At the Fontainebleau European Council meeting in June 1984 an agreement was finally reached to reduce the UK's contribution towards the EEC budget. As the third poorest member state of the Community in 1984 Britain was set to become the largest net contributor, owing to her comparatively fewer farms and the Common Agricultural Policy comprising 70% of EEC expenditure. In an often acrimonious battle with her European colleagues Mrs Thatcher threatened to withhold Britain’s budgetary contribution and had blocked the proposed increase in the VAT levy – then the main source of EEC revenue – required to balance the budget, in a dispute which had been inherited from Callaghan in 1979. The deal was to set the pattern for Thatcher’s often fraught relations with the EEC in the future. |
