The Downing Street Years

by Margaret Thatcher

  In South Africa as 1990 opened the movement which I had hoped and worked for began. There were indications that Nelson Mandela would, after all the years of pressure, not least from me, shortly be released. I told our ambassador, Robin Renwick, that I would welcome the chance to see President de Klerk at Chequers if he visited Europe in the spring. I told the Foreign Office — who did not like it one bit — that as soon as Mr Mandela was freed I wanted us to respond rapidly by rescinding or relaxing the measures we had taken against South Africa, starting with the relatively minor ones which rested with us alone and did not have to be discussed with the European Community.

  On 2 February 1990 President de Klerk made a speech which announced Mr Mandela’s and other black leaders’ imminent release, the unbanning of the ANC and other black political organizations and promised an end to the state of emergency as soon as possible. I immediately went back to the Foreign Office and said that once the promises were fulfilled we should end the ‘voluntary’ ban on investment and encourage the other European Community countries to do likewise. I asked Douglas Hurd — now Foreign Secretary — to propose to other Community Foreign ministers at his forthcoming meeting with them an end to the restrictions on purchase of krugerrands and iron and steel. I also decided to send messages to other heads of government urging practical recognition of what was happening in South Africa.

  In April I was briefed by Dr Gerrit Viljoen, the South African Minister for Constitutional Development, on the contacts between the South African Government and the ANC, now effectively led once more by Mr Mandela. I was disappointed by the fact that Mr Mandela kept repeating the old ritual phrases, arguably suitable for a movement refused recognition, but not for one aspiring to a leading and perhaps dominant role in government. The South African Government was formulating its own ideas for the constitution and was moving towards a combination of a lower house elected by one-man one-vote with an upper chamber with special minority representation. This would help to accommodate the great ethnic diversity which characterizes South Africa, although in the long run some sort of cantonal system may be needed to do this efficiently.

  By the time that President de Klerk set off for his talks with European leaders in May, discussions with the ANC had begun in earnest. I was also glad that the South African Government was paying due regard to Chief Buthelezi, who had been such a stalwart opponent of violent uprising in South Africa while the ANC had been endorsing the Marxist revolution, to which some of its members are still attached.

  Talks with President de Klerk and Mr Mandela

  President de Klerk, Pik Botha and their wives came to talks and lunch at Chequers on Saturday 19 May. I felt that Mr de Klerk had grown in stature since my last meeting with him a year ago. It struck me that there were parallels with Mr Gorbachev — though perhaps neither would have welcomed the comparison: in each case one man brought to power through an unjust and oppressive system had the combination of vision and prudence to set about changing that system. My talks with Mr de Klerk focused on his plans for the next steps in bringing the ANC to accept a political and economic system which would secure South Africa’s future as a liberal, free enterprise country. The violence between blacks, which was to get worse, was already the single biggest obstacle to progress. But he was optimistic about the prospects for agreement with the ANC on a new constitution; and he thought that the ANC wanted this too.

  We discussed what should be done about sanctions. He said that he was not like a dog begging for a biscuit, seeking specific rewards for actions he took. What he wanted was the widest possible international recognition of and support for what he was doing, leading to a fundamental revision of attitudes towards South Africa. This seemed to me very sensible. Mr de Klerk also invited me to South Africa. I said that I would love to come but I did not want to make things more difficult for him at this particular moment. There was, I knew, nothing more likely to sour his dealings with other governments who had been proved wrong about South Africa than for me to arrive in his country as a kind of proclamation that I had been right. (In fact, it is a disappointment to me that I was never to go to South Africa as Prime Minister and I only finally accepted his invitation after I left office.)

  On Wednesday 4 July I held talks and had lunch at Downing Street with the other main player in South African politics, Nelson Mandela. I had seen him briefly in the spring when he had been feted by the media Left, attending a concert in Wembley in his honour, but this was the first time I really got to know him. The Left were rather offended that he was prepared to see me at all. But then he, unlike them, had a shrewd view as to what kind of pressure for his release had been more successful. I found Mr Mandela supremely courteous, with a genuine nobility of bearing and — most remarkable after all he had suffered — without any bitterness. I warmed to him. But I also found him very outdated in his attitudes, stuck in a kind of socialist timewarp in which nothing had moved on, not least in economic thinking, since the 1940s. Perhaps this was not surprising in view of his long years of imprisonment: but it was a disadvantage in the first few months of his freedom because he tended to repeat these outdated platitudes which in turn confirmed his followers in their exaggerated expectations.

  I made four main points in our discussion. First, I urged him to suspend the ‘armed struggle’. Whatever justification there might have been for this was now gone. Second, I supported the South African Government’s arguments against having an elected Constituent Assembly to draw up a constitution. It seemed to me that in order to maintain both the confidence of the white population and law and order it should be for the Government, the ANC and Inkatha (Chief Buthelezi’s movement) and others to agree on a constitution now. Third, I pointed out the harm which all his talk of nationalization could do to foreign investment and the economy in general. Finally, I said that I thought he should meet Chief Buthelezi personally — which he was refusing to do. This was the only hope for ending the violence between their supporters. Our relationship was unharmed by my straight talking. In spite of his socialist outlook, I believed that South Africa was lucky to have a man of Mr Mandela’s stature at such a time. Indeed, I hoped he would assert himself more at the expense of some of his ANC colleagues.

  It was only shortly before I left office that President de Klerk again came to see me at Chequers — on Sunday 14 October. There had been some progress since I had seen Mr Mandela in June. The ANC had agreed to suspend the ‘armed struggle’ and the two sides had agreed in principle on the arrangements for the return of South African exiles and the release of the rest of the political prisoners. The remaining features of the old apartheid system were being dismantled. The Land Acts were due to be repealed and the Population Registration Act — the last remaining legislative pillar of apartheid — would go when a new constitution was agreed. Only state education remained segregated but movement on this — for the whites — very sensitive matter had also begun. However, violence between blacks had sharply worsened and this was poisoning the atmosphere for negotiations.

  The South Africans were being careful about pressing for the lifting of the remaining sanctions. The most important contribution to this would have been that of the ANC: but they stubbornly refused to recognize that the case for sanctions — to the extent it had ever existed — was dead. Within the European Community, the key to a formal change of policy now was Germany, but for domestic political reasons Chancellor Kohl was still unwilling to act. The Americans held back for similar reasons. However, as President de Klerk told me, in practice most of the economic sanctions were being steadily eroded and what really mattered to the South Africans now was access to foreign loans and investment. (In fact, sanctions were gradually dismantled over the next few years: indeed the international community began to prepare financial aid for South Africa to undo the damage that sanctions had wrought.)

  President de Klerk was clearly frustrated that the further round of informal talks with the ANC on the constitution for which he had been pressing had s
till not occurred. The longer the process continued the more opportunity there was for hardliners — on either side — to derail the negotiations. The main principle to which he held was that there must be power sharing in the Executive. In the new South Africa no one must have as much power as he himself had now. In some respects he thought that the Swiss Federal Cabinet was a guide to what was needed. This seemed to me to be very much on the right lines — not that either hybrid constitutions or federal systems have much inherent appeal, but in states where allegiances are at least as much to subordinate groups as to the overarching institutions of the state itself these things may constitute the least bad approach. It remains to be seen whether the ANC leadership is prepared to recognize this. With all the risks of violence and all the shortcomings of the various political factions, South Africa remains the strongest economy on the continent and has the most skilled and educated population. It would be a tragedy if it cannot exploit these advantages to build a genuine democracy, which respects minority rights, on the foundation of a free economy.

  * See pp. 259–162.

  * See p. 75.

  * On 22 July 1946 91 people were killed when the hotel was bombed by Jewish terrorists from a group led by Menachem Begin.

  CHAPTER XVIII

  Jeux Sans Frontières

  Relations with the European Community — 1984–1987

  TWO VISIONS OF EUROPE

  The wisdom of hindsight, so useful to historians and indeed to authors of memoirs, is sadly denied to practising politicians. Looking back, it is now possible to see the period of my second term as Prime Minister as that in which the European Community subtly but surely shifted its direction away from being a Community of open trade, light regulation and freely co-operating sovereign nation-states towards statism and centralism. I can only say that it did not seem like that at the time. For it was during this period that I not only managed to secure a durable financial settlement of Britain’s Community budget imbalance and began to get Europe to take financial discipline more seriously, but also launched the drive for a real Common Market free of hidden protectionism. It was clear to me from the start that there were two competing visions of Europe: but I felt that our vision of a free enterprise Europe des patries was predominant.

  Now I see the period somewhat differently. For the underlying forces of federalism and bureaucracy were gaining in strength as a coalition of Socialist and Christian Democrat governments in France, Spain, Italy and Germany forced the pace of integration and a commission, equipped with extra powers, began to manipulate them to advance its own agenda. It was only in my last days in office and under my successor that the true scale of the challenge has become clear.

  At this time I genuinely believed that once our budget contribution had been sorted out and we had set in place a framework of financial order, Britain would be able to play a strong positive role in the Community. I considered myself a European idealist, even if my ideals differed somewhat from those expressed with varying degrees of sincerity by other European heads of government. I told a dinner of Conservative MEPs on Thursday 8 March 1984:

  I don’t want to paper over the cracks. I want to get rid of the cracks. I want to rebuild the foundations.

  … I want to solve [the current problems] so that we can set about building the Community of the future. A Community striving for freer trade, breaking down the barriers in Europe and the world to the free flow of goods, capital and services; working together to make Europe the home of the industries of tomorrow; seizing the initiative on world problems, not reacting wearily to them; forging political links across the European divide and so creating a more hopeful relationship between East and West; using its influence as a vital area of stability and democracy to strengthen democracy across the world.

  That is my vision.

  It v/as also, incidentally, the vision on which we were to fight the European Assembly elections later that year and do remarkably well, winning 45 out of the 81 United Kingdom seats.

  REFORMING COMMUNITY FINANCES:

  BRITAIN’S BUDGET CONTRIBUTION

  Before there was any hope of moving far towards those wider objectives I had to get more understanding and support from other Community heads of government for our position. The French presidency of the first half of 1984 seemed to offer an opportunity which must be grasped. The events in Athens the previous December — where the only thing to record was disagreement — were widely considered to have reduced Community negotiations to the level of farce.* President Mitterrand was, I knew, someone who relished a diplomatic success and would probably be prepared to sacrifice French national interests — at least marginally — in order to secure one. In January (in Paris) and in early March (at Chequers) I had talks with him. In January Geoffrey Howe and I also discussed the Community budget and other matters with the Italian Government in Rome. The following month Chancellor Kohl and I held talks at No. 10. These meetings were pleasant enough, but no clear undertakings were given. The Foreign Affairs Councils — that is the meetings of Community Foreign ministers — in February and March advanced matters no further. But I was reasonably optimistic that the European Council in Brussels, which I was to attend on Monday 19 and Tuesday 20 March, might give us the lasting, satisfactory solution on the British budget contribution which I wanted.

  By the time I reached Brussels three possible ‘solutions’ to the budget question had been advanced — one by the Commission President, Gaston Thorn, one by the Germans, and one by the French presidency. None was satisfactory to us, but all of them acknowledged the principle behind our ‘threshold’ proposal at Athens — that a country’s prosperity should be taken into account in determining its net contribution. We were getting down to brass tacks. I was also glad that President Mitterrand, unlike his Greek predecessor, had chosen a more sensible order of discussion at the Council, beginning with the issues of budget discipline and budget imbalances. After initial discussion, officials went away to work on the text relating to the budget while we moved on to the issue of increasing the Community’s ‘own resources’. On this, the line-up was predictable. The President of the Commission wanted an increase in the current VAT ceiling, not just to 1.4 per cent but to a minimum of 1.6 per cent. Garret FitzGerald wanted a minimum of 1.8 per cent. President Mitterrand suggested 1.6 per cent. Chancellor Kohl and I would have none of this: 1.4 per cent was as far as we could possibly go — and that was only after other matters relating to the budget and agricultural spending had been satisfactorily resolved.

  The Council was due to meet again at about 11 o’clock the next morning. President Mitterrand and Chancellor Kohl had a working breakfast — something which was to become a feature of European Councils because it was widely and probably accurately believed that these were the occasion of the Franco-German deals which heavily influenced or in some cases virtually determined the outcome of the Council. I met President Mitterrand after his meeting with Chancellor Kohl and gained the impression that we were heading for a successful outcome.

  When the heads of government reconvened later that morning the session began with a gush of Euro-idealism. Chancellor Kohl and President Mitterrand became quite lyrical on the subject of getting rid of frontier controls, which they seemed to invest with a high symbolic significance. Then President Mitterrand urged that Europe should not be left behind by the USA in the space race. The Italian Foreign minister became still more enthusiastic, urging that Europe should be in the vanguard of moves against the ‘militarization of space’. It seemed to me that it would be more sensible to concentrate on sorting out the Community budget first and at last we got down to business.

  Now the high-mindedness quickly disappeared. The Irish Prime Minister tried and failed to gain a special exemption from the measures to limit milk production that the rest of us wanted. He promptly invoked the Luxemburg compromise and walked out. At 4 p.m. there was a long adjournment in order to study a new text of the draft communiqué. On resuming, we discussed once again the b
udgetary problems. The Italians and the Greeks stood out against giving Britain any permanent agreement to reduce our net budget contributions; more serious for us, President Mitterrand seemed to side with them. I intervened to say that I had fought this battle for five years and that I intended to have a system which was fair and which would last. At this point — whether spontaneously or by previous agreement with President Mitterrand I do not know — Chancellor Kohl upped and offered Britain a 1,000 million ecus rebate for five years — much less than I wanted and still only a temporary arrangement. Almost immediately France and the others agreed with Germany. I found myself isolated. I refused to accept his proposal. Nothing more could be done. No agreed communiqué was issued. To rub salt into the wound, France and Italy at a Foreign Affairs Council immediately after the heads of government summit broke up blocked payment of our 1983 refund.

  I had not expected such a totally negative outcome. So the question immediately arose as to whether we should withhold payments to the Community budget. This was partly a legal and partly a political question. We had always been advised that if we withheld contributions we would almost certainly lose any subsequent case before the European Court. In this instance, however, we were on somewhat stronger legal ground because the Community was withholding rebate payments to which we were entitled by previous agreement. Probably, we would have lost the case anyway. But it might have been politically worth fighting — that is we might have thus secured a favourable compromise — if we had enjoyed the united backing of the Parliamentary Party. Unfortunately, there was a hard core of Euro-enthusiasts on the Tory back-benches who instinctively supported the Community in any dispute with Britain. Though a clear minority, they robbed us of the advantages of unity. So as on previous occasions, I decided not to go down the path of withholding contributions. And we had other cards to play.