European Diary, 1977-1981 (50 page)

I returned hurriedly from my Elysée meeting to the Château de la
Muette for a large OECD lunch with all their many ambassadors. I had a good talk with van Lennep at lunch, who, throughout the day, I liked rather more than I had previously. After lunch but at the table there was a fairly intensive discussion, with an opening statement by me and a lot of questions from ambassadors which I wound up with a general answer at the end.

5.44 TEE to Brussels. Dined with Michael Jenkins, whom I am very glad to have back in Brussels.

TUESDAY, 28 NOVEMBER.
Brussels, Rome and Brussels.

Avion taxi to Rome accompanied by Crispin and Plaja, the Italian Permanent Representative, for lunch with Andreotti. We arrived in dismal weather and drove straight to the Palazzo Chigi where we started with Andreotti and two or three officials, Ruggiero, who seems to be coming up in the hierarchy, La Rocca
⁶⁰
as usual, and Plaja of course; Pandolfi (Minister of Finance) was with us for part of the time.

The Italians, both Andreotti and Pandolfi, sounded extremely positive about EMS and gave the impression that while they had previously been somewhat influenced by British hesitations they were now moving away from them and were on the brink of a favourable decision. I got them on to some detailed discussion about concurrent studies. They were less interested in agriculture than they had been when I had last seen Andreotti in September. They were not even overwhelmingly interested in the Regional Fund. Their clear first interest was in subsidized loans. They wanted the subsidy to be 4 per cent off the normal interest rate and they wanted a good deal of money (although they weren't anxious to say exactly how much), which was to be specifically directed to infrastructure projects in the Mezzogiorno. They implied they had had helpful conversations not only with Schmidt but also with Giscard about all this.

Immediately after lunch we left for Ciampino, from where we took off on a nasty rainy day just after 3.30. After several hours in the office, I went to Tervuren to a fashionable dinner party of the Ullens de Schootens, she Swedish and Prince Bernadotte's daughter. After dinner I had about half an hour's talk with the Chinese
Ambassador, who was a rather incongruous guest, and I suppose that was quite useful, though not exactly relaxing after my long Roman day.

THURSDAY, 30 NOVEMBER.
Brussels, Bonn and Brussels.

Received Al Ullman, Chairman of the Ways and Means Committee of the House of Representatives, a curious figure, in his sixties, though looking younger with a somewhat trendy hairstyle, though rugged face. I found him friendly and intelligent and thought it well worthwhile having seen him.

Then at 11 o'clock, I went downstairs on a bitter, freezing day, to receive the Prince of Wales. I brought him up to my room and had half an hour's easy private talk with him. He was anxious to be informed about what life in the Berlaymont and the Community was like and showed interest in the details of operation, which I found sensible and agreeable. He gave me a photograph of himself in a rather nice self-deprecating way, saying, ‘I am told I ought to give you this. I don't suppose you want it, but I hope you won't do the same as Trudeau, who immediately stuffed it into a drawer which was crammed full already of ones of most other members of my family.' So I said I would not do exactly that and gave him a leather-bound copy of
Asquith
in return, with which he seemed pleased.

Then I took him into the Commission room for a meeting lasting about fifty minutes. I made a little speech of welcome, to which he responded nicely, and then several of the Commissioners performed, with him being given an opportunity to ask questions at the end of each. First, Ortoli, who kept saying, ‘Donc, Monseigneur, deuxième [or troisième or quatrième] hypothèse,' but on the whole did well and wasn't too long. Then Gundelach, then Tugendhat, who got in not because I changed my mind but because the question of the budgetary contribution had become of immediate relevance and was an appropriate subject to have; then Stevy Davignon, who performed brilliantly, the best of the four, whereas Gundelach rather surprisingly was the worst. Davignon gave a four-minute thumbnail sketch of industrial policy and what we were trying to do. The Prince asked a few questions. And then at the end he asked one or two more general questions not directly
relating to what had been said, including one to Cheysson, to whom I thought it was misdirected but it shrewdly wasn't, about the Atlantic Colleges of which he has become chairman following his Uncle Dickie.

Then I conducted him into the
‘cathédrale'
⁶¹
where we had a reception for a selection of the British staff–they had all been chosen by lot so it ought to have been fair–which he did well for forty or forty-five minutes. Then we went on into lunch with the Commission where he was placed
en face
to me and had Ortoli on one side and Gundelach on the other. The lunch went perfectly easily, though without any tremendously penetrating discussion. Afterwards I saw him off, just before 3 o'clock, walking most of the way to the Charlemagne with him, where he was about to see COREPER. There were a lot of people about, mainly photographers I think.

I immediately went to Zaventem to take an avion taxi to Bonn, and got into the Chancellery for a meeting with Schmidt at 4.30. This went on until 6.00 and was a good, useful, optimistic meeting.
⁶²
He thought and hoped that everything would be all right with the Irish and Italians, though not with the British. He said he had had a lot of very difficult negotiations with the Bundesbank, and that indeed a lot of opinion in Germany was against him on the issue, which considerably restricted what he could do in making concessions on the operation of the exchange rate mechanism in the new system. He indicated clearly what were his limits, which were certainly not intolerable. He had just come back from a long and exceptional session with the Board of the Bundesbank at Frankfurt, the first time for years a Chancellor had attended. He was however prepared to be pretty forthcoming on concurrent studies, although he was much more reserved on our tough agriculture paper, which I left with him. He said firmly, what I think he had said to me before, that his position
vis-à-vis
Ertl was such that while he could agree to a freeze he couldn't agree to a combination of a freeze and the dismantling of positive MCAs, which he interpreted as meaning an actual reduction in German farmers' incomes (it would not necessarily).

On concurrent studies, however, he was willing to contemplate two windows: one on the Regional Fund, in which he mentioned an increase of 200 or 250 million units of account, to be shared among the less prosperous participating countries, although
if necessary
letting this be distributed according to the established key if that got over a particular difficulty with the British; and, second, he was willing to do a significant sum in subsidized loans, with interest rate subsidies of the annual order of 400 million for a few years. He didn't like a 4 per cent subsidy, would have preferred 2 per cent, but thought one might settle at 3 per cent. So everything seemed in reasonably good shape from this point of view. He was rather more forthcoming than were Schulmann and Lahnstein, who were there, but I assumed that he could get his way with Federal Government officials.

The question was would he get his way with Giscard? I said, ‘What about the Regional Fund? Are you going to be able to move Giscard on that?' ‘I don't know, I think so,' he said. ‘I am going to telephone him now.' And, indeed, at the end of the interview I left the room with the call to Giscard starting and my assuming that, on the basis of their relationship, Schmidt, apparently firm on this, would prevail.

Back, reasonably satisfied, to Wahn and a quick return to Brussels, where I got into the office at 7.10 and did an hour's work before dining at home with Jennifer who had arrived from London. On balance I was pleased with the day.

SATURDAY, 2 DECEMBER.
Brussels.

After breakfast I went to see Vanden Boeynants, the new Belgian Prime Minister. I found him quite impressive and incisive, much more so than Tindemans, his only disadvantage being that he cannot speak English.
⁶³
Nonetheless I had a good hour's talk with him in French, which he speaks very clearly in a Flemish sort of way. He gives the impression of being more on the ball about the European Council than Tindemans did, even when he, Tindemans, was in the chair. Vanden Boeynants was anxious to be helpful, but was reserved on agriculture (not unnaturally with Belgian elections
coming up) and also a little more reserved than the Germans on the Regional Fund. But in general he was quite forthcoming, though expecting difficulty with the French, particularly in view of the adverse vote on the sixth VAT directive which had taken place in the French Chamber the night before, which was a dangerous defeat brought about by an unusual alliance of Communists and Gaullists.

A lunch party, rue de Praetère, for Averell and Pamela Harriman, plus Andre de Staercke, the old Belgian diplomat. The Luns' were also supposed to come, but didn't turn up. A telephone call at 1.30 elicited great confusion and abject apology from him–he thought it was Monday. ‘Never have I done such a thing in my life before,' he said. But I subsequently discovered from Jacques Tiné at dinner that evening that he had done almost exactly the same thing in Paris ten days before, so perhaps elderly absent-mindedness is beginning to affect the mind of even that Great Dane of a Dutchman.

Averell, who was off to Russia the next day, was on remarkable form for eighty-seven. He had had an endless programme of dinners in Brussels but seemed thoroughly fit on them. He was wearing a large pair of very new expensive shoes which is surprising if you have been a multi-millionaire all your life and therefore presumably accumulated quite a lot of good old shoes. Such a purchase at the age of eighty-seven seemed to point to an unusual combination of confidence in the future and meanness in the past.

SUNDAY, 3 DECEMBER.
Brussels.

I had a long pre-dinner meeting with Ortoli and his Director-General, and Crispin and Michel Vanden Abeele from my
cabinet.
It was not particularly useful or well structured. Francis, as he does sometimes but not often, talked too much and not very purposefully. His only good remark was: ‘Everything is too well set up for this Summit. It is too well prepared. I think it will go wrong. They generally do in these circumstances.' I went to bed with a distinct sense of apprehension about the following day.

MONDAY, 4 DECEMBER.
Brussels.

To the Charlemagne at 1.30 for lunch there and the beginning of the European Council. The heads of government turned up more or less on time and we got down to a working lunch by 2 o'clock. This was partly concerned with the agenda, although the shape of this was not discussed sufficiently rigorously, and partly with general economic problems, during which Giscard threw out the sensible idea that the Commission should produce a study of the shape of the European economy in relation to the world division of labour in 1990, to which I gladly acceded.

The Council session began at 3.45. Quite unexpectedly, instead of being a short session leading on to a meeting of heads of government and me, as had been the successful pattern at Copenhagen and Bremen, this developed into a long, grinding niggle which ran until 8.15, dealing almost entirely with the internal mechanics of the EMS. There was a lot of slow argument about detailed points–the balance between short- and medium-term credits, a semantic argument about the ‘presumption of intervention', or stronger or weaker words, when a currency was on the margin of divergence, and an Italian point, which caused a lot of difficulty, about a request for a specially loose obligation of repayment in the case of ‘involuntary debtors'.

It was all detailed and in my view manifestly soluble stuff, which should never have been allowed to take so long and block us from what were clearly the more difficult points about transfer of resources. It was also all done without anybody being asked to make a firm declaration of position as to whether they would come in and, if so, in what circumstances. Callaghan was never throughout this four and a half hours asked to say whether or not he was joining the central mechanism; and he volunteered no information. Schmidt chaired this long session, as he chaired the Council throughout, with good humour, detailed patience and a certain shrewdness, but without in my view having satisfactorily thought out his game-plan for the two days.

Dinner in the Palais d'Egmont, with only the heads of government and me, from 8.45 until 11.30. This at least settled the ‘Three Wise Men'. Giscard firmly proposed Marjolin. There was a certain amount of havering about who the Dutchman should be. The
Italians suggested that a Greek might be appointed (Andreotti had tried this out unsuccessfully on me on the previous Tuesday, but didn't press it hard when it was not well received by the others). Callaghan turned down Heath, I think understandably in his position, and Soames and Thomson for less adequate reasons, and then suddenly produced the name of Edmund Dell. This was not very well received because everybody except Schmidt said that they had never heard of him; but he was eventually supported by me on the ground that he was an admirable man even if somewhat anonymous, and it then went through.

The Brinkhorst suggestion seemed to have died for we heard no more of it, but there were two possible Dutch names, van der Stoel, on whom I have never been very keen because of his rigidity, and Biesheuvel,
⁶⁴
the man who was eventually appointed. It swung away from van der Stoel because as Dell and Marjolin were nominally members of Socialist parties (though I told Giscard that in fact I knew Marjolin had voted for him and not the Socialists at the last election–about which he, Giscard, was doubtfully pleased in the context) it was decided that the Dutchman had to be right of centre.