Richard North, 26/07/2020  

Work proceeds apace with the revision of The Great Deception. I've just completed that narrative to the end of 2006. The timelines of the last edition stopped in mid-2005, which means that I've added 18 months to the narrative in what was a very interesting period, of which I deal with the first six months here.

As I picked up the story in mid-2005, the European constitution had been rejected by the French and the Dutch in their referendums and the European Council of 16 June had decided that there was no quick fix. It had, therefore, launched a "period of reflection" and parked the issue for the time being.

Thus, when the UK took up the Council presidency on 1 July 2005, the main issue had become the multi-annual financial framework for 2007-2013. Blair was very much in the frame with Chirac demanding that Blair gave up the British rebate, in order to finance "big bang" enlargement.

Chirac, with serious domestic problems, was always happy to have a nice little spat with the British to take attention away from his own failing presidency. But, despite that, he was not on his own. Even Commission President Barroso had a go, at one time setting his spokesman, Johannes Laitenberger, on the case.

He quipped that the British presidency was like the Sheriff of Nottingham, 'taking from the poor to give to the rich'. Jack Straw, the then British foreign secretary, was always good for a swift retort. He told Laitenberger: "Mr Barroso is a great man but I dare say his spokesman knows less about what happened in Sherwood Forest than some of us. I might send him the film".

When Philippe Douste-Blazy, then minister of foreign affairs for France, later had a pop at Blair, declaring of his rebate offer: 'Britain is isolated, they have to propose another offer'. Straw's answer this time was: 'The French are always happy to negotiate with our money. That’s never been a problem".

This was all part of the months of tedious interplay, in which the European Union seems to specialise, before the "high noon" of the December European Council, when Blair was forced into a compromise deal in what he called a "wretched meeting in that boring and soulless room" in Brussels. In his autobiography, Blair wrote:
We got a deal which actually left Britain paying roughly the same as France for the first time. The UK media called it a betrayal, but frankly they would have done that even if I had led Jacques Chirac in chains through the streets of London. And by then I was past caring. We preserved the rebate, tied its demise to the CAP and agreed a break to the budget period where both could be reformed. Though I shouldn't say it, it was close to a minor miracle.
Blair wasn't wrong about the media. Possibly, one of the most generous reports came from The Guardian, which headlined: "Blair clinches deal with offer of big rebate cut". Britain, it reported, had given up £7 billion of the rebate negotiated by Margaret Thatcher, committing to contributions over the seven-year period of £40 billion - a 63 percent net increase.

Overall, the EU-25 had agreed an €862 billion spending package for the period, But Chirac seemed to differ in his understanding of what had transpired. He had "immediately hailed the deal after the British withdrew a call for a review of EU spending before the end of the budget period".

This paper too, predicted a reaction from "Britain's vocal Eurosceptic lobby". It suggested it would be "unappeased by confirmation in the small print that France's contributions would increase by 116 percent in the same period, bringing French input to EU funds almost to the same level as Britain's, a long-sought goal".

And contrary to the Guardian report, Blair had got his review. It was described in the Presidency Conclusions as a "complementary and inseparable" part of the agreement. The Commission was "invited" to undertake a full, wide ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, to report in 2008/9.

As to the Eurosceptic reaction, The Daily Telegraph headline proclaimed: "Blair set to give up £7bn in rebate fiasco"', the text referring to "climbdown", "surrender", and that Blair had "bowed to a Franco-German demand … to abandon calls for budget discipline and expand EU spending dramatically".

The Daily Mail was even more critical, spitting: "Blair's surrender", telling its readers "Tony Blair has completed a spectacular European U-turn by surrendering more than £1billion a year from Britain's EU rebate. In return for the gigantic cash handover he got virtually nothing". Even the relatively neutral Times reported: "Blair surrenders chunk of rebate".

There was no such balance from the Sunday Express. It headed a double-page spread with the single word: "Loser". An op-ed by Julia Hartley-Brewer, entitled: "It’s not Tony’s money to give, it’s all of ours", complained that, "once again, Tony Blair has clutched a mythical victory out of the jaws of humiliating defeat". The Sunday Times was not that much better, claiming that the Brussels deal made "every family £445 poorer".

It didn't finish on Sunday either. On the Monday, the Daily Mail resumed its assault with: "Blair hung out to dry", with an editorial headed, "Game, set and match to Chirac", recording that, "The self-satisfied smirk on the face of Jacques Chirac as the Brussels summit ended said it all".

The Times talked of a "costly climbdown", with the observation that, "When the French start praising Tony Blair's negotiating stance you know something is wrong". According to Chirac, Blair had made a "legitimate but politically difficult" gesture. But the paper thought that "next to nothing" had been achieved. "It would have been better for Mr Blair to walk away than agree this deal", it said.

In fact, Britain had been caught in a trap of its own making. She had been an enthusiastic advocate of enlargement, on the basis that it would "widen" rather than "deepen" the Community.

But, with the enlargement countries on board, they had to be paid for, and increasing the contributions to cover this delivered the unintended effect of increasing the UK's rebate. This was unsustainable. Something had to give, and Blair probably walked away with the best deal it was possible to get under the circumstances.

Nevertheless, out of this a legend born, of how Tony Blair had given away Margaret Thatcher's rebate.

Another facet of this negotiation was the role of Angela Merkel, at her very first European Council. It was she who had brought Blair and Chirac together, and then upped the budget from Britain's proposed 1.03 percent to 1.045 percent of the EU’s gross national income.

With an extra €4 billion up for grabs, it had been easier for Blair to "buy off" the Netherlands, Sweden and Ireland. But to square Poland, Merkel offered €100 million of EU aid earmarked for East Germany.

Polish prime minister, Kazimierz Marcinkiewicz, described it as 'the most beautiful and wonderful gesture of solidarity', although rather less starry-eyed British officials said the offer had been "pre-cooked" in case he had 'kicked up rough'.

Merkel's intervention was seen to hint at a possible shift in power in "Europe". More to the point, it extended her already well-established reputation as a "fixer", a point which has some relevance today.

As to the Constitution, the European Council had had virtually nothing to say, other than it would "return to the issue in the first half of 2006 under the Austrian Presidency".

At the close of 2005, though, when he returned to the Commons, Blair faced the new leader of the Opposition, David Cameron. After Blair's 1996 jibe to Major on his BSE "rout", when he'd been trounced by the Commission on the beef ban, Cameron neatly turned the tables.

"On the budget", he said, "does the Prime Minister remember having three clear objectives: first, to limit its size, when almost every country in Europe is taxing and borrowing too much; secondly, to ensure fundamental reform of the CAP; and, thirdly, to keep the British rebate unless such reform occurs?" "Is it not now clear", Cameron asked, "that he failed in every single one?"

The curse of "Europe" had struck again. Even when he had succeeded, Blair had been branded a failure. Cameron is soon to experience the same phenomenon.

Also published on Turbulent Times.

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