Extended Meaning of the Treaties" and the Community Treaties"

Part of Clause 1 – in the House of Commons at 10:40 pm on 10th December 1985.

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Photo of Mr George Robertson Mr George Robertson , Hamilton 10:40 pm, 10th December 1985

The fact is that the European Community's immediate financial crisis could be resolved by an increase in the funds, but that option is not available either to the European Community or to the British Government.

Secondly, the crisis could be resolved through the reform, reorganisation and revamping of the European Community's existing expenditure. All hon. Members know that reform of the Community's financial institutions is essential if the crisis is not entirely to threaten the basis of the European Community. The European Parliament is considering this week the European Community's budget and it has substantial views about it, only some of which are connected with the outcome of the Luxembourg summit.

The statement of fact that is contained in the explanatory memorandum— that Spain's contribution to, and receipts from the European Communities Budget should roughly balance and that Portugal should be a modest net beneficiary"— is threatened by the fact that the Community's draft budget makes inadequate provision for discharging the promise that was made to Spain and Portugal during the negotiations. That is the tip of the very large iceberg of financial irresponsibility that faces the European Community this year. I do not undermine the general belief that Community membership should expand from 10 to 12 if I point out the contradictions in the way in which the European Community finances itself.

At the bottom of the crisis lies the common agricultural policy. It takes up between 70 and 74 per cent. of the European Community's budget and threatens to devour even more of it in future years. The crisis will inevitably be made worse by the accession of Spain and Portugal, on account of the agricultural surpluses.

The European Community is under threat. If the budget does not balance, Ministers will be forced to adopt short-term expedients. In the long term this country's status as a net beneficiary of the regional and social fund will be threatened by the accession of Spain and Portugal, which will have a share of the existing cake. The shift in the European Community's balance from the industrial to the agricultural countries —that is, from the north to the south of Europe —will ultimately threaten the coherence and credibility of European Community policies.