British Prime Minister Margaret Thatcher told leaders of the other eight common market countries today they must reduce Britain's bill considerably or face a crisis in the European Economic Community.
Unless changes are made Britain will contribute next year about $2 billion more to the EEC in various taxes than it will receive in benefits and subsidies. Thatcher complained this would make Britain, now one of the Common Market's poorer countries, the largest net contributer to its budget.
At a time when her government was forced to cut its own spending on social welfare programs at home, she said, paying so much into the Common Market was "deeply resented as unfair." If nothing is done about it, officials in London have hinted, Thatcher is ready to disrupt the EEC by selectively vetoing various policies and budgets.
"When there is so much trouble in the world," she pointedly warned other European leaders in a tough speech as the two-day EEC summit began here today, "the last thing we need is a crisis now in the Community."
The frosty, skeptical reception she received here today, including tough questioning from German Chancellor Helmut Schmidt, threatens just such a crisis; however, the EEC bureaucracy has come up with a formula that could cut Britain's bill by nearly half, and negotiations based on it will continue tomorrow.
More important, Thatcher's determined effort to force a change in the complicated EEC financial structure to help economically ill Britain comes at a time when the Common Market is already beset by threatening budget problems and increasingly nasty bickering among its nine members.
Despite the Common Market's free trade policy, for example, the French are trying to stop Britain from exporting cheap lamb to France, and the British don't want the french selling cheap milk in Britain. Denmark and britian are arguing over fishing rights in British waters. And all of the other eight are unhappy Britain does not sell them its North Sea oil at discount prices.
Meanwhile, the money the Common Market collects from it members in special sales and import taxes will soon no longer be sufficient to support its mushrooming program of farm subsidies. These now eat up 70 percent of the EEC budget and help cause Britain's net deficit because most of the money goes to other EEC countries, who have more, and less efficient farmers.
Like U.S. agriculture price supports in the past, the Common Market's farm policy also has produced huge surpluses of some products, particularly milk, sugar and wine, which the EEC itself must buy at premium prices and store or sell off at bargain prices.
There is now general agreement among Common Market leaders that something must be done about the agricultural policy to cut its cost and reduce the surpluses. The elected European parliament, a new Common Market institution, is now threatening to veto the entire EEC budget unless the farm subsidies are reduced and more industry and community money is spent on improving social conditions in the member nations.
Many of these problems could be exacerbated when the Common Market is soon expanded from nine to 12 nations encompassing most of Western Europe, with the anticipated addition of Greece, Spain and Portugal to current members Britain, Ireland, France, Germany, Italy, Belgium, Holland, Luxenbourg and Denmark.