VISIT OF HELMUT SCHMIDT
On the following day Members of Parliament assembled-to take the oath. But Thursday was a day of more than ceremonial importance (indeed there was one ceremony which somehow got lost in the rush — Denis’s birthday). It was on that day that Helmut Schmidt, the West German Federal Chancellor, arrived in London on an official visit originally arranged with the Labour Government — the first head of a foreign government to visit me as Prime Minister.
There had been some discussion about whether this visit should go ahead. But I was particularly keen that it should. I had met Herr Schmidt in Opposition and had soon developed the highest regard for him. He had a profound understanding of the international economy on which — although he considered himself a socialist — we were to find ourselves in close agreement. In fact, he understood a good deal better than some British Conservatives the importance of financial orthodoxy — the need to control the money supply and to restrain public spending and borrowing so as to allow room for the private sector to grow. But he had to be told straight away that although Britain wanted to play a vigorous and influential role in the European Community, we could not do so until the problem of our grossly unfair budgetary contribution had been resolved. I saw no reason to conceal our views behind a diplomatic smokescreen; indeed I wanted to convince Helmut Schmidt of both the reasonableness of our position and the strength of our determination precisely because he and West Germany exercised great influence in the Community. So I used every occasion to get the message across.
The speech which I delivered that Thursday evening at our dinner in honour of the Federal Chancellor was my first opportunity to set out my new approach towards the European Community. I rejected right from the start the idea that there was something ‘un-European’ in demanding that inequities be sorted out. In a passage which caught the media’s attention, I said:
It has been suggested by some people in this country that I and my Government will be a ‘soft touch’ in the Community. In case such a rumour may have reached your ears, Mr Chancellor, from little birds in Smith Square, Belgrave Square, or anywhere else, it is only fair that I should advise you frankly to dismiss it (as my colleagues did long ago!). I intend to be very discriminating in judging what are British interests and I shall be resolute in defending them.
At our joint press conference the following day we were asked about our personal relations, since Helmut Schmidt was a socialist who had always referred to Mr Callaghan as ‘Jim’. When I stressed the similarity of our policies, he intervened: ‘Don’t go too far, Prime Minister, and do not spoil my relations with my own Party, please!’