journal of european integration history revue d'histoire de l ...

118Alan S. MilwardKingdom’s first unsuccessful negotiations for membership in 1961-3. An additionalpurpose of that Regulation was, indeed, at the time, to deter Britain from pursuingits application. Financial Regulation No.25 foresaw the main body of ‘ownresources’ being drawn from the frontier levies which were to be used for thepurpose of gradually equalising the prices of agricultural products moving withinthe common market. The clear implication of this policy was that once prices wereequalised ‘own resources’ would then be derived by transferring to the EuropeanCommission the income from the Common External Tariff of the Community.Those member-states which were the greatest food importers once the levies werein place would pay the greatest part of the Community’s expenses. Within the Sixthe biggest volume importer was Germany, although had the British application formembership not failed the United Kingdom would have run Germany close as chiefpaymaster. The exact circumstances in which Germany accepted this Regulationafter summer 1962 have never been fully explained. 1 However, it was accepted inthe first place only for three years and there followed a prolonged struggle throughthe1960s by France to make this system of financing the Community permanent. 2Since by far the greatest part of Community expenditure was on the CommonAgricultural Policy (CAP) and since the United Kingdom was certain to receive aproportionately smaller share of the benefits from that policy than Germany,Financial Regulation No.25 might well have led to Britain breaking off itsnegotiations for entry in 1963 had de Gaulle not pronounced his veto. Germany,with its large agricultural sector, was guaranteed a large return from the CommonAgricultural Policy, although by no means one commensurate with its outlays.The Financial Regulation remained a subject of persistent inter-ministerialcontroversy in Germany with the result that it was accepted only as a temporaryregulation. At the time of Britain’s second application for membership in 1967 itwas scheduled for final consideration, in December 1969 in what France treated asan ultimatum. As far as France was concerned, ‘completion’ meant that Germanymust permanently accept as a permanent solution what it had signed in 1963. Afterthat, and only after that, if ‘widening’ was to follow, the United Kingdom must dothe same. What had been set out in Financial Regulation No.25 in 1962 was anacquis français to be cemented into place as an acquis communautaire.The problem which this posed for British membership went deeper than thedisproportionate cost of the Community budget which Britain must meet. A largevolume of food imports from Commonwealth countries at prices much lower thanthose prevailing in Europe would have to be partly substituted, to conform with theprinciple of European preferences and the gradual alignment with the CommonExternal Tariff of the Community, by more expensive imports from theCommunity. The impact of this change on reducing the outflow of transfers fromBritain to ‘own resources’ was not easily calculable. The immediate impact of1. A.S. MILWARD, The United Kingdom and the European Community, vol.1: The Rise and Fall ofa National Strategy 1945-1963, Whitehall History Publishing, London, 2002, p.386.2. A.-C. LAURING KNUDSEN, Defining the Policies of the Common Agricultural Policy. A HistoricalStudy, PhD thesis, European University Institute, 2001.