The Path to Power m-2

by Margaret Thatcher

  An obvious priority involves addressing Britain’s financial contributions to the European Union. In any case, it is difficult to see how the present Common Agricultural Policy (CAP) could continue if the Central and Eastern European countries where agriculture remains of considerable importance are admitted to full membership, as is eminently desirable. The CAP is not only a financial drain; it also significantly increases food prices above general international levels and so increases labour and business costs. It would be open for debate what, if anything, should be put in its place to support British farming. Similarly, the so-called ‘Cohesion Fund’ designed to compensate the weaker economies for the financial and monetary rigours envisaged by Maastricht should be another target for revision.

  Secondly, we should try to reverse the growing protectionism of the European Community, which almost derailed the GATT round, and significantly reduced its scope, and which costs Britain wealth and jobs. Unfortunately, the protectionist mentality is only likely to grow as increased costs, resulting from Community social policy and lack of labour market flexibility, reduce the ability of industries in Europe to compete successfully. Yet the European Union can afford such protectionism less than ever because of the shift of advantage from Europe to the Americas. This has been well observed by Professor Patrick Messerlin:

  Until recently, the US had no serious alternatives to a trade policy based on GATT disciplines… The situation will be reversed in the decades to come. The US — with South American countries opening their borders and boosting their growth- will enjoy the relaxation that regional opportunities can offer. By contrast, the EU has exhausted its capacity to expand regional trade in a significant way for a long time to come. The EU — bordered on its southern and eastern flanks by countries unconvinced of the gains from freer trade, or too small to bring substantial benefits to the EU — will be in the same position, in this respect, as the US in the 1950s and 1960s.

  The EU has only one route left. It must move the GATT from the periphery to the centre of its trade policies.[76]

  If this does not happen — and worse if, as I have suggested, it moves further towards protectionism — Britain will be the worst affected. That is why it is so important that we should work to establish special arrangements between the European Community and the North American Free Trade Area.

  What we need here is something like a North Atlantic Free Trade Area, which would incorporate the emerging market democracies of Central and Eastern Europe as well as the EU itself. It would have a number of important economic and political benefits. First, it would provide unimpeded access for Britain and other European countries to the rapidly expanding markets of the Americas. All the same arguments used to justify our entry into the EEC in the early 1970s and then the creation of the Single Market in the mid to late 1980s — namely the expansion of trade opportunities — apply here. Secondly, by involving the Americans, with their tradition of free enterprise and open trade, in the new transatlantic trading framework we would shift the balance away from the Continental European emphasis on subsidies and protection — to Britain’s advantage. Within such a grouping we would be less likely to be a lone voice for free markets. Thirdly, the establishment of closer economic relations between Europe and America would help underpin NATO, whose raison d’être has been called into question by the end of the Cold War. A North Atlantic Free Trade Area would help create the conditions for a continued American commitment to Europe’s defence, while reassuring other European countries concerned about the predominance of Germany. Finally, the new Free Trade Area would be the most powerful — but also the most liberal — bloc within the GATT. As such, it would be able to insist that the global trend was towards free trade rather than protectionism. Britain is well placed to argue on both sides of the Atlantic for such an approach; moreover, our particular interests and identity as an outward-looking, open trading nation with a traditional commitment to strong links with America would be well served by it.

  Finally, in planning the route to 1996 we cannot continue to ignore the erosion of our parliamentary sovereignty. As Lord Denning has said:

  No longer is European law an incoming tide flowing up the estuaries of England. It is now like a tidal wave bringing down our sea walls and flowing inland over our fields and houses — to the dismay of all.

  How precisely the British Constitution — which is what is ultimately at stake — can be protected against this ‘tidal wave’ needs now to be considered. Certainly, it can only be done by the explicit exercise of parliamentary sovereignty; moreover, the sooner the initiative is wrested from the European Court so as to clarify British judicial thinking, the better. There is a strong case for amending the 1972 European Communities Act to establish the ultimate supremacy of Parliament over all Community law, making clear that Parliament can by express provision override Community law.

  Britain would not be alone among Community countries in protecting the ultimate supremacy of its domestic law. Germany, for example, does not acknowledge the power of Community law to override its constitutional law, as the Federal Constitutional Court made clear in the Maastricht Treaty case. France likewise maintains the ultimate supremacy of its constitutional law, and its conseil d’etat evolved doctrines and procedures which limit the practical application of Community law in cases where the interests of the French state so require.[77]

  We in Britain should also set out rules relating to conflicts between Community law and Acts of Parliament which unintentionally arise (as in the Factortame case), and establish a procedure whereby an Act unintentionally in conflict with Community law can be suspended by Order in Council where necessary rather than by the courts, so discouraging the drift in court decisions and judicial thinking towards narrowing the scope of parliamentary sovereignty. There should be a reserve list of protected matters where Parliament alone can legislate, to include our constitutional arrangements and defence. Finally, we should take reserve powers, exercisable by Order in Council, to enable us in the last resort to prevent specific Community laws and decisions taking effect in the United Kingdom.[78] These various powers would, one imagines, be used very sparingly; but their very existence would act as a disincentive to European encroachments. But the debate about how rather than whether such actions should be taken is overdue.

  It is not possible to predict precisely where this process of negotiation would end. Whether Britain would be part of an outer tier Community membership, whether we would have some kind of association agreement similar to that enjoyed for years by the European Free Trade Area (EFTA) countries, and later by the European Economic Area (EEA) countries, or whether the European Union would be transmuted into a series of bilateral or multilateral agreements between countries under new treaties in some version of ‘variable geometry’ — all of these are possibilities.

  In any case, it is not the form but the substance which is important. What is clear is that a point has been reached — indeed it was reached even before Maastricht — at which the objectives and perceived interests of the different members of the Community radically differ. A clear understanding that this is so and that our strategy for 1996 must be planned accordingly is the essential foundation for success.

  Nor do I believe that such an approach is incompatible with the long-term interests of other European countries. If it is allowed to continue on its present course the European Union will fail at all levels. It will exclude the post-communist countries of Central and Eastern Europe by imposing conditions for entry which they will not be able to fulfil. It will condemn the south European countries to debilitating dependency on hand-outs from German taxpayers. It will be a force for protectionism and instability in the wider world.

  If the Franco-German bloc decides to go ahead with the recreation of a modern equivalent of the Carolingian Empire, that is its choice. The consequences will almost certainly be traumatic. In a world of re-awakened nationalism it is hard to imagine Frenchmen accepting in perpetuity their country’s relegat
ion to being a German satellite — any more than it is easy to conceive German taxpayers providing ever greater subsidies for failing regions of foreign countries, as well as housing, health and other benefits for immigrants driven by economic necessity across Germany’s borders, and losing the assurance of the Deutschmark to boot. All this against the background of a shrinking share of world trade and wealth, as investment and jobs moved away from Europe. At some point, the electorates of those countries will rebel against policies which condemn them to economic disruption, rule by remote bureaucracies and the loss of independence.

  There is only a limited amount that Britain can do alone to prevent these unwelcome developments. But it is not inappropriate to quote the aspiration of Pitt the Younger to the effect that Britain ‘has saved herself by her exertions, and will… save Europe by her example’. In the meantime, the best service which can be done by those committed to the ideals I set out at Bruges — of freely cooperating nation states which relish free enterprise and welcome free trade — is to gather together all those politicians, jurists, economists, writers and commentators from the different European states to relaunch a movement for transatlantic cooperation including a wider Europe and the Americas. As I urged at the end of the Bruges speech:

  Let us have a Europe which plays its full part in the wider world, which looks outward not inward, and which preserves that Atlantic community — that Europe on both sides of the Atlantic — which is our noblest inheritance and our greatest strength.

  CHAPTER XIV

  New World Disorder

  Foreign policy and defence

  EUPHORIA PUNCTURED

  By contrast with European Community affairs, the overall path of events in foreign policy at the time I left office continued initially much as I would have wished. That may seem strange, even callous, in view of the fact that preparations were under way for a war in the Gulf whose exact course we could not predict. Yet I was convinced that the action taken was both right and necessary and that the West or, as we tactfully preferred to describe it, ‘the international community’, would prevail over Saddam Hussein and reverse Iraq’s aggression against Kuwait. Moreover, the crisis had led to a re-establishment of that vital ‘special relationship’ between the United States and Britain which I regarded as central to my approach.

  Of greater long-term importance, however, was the end of the Cold War, or again more precisely if less tactfully, the defeat of Soviet communism in that great conflict, without which indeed the relatively smooth passage of events in the Gulf would have been impossible. I had unsuccessfully resisted the reunification of Germany. But the course of events which led to the landslide victory of Solidarity in the Polish elections of June 1989, the fall of the Berlin Wall that November, the overthrow of the Ceausescus in Romania in December, the election of Vaclav Havel as President of a free Czechoslovakia in the same month, and the victory of non-communists in elections in Hungary in April 1990 — these I regarded as tangible and profoundly welcome results of the policies which Ronald Reagan and I had pursued unremittingly through the 1980s. And I had no doubt that the momentum was sufficient for the process to continue, for the time being at least. Where that would leave Central and Eastern Europe and the Soviet Union it was as yet impossible precisely to say. I knew enough of the complex history of these regions to understand that the risks of ethnic strife and possible attempts to change borders were real. At least the rejuvenated Conference on Security and Cooperation in Europe (CSCE), the result of the Helsinki process, could provide, we then thought, a useful diplomatic framework for resolving disputes. Events have, however, disappointed us.

  I had seen for myself in Ukraine how strongly the nationalist tide was flowing against the old Soviet Union.[79] As I told Jacques Delors at the outset of that final European Council I attended, I did not believe that it was for West Europeans to pronounce upon the future shape of the Soviet Union or its successors — that was for the democratic choice of the peoples concerned.[80] But the fact that I did not believe we could see into the future, let alone be confident in shaping it, did not diminish my satisfaction at the changes which were taking place. Millions of subjects of the Soviet Empire and its client states who had been deprived of their basic rights were now living in free democracies. And these new democracies had abandoned their aggressive military alliance, armed with nuclear weapons, against the West. These were great human and security gains. Neither then nor later did I feel any nostalgia for the diplomatically simpler but deadly dangerous Cold War era.

  The increasing preoccupation of a weakened, fitfully reforming Soviet Union with its own huge internal problems enabled other regional conflicts to be resolved. The ending of Soviet-backed subversion in Africa meant that reformers in South Africa had a new opportunity to reach agreement about that country’s future. In fact, whether it was in Africa or the Middle East, in Central or South America, in the Indian sub-continent or in Indo-China, the end of the Soviet pursuit of a long-term strategy of global dominance opened the way for progress. Suppressed desires for political and economic freedom were brought to bear on corrupt and oppressive regimes which could no longer argue for support from Moscow (or indeed from Washington) lest they go over to the other side.

  An old world order — a bi-polar world divided between the Soviet Union and the West and their respective allies — had passed away. But had a new world order been born? Certainly, there was a temptation in the immediate aftermath of the collapse of communism to believe so. And statements welcoming it can be quoted from across the political spectrum. In retrospect, however, it can be seen that two quite different visions obtained. My own view of it was a Pax Americana in the camouflage of United Nations Resolutions. This would require strong US leadership, the staunch support of allies, and a clear strategic concept that distinguished between real threats to Western interests and international order on the one hand, and local disputes with limited consequences on the other. I still think that this prudent approach could have created a durable international order without open-ended obligations. Unfortunately, it became confused with a more messianic, and consequently less practical, concept of a world order based on universal action through multilateral agencies untainted by strategic self-interest. This is, of course, a more idealistic vision; but as Macaulay remarked: ‘An acre in Middlesex is worth a principality in Utopia.’

  Even in the days after the Gulf War when euphoria about the possibilities of the New World Order was at its height, I was left feeling uneasy. I suspected that too much faith was being put in high-flown international declarations and too little attention paid to the means of enforcing them. Oddly enough, it was in preparing for my visit to South Africa in May 1991 that I started to read more deeply about the ill-starred League of Nations, one of whose principal architects was the South African Jan Smuts. The rhetoric of that time struck me as uncannily like that which I was now hearing. Similarly, Smuts’ own conclusion, when the League had failed to take action against the dictators and so prepared the way for the Second World War, struck me as equally damning of the kind of collective security upon which the future of post-Cold War stability and freedom was supposed to be based: ‘What was everybody’s business in the end proved to be nobody’s business. Each one looked to the other to take the lead, and the aggressors got away with it.’

  Of course, it could be argued that the situation now was different. After all, Saddam Hussein had not ‘got away with it’ — though he did ‘get away’. But I thought it of vital importance to understand why this had been achieved. It was because, contrary to the experience of the League of Nations, America had asserted herself as the international superpower it was her destiny to be, and self-confident and well-armed nation states such as Britain and France had acted in support, that success was obtained in the Gulf. Yet there were all too many commentators and politicians prepared to deduce quite the opposite — namely that the United Nations should itself become a supra-national force, with the authority and the resources to
intervene at will, and that nation states should accordingly abandon their sovereignty. The UN’s ambitions to become a world government would only, if encouraged, lead to world disorder. But with much subtlety and to considerable effect, left-liberal opinion in the West was able, with the naive collaboration of many conservatives, to turn the circumstances arising from the end of the Cold War to its own advantage.

  I spoke out against these trends in a speech to UN Ambassadors in New York in September 1991. I defended the ‘new nationalism’ which was apparent among the constituent peoples of the Soviet Union and Central and Eastern Europe. This was itself, I argued, a reaction against the tyranny of communism; most of those who embraced it were convinced democrats; and, to the extent that there was a risk of excesses, these should be seen as proof that attempts to suppress national identity were both bound to fail and would result in even stronger national passions when they eventually did fail. That had important implications for the future of the UN.

  True internationalism will always consist of cooperation between nations: that’s what the word means. And similarly, the United Nations, which embodies the highest aspirations of internationalism, reminds us by its very name of its true purpose. The starting-point for all your deliberations is that you represent nations. Your often elusive goal is that they should be united in some common purpose. But unity of purpose — not union — is the objective.

  In fact, by the time I spoke in New York it was already becoming apparent that all was not well with the New World Order. I was deeply concerned about the West’s failure to see what was at stake in the former Yugoslavia, where Slovenia’s and Croatia’s bids for freedom from the oppressive impoverishment of communism were being challenged by armed force. For me, rights of national self-determination and self-defence (indeed human rights more generally) lay at the heart of any just international order — and, at least as important, of any stable international order. Stability is a conservative value in foreign policy: anyone who doubts that should be given a one-way ticket to Mogadishu. But stability should not be used as an excuse for upholding a status quo that is itself inherently unstable because it suppresses social forces that cannot ultimately be contained.