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By this time, the institutions of Europe were well established, & they hadn’t been designed with the UK’s economy in mind.
Painful concessions had to be made by the British, particularly in agriculture.
Despite being members, the Br. People & their politicians were by no means keen to march down what many on the continent saw as a path leading towards a federal Europe.
One of the conditions stated by E. Heath when Britain was to enter the EEC, was that joining the Community does not entail a loss of national identity or an erosion of essential national sovereignty.
Both Labor and the Conservatives found themselves heavily divided on the issue of the UK’s involvement in united Europe, as it was feared by many politicians that power was moving irrevocably from Westminster to Brussels.
As a result, despite being a member of the EC, Britain’s relations with its European partners were far from smooth, especially during the Thatcher era.
M. Thatcher & the Conservative Party returned to power in 1979, took a rather skeptical attitude towards the UK membership in the EC. This reached a showdown in 1985, when M. Thatcher demanded the repayment of part of the UK’s budget. Britain was paying more and more into the EEC budget than it got out. So the UK demanded some of its money back as a rebate (возврат).
Although it meant that Britain got a better deal, the EEC budget continued to grow rapidly, with the CAP and payments to poorer member countries.
The Common Agricultural Policy (CAP) was started in 1962 to ensure fair standard of living for farmers & to provide a stable & safe food supply at affordable prices.
Ireland, Spain, Portugal and Greece were particularly expensive for the EEC.
Thatcher also rejected plans sketched out by the European Commission President Jacques Delores for united European’s wide social rights (what later became known as the Social Chapter).
With much reluctance Thatcher gave her consent for the UK to join the Exchange Rate Mechanism in October 1990. ERM was the system set up in March 1979 (as part of the European Monetary System) to reduce exchange rate variability and achieve monetary stability in Europe, in preparation for Economic & Monetary Union & the introduction of a single currency - the euro.
Britain was forced to exit the program within two years after the pound sterling came under major pressure from currency speculators, including George Soros.
The ensuing crash of 16 September, 1992 was dubbed “Black Wednesday” (by analogy with “Black Thursday” in the USA – Great Depression).
The UK spent over 6 billion pounds trying to keep the currency within the narrow limits, and Soros, blamed for the currency speculation, was dubbed as “the man who broke the Bank of England”.
Britain’s failure to stay within the EEM was one of the signs the PM John Major failed to mend fences with Europe when M. Thatcher resigned.
In February 1992 the Maastricht Treaty was signed with the aim to create a single European currency to challenge the international supremacy of the dollar.
The Treaty also created a new model for the Community based around three “pillars” which covered economic relations, foreign affairs and home affairs.
Britain pushed for and got an “opt out” (вне зоны) clause for the single currency. This meant that the UK, being part of the European Community, did not participate in the single currency project.
Apart from the single currency, the British were also given an opt-out for the Social Chapter.
The Maastricht Treaty proved to be a long-running headache for the J. Major government as he struggled to have it ratified by the Parliament. A fierce debate about the Treaty also raged in the Conservative Party. The divisions over Europe were so powerful that they nearly caused the collapse of the Conservative Government.
