it might be wise and there was something to be said for seeing both ends of the country and not just doing the places that everybody went to.