Thatcher’s EU Policy: A Personal Perspective

Dr Gunnar Beck

I arrived in this country as a student from Germany very shortly before Mrs. Thatcher resigned as British Prime Minister.

I still remember that much of her party had fallen out of love with her in 1990, that she often came across as obstinate, narrow-minded, and ideologically driven, and that she divided opinion as no other politician I remember. At my college in Oxford she was almost universally and equally disliked by both my Communist and extreme conservative friends, although my college tutor Nevil Johnson whom I respected for his personally often difficult but impeccable moral rectitude, greatly admired her.  I have since had the opportunity of listening to many of her public pronouncements on the N. Ireland conflict and the miners’ strike, much of which struck me as lacking in compassion, sometimes crude, even inhumane at times. Many people  consider that her entire economic policy had disastrous social consequences and devastated entire regions of Wales, Scotland and Northern England.

Yet, I do not feel competent to judge the economic record of the Thatcher government. She massively reduced the size of British industry and promoted one-sided reliance on the financial sector which is now a dominant feature of the British economy and one of its great insoluble problems. However, what I cannot judge is how uncompetitive British industry had become compared to German, Japanese or American industry, and whether a sensible industrial policy could have restored its fortunes. German success reflects German education and Japan’s admirable ability to manage relative decline reflects Japanese virtues. It is doubtful whether British industry could have even approached German or US productivity within a generation or even two. Over-reliance on the City has effectively handed government in Britain over to the banking industry, but it is unclear to me which other routes of economic regeneration were open to Britain in the 1980s. It is unlikely that there were no alternatives but it is indisputable that Thatcher took very difficult decisions, which subsequent governments never did.

Compare her with all her faults, to Tony Blair, who inherited a growing economy, did nothing to reverse the trend towards reliance on finance, who improved the NHS but in a wasteful und unsustainable manner, and whose government ended up borrowing massively, which crucially contributed to the worst financial crisis for at least 80 years, who distorted intelligence evidence to wage a patently unlawful war and who altogether followed a fiscally irresponsible and politically almost universally opportunistic course. Thatcher showed fiscal prudence, had fewer alternatives, and had inherited an economy that made many talk of Britain as the ‘sick man of Europe’. Blair was elected during the early stages of an economic boom, he could have invested in education and healthcare for the long term, promoting science, technology and engineering and overseen an economically sensible immigration policy. Thatcher had massive character flaws but on character and integrity she wins outright over her principal successor .

I never liked her because of what seemed a ruthless indifference to the fate of the disadvantaged. Nevertheless, I regard her as perhaps the most noteworthy political figure since Richard Nixon, except perhaps for Mikhael Gorbachev. President Mitterand was far more civilised and well read and a master manipulator but all this to no good end. Chancellor Helmut Kohl did one thing right – reunification – which fell into his lap due to circumstances far beyond Germany’s control, but who is now known to bear responsibility for both the euro and Germany’s greatest post-war bribery and party financing scandal and who was rightly described by the then Greek foreign minister Pangalos as a ‘giant of bestial force and a child’s brain.’

It seems to me that at least from a national British perspective Thatcher’s policy toward the EU is often painted in too negative a light. Thatcher never established rapport with Kohl and Mitterand, which limited her influence it Europe, and she did not prevent the Single European Act. Yet, no one predicted at the time that the SEA would set free quite the integrationist momentum it did. She negotiated a very significant rebate for Britain at a time when Britain was poorer than the EU average, and her opposition to the single currency at least allowed for the later skilful negotiation of the UK opt-out by Major, Hurd and John Kerr. She did join the ERM, which was a bad mistake, but against her own better instinct and only at Nigel Lawson’s and Geoffrey Howe’s insistence they would resign if she did not.

Thatcher’s strident nationalism was generally unhelpful in her relations with other EU members and her reciprocated dislike of Helmut Kohl may have reinforced Kohl’s psychological and political dependence on Mitterand who cleverly manipulated the German Chancellor over the single currency and many other hasty and ill thought through projects. A more cooperative attitude from Britain might have reinforced Germany’s sounder financial instincts within the EU, but at the risk of participation in the single currency. Thatcher can hardly be blamed for not participating in a project that in her final days was finally proven to be a failure. On most EU-related issues Thatcher’s stance now seems to be vindicated: EMU was not desirable and ultimately has to fail as a viable high growth currency union. An internal Market (which she supported), could be advantageous. And the EU is ultimately not strong enough to create a political counterweight to the USA or China. Political and monetary union, I personally always thought, could in some respects be desirable and strengthen Europe’s hand vis-à-vis the US notwithstanding the erosion of national sovereignty, but only if they could work. Regrettably, both the euro and a common foreign and defence policy have proved illusory ideals. Thatcher saw that, and it matters not that her right thinking might have also been wishful.

As a German it was impossible for me to warm to Thatcher, because she seemed irrationally opposed to German reunification. She was also historically too illiterate and sociologically and psychologically too unaware to appreciate the profound changes Germany had undergone since 1945. She in particular did not understand the profound pacificism that then was and still is a major feature of German political life. She never understood that Germany no longer has any desire to dominate – Merkel does not wish to dominate the rest of the eurozone. Nor will Merkel’s austerity policy ultimately succeed. Merkel wants to save the euro, because she cannot see it does not work, and wants to do in the interest of peace and German industry. Paradoxically Germany’s first female Chancellor will not achieve either. Thatcher who might have got on much better with Merkel, erroneously thought Kohl was a bully intent to dominate the EU.

Thatcher made difficult economic decisions. They ultimately lead to a situation where the City of London now appears to govern the country. Yet it is unclear what options Thatcher had in restoring the fortunes of British industry. Thatcher never really played a leading role in the EU, but then was this possible given that she was, as we now know, rightly opposed to the more ambitious plans for further integration.? At least her policies subsequently minimised British involvement in some of the Union’s most self-destructive projects. Thatcher fought a war which ultimately saved her career, although a negotiated outcome which would have avoided the Falklands confrontation and which was favoured by many of her cabinet colleagues, would have been preferable if possible. However, the Falklands war, unlike Blair’s second Iraq war, was not perceived as an unjust war. Perhaps her record and imperfections are best evaluated by comparison to the only other longlasting government in recent times. Tony Blair during his ten years in office agreed to the EU Constitutional Treaty, promised Britain a referendum  on that Constitution – a promise on which he ultimately reneged – and he agreed to no less than 3 EU amending treaties. Blair wanted to join the euro – a calamity which only the sometimes misjudged Brown prevented. Furthermore Blair who was such a “smiley” in his early days, eventually fell out with most of his EU partners over Iraq, despite going along with most integrationist steps under his time in office. On Europe too, Thatcher seems to have a much stronger record than the only PM of similar tenure in recent times. Of course, many in Britain blame the EU for most of the country’s ills. This is humbug, but it seems to me that in difficult circumstances Thatcher pursued a reasonably principled and successful policy on the EU, certainly when judged from Britian’s national interest.  Major did so too. Tony Blair, by contrast, achieved nothing on anything, he irreversibly lowered the tone of public discourse and discussion, he was an opportunist where Thatcher was an ideologue, and it is doubtful that he even deserves to be credited with the course of events in Northern Ireland where Clinton’s role and that of David Trimble, Gerry Adams and Martin McGuiness were paramount.

Margaret Thatcher was with little doubt Britain’s most remarkable prime minister in the last forty years, perhaps longer. Her economic legacy is difficult to judge and, on the assumption that large sections of British industry could have been restored to profitability, was probably largely flawed. Her EU policy, however, was determined by intuitions that have largely been proven right and yielded results more obviously in Britain’s interest than that of later Prime Minister except perhaps John Major.

Gunnar Beck is the author of The Legal Reasoning of the Court of Justice of the EU, Hart Publishing, Oxford 2013.

1 thought on “Thatcher’s EU Policy: A Personal Perspective

  1. Interesting column. Yes, she was far more subtle on the EU than she is given credit for.

    Her Bruges speech is worth reading, as an exposition of her european policy it’s far less “eurosceptic” than it is nowadays presented as.

    In more detail:

    “…An internal Market (which she supported), could be advantageous.”

    She did more than support it. She sent an experienced businessman-politician (Lord Cockfield) as Commissioner to Brussels. He did the detailed spadework on the Internal Market, Delors did the presentation of it.

    “Merkel does not wish to dominate the rest of the eurozone. Nor will Merkel’s austerity policy ultimately succeed. Merkel wants to save the euro, because she cannot see it does not work, and wants to do in the interest of peace and German industry. Paradoxically Germany’s first female Chancellor will not achieve either.”

    We’ll see. The EU is an incredibly difficult construction to reform. And yet it is reforming, very slowly. I’m not sure that Merkel and Thatcher would have got on, though. One is anti-ideological, one has an ideology named after her.

    “Kohl …was rightly described by the then Greek foreign minister Pangalos as a ‘giant of bestial force and a child’s brain.’ ”

    I love this quote!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s