4 JULY 1981, Page 9

Converting the British

John Palmer

Luxembourg 'If this European Community was situated on the moon, it would fall apart in next to no time. It is just our mutual fear and mistrust of the outside world which holds everything together.' This is the sort of comment one has grown to expect from British politicians and officials hardened by experience of Brussels and the EEC. The fact that it was actually made by a senior West German diplomat reflects the extent to which weariness of 'European idealism' has become the norm.

Much talk of this nature was to be heard in the corridors at the Luxembourg EEC summit this week. It reflected the cynicism of those who knew that, in the guise of the grand reform of the EEC Budget and the Common Agricultural Policy, the European Community is heading for a huge internal squabble over the distribution of financial and political advantages among the member states.

From the British, this time, there has come far less cynicism and far fewer declarations of intent to 'fight to the last ditch' for national interests. There are three reasons for this. Britain has just embarked on its six-month stint in the Presidency of the EEC Council of Ministers, and Whitehall clearly believes that it behoves Britain to give an impression of detachment and dedication to European principle, appropriate for the country which will be in the Common Market's driving seat.

Secondly, the Commission has just pro duced what are, by Brussels's standards, some radical and far-reaching proposals for Budget and CAP reform. True, it is for the Commission to propose and for the governments of the ten — in the Council — to actually dipose, but there is ill-disguised satisfaction with the extent to which the Commission now recognises the justice of Britain's complaints about the budget system and the monstrous share of EEC finances eaten up by CAP. Better still, the Commission accepts that for some time (at least five years) the other member states will have to pay a large part of Britain's EEC budget contributions and, if necessary, pay for them by levies on the profits they currently draw from the CAP. It is hardly surprising, then, that Mrs Thatcher, Lord Carrington and their retinues in Luxembourg could afford to take a relatively detached view of the forthcoming budget negotiations: this time it will be for the other EEC leaders to demand the right to keep 'our money'.

Thirdly, the British will endeavour to give their presidency a much more elevated political and international character. It was entirely in keeping with this approach that Lord Carrington formally unveiled his Afghanistan peace conference plan in Luxembourg. It is being backed by the EEC, and by most of the UN Security Council, and has a good chance of being supported not just by the Islamic nations but by the Soviet Union as well.

At the same time, the Foreign Secretary will try to breathe life into the jaded 'European initiative on Palestine.' It has looked sickly ever since the election of President Reagan last year and has been blocked at every turn by Mr Begin in Jerusalem. It is far from clear just what Lord Carrington expects to do about it now he is in charge but he will want to keep the issue alive pending a more flexible attitude in the US and Israel.

Some other EEC foreign ministers in Luxembourg were none too pleased at the British pretensions in the field of EEC foreign policy. There were even suggestions that the British, having given up the search for answers to Britain's and Europe's problems, were resolved instead to solve the world's problems. But it will do the British Government and the EEC no harm to be seen taking an interest in world affairs and not just haggling over budget rebates, lamb 'clawback' prices and allocations of herring and cod in the North Sea.

As far as the government is concerned, the hope is that the combination of a 'peace' orientated EEC foreign policy line and a tough line on budget and CAP reform will help to reverse the tide of anti-market opinion in Britain itself. This is a far more hazardous operation. British sentiment against the EEC goes deep (deeper than in any other country, although disenchantment with the Market is increasing almost everywhere).

In particular, the Government will not find it easy in six months to rally support in the Labour Movement for the tiny, and diminishing band of 'Pro-Europeans'. They have been weakened by the defections to the SDP and by a split in their own ranks about how best to stem the demand for outright withdrawal of Britain under the next Labour Government. Some, like Mr Denis Healey, have even concluded they have to line up with the anti-marketeers — over the CAP, the 'loss of Parliamentary Sovereignty' etc so as better to fight for some unspecified kind of continued association between Britain and the EEC.

If there is any one factor which might cause some on the Left of the Labour Party to re-think their attitude to the EEC it is the election victory of President Mitterand and the French Socialists. This is not a factor which will carry much weight with centreright 'Atlanticists' and nationalists such as Mr Peter Shore and Mr John Silkin, but it may influence some of those who support Mr Tony Benn.

It is not that anyone expects the French Socialists to transform the nature of the Common Market or its fundamental dedication to making European multinational capitalism work as best it can. Rather, it is a question of a change in Euro-rhetoric and the fact that this rhetoric is likely to feed rising expectations among socialists throughout Europe for a change in policy and direction. This emerged clearly enough at the Luxembourg Summit where demonstrating EEC trade unionists clearly looked to the French to lead the way in the debate about unemployment and the need for an alternative, non-monetarist strategy to overcome the economic crisis.

Mrs Thatcher and Sir Geoffrey Howe are thus finding themselves increasingly isolated in their defence of the pure counterinflationary doctrine. Even the West German Social Democrats are looking hard for ways of stimulating at least selected sectors of the European economy. The European storm over unemployment is likely to reach a crescendo at the London EEC Summit next November, which Whitehall sees as the apex of Britain's Common Market Presidency.

The question is already being asked by the European left to the British left: 'Why not join us in this endeavour to force a change of policy?' To the retort that a Labour Governmen t wou ld have to leave the EEC first in order to pursue its Socialist industrial and economic strategy, the European Left replies: 'First implement your policies and then see if they dare throw you out.' The suspicion on this side of the Channel is that the other EEC states would learn to live with a left-wing Labour government.

The British presidency is unlikely, then, to alter the fundamental debate on Europe in the Labour Party. It is unlikely to solve all the underlying conflicts of economic interest which bedevil British/EEC relations. But Lord Carrington's presidency may at least enthuse the Tories with the feeling that once again Britain is playing a world role.