199

Notes

Abbreviations used in notesCAB Cabinet PapersES Ministerial Committee on Economic StrategyEUS Ministerial Committee on European StrategyFCO Foreign and Commonwealth OfficeFV Department of Trade and IndustryPREM Prime Minister’s OfficeT TreasuryTFIA Files released by the Treasury under the Freedom of Information Act

Chapter 1 Introduction

1 Stephen George, An Awkward Partner: Britain in the European Community (Oxford:Oxford University Press, 1998). For the overview of British and French policytowards European integration, see Andrew Geddes, The European Union andBritish Politics (Basingstoke: Palgrave Macmillan, 2004); John W. Young, Britainand European Unity 1945–1999 (Basingstoke: Macmillan, 2000); Hugo Young,This Blessed Plot: Britain and Europe from Churchill to Blair (London: Macmillan,1998); and Alain Guyomarch, Howard Machin and Ella Ritchie, France in theEuropean Union (Basingstoke: Macmillan, 1998).

2 The Hague European summit of 1969 commissioned the Werner Committee todraw up a report on EMU. See Werner Report, ‘Report to the Council and Com-mission on the Realization by Stages of Economic and Monetary Union in theCommunity’, Supplement to Bulletin of the European Communities, No. 11, 1970.

3 European Council, ‘Resolution of the European Council of 5 December 1978on the Establishment of the European Monetary System and related Matters’,Bulletin of the European Communities, No. 12, 1978.

4 Alec Cairncross, ‘The Heath Government and the British Economy’, in StuartBall and Anthony Seldon (eds), The Heath Government 1970–74: A Reappraisal(London: Longman, 1996), 132.

5 On EMU in the 1970s, see Loukas Tsoukalis, The Politics and Economics of theEuropean Monetary Integration (London: George Allen & Unwin, 1978). For ahistorical account of the process which culminated in the establishment of the EMS, see Peter Ludlow, The Making of the European Monetary System: A Case Study of the Politics of the European Community (London: Butterworth,1982). Kenneth Dyson and Kevin Featherstone, The Road to Maastricht:Negotiating Economic and Monetary Union (Oxford: Oxford University Press,1999) is a monumental work on the entire history of European monetaryintegration after the Second World War and should be the starting point fora scholar of later generations. David Marsh, The Euro: The Politics of the New Global Currency (New Haven: Yale University Press, 2009) is also a veryinformative book on the history and prospects of the single currency.

6 Dean Acheson, ‘Extract from a Speech at West Point’, in Ian S. McDonald(ed.), Anglo-American Relations since the Second World War (Newton Abbot:David & Charles, 1974), 181–2.

7 Ernest Haas, The Uniting of Europe: Political, Social, and Economic Forces,1950–1957 (Stanford: Stanford University Press, 1958); Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht(London: UCL Press, 1998).

8 David Reynolds, ‘A “Special Relationship”? America, Britain and the Inter-national Order since the Second World War’, International Affairs, 62(1) (1986),2.

9 Allan Bullock, Ernest Bevin: A Biography (new edn; London: Politico’s, 2002).For a revisionist view, see John W. Young, Britain, France and the Unity ofEurope 1945–51 (Leicester: Leicester University Press, 1984).

10 Michael Charlton, The Price of Victory (London: British BroadcastingCorporation, 1983).

11 Wolfgang Kaiser, Using Europe, Abusing the Europeans: Britain and EuropeanIntegration, 1945–63 (Basingstoke: Macmillan, 1996), 130; N. Piers Ludlow,Dealing with Britain: The Six and the First UK Application to the EEC (Cambridge:Cambridge University Press, 1997), 30.

12 Cmnd 4715, The United Kingdom and the European Communities (London:HMSO, 1971), paragraph 35.

13 John W. Young, International Policy (The Labour Governments 1964–70, 2;Manchester: Manchester University Press, 2003), 20.

14 Christopher Hill and Christopher Lord, ‘The Foreign Policy of the HeathGovernment’, in Stuart Ball and Anthony Seldon (eds), The Heath Governmentof 1970–74: A Reappraisal (London: Longman, 1996), 305.

15 For France’s European strategy during the early post-war period, see WilliamHitchcock, France Restored: Cold War Diplomacy and the Quest for Leadership in Europe, 1944–54 (Chapel Hill: University of North California Press, 1998);Michael Sutton, France and the Construction of Europe, 1944–2007: The Geo-political Imperative (Oxford: Berghahn Books, 2007).

16 Compare Frances M. B. Lynch, France and the International Economy: From Vichyto the Treaty of Rome (London: Routledge, 1997), 183 with Peter Mangold, The Almost Impossible Ally: Harold Macmillan and Charles de Gaulle (London: I. B. Tauris, 2006), 82. A more balanced account is available in Alan S. Milward,The Rise and Fall of a National Strategy 1945–63 (The United Kingdom and theEuropean Community, 1; London: Frank Cass, 2002), 252.

17 Mangold, Impossible Ally, 81–2.18 Sutton, France, Chapter 4.19 As for French policy towards NATO, see Frédéric Bozo, ‘Détente versus Alliance:

France, the United States and the Politics of the Harmel Report’, ContemporaryEuropean History, 7(3) (1998).

20 Marsh, Euro, 41–4.21 Uwe Kitzinger, Diplomacy and Persuasion: How Britain Joined the Common Market

(London: Thames and Hudson, 1973), 38–9.22 Edward Heath, Old World, New Horizons: Britain, Europe, and the Atlantic Alliance

(Cambridge: Harvard University Press, 1970), 32 pointed out that Britain’s pastapplications to the EEC had failed because London and Paris had opposingvisions on Europe.

200 Notes

23 Haig Simonian, The Privileged Partnership: Franco-German Relations in the European Community 1969–1984 (Oxford: Clarendon Press, 1985), 5. As for the detailed explanation of the Ostpolitik, see Timothy Garton Ash, In Europe’s Name: Germany and the Divided Continent (London: Vintage,1994).

24 Georges-Henri Soutou, ‘The Linkage between European Integration andDétente: The Contrasting Approaches of de Gaulle and Pompidou’, in PiersLudlow (ed.), European Integration and the Cold War: Ostpolitik-Westpolitik,1965–73 (London: Routledge, 2007), 26–9.

25 Jean-Pierre Corcelette and Frédéric Abadie, Georges Pompidou: Le désir et ledestin (Paris: Editions Balland, 1994), 337.

26 Ibid.27 For an instance of this view, see Tsoukalis, European Monetary Integration,

63–81.28 David J. Howarth, The French Road to European Monetary Union (Basingstoke:

Palgrave, 2001), 29.29 Harold James, International Monetary Cooperation Since Bretton Woods (New

York: Oxford University Press, 1996), 249.30 Britain concluded the Basle Agreement with the United States and the other

11 countries, who offered a medium-term dollar credit for Britain. The Britishgovernment also negotiated bilateral sterling agreements with the sterling areacountries. Under the agreements, these countries were obliged to hold a cer-tain proportion of their foreign exchange reserves in sterling. In exchange,Britain agreed to guarantee the value of 90 per cent of their sterling balancesin the US dollar. As a consequence of these developments, Britain becamefinancially and therefore politically dependent on the United States. Francewas not a signatory of the Basle Agreement.

31 Milward, Rise and Fall, Chapters 7, 9 and 10.32 Susan Strange, Sterling and British Policy: A Political Study of an International

Currency in Decline (Oxford: Oxford University Press, 1971). See also Alan S. Milward, The Reconstruction of Western Europe 1945–51 (London:Routledge, 1984), 237–8; Kaiser, Using Europe, 41; Catherine R. Schenk, ‘The UK, the Sterling Area, and the EEC, 1957–63’, in Anne Deighton and Alan S. Milward (eds), Widening, Deepening and Acceleration: TheEuropean Economic Community 1957–63 (Baden-Baden: Nomos Verlag,1999), 123–37.

33 Simonian, Partnership, 19.34 Lynch, France, 186–209.35 Charles de Gaulle, Mémoires d’espoir (Le renouveau, 1958–1962, 1; Paris: Plon,

1970), 23.36 Douglas Hurd, Memoirs (London: Little, Brown & Company, 2003), 198; Jean-

René Bernard, ‘Britain into Europe’, in Richard Mayne, Douglas Johnson andRobert Tombs (eds), Cross Channel Currents: 100 Years of the Entente Cordiale(London: Routledge, 2004), 171.

37 Tsoukalis, European Monetary Integration, 33.38 Ludlow, European Monetary System, 159–61.39 Moravcsik, Choice for Europe, 291.40 As for the historical background of these hostilities, see Jack Hayward,

‘France and the United Kingdom: The Dilemmas of Integration and National

Notes 201

Democracy’, in Jeffrey Anderson (ed.), Regional Integration and Democracy:Expanding on the European Experience (Lanham: Rowman & Littlefield, 1999);Sudhir Hazareesingh, Political Traditions in Modern France (Oxford: OxfordUniversity Press, 1994), Chapter 5.

41 Tsoukalis, European Monetary Integration, 33, 37–8.42 Philip Lynch, The Politics of Nationhood: Sovereignty, Britishness and Conservative

Politics (Basingstoke: Macmillan, 1999), 39–41.43 Anthony Forster, Euroscepticism in Contemporary British Politics: Opposition

to Europe in the British Conservative and Labour Parties since 1945 (London:Routledge, 2002), 40.

44 Sudhir Hazareesingh, ‘Vincent Wright and the Jacobin Legacy in Historicaland Theoretical Perspective’, in Sudhir Hazareesingh (ed.), The Jacobin Legacyin Modern France: Essays in Honour of Vincent Wright (Oxford: Oxford UniversityPress, 2002), 6.

45 Andrew Knapp, Gaullism since de Gaulle (Aldershot: Dartmouth, 1994).46 Michael Newman, Socialism and European Unity: The Dilemma of the Left

in Britain and France (London: Junction Books, 1983).47 R. E. M. Irving, ‘The Centre Parties in the Fifth French Republic’, Parliamentary

Affairs, 29(3) (1976); Vincent Wright, ‘Presidentialism and the Parties in theFrench Fifth Republic’, Government & Opposition, 10(1) (1975).

48 David M. Wood, ‘Comparing Parliamentary Voting on European Issues inFrance and Britain’, Legislative Studies Quarterly, 7(1) (1982). According to him,however, the difference between the moderates and radicals on Europe wasmore blurred on the right.

49 Kathleen Thelen and Sven Steinmo, ‘Historical Institutionalism in Compar-ative Politics’, in Sven Steinmo, Kathleen Thelen and Frank Longstreth (eds),Structuring Politics: Historical Institutionalism in Comparative Analysis (Cambridge:Cambridge University Press, 1992).

50 Moshe Maor, ‘Party Competition in Interlinked Political Markets: The European Union and its Member States’, in Keith Dowding and DesmondKing (eds), Preferences, Institutions and Rational Choice (Oxford: ClarendonPress, 1995) treated the relationship between government and oppos-ition as a party-systemic factor. See also his later work, ‘The Relation-ship between Government and Opposition in the Bundestag and House of Commons Run-up to the Maastricht Treaty’, West European Politics, 21(3)(1998).

51 Vernon Bogdanor (ed.), Coalition Government in Western Europe (London:Heinemann Educational Books, 1983). See also Kaare Strom, MinorityGovernment and Majority Rule (Cambridge: Cambridge University Press,1990).

52 Dyson and Featherstone, Road to Maastricht, 99, 121. See also Jonathan Story,‘The Launching of the EMS: An Analysis of Change in Foreign EconomicPolicy’, Political Studies, 36 (1988).

53 Maurice Duverger, ‘A New Political System Model: Semi-Presidential Govern-ment’, European Journal of Political Research, 8(2) (1980).

54 Robert Elgie, ‘France’, in Robert Elgie (ed.), Semi-Presidentialism in Europe(Oxford: Oxford University Press, 1999).

55 R. Formesyn, ‘Europeanisation and the Pursuit of National Interests’, inVincent Wright (ed.), Continuity and Change in France (London: George Allen &

202 Notes

Unwin, 1984), 220, reports that during his presidential campaign in 1974Giscard d’Estaing restrained himself from making a statement on Europeanissues which might alienate Gaullist supporters.

56 Mark Aspinwall, ‘Odd Man Out: Rethinking British Policy on EuropeanMonetary Integration’, Review of International Studies, 29 (2003), 364.

57 Andrew Knapp and Vincent Wright, The Government and Politics of France,4th edn (London: Routledge, 2001), 241–68.

58 Philip Norton (ed.), Dissension in the House of Commons: Intra-Party Dissentin the House of Commons’ Division Lobbies 1945–74 (Basingstoke: Macmillan,1975) and Dissension in the House of Commons 1974–79 (Oxford: ClarendonPress, 1980).

59 This definition of causality is most commonly used in the literature of political science, such as Gary King, Robert Keohane and Sidney Verba,Designing Social Inquiry: Scientific Inquiry in Qualitative Research (Princeton:Princeton University Press, 1994).

60 John Ramsden, The Winds of Change: Macmillan to Heath, 1957–1975 (London:Longman, 1996).

61 David Hine, ‘Leaders and Followers: Democracy and Manageability in the Social Democratic Parties of Western Europe’, in W. Paterson and A. Thomas (eds), The Future of Social Democracy: Problems and Prospects ofSocial Democratic Parties in Western Europe (Oxford: Oxford University Press,1986).

62 For a brief discussion on the alternative methodologies which can beemployed to analyse intra-party politics, see Paul Webb, The Modern BritishParty System (London: Sage, 2000), 176–7.

63 S. E. Finer, H. B. Berrington and D. J. Bartholomew, Backbench Opinion in theHouse of Commons 1955–59 (Oxford: Pergamon Press, 1961).

64 For example, Kathleen R. McNamara, The Currency of Ideas: Monetary Politicsin the European Union (Ithaca: Cornell University Press, 1998) attributed the success of the EMS to the convergence of national economic manage-ment, namely, the adoption of monetarism. However, her argument cannotexplain convincingly why Britain did not participate in the ERM until 1990.

65 Arend Lijphart, ‘Comparative Politics and the Comparative Method’, The American Political Science Review, 65(3) (1971), 682–93; Arend Lijphart,‘The Comparable-Cases Strategy in Comparative Research’, ComparativePolitical Studies, 8(2) (1975), 158–77; Charles Ragin, The Comparative Method:Moving Beyond Qualitative and Quantitative Strategies (Berkeley: University ofCalifornia Press, 1987), Chapter 3.

66 Donald T. Campbell, ‘Degrees of Freedom and the Case Study’, ComparativePolitical Studies, 8 (1975), 182.

67 James Mahoney, ‘Strategies of Causal Assessment in Comparative HistoricalAnalysis’, in James Mahoney and Dietrich Rueschemeyer (eds), ComparativeHistorical Analysis in the Social Sciences (Cambridge: Cambridge UniversityPress, 2003).

68 Peter Hall, ‘Aligning Ontology and Methodology in Comparative Politics’,in James Mahoney and Dietrich Rueschemeyer (eds), Comparative HistoricalAnalysis in the Social Sciences (Cambridge: Cambridge University Press, 2003),392, 393, 394.

Notes 203

Chapter 2 National Political Parties and Party Systems inthe Study of European Integration

1 As for the Europeanisation of national party systems, see Robert Ladrech,‘National Political Parties and European Governance: The Consequences of“Missing in Action”’, West European Politics, 30(5) (2007); Peter Mair, ‘TheLimited Impact of Europe on National Party Systems’, West EuropeanPolitics, 23(4) (2000).

2 Giovanni Sartori, Parties and Party Systems: A Framework for Analysis (Cambridge:Cambridge University Press, 1976), 44.

3 Robert A. Dahl, ‘Patterns of Opposition’, in Robert A. Dahl (ed.), PoliticalOppositions in Western Democracies (New Haven: Yale University Press, 1996),Chapter 12.

4 Ernst Haas, The Uniting of Europe: Political, Social and Economic Forces 1950–57(Stanford: Stanford University Press, 1958), 16.

5 Ibid., 154–9.6 Kevin Featherstone, Socialists Parties and European Integration: A Comparative

History (Manchester: Manchester University Press, 1988), 11.7 Ibid., 11–12.8 Haas, Uniting of Europe, 23.9 Ibid., 26–31.

10 Loukas Tsoukalis, What Kind of Europe (Oxford: Oxford University Press,2003).

11 Ben Rosamond, Theories of European Integration (Basingstoke: Macmillan,2000), 57–8 points out that Haas was under the influence of the end of ideology thesis.

12 Ibid., 88.13 W. Sandholtz and A. Stone Sweet (eds), European Integration and Supra-

national Governance (New York: Oxford University Press, 1998); George Ross,Jacques Delors and European Integration (Cambridge: Polity, 1995).

14 Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht (London: UCL Press, 1998); Andrew Moravcsik,‘Preferences and Power in the European Community: A Liberal Inter-governmentalist Approach’, Journal of Common Market Studies, 31(4) (1993).

15 Moravcsik, Choice for Europe, 36.16 Liesbet Hooghe and Gary Marks, Multi-Level Governance and European Integration

(Lanham: Rowman & Littlefield, 2001), 1.17 Thomas Risse-Kappen, ‘Exploring the Nature of the Beast: International

Relations Theory and Comparative Policy Analysis Meet the European Union’,Journal of Common Market Studies, 34(1) (1996).

18 Simon Hix, ‘The Study of the European Community: The Challenge to Com-parative Politics’, West European Politics, 17 (1994); ‘The Study of EuropeanUnion II: The “New Governance” Agenda and its Rival’, Journal of EuropeanPublic Policy, 5(1) (1998).

19 Liesbet Hooghe, Gary Marks and Carole J. Wilson, ‘Political Parties Take aStand’, in Hooghe and Marks, Multi-Level Governance, Chapter 10.

20 Seymour Martin Lipset and Stein Rokkan, ‘Cleavage Structures, Party Systems,and Voter Alignments: An Introduction’, in Seymour M. Lipset and Stein

204 Notes

Rokkan (eds), Party Systems and Voter Alignments: Crossnational Perspectives(New York: Free Press, 1967).

21 Hooghe and Marks, Multi-Level Governance, 164.22 Simon Hix, ‘Dimensions and Alignments in European Union Politics:

Cognitive Constraints and Partisan Responses’, European Journal of PoliticalResearch, 35(1) (1999), 79; Paul Tagaart, ‘A Touchstone of Dissent: Euro-scepticism in Contemporary West European Party System’, European Journal ofPolitical Research, 33(3) (1998).

23 This is also true of their more recent work. See Liesbet Hooghe, Gary Marksand Carole J. Wilson, ‘Does Left/Right Structure Party Positions on EuropeanIntegration?’, in Gary Marks and Marco R. Steenbergen (eds), European Inte-gration and Political Conflict (Cambridge: Cambridge University Press, 2004),137.

24 Hans Daalder (ed.), Comparative European Politics: The Story of a Profession(London: Pinter, 1997), 29.

25 See Hix, ‘Dimensions and Alignments’, 73. This is probably because to admitthe existence of a social cleavage which is not reflected in the party systeminvites intractable questions about the ambiguous relationship between socialcleavages and the party system.

26 For example, Matthew Gabel, ‘European Integration, Voters and NationalPolitics’, in Klaus H. Goetz and Simon Hix (eds), Europeanised Politics? EuropeanIntegration and National Political Systems (London: Frank Cass, 2001).

27 Hooghe and Marks, Multi-Level Governance, 125. This concern (and the limits accompanying it) is shared by an otherwise brilliant book, Simon Hix and Christopher Lord, Political Parties in the European Union (Basingstoke:Macmillan, 1997).

28 On the first British application to the EEC, Ronald Butt, ‘The Common Marketand the Conservative Party, 1961–2’, Government & Opposition, 2(3) (1967);David Dutton, ‘Anticipating Maastricht: The Conservative Party and Britain’sfirst Attempt to Join the European Community’, Contemporary Record, 7(3)(1993). On the second application by the Labour Government, see PhilipLynch, ‘The Conservatives and the Wilson Application’, and Anne Deighton,‘The Labour Party, Public Opinion and “the Second Try” in 1967’, in Oliver J. Daddow (ed.), Harold Wilson and European Integration: Britain’s SecondApplication to Join the European Community (London: Frank Cass, 2003); John W. Young, International Policy (The Labour Governments 1964–70, 2;Manchester: Manchester University Press, 2003). On the internal division of the Conservatives since the middle of 1980s, D. Baker, A. Gamble and S. Ludlam, ‘1846…1906…1996? Conservative Splits and European Integration’,The Political Quarterly, 64(4) (1993); D. Baker, A. Gamble and S. Ludlam,‘Parliamentary Siege of Maastricht 1993’, Parliamentary Affairs, 47(1) (1994); S. George and M. Sowemimo, ‘Conservative Foreign Policy towards the Euro-pean Union’, in S. Ludlam and M. J. Smith (eds), Contemporary British Con-servativism (Basingstoke: Macmillan, 1996); M. Sowemimo, ‘The ConservativeParty and European Integration 1988–95’, Party Politics, 2(1) (1996). On thechanging policy of Labour, Roger Broad, Labour’s European Dilemmas: FromBevin to Blair (London: Palgrave Macmillan, 2001); Erin Delaney, ‘The LabourParty’s Changing Relationship to Europe’, Journal of European IntegrationHistory, 8(1) (2002); S. George and D. Haythorne, ‘The British Labour Party’, in

Notes 205

J. Gaffney (ed.), Political Parties and the European Union (London: Routledge,1996); S. Tindale, ‘Learning to Love the Market: Labour and the Euro-pean Community’, The Political Quarterly, 63(3) (1992). On the EMU, PhilipStephens, Politics and the Pound: The Tories, the Economy and Europe (London:Macmillan, 1996); Helen Thompson, The British Conservative Government and the European Exchange Rate Mechanism, 1979–1994 (London: Pinter, 1996); Mark Aspinwall, ‘Odd Man Out: Rethinking British Policy on EuropeanMonetary Integration’, Review of International Studies, 29 (2003).

29 The few exceptions are Nigel Ashford, ‘The Political Parties’, in StephenGeorge (ed.), Britain and the European Community (Oxford: Oxford UniversityPress, 1992); Robert J. Lieber, British Politics and European Unity: Parties, Elitesand Pressure Groups (Berkeley: University of California Press, 1970).

30 For example, Alain Guyomarch, Howard Machin and Ella Ritchie, France inEuropean Union (Basingstoke: Macmillan, 1998); Alistair Cole, ‘The FrenchSocialists’, and James Shields, ‘The French Gaullists’, in John Gaffney (ed.),Political Parties and the European Union (London: Routledge, 1996). However,there are very stimulating studies on the period between the late 1980s andthe early 1990s, in which the minority government of the French Socialistssuccessfully implemented the Single European Act and achieved EMU. SeeAlain Guyomarch, ‘The European Dynamics of Evolving Party Competitionin France’, Parliamentary Affairs, 48(1) (1995); Robert Elgie and Moshe Maor,‘Accounting for the Survival of Minority Governments: An Examination ofthe French Case, 1988–91’, West European Politics, 15(4) (1992).

31 Christopher Lord, British Entry to the European Community under the HeathGovernment of 1970–4 (Aldershot: Dartmouth, 1993).

32 Michael Newman, Socialism and European Unity: The Dilemma of the Left in Britain and France (London: Junction Books, 1983); Featherstone, SocialistParties.

33 Featherstone, Socialist Parties, 133.

Chapter 3 Britain’s Policy on EMU During the EntryNegotiations with the EEC, 1970–71

1 This agreement came to have a very important meaning later on, whenthe EC countries resumed their interests in EMU in the late 1980s. Whenthe Hanover European Council of 1988 commissioned the Delors Com-mittee to produce a detailed plan for EMU, there was no vote on the prin-ciple of EMU, and therefore Britain did not have a veto, because thedecision had already been taken in 1972. Margaret Thatcher complainedabout this in her memoirs, but she was hardly entitled to do so, since shehad been a member of the Cabinet that endorsed that decision in 1972.See Margaret Thatcher, The Downing Street Years (London: HarperCollins,1993), 741.

2 Notwithstanding its importance, British policy towards EMU in the early1970s has attracted very scant scholarly attention to date. This is trueboth in the case of the literature concerned with the European policy ofthe British government during this period, and also those works investi-gating EMU and its failure. Among the former, Christopher Lord’s British

206 Notes

Entry to the European Community under the Heath Government of 1970–4(Aldershot: Dartmouth, 1993) briefly describes Britain’s policy towards EMU.As an example of the latter, see Loukas Tsoukalis, The Politics and Economicsof European Monetary Integration (London: George Allen & Unwin, 1978); otherwise a brilliant book, if focused mainly on French and German policy.

3 Here the sterling balances mean sterling held by non-UK residents. Mostof the balances were deposited in London and used for a wide range ofpurposes. In the following argument, we will limit our attention to the‘official’ balances held by central banks.

4 As for the recovery of sterling–dollar convertibility, see Alan Milward,European Rescue of the Nation State (London: Routledge, 2000), Chapter 7.

5 Benjamin Cohen, The Future of Sterling as an International Currency (London:Macmillan, 1971), 206.

6 It is noteworthy that France was not a signatory to the Basle Agreement.7 Saki Dockrill, Britain’s Retreat from East of Suez: The Choice between

Europe and the World? (London: Palgrave Macmillan, 2002), Chapter 5;John W. Young, International Policy (The Labour Governments 1964–70, 2;Manchester: Manchester University Press, 2003), Chapter 3.

8 CAB134/2598, ‘Sterling and the EEC’, Ministerial Committee on theApproach to Europe, 8 October 1970, paragraphs 12 and 18.

9 Anthony Barber was subsequently appointed Chancellor of the Exchequerfollowing the sudden death of Iain Macleod on 20 July, which was amajor blow for the Conservative government. Geoffrey Rippon succeededhim as Chancellor of the Duchy of Lancaster and took over his respons-ibility for the entry negotiations.

10 Sir Con O’ Neill, Britain’s Entry into the European Community: Report on theNegotiations of 1970–72 (London: Frank Cass, 2000), Chapter 2.

11 CAB128/47, Cabinet Conclusions, CM(70) 1(3), 23 June 1970; CM(70)2(4), 25 June 1970; CAB129/150 Cabinet Memoranda, CP (70) 2, 23 June1970; CP (70) 4, 26 June.

12 J. G. Morgan and T. McNally to Harold Wilson, 23 October 1970, HaroldWilson Papers, MS. Wilson c.904, Confidential Filing: Opposition Years1970–74, Bodleian Library, Oxford.

13 COM (69) 150, Commission Memorandum to the Council on the Co-ordinationof Economic Policy and Monetary Co-operation, Supplement to Bulletin of theEuropean Communities, No. 3, 1969.

14 The ‘monetarist’ school here is unrelated to monetarism, a paradigm ofmonetary policy-making which became popular in the UK in the early1980s.

15 CAB134/2598, ‘Economic and Monetary Union’, Ministerial Committeeon the Approach to Europe, 18 October 1970, paragraph 8.

16 T312/2729, ‘United Kingdom Attitude to Economic and MonetaryHarmonisation in the European Economic Community’, Cabinet OfficialCommittee on the Approach to Europe, 25 June 1970.

17 T312/2729, ‘Financial and Monetary Questions’, Cabinet Official Committeeon the Approach to Europe, 25 June 1970.

18 CAB134/2598, ‘Financial and Monetary Questions’, Ministerial Committeeon the Approach to Europe, 13 October 1970, paragraph 22.

19 The Times, 15 January 1971 and 23 February 1971.

Notes 207

20 CAB134/2598, ‘Capital Flows to the Sterling Area’, Ministerial Committeeon the Approach to Europe, 13 October 1970, paragraph 4.

21 PREM 15/371, Record of a Meeting held by the Prime Minister at No. 10Downing Street to discuss sterling with relation to Britain’s entry into theEEC, 4 May 1971.

22 CAB134/2598, ‘Financial and Monetary Questions’, paragraphs 3 and 4.23 T312/2729, ‘Financial and Monetary Questions’, paragraph 7.24 Henry Kissinger, White House Years (paperback edn; London: Phoenix Press,

2000), 89.25 T328/654, Extract from the record of the Ambassador’s talk with President

Pompidou, 20 November 1970. President Pompidou added that, althoughsome French officials were arguing that to have the international currencywould give Britain unfair advantages after the accession to the EEC, herather regarded the international status of sterling as a burden.

26 T328/654, ‘Economic and Monetary Union: The Ideal, the Feasible andthe Opportunity for Britain’, November 1970, paragraph 35. See also Cohen,Future of Sterling, 224.

27 PREM15/813, Barber to Heath, 26 June 1972.28 CAB128/47, Cabinet Conclusions, CM(70) 45(4), 10 December 1970;

CM(70) 47(1), 14 December 1970; CAB129/154, Cabinet Memoranda,CP(70) 115, 7 December 1970; CP(70) 118, 11 December 1971.

29 CAB134/2598, ‘Economic and Monetary Union’, paragraphs 42 and 43.30 Ibid., paragraph 7.31 CAB134/2598, ‘Sterling and the EEC’, Ministerial Committee on the

Approach to Europe, 8 October 1970, paragraph 14.32 For the deputy leadership election, see Roy Jenkins, A Life at the Centre

(London: Macmillan, 1991), 309; David Owen, Time to Declare (London:Michael Joseph, 1991), 167–8. The latter includes a particularly superbanalysis of the election result.

33 Werner Report, Report to the Council and the Commission on the realisa-tion by stages of Economic and Monetary Union in the Community,Supplement to Bulletin of the European Communities, No. 11, 1970.

34 CAB134/2598, ‘Economic and Monetary Union’, paragraph 3.35 The Times, 23 November 1970.36 See CAB134/2598, ‘Economic and Monetary Union’.37 T328/654, ‘Economic and Monetary Union’, Cabinet Official Committee

on the Approach to Europe, Subcommittee on Financial and MonetaryAffairs, 9 November 1970, paragraph 53.

38 The Times, 24 November 1970.39 The Times, 14 December 1970.40 The Times, 8, 9 and 10 February 1971.41 The Times, 19 February 1971.42 The Times, 15 January 1971.43 The Times, 19 and 20 March 1971.44 The Times, 31 March 1971.45 For example, PREM 15/369, UK application to join EEC: options if applica-

tion fails; Prime Minister’s meeting with the President Pompidou; part 4.46 Edward Heath, The Course of My Life: My Autobiography (London: Hodder &

Stoughton, 1998), 364–5.

208 Notes

47 The French agenda is included in PREM 15/371, Telegram No. 497 of 4 May from Paris.

48 PREM15/371, Note of a Meeting held at 10 Downing Street at 4:00 pm, 4 May 1971. See also PREM15/371, Note of a Meeting held at 10 DowningStreet, 5 May 1971.

49 The author’s translation from the French agenda.50 PREM15/371, ‘Prime Minister’s Visit to Paris’, Soames to Greenhill, 7 May

1971. The emphasis was added by the author.51 PREM15/371, ‘UK–EEC Negotiations’, Soames to Greenhill, 21 April 1971.

The emphasis was added by the author.52 PREM15/372, Preparatory Discussions about the Meeting between the

President of the French Republic and the Prime Minister of the UnitedKingdom, 15 May 1971.

53 T312/3251, ‘Visit of the Prime Minister to Paris’, Norbury to RobertArmstrong, 11 May 1971.

54 T312/3251, ‘Visit of the Prime Minister to Paris 19–21 May: Future ofSterling’, 13 May 1971.

55 T312/3251, ‘Briefs for the Prime Minister’s Visit to M Pompidou: FurtherItem on “Dollar Imperialism”’, Slater to Rawlinson, 11 May 1971; ‘DollarImperialism’, Hedley-Miller to Rawlinson, 12 May 1971. In the final draft,the title of the passage was changed to ‘the Dollar Problem’.

56 The Times, 10 May 1971.57 The Times, 11 and 12 May 1971.58 Heath, Course, 371.59 House of Commons Debates, 10 June 1971; Heath, Course, 375.60 The statement was reprinted in the White Paper the government published

in July.61 It was No. 10 and the Elysée that decided to settle the matter in this way.

The content of the statement was agreed by both sides beforehand. Ripponand Giscard d’Estaing, both of whom had no part in the preparatory process,loyally played a role assigned to them by their superiors.

62 PREM15/372, Robert Armstrong to Ryrie, 24 May 1971.63 PREM15/373, Robert Armstrong to Tickell, 5 June 1971.64 PREM15/372, FCO Telegram No. 264 of 21 May, Soames to Neale and

Morse.65 PREM15/373, Robert Armstrong to Tickell, 5 June 1971.66 Heath seems to have believed that the deteriorating relationship between

France and West Germany was a major factor in explaining his successfulmeeting with President Pompidou. See his report of the meeting to theCabinet, in CAB128/49, Cabinet Conclusions, CM(71) 27, 24 May 1971.Soames shared this view. PREM15/374, ‘The Prime Minister’s Visit to Paris:19–21 May 1971’, Soames to Douglas-Home, 9 June 1971. During the sum-mit meeting Pompidou said: he ‘saw this not as a question of creating a newentente cordiale. That had been directed against someone [the Germans].’Yet he did not hide his antipathy towards Schiller. Record of a Conversationbetween the Prime Minister and the President of the French Republic, 20 May 1971 (session 1), released under Margaret Thatcher Foundation FoIrequest. <http://www.margaretthatcher.org/archive/heath-eec.asp>

67 CAB128/49, Cabinet Conclusions, CM(71) 27, 24 May 1971.

Notes 209

68 The Times, 10 November 1970.69 T328/654, ‘Ministerial Committee on the Approach to Europe’, 19 November

1970, paragraph 7.70 Cmnd 4715, The United Kingdom and the European Communities (London:

HMSO, 1971), paragraph 28.71 The Times, 15 January 1971.72 Hugo Young, This Blessed Plot: Britain and Europe from Churchill to Blair

(London: Macmillan, 1998), Chapter 7.73 The analytical framework here is adopted from Wolfgang C. Muller and

Kaare Strom, Policy, Office, or Votes? How Political Parties in Western EuropeMake Hard Decisions (Cambridge: Cambridge University Press, 1999).

74 PLP, Minutes of a Party Meeting, 13 May 1971, Labour History Archive,Manchester. See also the Minutes of Parliamentary Committee Meetingsheld during the period.

75 Owen, Declare, 174. As for the preparatory process which led to the adver-tisement, see David Marquand, ‘The Welsh Wrecker’, in Andrew Adonis andKeith Thomas (eds), Roy Jenkins: A Retrospective (Oxford: Oxford UniversityPress, 2004), 115; Owen, Declare, 173–5.

76 The Times, 12 May 1971.77 Giles Radice, Friends & Rivals: Crosland, Jenkins and Healey (London: Little,

Brown & Company, 2002).78 Owen, Declare, 176.79 Jenkins, Life, 318; Owen, Declare, 176.80 Healey later explained that he ‘put the arguments on each side’ in his

Daily Mirror article. Denis Healey, The Time of My Life (London: PenguinBooks, 1990), 359.

81 Minutes of a Meeting of the National Executive Committee, 23 June 1971. A decisive vote for a special party conference was cast by Shirley Williams, a prominent pro-European MP, who did so on the grounds of party demo-cracy. Jenkins, Life, 320.

82 British Labour Party, Labour and the Common Market, Report of a SpecialConference of the Labour Party, 17 July 1971.

83 Minutes of a Meeting of the National Executive Committee, 28 July 1971.84 Owen, Declare, 180–1.85 The motion which opposed the EEC membership in principle was narrowly

defeated.86 See George H. Gallup (ed.), The Gallup International Public Opinion Polls,

Great Britain, 1937–75 (New York: Random House, 1976).87 Jenkins, Life, 316.88 Heath, Course, 378.89 Tim Renton, Chief Whip: People, Power and Patronage in Westminster (London:

Politico’s, 2004), 290. A ‘Personal and Private’ note dated 5 October 1971is attached as Appendix, 353–6.

90 The Shadow Cabinet actually had two meetings on the same day. The firstmeeting, which was held before the government issued a statement on a free vote, decided to impose a three-line whip on the PLP. The secondmeeting was arranged at very short notice after the government statementand confirmed the conclusion of the first meeting. See PLP, Minutes of aParliamentary Committee Meeting, 18 October 1971, and Minutes of a

210 Notes

Special Meeting of the Parliamentary Committee, 18 October 1971. Jenkinscould not attend the second meeting and bitterly complained about Wilson’sconduct during the episode (Jenkins, Life, 329). However, if we considerWilson’s reaction to the government’s statement, Jenkins’s attendance wasunlikely to have changed the decision of the Shadow Cabinet.

91 PLP, Minutes of a Meeting, 19 October, 1971.92 PLP, Minutes of a Parliamentary Committee Meeting, 19 October 1971.93 Owen, Declare, 181.94 For Wilson’s position on EEC membership, John W. Young, ‘Europe’,

in Anthony Seldon and Kevin Hickson (eds), New Labour, Old Labour: The Wilson and Callaghan Governments, 1974–79 (London: Routledge,2004), 139–53.

95 Heath, Course, 376.96 Cmnd 4715.97 Cmnd 3269, Membership of the European Communities (London: HMSO,

1967).98 CAB128/49, Cabinet Conclusions, CM (71) 36, 1 July 1971; CAB129/158,

Cabinet Memoranda, CP (71) 76.99 House of Commons Debates, 25 October 1971, 1246–7.

100 PREM15/379, Roberts to Tickell, 21 July 1971.101 PREM15/380, Tickell to Roberts, 27 July 1971; Davis to Roberts, 27 July

1971; Robert Armstrong to Heath, 28 July 1971.102 The Macmillan government applied to the EEC in 1961 mainly as a con-

sequence of political considerations, but highlighted the economic aspectof membership as well. Piers Ludlow, Dealing with Britain: The Six and theFirst UK Application to the EEC (Cambridge: Cambridge University Press,1997); Piers Ludlow, ‘A Mismanaged Application: Britain and the EEC,1961–63’, in Anne Deighton and Alan S. Milward (eds), Widening, Deepeningand Acceleration: The European Economic Community 1957–63 (Baden-Baden:Nomos Verlag, 1999), 271–85.

103 It was not by accident that the Single European Act, which was enacted toachieve a single European market, brought about a large-scale transfer ofsovereignty through more frequent use of majority voting in the decision-making process of the EC.

104 The following classification of MPs is based on the vote of October 1971on the principle of Britain’s entry into the EEC. In the case of abstention,the Conservative MPs are included in the ‘anti-European’ category buttheir Labour counterparts are classified as ‘pro-European’. For the sake ofsimplicity, the Unionist Party is included in the Conservative Party, whilethe Liberals and the Scottish Nationalist Party are included in the LabourParty.

105 A breakdown of anti-European Labour MPs (total = 65): opposition to entryin principle = 40; opposition to the terms = 10; unclear = 13; supportingentry but voted against = 2. MPs are judged against entry in principle if theystated in their speeches either (1) they were opposed to entry in principle, (2) they voted against the application in 1967, or (3) they were against entrybecause of the loss of sovereignty involved.

106 The list of Labour frontbenchers who spoke against the principle of EEC membership: Shore, Foot, Douglas Jay, and Castle. The Conservative

Notes 211

ministers who responded by criticising these Labour speakers as con-tradicting the official policy of the Labour Party or the policy of the pre-vious Labour administration included James Prior, Keith Joseph, RobertCarr and Reginald Maudling.

107 House of Commons Debates, 28 October 1971, 2210.108 For instance, Anthony Forster, Euroscepticism in Contemporary British Politics:

Opposition to Europe in the British Conservative and Labour Parties since 1945(London: Routledge, 2002), 40 suggests that Labour anti-Marketeers focusedon bread and butter issues.

109 Of all the Labour abstainers, eight had the chance to make a speech duringthe parliamentary debates. At least six abstained because of the party policy.

Chapter 4 Britain and the EEC’s First Steps Towards EMU, 1971–74

1 Alan S. Milward, The Reconstruction of Western Europe 1945–1951 (London:Routledge, 1984).

2 Barry Eichengreen, Globalizing Capital: A History of the International MonetarySystem (Princeton: Princeton University Press, 1996).

3 Henry Kissinger, White House Years (paperback edn; London: Phoenix Press,2000), 425–6.

4 As for the initial position of the United States, see PREM15/309, Note of aMeeting in the Chancellor of the Exchequer’s Room, 16 August 1971; Meetingwith Mr Paul Volcker, 16 August 1971.

5 PREM15/309, Note of a Meeting at 10 Downing Street, 16 August 1971.6 This consideration led to a proposal for the reform of the international mone-

tary system, based on the SDR made by Anthony Barber in his famous speechduring the annual meeting of the IMF in September 1971.

7 PREM15/309, ‘US Economic Measure’, 16 August 1971. See also ‘InternationalMonetary Situation’, Lord Cromer to Douglas-Home, 15 August 1971.

8 PREM15/309, ‘Meeting with EEC Finance Ministers’.9 Dorothee Heisenberg, The Mark of the Bundesbank: Germany’s Role in European

Monetary Cooperation (Boulder: Lynne Rienner Publishers, 1999), 30.10 Andreas Wilkens, ‘Westpolitik, Ostpolitik and the Project of the Economic and

Monetary Union: Germany’s European Policy in the Brandt Era’, Journal ofEuropean Integration History, 5(1) (1995), 100.

11 Harold James, International Monetary Cooperation Since Bretton Woods (Oxford:Oxford University Press, 1996), 249.

12 The European summit was eventually held at Paris in October 1972, thoughfor different purposes from the original intention.

13 PREM15/309, Record of the Chancellor of the Exchequer’s Visit to Brusselson 19 and 20 August 1971 for Consultations with EEC Finance Ministers,23 August 1971; CAB128/49, Cabinet Conclusions 1971, CM(71) 45(1), 2 September 1971.

14 PREM15/310, ‘International Monetary Situation’, Note of a Meeting held at10 Downing Street, 3 November 1971; Allen to Cromer, 5 November 1971.

15 PREM15/310, ‘International Monetary Situation’, 29 October 1971.16 PREM15/309, Ryrie to Gregson, 18 August 1971.

212 Notes

17 PREM15/326, Heath to Pompidou, Paris Telegram No. 851 of 24 November1971; Heath to Brandt, Bonn Telegram No. 935 of 26 November 1971.

18 Foreign Relations of the United States (FRUS), 1969–1976 Volume 3 (Washing-ton: United States Government Printing Office, 2001), No. 204.

19 Ibid.20 PREM15/812, Record of the Restricted Sessions of Meetings of the Group of

Ten and of EEC Ministers in Rome, 30 November and 1 December 1971.21 FRUS, 1969–1976 Volume 3, No. 220. This arrangement meant that the max-

imum margin between currencies other than the US dollar would be ±4.5 percent: since if one currency reached the upper limit against the dollar and ano-ther currency the lowest limit, the difference between the two would amountto 4.5 per cent. Moreover, the relative position of the two currencies can bereversed.

22 The French explained to their European allies that the original Americanfigure was 2.5 per cent. PREM15/812, FCO Telegram No. 1598 of 15 December,Soames to Heath.

23 The Times, 22 January, and 8 and 11 February 1972.24 Loukas Tsoukalis, The Politics and Economics of European Monetary Integration

(London: George Allen & Unwin, 1978).25 This is because these measures would not influence the status of the US dollar

outside Europe. It is not only these institutional factors but also economicreality, such as the scale of economy and the development of the capitalmarket, which decides the position of the international currency. If Europe is to challenge the position of the US dollar as the international currency, the establishment of a single currency and the existence of a unified capitalmarket are the minimum conditions for doing so. In this sense, PresidentPompidou was right when he emphasised that the French policy was to makeEurope more independent, and that it was not anti-American as often describedby the foreign (British) press. The Times, 30 September 1972.

26 CAB130/572, Minutes of a Meeting held at 10 Downing Street, 15 March1971.

27 Edward Heath, The Course of My Life: My Autobiography (London: Hodder &Stoughton, 1998), 398.

28 John Ramsden, The Winds of Change: Macmillan to Heath 1957–1975 (London:Longman, 1996), 350; Robert Taylor, ‘The Heath Government, IndustrialPolicy and the “New Capitalism”’, in Stuart Ball and Anthony Seldon (eds),The Heath Government 1970–74: A Reappraisal (London: Longman, 1996); JohnCampbell, Edward Heath: A Biography (London: Jonathan Cape, 1993), 442.

29 PREM15/841, Note of a Discussion at 10 Downing Street, 3 November 1971;CAB134/3387, ES(71) 23, 22 November 1971; CAB134/3495, ES(72) 1, 19January 1972.

30 For example, Ramsden wrote: ‘On incomes policy, Heath’s personal position is harder to divine, since this was not so clearly an issue that related directly to his central vision of a European future for Britain.’ See John Ramsden, ‘ThePrime Minister and the Making of Policy’, in Stuart Ball and Anthony Seldon(eds), The Heath Government 1970–74: A Reappraisal (London: Longman, 1996),42.

31 PREM15/812, Bailey to Robert Armstrong, 26 November 1971.32 PREM15/812, Robert Armstrong to Bailey, 29 November 1971.

Notes 213

33 PREM15/818, Robert Armstrong to Bailey, 25 February 1972.34 PREM15/818, Robert Armstrong to Bailey, 2 March 1972.35 PREM15/818, Robert Armstrong to Bailey, 25 February 1972.36 PREM15/813, Record of the Meeting between the Prime Minister and the

Chancellor of the Exchequer, 21 June 1972.37 PREM15/813, Record of the Meeting between the Prime Minister and the

Chancellor of the Exchequer, 22 June 1972.38 PREM15/813, ‘Floating of the Pound’, 4 July 1972.39 Ibid.40 PREM15/819, ‘Gen 92: Pay and Prices Policy’, Memorandum to the Prime

Minister, 20 June 1972.41 The Prime Minister was initially reluctant to introduce statutory policy ‘after

the experience of the last ten years’, when it was first mentioned just beforethe floating of sterling (PREM15/813, Record of the Meeting between thePrime Minister and the Chancellor of the Exchequer, 21 June 1972). However,the government began to consider the possibility of a statutory policy as earlyas the beginning of July. PREM15/819, ‘Speaking Note for the Prime Minister’,Bailey to Robert Armstrong, 3 July 1972; Heath, Course, 410.

42 PREM15/819, Record of a Meeting with the president of the CBI. Heath wasmore equivocal on this point in his meeting with the representative of theTUC.

43 PREM15/820, Sir William Armstrong to Robert Armstrong, 27 July 1972;Robert Armstrong to Sir William Armstrong, 28 July 1972.

44 PREM15/894, ‘European Summit’, 6 October 1972. PREM15/1518, Record ofa Conversation between the Prime Minister and the President of the FrenchRepublic, 18 October 1972.

45 Norway, one of the candidate states, did not enter the EEC as a result of anegative vote in the referendum.

46 For an example of this view, see Kenneth Dyson and Kevin Featherstone,The Road to Maastricht: Negotiating Economic and Monetary Union (Oxford:Oxford University Press, 1999), 538.

47 PREM15/1518, ‘Note for the Record’, 13 July 1972.48 PREM15/1458, Record of the Meeting between the Prime Minister and the

Chancellor of the Exchequer, 10 February 1973. For the French prefer-ence of a global solution over a joint Community float, see PREM 15/1459,FCO Telegram No. 1198 of 6 March, ‘Currency Crisis: Meeting of MonetaryCommittee 6 March’.

49 PREM15/1458, Record of the Meeting between the Prime Minister and theChancellor of the Exchequer, 10 February 1973.

50 PREM15/1458, O’Brien [Governor of the Bank of England] to Barber, 9 February 1973.

51 PREM15/1457, ‘Exchange Rate Policy’, 6 February 1973.52 The Japanese yen and Italian lira moved into floating.53 PREM15/1518, ‘The EEC, International Monetary Reform, and EMU’,

6 July 1972, offers a very good summary of the French position on theissue.

54 Whilst the US administration lacked the will to adjust its policy to the require-ments of the international monetary system, it refrained from publicly crit-icising fixed exchange rates. This American policy was described as ‘benign

214 Notes

neglect’ and gradually undermined the Bretton Woods regime. James, Inter-national Monetary Co-operation, 210–11.

55 Dyson and Featherstone, Road to Maastricht, 75–83.56 Ibid., 97. Dyson and Featherstone have rightly pointed out the shift of the

French focus to the German monetary power during the period, but with-out connecting it to the collapse of the Bretton Woods regime, which was aserious policy failure from the French viewpoint. Whilst the emergence of a regional currency bloc strengthened German influence in Western Europe,the US dollar was off the hook. President Pompidou later confessed to Heaththat ‘he was struck by the very favourable situation in which the Americans atpresent found themselves. The dollar had every right but no obligation.’PREM15/1460, Extract from the Meeting between the Prime Minister andPresident Pompidou, 22 May 1973.

57 PREM15/1459, Record of a Meeting between the Prime Minster and the Chan-cellor of the Federal Republic of Germany at Schloss Gymnich on 1 March1973 at 5:35 pm (the first meeting) and at 10:55 pm (the second meeting);Record of a Conversation between the Prime Minister and the Chancellor ofthe Federal German Republic at the Federal Chancellery on 2 March 1973.

58 PREM15/1459, Note of a Meeting held at 10 Downing Street, 2 March 1973.59 PREM15/1459, ‘Cabinet: Currency Crisis’, Note of a Meeting held at Chequers,

3 March 1973.60 Ibid.61 Ibid.62 CAB128/51, Cabinet Conclusion, CM(73) 13(2) Confidential Annexe,

5 March 1973.63 The quotation is from Barber’s statement. PREM15/1459, Note of a Meeting

held at 10 Downing Street, 2 March 1973. The emphases are added by theauthor.

64 Ibid.65 PREM15/1459, ‘Cabinet, Currency Crisis’.66 The tough stance of the Chancellor of the Exchequer received a favourable

domestic reception. The Times, 6 March 1973.67 PREM15/1459, FCO Telegram of No. 1198 of 6 March, ‘Currency Crisis:

Meeting of Monetary Committee 6 March’.68 PREM15/1459, Record of the Belgian Ambassador’s visit to Robert Armstrong,

10 March 1973. 69 PREM15/1459, FCO Telegram No. 374 of 8 March.70 PREM15/1459, Brandt to Heath, 9 March 1973. The scale of a proposed

medium-term loan was between 1 and 2 billion dollars, according to FCOtelegram No. 337 of 11 March.

71 PREM15/1459, Robert Armstrong to Barber, 10 March 1973. The ForeignSecretary was urging for a compromise as well. PREM15/1459, Douglas-Home to Heath, 9 March 1973.

72 Rainer Hellmann, Gold, the Dollar, and the European Currency Systems: The Seven-Year Monetary War (New York: Praeger, 1979), 38.

73 PREM15/1459, FCO Telegram No. 1331 of 12 March 1973, ‘Currency Crisis:Council of Ministers, 11 March’. Sweden, Austria and Switzerland joined acommon float with other EEC countries, though they were not members ofthe EEC.

Notes 215

74 PREM15/1459, Heath to Barber, 12 March 1973.75 Heisenberg, Mark of Bundesbank, 40.76 PREM15/1461, Extract from meeting: Prime Minister, Chancellor of the

Exchequer and Governor of the Bank of England, 5 September 1973.77 For the text of Chancellor Brandt’s message to President Nixon, see PREM15/

1459, FCO Telegram No. 857 of 4 March 1973.78 PREM15/1459, FCO Telegram No. 851 of 3 March 1973, Nixon to Heath.79 PREM15/1459, Heath to Nixon, 4 March 1973.80 PREM15/1459, FCO Telegram No. 382 of 9 March 1973, ‘Currency Crisis:

Meeting of Enlarged Group of Ten’. This was the question of whether a Community float would be clean or dirty. If it was a ‘dirty’ float, Europeancountries would intervene in the foreign exchange market to keep the value of their currencies artificially low against the US dollar. This could prevent the recovery of the US balance of payments.

81 CAB128/51, Cabinet Conclusion, CM(73) 13(2) Confidential Annexe, 5 March 1973.

82 PREM15/1459, FCO Telegram. No. 943 of 10 March, 1973, ‘MonetarySituation’.

83 PREM15/1459, Record of a Meeting at Chequers, 4 March 1973.84 CAB134/3624, EUS(73) 2nd Meeting, Ministerial Committee on European

Strategy, 25 July 1973.85 This formula was known as the ‘Houghton doctrine’, named after the chair-

man of the PLP, Douglas Houghton.86 Roy Jenkins, A Life at the Centre (London: Macmillan, 1991), 332.87 Heath, Course, 383–5. See also Philip Norton, Conservative Dissidents: Dissent

within the Parliamentary Conservative Party, 1970–74 (London: Temple Smith,1978), 80.

88 Roger Broad, Labour’s European Dilemmas: From Bevin to Blair (London: PalgraveMacmillan, 2001), 89.

89 PLP, Minutes of a Parliamentary Committee Meeting, 15 March 1972, LabourHistory Archive, Manchester.

90 The Times, 17 March 1972.91 The Minutes of the National Executive Committee, 22 March 1972.92 PLP, Minutes of a Parliamentary Committee Meeting, 29 March 1972.93 The Times, 5 October 1972. Wilson stood firm in his refusal of outright

withdrawal from the EEC, once the Labour Party was elected to govern-ment. The party conference narrowly defeated the motion which urged forwithdrawal without renegotiation.

94 Kissinger, White House Years, 965.95 Haig Simonian, The Privileged Partnership: Franco-German Relations in the

European Community 1969–1984 (Oxford: Clarendon Press, 1985); KennethMorgan, Callaghan: A Life (Oxford: Oxford University Press, 1997).

96 PREM15/1460, Record of the Meeting between the Prime Minister and Sir Christopher Soames, 25 March 1973. Soames told Heath that ‘in his recentmeeting with President Pompidou, the President had used Sir Christopher as if he was still British Ambassador [Soames was appointed to the EuropeanCommissioner in January 1973] to speak in forthright terms about his dis-appointment at Britain’s failure to refix the parity. Events had not gone as heexpected when he discussed these problems with the Prime Minister in 1971

216 Notes

… Now here we were, still outside the Community arrangements, with nodefinite date for coming in. President Pompidou had made it very clear thatthere was no prospect of any progress on other Community policies of interestto us so long as we were outside the monetary arrangement.’

Chapter 5 Comparing British and French Policy onEuropean Monetary Integration (1): The Currency Crisis of 1976

1 For example, Peter Ludlow, The Making of the European Monetary System: A Case Study of the Politics of the European Community (London: Butterworth,1982). Though written more than 20 years ago, this still remains the bestwork on the subject.

2 Ludlow, European Monetary System, 81 and Kenneth Morgan, Callaghan: A Life (Oxford: Oxford University Press, 1997), 393 are among examples of this view. Morgan’s work is the official biography of the former PrimeMinister, and makes full use of his private papers.

3 Tony Benn, The Benn Diaries (New Single Volume edn; London: ArrowBooks, 1996), 374.

4 Kathleen Burk and Alec Cairncross, ‘Good-bye, Great Britain’: The 1976 IMFCrisis (New Haven: Yale University Press, 1996), 66. It is not our intention to deny that there were noticeable personal differences between Heath andCallaghan. In his memoirs, Callaghan critically commented that Heath’sstrong commitment to Europe had weakened Britain’s relationship with theUnited States and the Commonwealth (James Callaghan, Time and Chance(London: Collins, 1987), 295–6). However, he also wrote that from a politicalperspective ‘I was sympathetic to closer cooperation with our Europeanneighbours. I was of course a firm believer of the Atlantic alliance, but asyears went by, it seemed that the strength of the Superpowers was so muchgreater than other individual nations that the voice of Europe was in dangerof being lost in world affairs’ (ibid., 305). The following analysis will uncoverthis relatively unknown aspect of the Callaghan diplomacy.

5 Mark Harmon, The British Labour Government and the 1976 IMF Crisis(Basingstoke: Macmillan, 1997). This book is based on intensive survey ofthe American sources, and therefore highly useful for understanding thedegree of US involvement in the IMF crisis.

6 Tony Benn, Against the Tide: Diaries 1973–76 (London: Hutchinson, 1989),687.

7 Burk and Cairncross, ‘Good-bye, Great Britain’, 91. The quotation is takenfrom Burk’s interview with Karl-Otto Pöhl, then State Secretary of the FinanceMinistry in Bonn, who worked as a personal envoy for Schmidt throughoutthe IMF crisis.

8 Dorothee Heisenberg, The Mark of the Bundesbank: Germany’s Role in EuropeanMonetary Cooperation (Boulder: Lynne Rienner Publishers, 1999); MichaelLoriaux, France after Hegemony: International Reform and Financial Change(Ithaca: Cornell University Press, 1991).

9 Rainer Hellmann, Gold, the Dollar and the European Currency Systems: TheSeven-Year Monetary War (New York: Praeger, 1979).

Notes 217

10 Margaret Garritsen de Vries, The International Monetary Fund 1972–1978(Narrative and Analysis, 2; Washington: International Monetary Fund,1982), Chapter 37.

11 John Goodman, Monetary Sovereignty: The Politics of Central Banking in West-ern Europe (Ithaca: Cornell University Press, 1992), 111; Loriaux, France afterHegemony, 9.

12 Loriaux, France after Hegemony, 33.13 There were, of course, a number of differences in the economic situation

of the two countries. In France, due to the tradition of fiscal conservatism,the size of fiscal deficits was much smaller than in other countries, includ-ing Britain. In controlling the growth of the monetary supply, therefore,the main problem before the French government was how to restrain theexpansion of bank lending, not reducing the level of public spending aswas the case for its British counterpart. Moreover, although both countriesrelied on foreign borrowing, in the British case a large proportion of foreignborrowing was made in sterling, not US dollars (and was thus recorded as anincrease in the sterling balances). Yet these differences did not mask theoverall similarities explained above.

14 Goodman, Monetary Sovereignty, 119.15 Andrew Britton, Macroeconomic Policy in Britain 1974–87 (Cambridge:

Cambridge University Press, 1991), 36–8.16 During the referendum campaign on Britain’s continuing membership of

the EEC in 1975, there was talk of the possibility of forming a governmentof national unity which would include all political forces belonging to theyes camp. However, this never transpired, and nor did the result of the refer-endum change the parliamentary arithmetic, which was to constrain thegovernment’s conduct of European diplomacy for the rest of the Parliament.David Butler and Uwe Kitzinger, The 1975 Referendum (London: Macmillan,1976).

17 Goodman, Monetary Sovereignty, 110; Loriaux, France after Hegemony, 183.

18 Philip Cerny, ‘The New Rule of the Game in France’, in Philip G. Cerny and Martin A. Schain (eds), French Politics and Public Policy (London: FrancesPinter, 1980).

19 Kevin Hickson, The IMF Crisis of 1976 and British Politics (London: TaurisAcademic Studies, 2005).

20 Morgan, Callaghan, 542.21 Burk and Cairncross, ‘Good-bye, Great Britain’, 67; Leo Pliatzky, Getting and

Spending: Public Expenditure, Employment and Inflation (Oxford: Blackwell,1982), 154. Pliatzky was the Second Permanent Secretary in the Treasuryand the head of the public expenditure unit.

22 Stephen Fay and Hugo Young, ‘The Day the £ Nearly Died’, The SundayTimes, 14, 21, 28 May 1978 made this allegation.

23 Edmund Dell, A Hard Pounding: Politics and Economic Crisis 1974–76 (Oxford:Oxford University Press, 1991), 195–6. Dell had been the Paymaster Generaland was promoted to Secretary of Trade.

24 Callaghan, Time and Chance, 414.25 Harold Wilson, Final Term: The Labour Government 1974–1976 (London:

Weidenfeld and Nicholson and Michael Joseph, 1979), 227.

218 Notes

26 PREM16/796, ‘The Sterling Exchange Rate’, Healey to Wilson, 8 March1976.

27 Callaghan, Time and Chance, 419–20, 429, 431–3, 446. By contrast, Dell, HardPounding, 255 regards the sterling balances as of secondary importance.

28 Jim Tomlinson, ‘Economic Policy’, in Anthony Seldon and Kevin Hickson(eds), New Labour, Old Labour: The Wilson and Callaghan Governments,1974–79 (London: Routledge, 2004), 55.

29 The Social Contract was an agreement concluded between the Labourgovernment and the TUC; in exchange for accepting voluntary restrainton pay rises, the TUC was allowed to participate in the government’spolicy-making over a wide range of social and economic issues.

30 Pliatzky, Getting and Spending, 122, 132.31 Ibid., 138–40.32 Hellmann, European Currency Systems, 100–4; George Zis, ‘The International

Status of Sterling’, in Michael Artis and David Cobham (eds), Labour’s Econ-omic Policies 1974–1979 (Manchester: Manchester University Press, 1991),111.

33 The official papers recently released by the Treasury under the Freedom ofInformation Act (hereafter the TFIA) support this analysis. Of all the lossto the reserves of the Bank of England between March and the first weekof May 1976, more than a quarter was on account of the reduction in theofficial balances. TFIA, ‘Speaking Note on Pressure in March, April and theFirst Week of May’. <http://www.hm-treasury.gov.uk/about/information/foi_disclosures/2006/foi_sterling_imf_2006.cfm> PDF file 05.

34 Hellmann, European Currency Systems, 100–4. See also TFIA, ‘Source ofPressure’, Walker to Barratt, 8 June 1976, PDF file 05.

35 CAB128/57/1, Cabinet Conclusions, Confidential Annex, CC(75) 31, 1 July 1975. Having failed to reach agreement over the sterling balances withthe rest of the EEC, the Heath government decided to offer a unilateral guar-antee to the official sterling holders in September 1973, which was extendeduntil the end of 1974 by the Labour government. See PREM16/38 ‘OfficialSterling Balances’, Healey to Wilson, 13 March 1974.

36 PREM16/371, ‘New Sterling Guarantees’, 7 July 1975.37 PREM16/371, ‘External Borrowing Policy’, Lever to Wilson, 9 October

1975.38 Callaghan, Time and Chance, 399.39 The following account is based on Burk and Cairncross, ‘Good-bye, Great

Britain’, 6–13 and Harmon, 1976 IMF Crisis, 62–78, 122–30.40 Harmon, 1976 IMF Crisis, 233.41 Ibid., 65–6.42 Ibid., 126.43 Bulletin of the European Communities, No. 12, 1974.44 For details of the Fourcade Plan, Dyson and Featherstone, The Road to

Maastricht: Negotiating Economic and Monetary Union (Oxford: Oxford UniversityPress, 1999) 112–14, 297.

45 FV61/61, Copy of Mr Leo Tindemans’ letter to his European Council col-leagues, 29 December 1975.

46 European Union: Report by Mr Leo Tindemans, Prime Minister of Belgium,to the European Council, Supplement to Bulletin of European Communities,

Notes 219

No. 1, 1976. All quotations in this paragraph are made from Chapter 3 of the report.

47 FV61/61, ‘Tindemans’ Report: Economic, Monetary and Industrial Aspects’,Note by HM Treasury, paragraph 7.

48 Ibid., paragraph 17.49 This view was shared by a contemporary commentator who was more

enthusiastic about EMU than the British Treasury. Loukas Tsoukalis, ThePolitics and Economics of European Monetary Integration (London: GeorgeAllen & Unwin, 1978), 159–61.

50 FV61/61, ‘Monetary Aspects’, paragraph 15.51 FV61/61, FCO Telegram No. 27 of 10 January 1976; FCO Telegram No. 4

of 19 January 1976.52 FV61/61, FCO Telegram No. 3 of 8 January 1976.53 Ibid.54 FV61/61, FCO Telegram No. 11 of 10 February 1976.55 FV61/61, Boyes to Part, 14 January 1976.56 FV61/61, ‘Monetary Aspects’, paragraph 20.57 ©The Times, 7 February 1976, nisyndication.com.58 Ibid.59 PREM16/799, ‘Prime Minister’s Meeting with Chancellor Schmidt at

Chequers’, 11 October 1976.60 Burk and Cairncross, ‘Good-bye, Great Britain’, 40.61 TFIA, Note of a Meeting held at 11 am, 3 June 1976, PDF file 06.62 TFIA, Note of a Meeting held at 7.00 pm, 3 June 1976, and Record of the

Telephone Conversation between Simon and Healey, PDF file 03.63 TFIA, Note of a Meeting held at 11 o’clock, 5 June 1976, PDF file 06.64 TFIA, Record of the Telephone Conversation between Healey and Richardson,

5 June 1976, PDF file 06.65 Ibid.66 Burk and Cairncross, ‘Good-bye, Great Britain’, 40.67 TFIA, ‘Monetary Targets’, Wass to Principal Private Secretary [Stowe],

16 June 1976, PDF file 11.68 TFIA, Note of a Meeting, 20 July 1976, PDF file 19.69 Report on the Seventy-fifth Annual Conference of the Labour Party (London:

Labour Party, 1976), 188.70 E. H. H. Green, Thatcher (London: Hodder Arnold, 2006), Chapter 2.71 Britton, Macroeconomic Policy, 34.72 Ibid., 37.73 Office for National Statistics, United Kingdom Balance of Payments: Pink

Book, 2008 edn (London: Palgrave Macmillan, 2009).74 Morgan, Callaghan, 537.75 In this way, we can avoid the pitfalls of analysis centred on the concept

of the post-war consensus. If we are preoccupied with the question ofwhether the policy of the Callaghan government can be best described asthe remnants of the post-war consensus or as the precursor to Thatcheritereforms, we are likely to overlook those elements of the government’spolicy that cannot be classified in either category.

76 PREM16/800, ‘Note for the Record’, 10 November 1976.77 Pliatzky, Getting and Spending, 153.

220 Notes

78 The Times, 26 October 1976.79 Benjamin Cohen, The Future of Sterling as an International Currency (London:

Macmillan, 1971), 206–7.80 Callaghan, Time and Chance, 419. This offer was made on the condition

that the UK and countries in the sterling area accept the suspension ofgold–dollar convertibility.

81 Ibid., 420.82 Ibid., 429. PREM16/798, Transcript of a Telephone Conversation between

the Prime Minister and President Ford, 29 September 1976.83 Burk and Cairncross, ‘Good-bye Great Britain’, 64.84 Callaghan, Time and Chance, 211.85 Ibid.86 Ibid.87 PREM16/796, ‘Swap Facilities with New York Federal Reserve’, 3 June

1976. This was exactly what happened after the devaluation of sterling in1967. The US dollar was widely expected to be devalued against gold, andwas therefore sold on a large scale. In 1968, the market price of gold wasseparated from the official price [1 troy ounce of gold = US$35], whichhenceforth was applied only to transactions between the central banks.Thus, the so-called ‘gold window’ was closed.

88 Fay and Young, ‘The Day the £ nearly Died’, The Sunday Times, 21 May1978, 34. The emphasis was added by the author.

89 Callaghan, Time and Chance, 431.90 Kathleen Burk, ‘Symposium: 1976 IMF Crisis’, Contemporary Record, 3(2)

(1989), 45.91 Callaghan, Time and Chance, 432.92 PREM16/800, ‘IMF Loan and Safety Net for Sterling Balances’, 5 November

1976.93 PREM16/800, ‘Prime Minister’s Conversation with Chancellor Schmidt’,

5 November 1976.94 Tony Benn, Against the Tide, 637.95 PREM16/799, ‘Economic Strategy’, Palliser to Stowe, 4 November

1976.96 PREM16/799, ‘IMF Loan and Safety Net for Sterling Balances’, 1 November

1976.97 ©The Times, 5 November 1976, nisyndication.com.98 Fay and Young, ‘The Day the £ nearly Died’, The Sunday Times, 21 May

1978, 34.99 Ibid. The emphasis was added by the author.

100 PREM16/800, ‘Prime Minister’s Conversation with Chancellor Schmidt’, 5 November 1976.

101 Burk and Cairncross, ‘Good-bye, Great Britain’, 78.102 Fay and Young, ‘The Day the £ nearly Died’, 21 May 1978, 34.103 PREM16/802, President Ford to Callaghan, 20 November 1976.104 Callaghan, Time and Chance, 433.105 Ibid.106 Benn, Against the Tide, 653–4.107 Callaghan, Time and Chance, 435.108 Ibid., 437.

Notes 221

109 Burk and Cairncross, ‘Good-bye Great Britain’, 91. The emphasis was addedby the author.

110 Ibid., 67.111 Callaghan, Time and Chance, 436.112 PREM16/804, ‘Note for the Record: IMF Negotiations’, 1 December

1976.113 Benn, Against the Tide, 661–9.114 For the details of the Alternative Economic Strategy, Mark Wickham-Jones,

Economic Strategy and the Labour Party: Politics and Policy-Making, 1970–1983(London: Macmillan, 1996).

115 Susan Crosland, Tony Crosland (London: Jonathan Cape, 1982), 379. SusanCrosland wrote that David Hill, Roy Hattersley’s political adviser, approachedTony Benn’s adviser, Francis Morrell, to form a united front against theTreasury’s proposal. Morrell told Hill that ‘the Bennites were not willing toplay that game with the Crosland group’. In fact, the leftist ministers otherthan Benn seem to have been more willing to cooperate with Crosland. Benn,Against the Tide, 656–7, 661.

116 Fay and Young, ‘The Day the £ nearly Died’, The Sunday Times, 28 May1978, 33.

117 Crosland, Tony Crosland, 381.118 Fay and Young, ‘The Day the £ nearly Died’, The Sunday Times, 21 May

1978, 35.119 Callaghan, Time and Chance, 439.120 Ibid.121 Ibid.122 Lower interest rates as a result of the package were expected to reduce the

PSBR by £300 million.123 Benn, Against the Tide, 673.124 Ibid.125 Ibid., 674.126 The IMF initially rejected the British proposal, and, in his memoirs, Healey

offers a very detailed account of how he pressurised the IMF to agree withhis figure, by threatening ‘a general election on the issue of the IMF versusthe people’. Healey, My Life, 432. See also PREM16/805, Note of a meetingheld at Number 11 Downing Street, 3 December 1976.

127 TFIA, ‘A Package of Deflationary Measures’, Hopkin to Wass, 12 November1976, PDF file 27.

128 Denis Healey, The Letter of Intent, 15 December 1976, paragraph 2.129 TFIA, ‘A Package of Deflationary Measures’, PDF file 27.130 Benn, Against the Tide, 672.131 Ibid., 673.132 TFIA, ‘A Package of Deflationary Measures’, PDF file 27.133 TFIA, ‘Economic Effects of the Measures’, 13 December 1976, PDF file 37.134 PREM16/808, FCO Telegrams Nos 4189, 4208, and 4213 of 13 December

1976. The agreement on a safety net for sterling was eventually reached inthe next year.

135 Benn, Against the Tide, 687.136 Burk and Cairncross, ‘Good-bye Great Britain’, 109, quoting from the Manu-

script Diary of Tony Benn.

222 Notes

137 Callaghan, Time and Chance, 449.138 Ibid., 451.139 Ibid.140 The no confidence motion was rejected by 322 to 298. Therefore, the gov-

ernment would have been defeated by two votes had it not made arrange-ments with the Liberals.

141 Callaghan, Time and Chance, 456.142 Vernon Bogdanor, Multi-Party Politics and the Constitution (Cambridge:

Cambridge University Press, 1983), 159.143 Michael Steed, ‘The Liberal Party’, in H. M. Drucker (ed.), Multi-Party Britain

(London: Macmillan, 1979), 78.144 Callaghan, Time and Chance, 466.145 Cmnd. 7405, The European Monetary System (London: HMSO, 1978), para-

graph 45.

Chapter 6 Comparing British and French Policy onEuropean Monetary Integration (2): The Establishment of the EMS, 1978–79

1 This complicated institutional arrangement was designed as a last-minutecompromise to accommodate Britain and have the EMS launched as aCommunity scheme. Note the fact that, until late November, while theBritish government considered the matter in terms of whether sterlingshould enter the EMS, the debate within the government centred on whatwas to become the ERM.

2 The second factor will be excluded from the following analysis, becausethe sterling balances agreement concluded at the end of the IMF crisis was still valid. Although the agreement did not reduce the absoluteamount of the official sterling balances, the relative importance of sterling as a reserve currency declined steadily in the second half of the1970s.

3 Edmund Dell, ‘Britain and the Origins of the European Monetary System’,Contemporary European History, 3(1) (1994), 20.

4 Interview with Edmund Dell, 23 July 1998, 11–12, for example. This andother interviews referred to in this chapter were conducted in the contextof the oral history project of the European Commission, and their tran-scripts are available at the website of the European University Institute.<http://www.iue.it/ECArchives/EN/OralHistory.shtml>

5 Leader’s Consultative Committee (LCC), ‘The European Monetary System(EMS)’, Minutes of a Meeting, 25 October 1978, Thatcher Archive. <http://www.margaretthatcher.org/archive/thatcher-archive.asp>. Lawson was thearchitect of the party’s economic strategy and was promoted to Chancellorof the Exchequer after the general election of 1983.

6 LCC, ‘European Monetary System’, Howe to Thatcher, 31 October 1978,Thatcher Archive. Howe became Chancellor of the Exchequer in 1979, andmoved to the Foreign Office in 1983.

7 Roy Jenkins, European Diary 1977–1981 (London: Collins, 1989), 23.8 Ibid., 168.

Notes 223

9 Roy Jenkins, ‘Europe’s Present Challenge and Future Opportunity’, JeanMonnet Lecture delivered in Florence, 27 October 1977. All followingquotations are made from the text of the speech.

10 Commission of the European Communities, Report of the Study Groupon the Role of Public Finance in European Integration (Brussels, April1977). It is fair to add that MacDougall himself reached the opposite conclusion from the same analysis; ‘I had been using this argument forarguing we’re not yet ready for a single currency, it was going to causemore trouble and was more likely to cause disharmony in Europe thanadvance European integration.’ Interview with Sir Donald MacDougall, 9 July 1998, 16.

11 Peter Ludlow, The Making of the European Monetary System: A Case Study ofthe Politics of the European Community (London: Butterworth, 1982), 26.

12 Jonathan Story, ‘The Launching of the EMS: An Analysis of Change inForeign Economic Policy’, Political Studies 36 (1988), 404.

13 Valéry Giscard d’Estaing, Le Pouvoir et la Vie (La recontre, 1; Paris: Compagnie12, 1988), 131.

14 Kenneth Dyson and Kevin Featherstone, The Road to Maastricht: Negotiationson Economic and Monetary Union (Oxford: Oxford University Press, 1999),100.

15 Giscard d’Estaing, Le Pouvoir et la Vie, i, 134.16 Ibid., 129. Giscard wrote that the floating of currencies from March 1973

was initially regarded only as ‘a transitional measure’, and that Franceplayed an active part in the subsequent attempt to ‘define a new systembased on stable but adjustable parities’.

17 Ibid., 134.18 Volkmar Lauber, The Political Economy of France: From Pompidou to Mitterrand

(New York: Praeger, 1983), 85.19 Valéry Giscard d’Estaing, Le Pouvoir et la Vie (L’affrontment, 2; Paris:

Compagnie 12, 1991), 132.20 Michael Loriaux, France After Hegemony: International Change and Financial

Reform (Ithaca: Cornell University Press, 1991). Lauber, Political Economy ofFrance, 101.

21 Lauber, Political Economy of France, Chapter 8.22 Raymond Barre, Une politique pour l’avenir (Paris: Plon, 1981), 118–19.23 Ibid.24 Vincent Wright, ‘The French General Election of March 1978: “La Divine

Surprise”’, West European Politics, 1(3) (1978), 27.25 Rainer Hellmann, Gold, the Dollar, and the European Currency Systems:

The Seven-Year Monetary War (New York: Praeger, 1979), 59–60.26 Ludlow, European Monetary System, 33.27 Wright, ‘La Divine Surprise’, 25–6. (The emphasis is added by the author.)28 Jenkins, European Diary, 180.29 D. S. Bell and Byron Criddle, The French Socialist Party: Resurgence and Victory

(Oxford: Clarendon Press, 1984), 95–101.30 Wright, ‘La Divine Surprise’, 33.31 Ibid., 47.32 Giscard’s interview in L’Express, 9–15 May 1977, 42; Valéry Giscard d’Estaing,

Towards a New Democracy (London: Collins, 1977).

224 Notes

33 Wright, ‘La Divine Surprise’, 47.34 John Frears, ‘Legitimacy, Democracy and Consensus: A Presidential Analysis’,

West European Politics, 1978, 1(3), 11–23; John Frears, ‘Parliament in the FifthRepublic’, in William G. Andrews and Stanley Hoffmann (eds), The Impact of the Fifth Republic on France (Albany: State University of New York Press,1981), 47–68.

35 Wright, ‘La Divine Surprise’, 47–8.36 Ibid., 50.37 Story, ‘Launching of the EMS’, 401.38 Valéry Giscard d’Estaing, Le Pouvoir et la Vie (Choisir, 3; Paris: Cie 12,

2006), 246.39 The Times, 7 July 1978; Dyson and Featherstone, Road to Maastricht, 99,

121; Ludlow, European Monetary System, 142.40 Kenneth Morgan, Callaghan: A Life (Oxford: Oxford University Press,

1997), Chapter 25.41 James Callaghan, Time and Chance (London: Collins, 1987), 486, 488.42 Ibid., 490.43 The Labour government could have kept the value of sterling low by abol-

ishing exchange controls and allowing international outflow of capital,but in fact it avoided this course. The Conservatives, by contrast, removedall restrictions on capital movement once they returned to power in 1979.This is another example of major differences between the Callaghan andThatcher governments.

44 Callaghan, Time and Chance, 474.45 Morgan, Callaghan, 633.46 Jim Tomlinson, ‘Economic Policy’, in Anthony Seldon and Kevin Hickson

(eds), New Labour, Old Labour: The Wilson and Callaghan Governments,1974–79 (London: Routledge, 2004), 57.

47 Dell, ‘Origin of the EMS’, 31.48 Jenkins, European Diary, 246.49 Giscard d’Estaing, Le Pouvoir et la Vie, i, 134–6.50 PREM16/1615, ‘Prime Minister’s Meeting with Chancellor Schmidt’,

12 March 1978.51 PREM16/1615, Stowe to Callaghan, 13 March 1978.52 Peter Ludlow represents this interpretation. Ludlow, European Monetary

System, 81. See also Jenkins, European Diary, 240.53 PREM16/1615, ‘Prime Minister’s Discussion with Chancellor Schmidt and

President Giscard’, 8 April 1978.54 PREM16/1615, ‘Proposal for European Currency Reserve’, 7 April 1978.55 Story, ‘Launching of the EMS’, 404.56 PREM16/1615, ‘Meeting with the President of the United States in the

Cabinet Room at the White House’, 23 March 1978.57 International Herald Tribune, 15/16 July 1978.58 Callaghan, Time and Chance, 492.59 PREM16/1615, ‘Proposal for a European Currency Reserve’, 7 April 1978.60 PREM16/1634, FCO Telegram No. 512 of 20 June 1978; FCO Telegram

No. 512 of 28 June; ‘European Monetary Reform’, Couzens to Stowe, 29 June1978. See also PREM16/1617, FCO Telegram No. 536 of 25 June 1978.

61 Ludlow, European Monetary System, 109.

Notes 225

62 Interview with Sir Michael Butler, 10 August 1998, 21. Butler, Under-secretary of the Foreign Office at the time, soon became the UK PermanentRepresentative to the EEC.

63 Ibid.64 PREM16/1615, ‘Prime Minister’s Discussion with Chancellor Schmidt and

President Giscard’, 8 April 1978.65 PREM16/1616, ‘Prime Minister’s Conversation with President Carter’,

17 April 1978.66 PREM16/1616, ‘Bonn Summit’, Hunt to Callaghan, 29 May 1978.67 Interview with Butler, 22.68 The paper is annexed to the Conclusions of the Bremen European Council

and commonly known as the Bremen Annex. Bulletin of the EuropeanCommunities, No. 6, 1978, 20–1.

69 Despite the inefficiency of interventions in the dollar (e.g. sometimes one EEC country was selling the dollar whereas another was buying, thuscancelling each other out), the US dollar was used for most interventionswithin the Snake. Commission of the European Communities, Interventionin Community Currencies versus Intervention in Dollars, 26 April 1978.

70 The Bremen Annex stated that ‘not later than two years after the start of thescheme, the existing arrangements and institutions will be consolidated in aEuropean Monetary Fund’, but it actually never took place.

71 Jenkins, European Diary, 283. See also PREM16/1634, Extract from therecord of the meeting between the Prime Minister and Roy Jenkins, 3 July1978.

72 Dell, ‘Origin of the EMS’, 34.73 Ibid., 36.74 The more detailed account of the meeting is available in Ludlow, European

Monetary System, 122–9. See also PREM16/1634, ‘European Council, Bremen,6/7 July: Discussion by Heads of Government and the President of theCommission during the Evening of 6 July 1978’.

75 Ludlow, European Monetary System, 126.76 Conclusions of the Bremen European Council. All of the following quota-

tions are from the same text.77 See Ludlow, European Monetary System, 119–20.78 International Herald Tribune, 31 July 1978.79 PREM16/1634, ‘European Currency Arrangements: Handling, Timing and

Tactics’, Healey to Callaghan, 22 June 1978.80 International Herald Tribune, 15–16 July and 28 September 1978.81 New York Times, 25 July 1978.82 Ibid.83 For the official record of the meeting, see PREM16/1618, ‘Bonn Economic

Summit: Second Plenary Session’, 16 July 1978.84 Giscard d’Estaing, Le Pouvoir et la Vie, i, 134.85 Jenkins, European Diary, 249.86 Dell, ‘Origins of the EMS’, 31.87 Dorothee Heisenberg, The Mark of the Bundesbank: Germany’s Role in

European Monetary Cooperation (Boulder: Lynne Rienner Publishers, 1999),60.

88 Ibid., 49. See also Dell, ‘Origins of the EMS’, 30.

226 Notes

89 Giscard d’Estaing wrote in his memoirs: after Bremen Callaghan ‘becamean ardent partisan’ of British participation in the EMS. Le Pouvoir et la Vie, i, 142.

90 House of Commons Debates, 10 July 1978, 1025–6.91 The Daily Telegraph, 10 July 1978.92 Dell, ‘Origins of the EMS’, 36.93 Ibid., 31.94 Ibid., 37.95 Denis Healey, The Time of My Life (London: Penguin Books, 1990),

439.96 Dell, ‘Origins of the EMS’, 35.97 Ludlow, European Monetary System, 145–6.98 Dell, ‘Origins of the EMS’, 20.99 Ibid.

100 Ibid., 29. PREM16/1635, FCO Telegram No. 599 of 21 July 1978; ‘EMS’,Franklin to Hunt, 1 September 1978.

101 This was at least what the French President expected. Giscard d’Estaing, Le Pouvoir et la Vie, i, 139.

102 FV61/62, ‘EMS: Concurrent Studies’.103 The Times, 13 July 1978. It is noteworthy that Heath made the speech at

Jenkins’s instigation. After Bremen, Jenkins also met the members of theLabour Committee for Europe and a couple of Conservative politicianssuch as Ian Gilmour and Willie Whitelaw in order to gain support for theEMS. Jenkins, European Diary, 291.

104 The Monetary Committee of the European Communities, Interim Report onthe European Monetary System (Brussels, 7 September 1978), 5.

105 The Times, 16 September 1978 is one example. It is noteworthy that theBritish government got the same impression. See PREM16/1635, FCO Tele-grams Nos 800 and 801 of 16 September 1978; FCO Telegram No. 754 of18 September 1978.

106 Le Monde, 17–18 September 1978.107 Ludlow, European Monetary System, 185.108 PREM16/1635, Wicks to Callaghan, 14 September 1978.109 PREM16/1635, ‘European Monetary System’, Healey to Callaghan,

14 September 1978.110 PREM16/1635, ‘Note of a Telephone Conversation between the Prime

Minister and the Chancellor of the Exchequer’, 18 September 1978.111 Ibid.112 David Owen, Time to Declare (London: Michael Joseph, 1991), 376. Healey’s

speech, as reported in a Canadian newspaper, was quite positive in toneand seems to support Owen’s version of the story. See ‘Healey Expects EEC Monetary System to be Operating Early in ’79’, The Globe and Mail, 21 September 1978.

113 Owen, Time to Declare, 376.114 Interview with Butler, 20–1. Healey later wrote: ‘I was fairly agnostic until

I realised how … it was likely to work in practice; then I turned against it’.My Life, 439.

115 Le Monde, 17 October 1978.116 Le Monde, 3 December 1978.

Notes 227

117 Tony Benn, Conflicts of Interest: Diaries 1977–80 (London: Hutchinson,1990), 354.

118 Ibid., 355.119 PREM16/1636, A Handwritten Note to Callaghan, 9 October 1978.120 CAB130/1047, GEN136(78) 5th Meeting, 10 October 1978; Dell, ‘Origins

of the EMS’, 49–50.121 The Guardian, 10 November 1978. Copyright Guardian News & Media Ltd.

1978.122 LCC/78/188, ‘European Monetary System’, 14 November 1978, paragraph

12, Conservative Party Archive, Bodleian Library, University of Oxford.123 Ibid., paragraph 7.124 Ibid., paragraph 8.125 LCC, ‘European Monetary System’, Lawson to Thatcher, 30 October 1978,

Thatcher Archive.126 LCC/78/223, Minutes of the 223rd meeting, 15 November 1978, Conservative

Party Archive.127 LCC, ‘European Monetary System (EMS)’, Minutes of a meeting on 25 October.128 PREM16/1636, ‘European Monetary System and the Choice for the UK’,

Richardson to Callaghan, 31 October 1978.129 Dell, ‘Origins of the EMS’, 52.130 PREM16/1638, ‘European Monetary System’, Hunt to Callaghan, 29 November

1978.131 Monetary Committee, Interim Report.

Chapter 7 Conclusion

1 Arend Lijphart, ‘Comparative Politics and the Comparative Method’, TheAmerican Political Science Review, 65(3) (1971).

2 Andrew Moravcsik, The Choice for Europe: Social Purposes and State Power from Messina to Maastricht (London: UCL Press, 1998), Chapter 4.

3 Jan Zielonka, Europe as Empire (Oxford: Oxford University Press, 2006).4 After Blair became Prime Minister, there were long negotiations between him

and German Chancellor Gerhard Schröder on the reform of the CAP, whichwas to be reviewed in 2002. In exchange for backing the British on the issue,Germany asked the UK to join the euro. Robin Cook, Foreign Secretary duringthe first Blair government, recorded in his diary: ‘Schröder had given Britainuntil the end of 2002 to prove it was serious about the euro, and if by then we had made no move to join, he would revert to Germany’s traditional part-nership with France’. Robin Cook, The Point of Departure: Diaries from the FrontBench (London: Pocket Books, 2004), 171.

5 See, for example, David Howarth, ‘The Domestic Politics of British Policy onthe Euro’, European Integration, 29(1) (2007), 47–68.

6 In fact, pro-European politicians seem to have understood the importance ofbipartisan cooperation on the euro. Since Labour returned to power in 1997, across-party organisation, Britain in Europe, was founded to campaign for a ‘yes’vote for the euro, with Clarke being a core member of the organisation. In addi-tion, a member of the Liberal Democratic Party was invited to participate in theCabinet Committee on European Policy.

228 Notes

229

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Acheson, Dean, 4Anglo-French summit, 9, 36, 45,

49–56, 61–2, 73, 95, 113, 154,192

See also France, United KingdomAtlantic relationship see US-Europe

relationship

balance of payments, 120, 128–9,164, 193

as obstacle to UK participation inEuropean monetaryintegration, 11, 43, 56, 76, 95,108, 156

France, 11, 120UK, 11, 37, 41, 43, 48, 51, 56, 66,

71, 76, 82, 84–5, 89–91, 95,120, 125, 146, 148, 150, 156

US, 6–7, 80, 128, 164, 169–70, 172,177, 216n80

Bank of England, 54, 81, 82, 90, 96,100, 101, 105, 107, 124, 134, 135,136, 140, 148, 155, 187

Barber, Anthony, 39, 82, 85, 87–8,90–1, 100, 105–6, 207n9, 212n6

Barre, Raymond, 17, 40, 117, 120–1,166, 178

Basle Agreement, 37, 41, 42, 48, 54,55, 142, 143, 201n30, 207n6

See also sterling, sterling balancesBenn, Tony, 62, 111, 126–7, 133, 148,

151, 180, 222n115bipartisanship, 16–17, 191, 198,

228n6failure of ~ on EEC membership in

the UK, 16–17, 38–9, 56–60, 65,68, 73–4, 78, 95, 99, 110–12,193–4

possibility of a bipartisan approachto the EMS in the UK, 159,186–7, 191, 195

successful cooperation of pro-European political forces in France, 16–17, 19, 29, 122,168–9, 195–6

See also party system, governmentand opposition

Brandt, Willy, 8, 47, 61, 100–2,105–6, 116, 123, 132, 144, 154,192

Britain see United KingdomBritish Empire, 4, 9–11, 35–7, 40, 43,

50–1 54–5, 57, 66, 70, 73, 75, 91,107, 113, 116, 142, 154, 155, 158,184, 192, 193, 217n4

Imperial preference, 9Sterling Area, 9, 10, 11, 37, 41, 43,

50, 51, 55, 81, 96, 107, 141,142, 201n30, 221n80

See also sterling, sterling balancesBundesbank, 8, 30, 52, 82, 106, 117,

162, 165, 189

Callaghan, James, 3, 61–2, 111–12,114, 116–17, 119, 122–7, 130,133, 136–52, 154–6, 158–9, 163,169–77, 179–80, 184–7, 190–1,193–4, 217n4, 227n89

Blackpool Speech, 136–9differences between the ~ and

Thatcher governments, 137–9,156, 220n75, 225n43

stance on the EMS, 158–9, 175–6,179–80, 184, 185–6, 190

triggering Labour’s turnaround onEEC membership, 61–2, 144,194

trying to obtain a Common Marketloan in exchange for sterling’sreturn to the Snake, 116, 123,133, 139–40, 143–4, 154, 192–3

Carter, Jimmy, 141, 158, 163, 169–70,172–7, 190, 194

241

Index

case study approach, 1, 20, 22–4, 196

Chirac, Jacques, 17, 19, 121, 169City of London, 10, 81Cold War, 5, 7Commonwealth see British EmpireCommunists (France), 13, 16, 166–9comparative method, 1, 20, 22–4Connally, John, 80, 84Conservative Party (UK), 12–13,

16–17, 20, 21, 29, 33, 40, 43–4,57–8, 63–5, 67–73, 111, 116–17,119, 121, 124, 133, 138, 144, 147, 159, 171, 186–7, 191, 193–5, 198, 211n106, 225n43,227n103

stance on the EMS, 159, 186–7Couzens, Ken, 163, 173–4Crosland, Tony, 126–7, 143, 147–9,

222n115

de Gaulle, Charles, 7–8, 10, 18, 36,52, 113, 121, 141, 165

antipathy to US influence inEurope, 7–8

attack on the international role ofthe US dollar, 7

Deutschmark, 8, 12, 40, 52, 76, 82–3,87, 96–101, 106, 120, 143, 157,164, 183

unilateral floating of, 8, 52Douglas-Hume, Alec, 63, 82

ECSC (European Coal and SteelCommunity), 5, 7, 27

ECU (European Currency Unit), 3, 12, 117, 157, 171, 175, 178, 179,181, 182, 183, 188, 189

EEC (European EconomicCommunity), 1, 2, 5, 6, 7, 9, 10,11, 12, 13, 20, 23, 27, 35, 36,38–83, 85–90, 92–7, 99–112,115–17, 121, 123, 129–34, 143–4,154–5, 157, 160, 164, 173, 175,180–1, 185–7, 189, 192–4,200n22, 208n25, 210n85,211n94, n102, n104, n106,214n45, 215n73, 216n93,218n16, 219n35, 226n62

EMCF (European MonetaryCooperation Fund), 3, 93, 117,157, 189

EMS (European Monetary System),2–3, 7–8, 11–12, 17–18, 22–3, 34,86, 94, 112, 114–19, 121–2,154–60, 162–5, 167, 169, 171–3,175–91, 193–7, 203n64, 223n1,227n89

quest for symmetry of interventionobligation, 12, 157, 175, 178,182–3

See also ECU, EMCF, ERMEMU (Economic and Monetary

Union), 1–3, 11–12, 35–41, 43–8,52, 54–9, 69, 73–9, 85–7, 89,91–4, 97, 102, 105, 108–9,112–14, 129–33, 143–4, 157,160–2, 165, 180, 192–3, 195, 199,206n30, n1, n2, 220n49

Barre Plan, 40, 44economist and monetarist schools

on, 40, 46, 108, 131–2, 207n14

two-tier approach to, 131–3Werner Report, 2, 38, 45–8, 56,

131See also Snake

ERM (Exchange Rate Mechanism),2–3, 11, 15, 17, 21, 23, 29, 115,117, 139, 157, 160, 185, 188–91,194, 196–7, 203n64, 223n1

UK opting out of, 2, 3, 125, 127,139, 157, 160, 185, 187–8, 189, 190, 194, 196–7, 203n64

European Commission, 27, 30, 40, 46, 54, 160

European Council, 30, 131, 148, 185

Bremen (July 1978), 3, 17, 157,163–4, 169, 173, 175–6, 177–9,196

Copenhagen (April 1978), 115, 157,163, 171–3, 178

See also European summitEuropean monetary cooperation

see European monetaryintegration

242 Index

European monetary integration, 1–9,11–22, 25, 29, 35, 38, 40, 43,46–7, 76, 78–9, 81, 86–7, 92,94–5, 99, 108–10, 112–13,115–19, 121–3, 129–33, 144, 154, 156, 159–60, 162–3, 165–7,174, 176–7, 186–7, 190–7

European summit, 130–1The Hague summit (December

1969), 36, 40, 199n2Paris summit (October 1972), 2, 85,

92–3, 212n12See also European Council

Europeanisation, 25, 32exchange rate, 2, 3, 11–12, 15, 37, 40,

43–4, 45–7, 52, 75, 77–8, 79,81–4, 85–90, 92–5, 97–100, 104,107, 113, 117–20, 124, 130–1,138–9, 156, 161–2, 164, 165,170–2, 175, 179–80, 187, 189,193, 195

British views on ~ stability, 88–92,120, 138–9, 156, 158, 169–72,174, 179–80, 190, 193–4

French support for an internationalmonetary system based onstable ~, 3, 8, 52, 77, 84–5, 107, 113, 118, 195

See also international monetarysystem

Federal Republic see West GermanyFoot, Michael, 44, 126–7, 149–50,

185–6, 211n106Ford, Gerald, 123, 140–1, 145, 147–8,

151Fourcade, Jean-Pierre, 130, 132franc, 1, 11–12, 17, 29, 40, 83, 98–9,

118–21, 130, 157, 159, 164,165–6, 178–9, 183, 195

See also SnakeFrance, 1–19, 21, 23, 25, 29, 33,

36–42, 45–55, 77–8, 82–5, 86,96–9, 107, 111, 113–14, 115–22,128, 130, 136, 157–8, 160–3,165–9, 172–3, 175, 177–9, 181–3,185, 189–90, 192, 195–7, 201n30,207n6, 209n66, 218n13, 224n16,228n4

differences with West Germanyover international monetaryissues, 8, 52, 77, 83–4

Franco-German partnership, 7–9,102, 114, 116, 165, 175, 183–4, 195, 209n66, 228n4

hostility against a Europeancurrency bloc, 3, 8, 52, 77,82–3, 96–8, 113, 195

successful cooperation of pro-European political forces,16–17, 19, 29, 122, 168–9,195–6

support for an internationalmonetary system based onstable exchange rate, 3, 8, 52,77, 84–5, 107, 113, 118, 195

Franco-German partnership seeFrance

French Empire, 4, 9–10

Gaullists (France), 13, 17, 121–2, 160,166, 168–9, 178, 185, 190

Giscard d’Estaing, Valery, 3, 13,16–17, 19, 33, 42, 48, 52–4, 96,105, 114, 116, 118, 121–2, 157,159, 163, 165–9, 171–8, 183–6,188, 190, 195–6, 202n55,209n61, 224n16, 227n89

Global Economic Summit, 118, 141Bonn Summit (1978), 164–5, 168,

170, 174, 177, 179government and opposition, 20–1,

34, 59–60, 65, 68–9, 110, 112,154, 156

relationship between ~ as key toexplain why UK parted fromFrance on European monetaryintegration, 15–17, 19, 21, 25,158–9, 196

See also bipartisanship, party system

Heath, Edward, 3, 9, 36, 39, 42–3, 45,49–55, 61, 63–7, 69, 73, 78, 82,90, 100–2, 105–7, 113–14, 116,123, 133, 144, 154, 159, 181, 182,192–3, 209n66, 213n30, 214n42,215n56, 216n96, 217n4, 227n103

Index 243

Heath, Edward – continuedmaking a secret deal on the sterling

balances with Pompidou, 9, 11, 36, 45, 54–5, 107–8

negotiating with Brandt prior to the start of a joint Communityfloat, 100–6, 116, 123, 144,154, 192

Healey, Denis, 62, 112, 126–7, 129,134–6, 141, 143, 145, 147–50,158–9, 180, 183–4, 186–8,210n80, 222n126, 227n112

stance on the EMS, 159, 183–4, 186

House of Commons, 16–17, 19–22,33, 35, 39, 49, 53, 56–8, 61, 64–5,68–73, 79, 88, 109–12, 121, 127,135, 152, 158–9, 194

Howe, Geoffrey, 159, 186, 195, 223n6

IMF (International Monetary Fund),46, 81, 117–18, 121–3, 127–9,136, 140, 144, 146–51, 160, 166,184, 212n6, 222n126

inflation, 2, 120, 128, 138convergence of ~ rates as condition

of monetary cooperation,11–12, 40, 43, 78, 86–7, 95,108, 119, 156, 161–2, 170,196–7

France, 11, 98, 114, 117, 119–20,130, 166, 178, 190

UK, 11, 76, 78, 85–6, 89, 91–2, 95,97, 100, 108, 114, 119–20,125–6, 133, 137, 139, 155–6,170, 186, 190, 193

US, 128, 169–70West Germany, 30, 52, 98, 105–6,

128, 164–5institutionalism, 14, 25intergovernmentalism, 5, 14, 25–6,

29–30international monetary system, 3,

7–8, 37, 40, 43, 46, 51–2, 55, 75,77–9, 81–5, 96–100, 106–7,113–14, 117–19, 165, 172, 179,187, 190, 194–5, 212n6, 214n54

collapse of the Bretton Woodsregime, 2, 6, 11, 52, 75, 78, 94,96–100, 113–14, 118–19, 154,160, 162, 165, 172, 179, 192,194–5, 214n54, 215n56

gold-dollar convertibility, 2, 8, 80,84, 221n80

Nixon shock, 75, 77, 79Smithsonian Agreement, 75, 77, 79,

85, 87, 89, 96See also exchange rate, US dollar

Jenkins, Roy, 44, 62, 110–12, 115,126–7, 198, 210n90

as the President of the EuropeanCommission, 126, 157, 160–2,167, 171

joint Community float, 2–3, 11, 52,75–9, 81–4, 94–109, 113, 116,123, 154, 162, 179, 192, 194,214n48

UK’s stance on, 81–2, 83–4, 94–5,96–7, 99–109

joint European float see jointCommunity float

joint float of European currencies see joint Community float

Kissinger, Henry, 6, 113, 144–5

Labour Party (UK), 3, 13, 16, 20, 22,29, 33, 37–8, 40, 44–5, 56–65,68–73, 77–9, 92, 95, 109–12,115–17, 121, 123, 124, 126–7,130, 133–8, 141, 144, 146,149–54, 156, 158–60, 165, 170–1,174, 180, 184, 185–8, 190, 193–4,198, 211n104–6, 212n108–9,216n93, 219n29, 227n103, 228n6

NEC (National ExecutiveCommittee), 20, 61–2, 111–12,152, 185, 188

Parliamentary Committee, 20, 61PLP (Parliamentary Labour Party),

60–1, 64, 111, 123, 126, 147,149, 151–3, 186, 210n90,216n85

turnaround on EEC membership,59–65, 144, 194

244 Index

Lawson, Nigel, 159, 186–7, 195,223n5

Lever, Harold, 111, 126–7, 134, 142,144–5, 148, 174, 180

Liberal Party (UK), 16, 121–2, 152–4,156, 211, 223n140, 228n6

Lib-Lab Pact, 121–2, 152–4

Marshall Plan, 5, 80Mitterrand, François, 17, 61, 116,

167, 169monetarism, 120, 123, 135 138–9,

203n64, 207n14MRP (France), 13, 33multi-level governance, 14, 25, 30–2

NATO (North Atlantic TreatyOrganisation), 5, 7, 67, 140, 148

neo-functionalism, 5, 14, 25–9Nixon, Richard, 2, 8, 42, 80, 82, 84,

106

OECD (Organisation for EconomicCooperation and Development),44

oil shock, 3, 128, 130, 165Ostpolitik, 8, 82Owen, David, 64, 159, 174, 184

party system, 4, 19, 25–6, 31–2, 35,38, 56, 58, 75, 156, 158, 168,192–3, 202n50, 204n1, 205n25

definition of, 26France, 19, 33, 168importance of, 15, 121, 197neglected by scholars, 14, 26, 34UK, 18, 33, 58, 73, 110, 112See also bipartisanship, government

and oppositionpolitical parties

See under individual namesPompidou, Georges, 3, 8–9, 11, 19,

36, 39, 42–3, 45, 47, 49–54, 61,73, 83–5, 95, 107, 111, 113–14,116, 118, 154, 165, 181, 192, 195,208n25, 209n66, 213n25,215n56, 216n96

Powell, Enoch, 12, 111PS (France), 13, 33

referendumon UK’s EEC membership (1975),

109–12, 130on UK’s participation in the euro,

198

Schiller, Karl, 52, 82, 209Schmidt, Helmut, 3, 96, 101, 105,

116–17, 123, 129–30, 132–3, 140,142–4, 147, 151, 154, 157, 160,162–5, 169–79, 183, 185–6, 188,190, 196, 217n7

Schuman Plan, 1, 130Second World War, 4–5, 67, 70,

79–80, 85, 136–7SFIO (France), 33Shore, Peter, 56, 148, 185,

211n106Snake, 1–3, 11–12, 18, 75–8, 85–94,

97, 100, 106, 114, 115, 118–19,121, 123, 129–33, 140, 143, 159,160, 162, 165–7, 171–2, 175, 178, 182–3, 188, 192–3, 195–7,226n69

asymmetry of interventionobligation, 165

franc’s exit from, 1–3, 76, 114, 115,118, 121, 130, 159, 160, 162,165–7, 178, 195

~ in the tunnel, 77~ left the tunnel, 93–4sterling’s exit from, 1, 3, 75–6, 77,

85–6, 90–2, 160, 162sterling’s possible return to ~ in

exchange for a CommonMarket loan, 116, 123, 133,139–40, 143–4, 154, 192–3

See also EMU, franc, sterling,sterling balances

Soames, Christopher, 42, 49–50, 54,209n66, 216n96

Social Contract, 124, 135, 146–7, 151,156, 219n29

sovereignty, 2–4, 11–13, 23, 28, 35,38, 44, 46–7, 56–9, 66–9, 71–4,75–8, 95, 100, 102–4, 108–9, 112,121, 156, 158, 178, 180, 190, 192,194, 211n103

Soviet Union, 5–7

Index 245

special relationship see UnitedKingdom

sterlingas an international currency, 7, 10,

37, 41–3devaluation of, 6, 10, 37, 41–3, 128,

141, 221n87See also British Empire, Snake,

sterling balancessterling balances, 9, 11, 36–8, 41–5,

48, 50–1, 53–6, 73, 76, 78, 81,95–7, 101–2, 105, 107–8, 113,116, 119, 122–7, 133–6, 138–46,154–5, 192–3, 201n30, 207n3,218n13, 219n27, n33, n35,223n2

as a cause of the IMF crisis, 124–6dollar guarantee for, 9, 11, 37, 54–5safety net for, 122–3, 127, 129,

133–5, 138–46, 149, 151, 155,222n134

secret deal between Heath andPompidou on, 9, 11, 36, 45,54–5, 107–8

See also British Empire, Snake,sterling

Suez crisis, 7, 10, 179summit see Anglo-French summit,

European summit, GlobalEconomic Summit

Thatcher, Margaret, 12, 27, 137, 139,152, 156, 187, 196, 206n1

Tindemans Report, 129, 131–3Treasury (UK), 41–3, 51, 54–5, 88–91,

96, 103–4, 107–8, 124–5, 132,134–5, 140, 143–8, 150, 155, 163,174, 198, 218n21, 219n33,220n49, 222n115

TUC (Trade Union Congress), 91, 124,127, 134, 146, 149–50, 156, 170,190, 193, 214n42, 219n29

UDF (France), 13, 17, 19, 29, 159,167–9, 190, 195–6

United Kingdom, 1–21, 23, 25, 29, 33,35–45, 47–60, 62–74, 75–7, 79,81–93, 94–7, 99–113, 115–22,128, 130–1, 133, 139–43, 148,

152, 154–6, 157–165, 169–82,184–191, 192–8, 201n30, 203n64,206n1, 208n25, 216n96, 218n16,223n1

failure of bipartisanship on EECmembership, 16–17, 38–9,56–60, 65, 68, 73–4, 78, 95, 99,110–12, 193–4

making a secret deal on the sterlingbalances in order to enter theEEC, 9, 11, 36, 45, 54–5, 107–8

opting out of a joint Communityfloat, 81–2, 83–4, 94–5, 96–7,99–109

possible return to the Snake inexchange for a CommonMarket loan, 116, 123, 133,139–40, 143–4, 154, 192–3

possibility of a bipartisan approachto the EMS, 159, 186–7, 191,195

refused to enter the ERM, 2, 3, 125, 127, 139, 157, 160, 185,187–8, 189, 190, 194, 196–7,203n64

relationship with France, 3, 8–9, 36,49–55, 78, 113–14, 181–2, 191

relationship with the United States,4–7, 8–9, 36–7, 42, 55, 70, 75,79, 82, 85, 95, 106–8, 114,116–17, 119, 154–5, 158, 164,172–3, 176–7, 187–8, 189–90,194

views on exchange rate stability, 88–92, 120, 138–9,156, 158, 169–72, 174, 179–80, 190, 193–4

See also British Empire, sterling,sterling balances

United States, 4–9, 35–8, 42, 47, 52,55, 57, 67, 70, 73, 75, 79–85, 87,89, 95–8, 106–7, 113–14, 116–19,123, 126–9, 134–5, 139–42,144–7, 154–5, 157–8, 160–1,163–4, 169–70, 172–3, 176–7,179, 187–90, 192–5, 201n30,214n54, 217n4

benign neglect of the dollar, 172,214n54

246 Index

refusing special treatment for theUK during the IMF crisis, 117,155

See also US dollarUS dollar, 2–3, 7–9, 11, 37, 42, 46, 48,

50–2, 54–5, 75, 77–84, 87, 90,93–4, 96–101, 106–7, 113, 118,120, 130, 132, 141–3, 157, 161–4,169–77, 179–80, 187–90, 192,194–5, 201n30, 213n21, n25,215n56, 216n80, 218n13,221n87, 226n69

devaluation of gold price, 8, 83–4position as the international

currency, 7–8, 42, 80–1, 87,113, 177, 213n25

See also international monetarysystem, United States

US-Europe relationship, 7, 8, 79–81,106–7, 113, 163–4, 176, 177,187–8

West Germany, 2–4, 7–9, 10, 11–12,77, 82, 83, 87, 94, 96–9, 100–1,105, 106, 108, 113, 116–19, 129,130, 132, 139, 142–4, 146, 148,169, 172–3, 177, 179, 180, 182,195, 209n66

advocacy of a joint Communityfloat, 2, 52, 77, 82, 100–1, 113,162

initiative on the EMS, 2–3, 122,157, 163–5

Wilson, Harold, 16, 20, 36, 37, 40,61–6, 111–12, 116, 124, 126, 141,152, 210n90, 216n93

Witteveen, Johannes, 128–9, 148

yen, 77, 80, 83, 97, 176, 214negative impacts of the EMS on,

176

Index 247