The Community Budget

Abstract

It was reasonable to hope in early 1978, when this chapter was written for the first edition of the book, that the budget problem faced by the whole Community and the particular case faced by Britain were on the way to solution. In the case of the latter, agreement had been reached at the European Council in Dublin in December 1975 on the ‘Financial Mechanism’ which was designed to set a limit to any excessive discrepancy between a member state’s contribution to the Community budget and its ability to pay. By the end of 1978, however, and the end of Britain’s transitional period, it had become clear that the mechanism was not having the effect the British had desired. In 1979, the Commission calculated that during 1980, Britain would be the largest net contributor to the Community, paying over £1000 million. In the Queen’s speech in May 1979, the new Conservative government said it would ‘press for a fairer pattern of budgetary and resource transfers in the European Economic Community.’ The so-called ‘British problem’ proved a particularly difficult one to resolve.