1 DECEMBER 1967, Page 2

Living with the veto

Mr Wilson says we are a proud nation. Per- haps this is part of his private dream-world in which he seeks refuge from the harsh realities of life. Reviled in Africa, Asia and at the United Nations, despaired of in Wash- ington and Canberra, and an object of charity to the central bankers, we have now once more been dismissed with contempt in Paris.

The uncompromisingly negative tone of the General's global survey on Monday has been roundly and fairly condemned by almost the entire French press. A desire to pay him back in his own coin is understand- able. But the British government's first con- cern must be for our own interests, and these are not always compatible- with the pursuit of revenge on the French.

The official response to the Elysee press conference, endorsed by the Opposition on Tuesday, has been to await the outcome of the next Common Market ministerial meet- ing on 18 December. We are asked to believe that the General may yet be forced to change his mind by his partners, or, failing that, that they will be prepared to break up the Com- mon Market and reform it with us in place of the French. At the very least, it is sug- gested, we have only to persist and the Common Market will be frozen at its present stage of development until the General has gone away.

The first two of these possibilities are most kindly dismissed as hallucinations. Cer- tainly the imposition of another French veto would create a new crisis of confidence within the European Community. But in many ways the Community is frozen already: there is no serious prospect of progress to- wards genuine political integration so long as de Gaulle is President of France.

Besides, there is no certainty that the next ministerial meeting of the Six will produce the positive response of a French veto. The General has not said that France will refuse to participate in further discussions among the Six about the British application, and the purpose of the West Gertnan government is to spare the French the embarrassment of having to say either yes or no.

The British government's present in- tention seems to be to crook the knee indefinitely, if need be, in the waiting-room of Europe. But with every extra week of procrastination the risk of total revulsion from the whole European enterprise in this country will grow: it is already spreading with alarming speed in both the major politi- cal parties.

There are two alternatives to the official policy predictably chosen by the Bourbons of the Foreign Office. One, of course, is to take no for an answer after all. This would be a perfectly logical reaction, and our politi- cal leaders would be unwise to overestimate the nation's patience in our humiliations. If we simply abandon our European policy there will be no external restraints on Mr Wilson's freedom to waste the oppor- tunities of devaluation. Yet the failure of de- valuation would not only unjustifiably dis- credit it as a conscious act of policy for the future : it might also precipitate the collapse of the gold-exchange standard.

Therefore the right response is to take the General at his word. We should approach him confidentially and invite him to spell out precisely what he has it in mind to offer us by way of 'favourable commercial ex- changes' between EFTA and the Common Market if we were meanwhile to desist from pressing our application for full membership. It may be that he is thinking of nothing more than a series of bilateral manufacturing agreements of the Concord type. If so, we ourselves should appeal over his head to his partners to negotiate substantial bilateral tariff cuts between the two European trading groups : it is an appeal they would find diffi- cult to resist.

Of course this would be no substitute for entry into the European Community; but it would- not be without attraction for us. It would reduce the inflationary impact of de- valuation on the British economy and it would provide a healthy restraint on the post- devaluation policies of the British govern- ment. In the longer term it would give a vital European slant to British political and economic relations.

But this would only be the first stage. Thereafter, as soon as it has been estab- lished—as we must hope it will be—that the devaluation has not been wasted, we should prepare comprehensive plans for a major shift in British strategy in monetary and de- fence matters from an 'Atlantic' to a 'Euro- pean' posture. In defence this would involve the establishment of a European McNamara- type committee to coordinate views on the targeting and eventual use of the British and, if possible, French deterrents. In monetary policy it would involve the abandonment of the sterile insistence on Anglo-American solidarity behind policies which may suit the Americans but are of little relevance to our own requirements, and its replacement by a drive for common European attitudes to- wards, American investment and a practical reform of the world monetary system with the ultimate objective of replacing sterling as a reserve and trading currency with a European unit which could face the dollar on equal terms.

If these plans were accepted in France they would render British participation in the European Community inevitable. If they were rejected, then they should immediately be offered to the Five. They would establish beyond dispute the genuineness of our con- version to the ideals of the European Com- munity and expose the General as the real obstacle to the emergence of the 'European Europe' which he professes to desire above all else.

Such a strategy would 'turn the sorry if • predictable (and predicted) end of the latest glorious failure to good account.