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Italy and the Hague Conference of December 1969 105Palazzo Chigi, in Rome, at the end of March 1971, explaining that Italy hoped thatthe UK, once in the EC, would support a revision of the CAP system that wouldthus become more advantageous to Italian and British interests. 19 Furthermore,Italy hoped that Great Britain would promote the shaping of a European regionalpolicy, with particular attention to underdeveloped areas, as the Mezzogiorno, andthe implementation of Community institutions, as the European Investment Bank,the European Social Fund and the European Agricultural Guidance and GuaranteeFund (EAGGF) in sustaining the development of these regions. 20Italy’s reaction to the other two goals of the triplet was not so enthusiastic. Theadoption of a definite regulation for financing agriculture in Europe, envisaged byFrance as the preliminary condition before starting negotiations with the UnitedKingdom, posed a series of problems to Italian agriculture:a) Italy’s CAP contribution was particularly high, the country having the highestlevel of agricultural imports within the Community;b) Italian products faced strong competition from Mediterranean countries, suchas Greece, which had signed an association agreement with the EC in 1961;c) the EC had failed to proceed to a structural development of Italian agriculture,which still employed the highest percentage of labour in Europe; 21d) the introduction of the Value Added Tax, as a first step in co-ordinating the fiscalsystems of the ‘Six’, would be particularly troublesome for Italy, both for politicalreasons and because of the country’s administrative inefficiency. It was anticipatedthat the introduction of VAT in Italy would meet with long delays causing severestrains with the other European countries, particularly France. 22As to the question of the EEC’s deepening, the Italian government approved theestablishment of an Economic and Monetary Union (EMU), although it appearedlukewarm towards the creation of a system of fixed parities proposed by the PlanBarre of February 1969. 23 Repeatedly, the governor of the Bank of Italy, GuidoCarli, and his close collaborator, Rinaldo Ossola, criticised the project of a19. PRO, PREM 15/370, Record of a conversation between the Chancellor of the Duchy of Lancasterand the Italian Prime Minister, Palazzo Chigi, March 29 th 1971, at 10.00 a.m., confidential.20. These proposals were made by Emilio Colombo at the eve of the Italian presidency of the Councilof ministers in June 1971. Sir Alec Douglas-Home, the British Foreign secretary, agreed and said:“He thought that regional policy would be very important for the future development of the Community,and hoped that it would be possible to arrange informal talks between the British and Italiangovernments on this subject, because their problems had much in common”, PRO, PREM 15/500, Record of a Meeting between the Prime Minister and the Foreign and Commonwealth Secretaryand Colombo and Moro, held at Chequers on monday June 28 th 1971, at 10.00 a.m., secret.21. HAEC, EN, Folder 1509, Note of November 4 th 1970 on Italian Agriculture.22. See HAEC, Franco M. Malfatti Papers (FMM), Folder 18, Visit to Paris, September 23-24 th 1970.23. See G. BOSSUAT, Le président Georges Pompidou et les tentatives d'Union économique etmonétaire and R. FRANK, Pompidou le franc et l’Europe, in: Georges Pompidou et l'Europe,op.cit. pp.407-408 and 339-369; P. WERNER, Union économique et monétaire. Les avatars durapport Werner, Editions Saint Paul, Luxembourg, 1991 and H. ZIMMERMANN, The Fall ofBretton Woods and the first Attempt to Construct a European Monetary Order, in: B. STRATH(ed.), From the Werner Plan to the EMU, Peter Lang, Bruxelles, 2001, pp.49-72.