Backing into Europe

Foreign Secretary James Callaghan last April sent shock waves through the Common Market by demanding a thorough renegotiation of the terms under which Britain joined the Community 18 months ago. If satisfactory adjustments were not made, he warned, the Labor government would call a national referendum, recommending withdrawal from the EEC. Last week "Sunny Jim" Callaghan showed up at a meeting of EEC foreign ministers in Luxembourg with a smile instead of a shillelagh. In a rather more conciliatory speech than his colleagues had expected, he announced that Britain's Labor government was "ready to play our full part in constructing a new Europe." Nonetheless, Callaghan told the EEC, "It is in the interest of every country to find a solution that takes account of the economic differences between member states and thus helps promote convergence."

What Callaghan meant was that Britain feels cheated by the terms of entry negotiated by the former Conservative government of Edward Heath. By 1980, the Foreign Secretary contended, Britain will be paying about 24% of the Common Market's budget according to the present schedule of assessments, even though its gross domestic product will be only 14% of the Community's total.

Behind his argument is a large body of British opinion that the benefits of membership in the Common Market have been oversold. Many Britons believe that the 13.6% jump in the cost of food last year can be blamed directly on the subsidies that French farmers collect under the EEC's Common Agricultural Policy. Beyond that, there is a visceral feeling that Britain ought not to be part of Europe, at least for the moment. According to a recent Gallup poll, 51% of all Britons surveyed thought it was wrong for their country to join the Common Market. Among those who agree is Prime Minister Harold Wilson's wife Mary. "I believe that Britain is an island," she said in a TV interview last week. "If God had meant us to be joined to the Continent, he would have joined us on."

Well Aware. In answer, pro-EEC British economists argue that participation in the Common Market cushions all its members against radical hikes in the price of staples. They point out that inflation last year in food prices was lower in France, Germany, Italy and the Benelux nations than it was in Japan, the U.S. or Britain. British prices would have been even lower, they say, had the United Kingdom been entitled to the full protection guaranteed by membership that it will gain in 1977.

These economists also contend that Britain will suffer far more than it might gain by leaving the Market, with the loss of potential markets for industrial goods. Well aware of such dangers, Wilson's government now appears to be backpedaling away from the referendum it promised lest the anti-EEC emotions it has stirred result in a negative vote.

In his first appearance before the EEC, France's new Foreign Minister Jean Sauvagnargues read Callaghan's speech as a threatening one. French Premier Jacques Chirac later warned Britain not to expect drastic changes and said that his government would oppose any renegotiation of the terms of entry. Other members were less antagonistic, and even France agreed to study recent growth patterns to determine whether Britain is being overcharged. Nonetheless, there was considerable resentment on the part of the ministers that at a tune when the Community as a whole is faced with unprecedented economic problems including record inflation and chronic payments imbalances, it should become bogged down in what they see primarily as Harold Wilson's domestic political problem.

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