Paper for the 9th Biennial EUSA Conference
31 March – 2 April 2005
Austin, Texas










SOVEREIGN STATES AND SUPRANATIONAL MONEY
Own Resources, and the Creation of a Financial 
Platform for the EU






Ann-Christina L. Knudsen, Ph.D.
Assistant Professor
Department of European Studies
Aarhus University, Denmark
euroalk@hum.au.dk






This is a draft of new research 
Do not quote or cite without permission of the author
Constructive comments are very welcome









Contents:

PART I: 
INTRODUCTION 

PART II:
THE POLITICS OF FINANCING THE COMMUNITY,  
AND THE FATE OF THE FIRST BRITISH MEMBERSHIP APPLICATION 
Basic issues of financing the Community
The peculiar birth of Regulation no. 25
Conflicting interpretations of Regulation no. 25
The Financial Regulation and the accession negotiations

SOME FINAL REMARKS





PART I:
INTRODUCTION

One of the specific characteristics of the modern, sovereign state has 
been its mandate to collect taxes, and to administer the common 
treasury on behalf of the citizens of its territory. The elected politicians, 
in turn, decide how the common money should be spent, and they are 
held responsible for their actions in the next election. This arrangement 
goes to the heart of what makes the modern state function, and 
conceptually distinguishes the state from other types of political 
organisations that do not have the mandate to collect and administer 
this revenue. The significance of taxes goes beyond the rational-technical 
mechanisms of budgets, as it also touches upon the symbolic position of 
the sovereign in the history of political systems.

In April 1970, however, the member states of the European Communities 
agreed to grant financial independence from the member states to the 
Communities by endowing them with own resources . In 1970, own 
resources were given both to the European Economic Community (EEC) 
and the European Atomic Energy Community (EAEC, or Euratom), 
whereas the European Coal and Steel Community (ECSC) had been given 
own resources already at its creation in the Treaty of Paris from 1951; for 
reasons of limitations, this study is for the moment primarily concerned 
with the EEC. The sources of revenue would come from traditional 
national tax sources – various import taxes, and value-added tax – and 
authority to administer and decide upon the use of this revenue was 
handed over in large part to the Commission and European Parliament. 
The member state governments were still part of the Community budget 
procedure in the Council of Ministers, but on issues of both practical and 
symbolic importance, they had signed away part of their sovereignty to 
the European project. The 1970 decision has been crucial to the way in 
which the Community has been financed ever since, and it remains the 
financial platform of the EU today . Yet, remarkable little scholarship 
exists on own resources. 

The creation of own resources for the Communities is interesting for a 
variety of reasons. Firstly, when the members states created own 
resources, they voluntarily gave up sovereignty in an area of fundamental 
importance to the internal functioning of the modern state. Although the 
actual amount of taxes given up was relatively modest in comparison 
with modern state budgets, the act of handing over traditional tax 
sources to the European project, and the long-lasting effect of this act, 
has both political and symbolic implications. The study therefore 
provides an interesting illustration of our theoretical understanding of 
the capacity of the post-war European state, of the creation of the system 
of European governance. 

Secondly, the stability of any political institution hinges on having a 
permanent financial solution. The 'who pays' discussion is revealing for 
the will to carry out political projects. The 1970-agreement for creating 
own resources came twelve years after the entering into force of the 
Treaties of Rome, by which time the member states had agreed to a lot of 
spending (the common agricultural policy in particular), but not how to 
finance it. Prior to 1970, the Communities were financed from member 
state contributions according to a key laid down in the Treaties. During 
the decade of the sixties, we hear about own resources primarily in 
relation to the debacle around the 1965-66 the empty chair crisis. This 
was when the French President de Gaulle withdrew high-level 
representation to the Community in reaction to a Commission proposal 
that involved the introduction of on resources, and budgetary authority 
to the European Parliament. What is less known, but perhaps more 
interesting, about the decade of the sixties and the political process of 
creating a permanent financing basis for the EEC, is the way in which 
the discussions and negotiations played out as a somewhat hidden 
parallel to the creation of the politically more visible projects: the CAP, 
the customs union, and the failed enlargement negotiations. This is an 
area of EU's history that we know very little about so far .

This paper forms part of a new research project into the origins of own 
resources. The serious lack of knowledge about this political process 
presents a major challenge to this study. The research therefore departs 
from an attempt to establish a narrative of the political process towards 
creating own resources. This narrative is based on completely new 
evidence from the historical archives of the Community institutions and 
member state administrations . Once we have a good overview of this, we 
can derive policy lessons and theoretical implications. This paper puts 
forward the first narrative linking the politics of financing the 
Community to the fate of the first attempt at enlarging the Community in 
1961-63. The case study is based on new investigations into multiple 
historical archives at the national and European levels. 

For the further study of project about 'sovereign states and 
supranational money – own resources, and the creation of a financial 
platform for the EU' additional narrative will focus on: the Commission's 
1965 proposals for financing the Community, the empty chair crisis and 
resolution; the status of the financing proposals during the period of the 
second enlargement attempt; the relaunching of the financing debate in 
connection the plans for monetary union around the December 1969 
Hague meeting; the final negotiations for the own resources agreement in 
April 1970. 



PART II:
THE POLITICS OF FINANCING THE COMMUNITY,  
AND THE FATE OF THE FIRST BRITISH MEMBERSHIP 
APPLICATION 

The rejection of British accession to the European Economic Community 
(EEC) by French President Charles de Gaulle in January 1963 is to date 
probably the most well-researched event by historians in the EU's 
history. Dominant explanations vary in emphasis on what caused the 
French President to throw the nascent Community into this crisis of 
trust.  Thus, many agree that the British themselves were to some degree 
at fault because they had set conditions in the accession negotiations in 
key areas such as agriculture and colonial trade that France was never 
going to accept. Another group of explanations focus on issues internal 
to the accession negotiations and the Community, the common 
agricultural policy (CAP) and the question of how to finance the 
Community in the future. A third emphasis is found with those studies 
that stress externalities and the wider international political context, 
such as the French President's dislike of the close relationship between 
the United States and Britain. The conclusion of the Nassau agreement 
shortly before the veto, so it is typically argued, accounts for the timing 
of the veto. Finally, some take the pragmatic route, suggesting the issues 
were all so interlinked that it is impossible to separate them. 

In each their different ways, these are excellent historical studies. It is 
important to notice, however, that they share the common trait that 
ultimately the explanations put forward are suggestive, deducting their 
conclusions from surrounding materials. Indeed they have to do so, as 
no historian has been able to find that final, trustworthy note where 
Charles de Gaulle stated what was really on his mind. His personal 
papers are still off limits to most historians. But it is certainly possible 
that that final piece of evidence never existed. President de Gaulle's press 
statement on 14 January 1963, for instance, where the de facto veto was 
publicised, stressed a variety of reasons. It also portrayed a view of the 
negotiations that some of those involved were hesitant to accept. Most 
scholars of Europe in the sixties would agree that de Gaulle was a 
(melo)dramatic personality whose statements intended for the public 
were not always an accurate guide to his thoughts or acts. This has also 
left scholars divided over how to interpret his intentions and 
preferences.  On the one hand stand those who believe that de Gaulle 
acted out of geo-strategic national interests, as state leaders in general 
may be expected to do, assuming that this would apply above all to a 
person with a military career. On the other hand are those who see the 
politician de Gaulle, concerned with re-election, with enforcing domestic 
welfare gains, and as someone who also pursued primarily economic 
strategies in foreign policy. These interpretations ultimately mirror 
debates within the realism and liberalism paradigms of international 
relations theory.

The purpose here is to present a new angle to the shipwrecked British 
accession negotiations that so far has been largely neglected by historical 
scholarship. The paper departs from the internal negotiations among the 
Six over finding a permanent financing model for the Community. The 
chronology of events is particularly interesting in the period between the 
passing of Financial Regulation no. 25 in the Council of Ministers on 14 
January 1962 – the regulation popularly known for having instituted 
'financial solidarity' in the Community – and the January 1963 veto. 
During 1962, the Financial Regulation became entangled in the 
enlargement negotiations with Britain, at the same time as serious 
internal tensions over this Regulation were building up among the Six. 

This paper shows, through the presentation of a broad range of new 
archival materials, that the French, as self-appointed leaders of both sets 
of negotiations, were close to losing control over the direction of the 
financing negotiations when the would-be paymasters in both Germany 
and Britain appeared highly reluctant to embrace the particular 
financing model promoted by the French in concert with the European 
Commission. It is primary Milward's 2002 analysis that promotes 
financing as the decisive point that led de Gaulle to act so resolutely in 
January 1963.  This paper supports Milward's analysis, as its findings 
derive from completely different primary sources.  In most accounts of 
these events, the issue of financing is treated as present, but also as a 
subsidiary issue of the CAP . This new research shows that the question 
of financing took on a life of its own during 1962. The history of financing 
the Community is one that has not been told at length yet.


Basic issues of financing the Community

It is necessary for the long-term stability of any political institution to 
have a permanent source of financing. From 1958, the Community was 
financed through direct member state contributions following a financial 
burden-sharing key laid down in article 200.1 of the Treaty establishing 
the EEC. Accordingly, Germany, France and Italy were to cover 28 per 
cent of Community expenditure, the Netherlands and Belgium 7.9 per 
cent, and the small member state of Luxembourg a mere 0.2 per cent. 
This burden-sharing key was roughly based on the relative size of each 
member state, and correlating to voting weights assigned in the Council 
of Ministers. 

Article 201 EEC opened the possibility of switching to another model for 
financing the Community, namely by creating 'own resources'; a direct 
albeit poor translation of the French resources propres. Own resources is 
a Community-technical term that refers to a source of revenue that flows 
automatically to the Community, and hence does not depend on the will 
of the member state governments. The Treaty stipulated that own 
resources could be instated from the revenue generated from the 
common customs tariff, once introduced, as well as from the external 
agricultural levy created in relation to the CAP. The formal procedure for 
enacting article 201 EEC was the Community method, that is, on 
proposal from the Commission, on decision by the Council, acting after 
advice from the European Parliament. The Treaty article stipulated also 
that each member state should adopt it "in accordance with their 
respective constitutional requirements". It meant that the introduction of 
own resources would have to go through national parliamentary 
recognition, and could not be enforced solely through a top-down Council 
regulation or directive. The additional national procedure for the creation 
of own resources was, no doubt, placed in the Treaty due to the symbolic 
importance of giving up national taxes, so central to modern state 
authority; this procedure, however, played hardly any role in these early 
policy discussions.

Among the landmark decisions adopted by the Council on 14 January 
1962 was Financial Regulation no. 25 which created the key financial 
instrument of the Community's budget: the European Agricultural 
Guidance and Guarantee Fund (EAGGF, perhaps better known by its 
French acronym, FEOGA).  Regulation no. 25 has typically been seen as 
the first step towards the introduction of own resources according to 
article 201 EEC; at the time of implementation, however, there was some 
ambiguity about this, as this paper will show. FEOGA was to cover 
Community expenditure regulated by the CAP such as agricultural 
guarantees, export refunds, and structural improvements. The 
Regulation stipulated that FEOGA was, on a gradually incremental basis, 
to be fed by the revenue accrued from the common external agricultural 
levies. At the same time there would be a gradual scaling down of the 
direct member state contributions. Whereas the Regulation did mention 
that at the common market stage the revenue from the common 
agricultural levies would become a budgetary resource for the 
Community, it only made specific provisions for the period until the end 
of the second stage of the common market in 1965. The political 
interpretation of this ambiguity in the legislative act became central to 
events that followed. 

On 14 January 1962 the Council also adopted the central framework 
regulations for the CAP that essentially directed the categories of 
expenditure for the Community. Interestingly, none of the regulations 
adopted on 14 January 1962 were accompanied by actual financial 
projections of how much these were expected to cost, as political projects 
that incur costs typically are. Nonetheless, even in the absence of formal 
estimates, it was not difficult to project, as most did, that the gradual 
switch to own resources as the method of financing the CAP would alter 
the burden-sharing among the member states that their parliaments had 
initially signed up in article 200.1 EEC. On the one hand, the 
introduction of an agricultural levy-based own resource would impose a 
system whereby net importing member states would have to surrender to 
the Community a traditional source of revenue from their frontier tariffs. 
An early Commission report stated boldly that with the introduction of 
own resources these receipts would have "perdu absolument tout 
caractère national, afin de faire face aux différents besoins nécessité par 
la politique commun" .  On the other hand, the CAP regulations – above 
all the Grain Regulation no. 19 – meant that funds could flow to a 
member state primarily from the CAP's common market organisations in 
the shape of price guarantees and export refunds. 

A rough cost-benefit calculation of a financing model based on own 
resources coming from the external agricultural levies of the Community 
would easily place France, as a large agricultural producer and exporter 
both to other EEC member states and third countries, as the ultimate 
beneficiary of the system of own resources. Member states with net 
agricultural imports from within and outside the Community, that is 
Germany followed by the Netherlands and Italy, would directly and 
indirectly become the main donors of the common project.  In fact, own 
resources were promising to be such a good financial deal for France that 
its Minister for Agriculture, Rochereau, in November 1960 announced 
that,

"parmi les mécanismes communautaires, le système des 
prélèvements apparaît comme une pièce maîtresse des 
propositions de la Commission". 

In this light, it is not surprising that the politics of financing the 
Community, and the debate over the introduction of own resources, split 
the positions of the member states into two main groups: those who 
'would have to pay' – that is, Germany, often supported by the 
Netherlands and Italy - and those who would become net beneficiaries, 
that is, France. The net financial result for Belgium was projected to be 
fairly neutral. If Britain ever joined under a system of own resources, she 
was likely to be "paying much more into the Community budget than she 
was ever likely to receive in the form of EC funds" , because this country 
imported more food from outside the Community than all of the Six put 
together.  

Whereas the overall positions of the key actors in the negotiations for 
financing the Community as described above are fairly predictable and 
well-known, the unusual procedure through which Regulation no. 25 
was created is not. Nor are the political implications inside the 
Community that ensued from this procedure. That narrative will unfold 
in the following sections. 


The peculiar birth of Regulation no. 25

The unusual trait surrounding the birth of the Financial Regulation is 
that it defied Community procedure to the extent that it had not 
originated as a legislative proposal in the Commission prior to the 
Council meeting where it was adopted. The Commission may actually 
never have intended to create a separate financing regulation prior to the 
60th Council meeting, beginning on 18 December 1961. By comparison, 
the Draft Proposal that became Grain Regulation no. 19 had already 
been sent out to the member states at the end of May 1961, providing 
ample time for consultation within governments.  Financial provisions 
were directly incorporated into the Draft Regulations for the CAP, and the 
Draft Grain Regulation was seen as the model for other CAP common 
market organisations.

The political preparation among the member states for the conclusion of 
the first stage of the implementation of the common market with respect 
to the CAP had been delayed during the fall of 1961, not least because 
Germany was facing elections. Hence, considering the important 
decisions to be taken by the end of 1961, the Council was ill-prepared at 
the beginning of the 60th Council meeting. The result was a meeting that 
was unusually long-drawn, confusing, and the final decisions were 
unclear on many points.  

The Council experienced several deadlocks over key issues during its 
'marathon' meeting from 18 December 1961 to 14 January 1962.  This 
was certainly also the case in relation to the provisions over financing the 
CAP. In response, an ad hoc working group was created during the 
Council meeting for reviewing the financial issues of the CAP. On 28 
December a separate proposal for financing the CAP emerged. It was 
presented as a temporary solution, namely as a three-year agreement 
whose provisions covered until 1965.  The details of how the ad hoc 
expert group worked remains obscure, but earlier (and later) sources give 
reason to believe that German hesitance towards the financial provisions 
– as well as other provisions – of the Draft Grain Regulation were 
dominating. 

The German hesitance had been twofold. Firstly, the German delegation 
had submitted a note in late November stating reluctance to accepting 
the institutional positioning of the FEOGA within the realm of the CAP 
and each of the common market organisations.  This reluctance was 
repeated in a working document that the Commission transferred to the 
Special Committee on Agriculture the day prior to the 60th Council 
meeting.  At this point, however, the Germans did not try to separate 
the financial provisions from the Draft Grain Regulation. Rather, the 
German aim was to broaden the notion of financial solidarity away from 
just the CAP to the Community in general. Secondly, on December 20, 
the German delegation submitted a proposal to the Council in which it 
showed agreement to the principle of recettes communautaires providing 
that the financial burden-sharing would still follow what was laid down 
in article 200.1 EEC.  Germany wanted to assure that its maximum 
contribution would never go above the 28 percent agreed in the EEC 
Treaty. If these sources give the essence of Germany's position, the fact 
that a Draft Financial Proposal emerged on 28 December is a partial 
victory to Germany who wanted it removed from the Draft Grain 
Regulation. It is important to notice that the Draft Financial Proposal 
had not been given any legal shape (regulation, directive or resolution) 
yet. In it, Germany did not manage to insert a maximum ceiling in the 
Draft Proposal, and it showed impossible to get this concession through 
later, as it tried to do in the final hours of the Council meeting on 13 
January 1962.  

After three weeks of exhaustive negotiations in the Council, the resulting 
text was one that both France and Germany were able to accept. France 
hinged its hopes to the fact that own resources were the stated aim of the 
Community's financing model. Germany seemed contented with two 
points. Firstly, that Community financing was now not only about the 
CAP, and, secondly, that the Financial Regulation was a temporary one. 
There had been very little time for consultation over the draft regulation 
within the participating governments before it was approved in the 
Council of Ministers. The hastened preparation of the Financial 
document also seems to have meant, at least for the German delegates, 
that they had not fully understood the legal status and implications of 
the document until after the Council meeting, as the next section will 
show. Seen in the long run, of course, an important long-term 
implication of the removal from the Draft Grain Regulation of the 
financial provisions was that there was no direct legal connection 
between the Community expenditure in the CAP regulations, and the way 
in which these regulations were to be financed. 


Conflicting interpretations of Regulation no. 25.

After the January 1962 meeting, Edgar Pisani, the French Minister for 
Agriculture, declared triumphantly on behalf of the French government 
that: 

"Les prélèvements perçus à la frontière commune sur les 
importations en provenance de pays tiers constituent une 
ressource propre de la Communauté. De ce fait, cette affectation 
des prélèvements devra être entérinée par chacun des Etats-
membres, conformément à ses règles constitutionnelles propres ce 
qui implique, dans certains pays, une approbation parlementaire. 
Les Six pays de la CEE se sont déjà engagés à mettre en oeuvre dès 
à présent la procédure prévue à l'article 201 du Traité afin que ce 
corollaire essentiel de la préférence communautaire au sein du 
marché unique puisse entrer en vigueur dès la fin de la période de 
transition".  

It was clear that the French government wanted to argue that own 
resources had now entered the acquis communautaire through Financial 
Regulation no. 25. And that the road to introducing them was 
irreversible. The formal wording of Regulation no. 25, however, did not 
make this so evident, because it only stipulated the possibility of making 
agricultural levies into own resources at the end phase. 

In Bonn, the opinion was somewhat different to the French, and a 
gradually growing resistance against Regulation no. 25 was spurred on 
by only a few people in the Federal Finance Ministry who had understood 
for quite a while that own resources would turn out to be a bad deal for 
Germany. Already in February 1960, the Finance Ministry had urged the 
Federal government to come up with a coordinated opinion about the 
destiny of the revenue from the external agricultural levies of the EEC.  
The request was overheard, and the influence of this Ministry remained 
marginal in Germany's EEC policy for still some time. Subsequently, the 
German government voted in favour of the Resolution passed by the 
Council of Ministers in December 1960 expressing political agreement to 
establishing common market organisations as the central pillar of the 
CAP, and the institution of a system of agricultural levies. The Resolution 
made reference to the possibility - not decision - that the levies could 
accrue to the Community to cover the expenditure for the CAP and 
Community activities after the end of the transition period.  Prior to the 
Resolution, there had hardly been any reactions in the German 
administration to the eventual cost of the Community. In fact, at that 
time only the French seem to have been actively engaged in getting the 
December 1960 Resolution passed. Olivier Wormser, the Director of 
Economic Affairs in the French Ministry for Foreign Affairs, was so keen 
on this that he was personally willing to meet his German colleagues to 
ascertain that the Germans did not have outstanding issues that could 
block the Resolution.  Wormser's concern for the German position was 
most likely caused by the seeming unpredictability of Werner Schwarz, 
the German Agriculture Minister, who in turn was heavily influenced by 
the domineering German farm group, the Deutsche Bauernverband.  
Wormser got his meeting with the Germans, and must have been 
satisfied with the answers that he received, because afterwards he 
triumphantly wrote in a note that the German government, 

"a enfin accepté, conformément au souhait de la France, 
l'affectation intégralement communautaire du prélèvement au 
stade définitif et, pendant la période préparatoire, l'affectation 
progressive du prélèvement à des actions communes dont il pourra 
être convenu" . 

It is important to note that a Resolution is not a legally binding 
instrument according to the Treaty, although, as a soft legal instrument 
it certainly displayed a political commitment.

Own resources were not mentioned again until they appeared in the 
Commission's Draft Grain Regulation at the end of May 1961. This 
document mentioned, as pointed out above, that the expenses from the 
various support measures at the agricultural market should be covered 
progressively by the Community. When this Commission document 
landed on the desk of Mr. Hartig, Director in the Federal Finance 
Ministry, he began a tireless crusade to halt Germany's commitment to 
the introduction of own resources. Unfortunately, apart from scattered 
archival remains, little is known about Hartig who became such a 
passionate guardian of German finances. 

In the first place, Hartig tried to persuade the Agriculture Ministry to 
submit German counter-proposals for the financing aspect of the 
Commission's May Draft Grain Regulation.  When the Agriculture 
Ministry refused to do so, an angered Hartig wrote directly to the German 
delegation in Brussels to alert them that, 

" … from German side, no position has yet been taken towards the 
financial provisions of the draft regulations (…). Accordingly there 
is no agreement between, on the one hand, the Agriculture 
Ministry, and on the other, the Federal Finance Ministry, as well as 
other relevant departments, about the financial provisions of the 
draft regulations and about any German counter-proposals".  

The Ministry for Agriculture, in turn, defended its rejection of Hartig's 
attack by referring to the likely reactions of the Deutsche Bauernverband 
– a perceived core electoral group to the government – if Germany 
negotiated over financing before it had even created the CAP: 

"If the Federal Republic agrees to a common financing already now, 
it can expect a severe criticism from German agriculture, if Federal 
funds are being used to finance interventions in other member 
states and agricultural exports (…)".  

The Agriculture Ministry, which was totally uninterested in financing, 
nonetheless assured the Federal Finance Ministry that it would prefer to 
stay with the financing model of member state contributions, and that it 
was against letting revenue from levies become own resources to finance 
the CAP. It concluded unilaterally that there was no major discrepancy 
between the opinions of the two ministries.  Of course, they were not in 
agreement. Subsequently, this disagreement internally in the German 
administration meant that no coherent position regarding the issue of 
financing or own resources emerged from the side of the German 
government prior to the important December 1961 Council meetings 
where the Commission's draft was scheduled for discussion and 
adoption.  

Still, trouble broke out when the Federal Economics and Finance 
Ministries discovered what the German delegation had agreed to in the 
60th Council meeting. Technically, a Regulation is the strongest legal 
instrument of the Community because it is binding upon the member 
states in its entirety, as well as being directly applicable in the member 
states.  In Bonn, the expectation had been a financing agreement in the 
form of a less binding legal instrument, for instance a declaration of 
intent over own resources, or another resolution.  Günther Harkort, the 
German Permanent Representative to the Community, had to account for 
why the delegation had failed at the 60th Council meeting: 

"The question of whether to give the Financial Regulation the 
shape of a Decision or a Regulation was open from the outset. Not 
until the very last stage of the discussion did the Council decide to 
choose a Regulation. With it, all the delegations agreed to an 
additional mention in the minutes of a ceiling for the contributions 
for the first three years of the transition period. (…) The Permanent 
Representatives have explicitly declared that their governments 
legally recognise the ceilings mentioned in the minutes. The 
ceilings have therefore again been guaranteed beyond doubt". 

Harkort was wrong about the guaranteed ceiling, but the German 
delegation had actually made several attempts to get such a financial 
ceiling for Germany included in the Regulation, as several documents in 
relation to the 60th Council meeting bear witness to.  Economics 
Minister Erhard therefore attempted a new procedure: he wanted to try 
and change the legal status of Regulation no. 25 before the final 
linguistic corrections and legal proving had been made, a process that 
was expected to take three to four months.  The German Permanent 
Representative therefore placed a reservation on Regulation no. 25 with 
the view of examining the text in more detail before finally approving it.  

An internal letter in the Economics Ministry explained the unusual birth 
of the Regulation. It said that because the Regulation had not been 
handled from draft and committee meeting hearings and legal services 
following the usual legislative procedure, mistakes had happened during 
the heated negotiations in Brussels.  The biggest mistake was possibly 
that Regulation no. 25 did not mention a financial ceiling for Germany's 
contribution. The note reiterated that the Federal Finance Ministry had 
demanded such a ceiling prior to the Council meeting, and had the 
Economics Ministry been present in the Council, it would also have 
insisted on this. In the Federal Finance Ministry, questions were asked 
about how such a mistake could possibly have occurred.  An 
explanation that circulated the inner circle of the ministry was that 
perhaps a linguistic mistake had happened in-between its previous 
report and the Brussels negotiations. It was noted that the report 
referred to Verordnung, which in German translates to both 'rule' in the 
general sense and 'regulation' in the Community-legal sense. Perhaps the 
German delegation had misunderstood the French documents? Whatever 
the reason for the blunder, the Economics and Finance Ministries in 
concert decided, firstly, to create an inter-ministerial investigation of the 
situation, and secondly, to push for reopening of these negotiations in 
Brussels. Neither proved successful, as we will see below. Like so many 
other inter-ministerial meetings in Adenauer's administration, this one 
ended in disagreement over how to approach the issue, and proved 
utterly unconstructive.  

On his side, Permanent Representative Harkort promised to address the 
matter in Brussels again, though he personally expressed doubts about 
this undertaking. Harkort believed – correctly as it turned out - that it 
was already too late.  When he did not achieve anything through this 
procedure, Heinz Starke, the German Finance Minister, personally went 
along to the next Council meeting.  Aided by Rolf Lahr, State Secretary 
in the German Foreign Affairs Ministry, Starke demanded the 
negotiations of Regulation no. 25 reopened, and a maximum contribution 
percentage for Germany inserted. Lahr also attempted to show that there 
had been a linguistic confusion and the German delegation had not 
initially understood the financial responsibility of the agreement.  With 
French Foreign Minister Maurice Couve de Murville chairing the meeting 
it is not surprising that the Germans could have saved themselves the 
belated effort.  

A final unsuccessful protest was delivered by State Secretary for 
Economic Affairs, Alfred Müller-Armack, at the time of approving the 
final translations of Regulation no. 25 in early April 1962.  As a 
minimum, he was allowed to insert a unilateral German statement in the 
minutes of that meeting, stating that the German government considered 
that "la déclaration insérée au procès-verbal sur la plafond de la 
contribution comme une proposition de même valeur juridique". And 
after this, the French delegation mocked the Germans by inserting 
another unilateral statement saying that Community law grants no legal 
status to unilateral statements inserted in minutes. On the basis of this 
'agreement to disagree' the members of the Council gave their 
unanimous approval to Regulation no. 25. The ministers parted with 
different interpretations of what Regulation no. 25 really meant for the 
future of the Community, in terms of the future role of levies, the end of 
the transition period, and the legal status of Germany's unilateral 
statement about a financial ceiling for contributions to the financing of 
the Community. The implications of this mess on Britain's future as a 
member state, was equally unclear at this point.


The Financial Regulation and the accession negotiations

Financial Regulation no. 25 was now part of the acquis communautaire, 
and thus part of the Community's legal body that prospect member 
states would also have to accept upon accession. During the spring 
1962, the British government was asked by the Commission and the 
French Presidency to send an official response to the new agreements. 
Off the record, it had been no secret that the British were generally 
unhappy with the Community agreements concluded on 14 January 
1962, and at the bottom line, British concerns referred to the issues of 
the financing regulation.  The official British response avoided 
commenting directly on article 201 EEC, and instead noted that Britain 
was prepared to contribute in a similar fashion as other large member 
states following the burden-sharing in article 200 EEC.  After delivering 
this message to the Community, Pierson Dixon, the leader of the British 
delegation at the official's level and British ambassador to France, noted 
that, "It was clear from remarks made outside the meeting that our 
remarks on this point had caused surprise and some alarm".  Such 
British signals, of course, went contrary to the French wish for an 
unobstructed implementation of article 201 EEC and own resources. 
Subsequent French diplomatic maneuvers aimed at ensuring that the 
link between the common market and the agricultural levies would be 
maintained also after the expiry of Regulation no. 25.  

When the enlargement negotiations resumed in early August, the 
Financial Regulation took centre-stage. Harold Macmillan, the ministerial 
leader of the British delegation, started out by acknowledging Regulation 
no. 25 as an acceptable basis for further negotiations, and therefore 
signaled a more reconciling view than the one expressed by Pierson 
Dixon before the summer. This, however, was not sufficient for some, 
and the British negotiators faced a rather hostile attempt to try and 
enforce the French view of what should happen after 1965 in this area 
led by two Frenchmen, namely Foreign Minister Maurice Couve de 
Murville, and French Commissioner Robert Marjolin.

In this connection, a meeting among the Six EEC member states in the 
evening of 4 August developed into the first direct internal confrontation 
over the way in which the accession and financing negotiations were 
handled. When the German delegation expressed reluctance towards the 
French strategy, Marjolin defied procedure for Commission competences. 
Hence, he "redrafted the French motion as a Commission proposal put 
forward by Robert Marjolin", which was a move that upset the German 
delegation so much that it chose to "reveal what had happened in the 
meeting to their British counterparts".  This helped little. In the absence 
of a clear German counter-initiative, Marjolin's paper proceeded into the 
enlargement negotiations with Britain in the early morning hours of 5 
August. At this time, most delegates had gone to bed or even collapsed, 
as happened also to the Luxembourg chairman of the meeting, Eugène 
Schaus. Edward Heath, who was the Lord Privy Seal and head of the 
British enlargement delegation, has described the events with a mix of 
disappointment and anger:

"A little before 4 a.m., the French unexpectedly demanded that we 
should sign a paper on financing the CAP, committing us to an 
interpretation of the financial regulation favourable to the French. 
(…) This action was self-evidently dilatory in intent, and I refused 
to be bounced into a snap judgment on such a complex matter. I 
was supported in this by the Germans and the Dutch, who were as 
irritated as I was. The French redrafted the document twice, but 
this only hardened my resolve. This was no way of carrying out 
such important negotiations, and I was having none of it". 

At 6.30 a.m., the negotiations had produced no result, and were 
adjourned until the autumn. The unorthodox French manouvre was 
clearly a traumatic event for the British. Ambassador Dixon noted in his 
diary that the night between 4 and 5 August marked "the end of the 
Brussels negotiations".  According to the main biographer of Macmillan, 
Dixon had been forewarned "in confidence" by a French official that 
"Couve had informed the other Five that the French were going to 'wreck' 
the negotiations by refusing any concessions over the financial 
negotiations". The Belgian Foreign Minister, Pierre Forthomme, later told 
the British that they "had done great damage by not allowing the 
financial regulation to be settled in August".  Throughout this political 
process, the Belgians showed a tendency to support the French view. 

While the Germans had not stood up to the situation in Brussels at the 
time, the incidence triggered strong reactions in the Federal Finance 
Ministry. The document that had been presented to the British in the 
early morning hours of 5 August was here referred to as the Marjolin 
Paper. It was viewed with great skepticism, as another French attempt to 
draw own resources into the acquis communautaire. Obviously, so 
German Finance experts reasoned, if the French succeeded in forcing the 
British to accept own resources, the matter would practically be settled, 
and Germany could not resist their introduction. The French clearly had 
similar expectations. 

Finance Minister Starke and his Director Hartig, however, still found 
themselves in a rather isolated position within the Federal 
administration, as if they were the only people to fully appreciate that if 
implemented in the way that the French government and Commissioner 
Marjolin wanted, Regulation no. 25 would be a poor financial deal for 
Germany. Their fears were well-grounded, considering the almost 
unchecked process whereby own resources moved into Community 
legislation: from the December 1960 Resolution to article 2 of Regulation 
no. 25 which directly accepted further elaboration of article 201 EEC. No 
one else in the German government seriously reacted against this.  The 
German government had in January 1962 most likely agreed to transfer 
the revenue of levies from imports of agricultural products from third 
countries to the Community to cover common expenditure at the stage of 
the common market. It had also accepted that agricultural exporters 
would receive subsidies for certain agricultural products in some of the 
other agreements regarding the CAP. In addition, the leaders of the 
Finance Ministry were furious over the fact that the German negotiators 
had not assured, at the very least, the insertion of a financial ceiling for 
Germany's future contribution to the EEC. 

After the night of the Marjolin Paper, Hartig addressed the matter in a 
long note intended for the Cabinet. He pointed out that, "The real 
purpose of this Paper is to undermine the use of article 201 of the EEC 
Treaty for transfers of revenue from levies from the member states to the 
Community" .  In Hartig's view, the Marjolin Paper was an attempt to 
sneak in via the back door an agreement to own resources that both the 
applicant countries and the EEC partners subsequently would have to 
accept. He described Marjolin as the Vertrauensmann, the confidant, of 
the French government in the Commission, and suggested that Marjolin 
had transgressed the 'neutrality' of Commissioners and drawn up the 
paper on the basis of instructions directly from Paris. Moreover, Hartig 
pointed out that the State Secretaries Rolf Lahr and Alfred Müller-
Armack, and the German permanent representative to the Community, 
Günther Harkort, were responsible for not standing up to the French 
move at the right time. Hartig accused his colleagues of simply not 
understanding properly the legal and financial implications of own 
resources for Germany. Hartig was disgusted by the French strategy, as 
he saw it:  

"The presentation at night of the paper and its discussion in the 
narrowest of circles belongs, of course, also the arsenal of the well-
known French negotiation tricks". 

This view was shared by Finance Minister Starke who, in a letter to the 
Chancellery, explained that:

"The attempts by the French clearly aim to commit the English to 
Regulation no. 25 from 14 January 1962 (…) There is no basis for 
the French demands of wanting to oblige extensively the other 
member states and in particular the Federal Republic as it has 
nonetheless already happened in the agricultural financing 
regulation. That demand is not legitimate".  

Clearly, the night of the Marjolin Paper was not only traumatic to the 
British, but to the Germans too. Starke insisted that the Chancellery and 
German government face up to the realities of the state of the 
Community negotiations. Starke went further, when he on 10 October 
personally presented the case to the Cabinet. He outlined carefully the 
financial prospects for Germany if article 201 EEC was introduced into 
Community legislation according to the French plan.  At the Cabinet 
meeting, Chancellor Adenauer reacted to Starke's warnings by talking 
generally about the Community and the importance of a successful 
outcome of the negotiations with Britain. The Chancellor obviously 
showed an outright disinterest in the case, as he so often did when faced 
with economics and dry technical matters. Starke did however manage to 
make the Chancellor raise the matter with the German members of the 
European Commission, and President Hallstein was mentioned as a key 
contact. Starke moreover managed to persuade his colleagues to take a 
Cabinet decision to reject the Marjolin Paper as basis for further 
accession negotiations with Britain. Representing the Economics 
Ministry at the meeting, Müller-Armack noted that he now for the first 
time saw the situation in full:

"Behind the [Marjolin] proposal is the political purpose that 
Germany will have to pay a price to France for the accession of 
England". 

Foreign Minister Schröder later thanked Starke for his warnings.  

The French, however, hardened their efforts to proceed with getting own 
resources accepted through the enlargement with Britain. Just as the 
Germans had finally realised what the French were up to, the French 
knew that convincing the Germans to accept the Financial Regulation 
was key to progress. Towards the end of October, the two French top 
officials Bernard Clappier, leader of the French enlargement negotiation 
delegation, and Director-General Olivier Wormser met in Bonn with the 
German Foreign Affairs Secretary of State, Rolf Lahr, with the explicit 
aim of persuading the Germans to accept the link between the successful 
ratification of British accession and full implementation of the Financial 
Regulation. Lahr refused, and subsequently wrote to some of his 
colleagues that he had had made it clear to the French that neither the 
Germans nor the British were willing to accept the French interpretation 
of the Financial Regulation.  Lahr's letter mentioned the word 
mißtrauen, mistrust, several times, referring to the procedure that the 
French had pushed forward. Given the value and prestige attached to the 
Financial Regulation by the French, he speculated that if the Financial 
Regulation was rejected

"the negotiations with Great Britain can enter a state of serious 
crisis". 

Engineered by Hartig, Finance Minister Starke now made a move to try 
and assure that his department be represented in all foreign affairs 
meetings where the issues of financing the CAP, own resources, and 
enlargement, were to be discussed. Starke directly warned his colleagues 
in the government that he believed that the French 

"will undoubtedly not hold back from artificially provoking a 
serious crisis in the negotiations with Great Britain". 

At this time, there was little doubt that Starke had convinced his 
colleagues in the governments about the need to assure that Britain did 
not commit to own resources via accepting the French interpretation of 
article 201 EEC and Regulation no. 25.  A new note from the Federal 
Ministry of Justice supported Starke's interpretation.  But the problem 
was still how to break it to the French without the Germans or British 
being seen as the source of an eventual crisis. Moreover, as one top 
official in the Federal Treasury recognised, "the French mostly manage to 
isolate the German delegation" in the accession negotiation. 

By mid-November, Starke asked the Brussels delegation to make the 
French aware that Germany would not accept any new negotiations 
within the EEC that did not involve a fair burden distribution for 
Community financing.  Yet a meeting at the Federal Finance Ministry a 
few days later showed that there was some uncertainty about how to 
approach the situation.  It seemed clear to leading voices in the Ministry 
that the message to the French was likely to provoke problems, possibly 
termination of the accession negotiations. They questioned whether this 
outcome was desirable, especially if Germany really was too late to avoid 
the automatic introduction of own resources by the end of the transition 
period. In that case, it was noted, British membership would give 
Germany someone to co-finance the Community with. 

From the point of view of financing, the Dutch government was facing a 
situation not unlike that of the Germans. The Dutch, however, may have 
been less inclined to confront the French directly with the financial 
question at this point for at least two reasons. Firstly, the Dutch were 
unlikely to try and endanger the full creation of the CAP by upsetting the 
French on the issue of financing.  Secondly, British accession to the 
Community promised the reward of direct access of Dutch farm products 
to British agricultural markets. Nevertheless, from the fall 1962, 
discontent was also brewing within the Dutch administration specifically 
with relation to French procedure and the Financial Regulation

"the French delegation will not yield an inch on this issue. (…) sur 
ce point la délégation française sera très très fermée". 

In a report to the Dutch Council of Minister from mid-October 1962, 
Foreign Minister Joseph Luns expressed that he was increasingly 
reluctant to accepting a model in which the Dutch would become 
permanent net financers of the Community along with Germany and 
Britain.  Within the Dutch Foreign Affairs Ministry there was a growing 
reluctance to accept that the French unilaterally was forcing such an 
unfavourable deal through the Community against the explicit wishes of 
at least three countries.  Moreover, several of the Dutchmen involved 
were beginning to view the procedure with which the situation had 
developed as a bad omen for future cooperation in the Community. The 
Dutch Permanent Representative tried for a short while to mediate 
between the French, Germans and British views, but it proved to be 
unsuccessful.  Towards the end of November, Dutch Foreign Ministry 
officials also tried contacting the Commission directly to make it revise 
the documents regarding the financing issue used in the negotiations 
with Britain.  Also this proved to be unsuccessful, not least because 
also the Commission itself was internally split over the procedure to 
follow.  

In the Commission, Marjolin insisted on upholding his Paper initially 
introduced in the enlargement negotiations – thus siding with the French 
government - whereas Hallstein and von der Groeben, at least in 
principle, tended to side with the German government. In fact, in a note 
to the other Commissioners in mid-November von der Groeben brought 
up the procedure for the issue of financing in order to try and face the 
mounting political problems surrounding the British accession 
negotiations.  He noted that among the member states, the French 
stood alone with wanting to implement article 201 EEC at the time of the 
British accession. The main reason for this resistance, so von der 
Groeben noted, was the unjust financial burden-sharing in the 
Community that the French interpretation so obviously would lead to. At 
about the same time, Hallstein made similar observations about the 
dispute among the Six over the financial regulation, not only between the 
Six and Britain. 

During December the negotiations appear to have been even more 
confusing than previously, as it was becoming unclear who needed to 
negotiate with who: was this above all an internal affair that needed to be 
solved between the Six, or could the matter be solved directly in the 
connection with the British accession negotiations?  The German and 
Dutch Foreign Affairs Ministries were now in frequent contact over this. 

In the German government, control of the situation was on the point of 
disappearing, had there ever been full control over it, in the eternal 
disputes among the ministries over competences. Foreign Affairs State 
Secretary Lahr sent his personal version of a compromise proposal to the 
four other EEC governments and the British, but not to the French. Lahr 
suggested that whatever agreement made between the Six and Britain 
during the accession negotiations should not have general validity for the 
Community afterwards.  It soon transpired, however, that Lahr had not 
consulted the rest of the German government on this. The Federal 
Finance Ministry in particular objected to both what they saw as an 
inappropriate procedure of excluding the French in this kind of 
communication, and the content of Lahr's message. Notwithstanding this 
early disagreement on procedure, this seems to have been the time when 
the German administration was ready to confront the French. During the 
week leading up to President de Gaulle's press conference, German State 
Secretary Lahr informed the French Director-General Wormser that the 
German government would definitely not accept the documents on which 
France wanted to base the financing agreement with Britain. 

"State Secretary Lahr has explicitly explained to Director Wormser 
that it won't happen this way". 



SOME FINAL REMARKS

The narrative presented above has delivered considerable new 
circumstantial evidence in support of the argument that the British 
membership application failed over the controversies over finding a 
financial model for the Community. It was a dispute not primarily 
between the Six and Britain, but within the Six. The aggressive French 
promotion of a particular financing model, though a mix of formal 
diplomatic negotiations and informal pressure, as well as the 
engagement of French Commissioner Robert Marjolin in this, created an 
increasing frustration among France's negotiating partiers. During 1962, 
Germany, and later Britain and the Netherlands, signaled serious doubts 
about accepting the French interpretation of Regulation no. 25. By the 
end of the year, the French must have been aware that the situation, as 
it had developed, was untenable. As a result, financing was an 
uncomfortable and unsettled issue both in the accession negotiations 
and among the Six by January 1963, and it seemed increasingly difficult 
for anyone to devise an exit strategy. It seems unlikely, however, that the 
leaders of the German, British or Dutch governments would have acted 
as abruptly as the French did, although none of the three seems to have 
known how to solve the problems at hand.

The narrative also tells us about the political process in the Community. 
Firstly, the incremental way in which financing was introduced lends 
evidence to the historical institutionalist assumptions about path 
dependence. Once an issue is introduced into the policy process, it 
becomes difficult to remove it. This happened with the idea of own 
resources from the time it was introduced into the December 1960 
Resolution. Secondly, it tells us about the informal politics that 
happened around the time of enlargement negotiations. The treaties do 
not prescribe a procedure for how to do enlargement, and certainly the 
sixties was a time for improvised procedures too. The French exploited 
that to the extreme in this case. 

Thirdly, the narrative tells us about the difficulty of operating with the 
'national interest' idea, as much of the literature on the Community in 
the sixties has done. The German administration was notorious for its 
turf-wars, and it meant that this member state was certainly not 
prepared to confront the Community effectively. The German acceptance 
of change in the financing model of the Community – from national 
contributions to own resources – started out as a strategic error caused 
largely by the uncoordinated domestic policy process. From this 
perspective, Adenauer's willingness to pay for the European project was 
not grounded in war-guilt, as has often been claimed.

Own resources was discussed in the early sixties only in a narrow sense. 
The wider constitutional issues, and the involvement of the European 
Parliament, did not enter the picture before the Commission's 1965 
proposals. Had the Germans (and British) accepted the introduction of 
own resources through the initial enlargement negotiations according to 
the French interpretation, it is not clear whether the EP would have  
gained an enhanced role in the budget process, as it did later.

The unsettled question of financing the Community during the 1960s 
meant that it rested on shaky foundations that threatened to collapse it 
on several occasions. In 1965, when it was time to renew Regulation no. 
25, de Gaulle was again ready to paralyse the Community's high-level 
decision-making bodies unless Germany agreed to extend Regulation no. 
25's commitment to own resources. When this resulted in yet another 
temporary agreement over financing, in 1966, the French continued to 
pursue the issue until own resources were finally introduced in the 1970 
Budget Treaty. Only then, was the French ready to accept Britain's 
membership. The budgetary package that Britain accepted then was not 
much different to the one that Britain had been presented in 1962. In 
turn this sparked a new battle for Britain, namely one of reducing its 
financial contributions to the Community. 

In the introduction, I linked the question of own resources to that of the 
giving up of national taxes to financing the Community. The research 
presented so far remains inconclusive. It is, however, interesting to note 
that in the everyday politics for creating the financial model for the 
Community in the early sixties, short-termism seemed to govern, and 
dominate over the more lofty talk about the historical and symbolic 
significance of giving up traditional national taxes to the Community. 

  Two complementary definitions of own resources are: that these constitute "a revenue 
base that was automatic in nature and not dependent on the will of the national 
authorities", and that these are "direct Community taxation". Brigid Laffan, The 
Finances of the European Union, London: Macmillan, 1997, p. 7, and Helen Wallace, 
Budgetary Politics: The Finances of the European Communities, London: George Allen 
and Unwin, 1980, p. 17.
  The EU also finances many of its activities through borrowing and lending. This goes 
in particular for the structural and development policies. For a thorough overview of the 
various financing sources of the EU, see Brigid Laffan, 1997.
  The evidence that we have is mainly based on secondary sources, for instance David 
Coombes, The Power of the Purse in the European Communities, London: Chatam House, 
PEP, 1972; Daniel Strasser, The Finances of Europe, Luxembourg: Office for Official 
Publications of the European Communities, 1981; Helen Wallace, Budgetary Politics: 
The Finances of the European Communities, London: George Allen and Unwin, 1980 …
  For more about this methodology, see Johnny Laursen in … Journal of European Integration History.
  Parts of this narrative will appear in an article in a forthcoming volume of Journal for 
European Integration History.  
  See in particular A.S. MILWARD, The Rise and Fall of a National Strategy 1945-1963, 
London, Frank Cass, 2002; O. BANGE, The EEC Crisis of 1963. Kennedy, Macmillan, de 
Gaulle and Adenauer in Conflict, Macmillan, Houndsmills, 2000; J. ELLISON, Accepting 
the Inevitable: Britain and European Integration, in: W. KAISER and G. STAERK, British 
Foreign Policy, Contracting Options, Macmillan: Houndsmills, 2000, pp.170-189; A. 
DEIGHTON and A. MILWARD (eds.), Widening, Deepening and Acceleration. The 
European Economic Community 1957-1963, Nomos, Baden-Baden, 1999; N.P. LUDLOW, 
Dealing with Britain. The Six and the First UK Application to the EEC, Cambridge U.K., 
Cambridge University Press, 1997; G. WILKES (ed.), Britain's Failure to Enter the 
European Community 1961-63. The Enlargement Negotiations and Crisis in European, 
Atlantic and Commonwealth Relations, Frank Cass, London, 1997; R. GRIFFITHS and S. 
WARD (eds.), Courting the Common Market: The First Attempt to Enlarge the European 
Community 1961-1963, Lothian Foundation Press, London, 1996; W. KAISER, Using 
Europe, Abusing the Europeans. Britain and European Integration 1945-1963, 
Macmillan, Houndsmills, 1996; W. KAISER, The Bomb and Europe. Britain, France and 
the EEC Entry Negotiations 1961-1963, in: Journal of European Integration History, vol. 
1, no. 1 (1995), pp.65-85.
  A good example of these different applications in respect to de Gaulle can be found in 
the debate in Journal of Cold War Studies, 2 (2) and (3) 2000. 
  MILWARD, Rise and Fall.
  Unpublished materials from the following historical archives have been used 
throughout this article: Algemeen Rijksarchief (ARA) in the Hague: Ministerie van 
Buitenlandse Zaken (ARA/MBZ), Ministerie van Financïen (ARA/MF), and Ministerie 
van Landbouw, Visserij en Voedselvoorziening (ARA/MLV) (depot Rijswijk); 
Bundesarchiv (BAK) in Koblenz: Bundeswirtschaftsministerium (BAK/B102), 
Bundesministerium for Ernährung, Landwirtschaft und Forsten (BAK/B116), and 
Bundesfinanzministerium (BAK/B126); Council of Ministers of the European Economic 
Community (CM2) in Brussels; Historical Archives of the European Communities 
(HAEC) in Brussels and Florence.
  For a detailed analysis of the political process leading to the creation of the CAP, see 
A.-C. KNUDSEN, Defining the Policies of the Common Agricultural Policy. A Historical 
Study, Florence, 2001 (Unpublished Ph.D. thesis). 
  Règlement no. 25 relatif au financement de la politique agricole commune, in: Journal 
Officiel des Communauté Economique Européenne, 5e année, No. 30, 20 avril 1962, 
pp.991, Luxembourg. 
  HAEC/BAC, 187/1995, 8, IV/COM(62)241, Commission, Direction Générale de la 
Concurrence, Application des dispositions de l'article 201 CEE (ressources propres) 
(Communication de M. von der Groeben), 09.08/1962.
  ARA/MLV, DGV/727, Report, Onderwerp: Financieel Reglement EEG, Kennmerk 
154966, 25.10.1962; ARA/MBZ, 996 EEG/1955-1964, 1259, 
Nota over het financieel reglement, 23.10.1962. 
  ARA/MBZ, 996 EEG/1955-1964, 114, P-V Conseil, 14-15.11.1960, Annexe II.
  LUDLOW, "British Agriculture and the Brussels Negotiations: A Problem of Trust", in 
G. WILKES (ed.), op.cit., pp. 110ff. 
  HAEC/BAC, VI/COM(61)73final, Proposition de règlement portant institution d'un 
régime de prélèvements et établissement graduel d'une organisation commune des 
marchés dans le secteur des céréales (Proposition de la Commission du Conseil), 
31.05.1961
  As Commission President Walter Hallstein famously recounted: "Forty-five separate 
meetings, 7 of them at night; a total of 137 hours of discussion, with 214 hours of 
subcommittees; 582,000 pages of documents; 3 heart attacks…", in HALLSTEIN, United 
Europe. Challenge and Opportunity, Cambridge MA, 1962, p.53. 
  CM2/1961, 51, P-V Conseil, 60, 18-22.12.1961, 29-30.12.1961, and 4-14.1.1962.
  CM2/1962, 497, VI/COM(61)215, Commission, Financement de la politique agricole 
commune (Proposition de la Commission au Conseil), 28.12.1961.
  CM2/1962, 496, T/541/61 (AGRI) Note, Délégation allemande, 23.11.1961.
  CM2/1962, 496, VI/8983/61, Commission, Direction-générale de l'Agriculture 
[DGVI], Agricoles - Financement communautaire (Document de travail), Annexed to: 
T/578/61 (AGRI), 17.12.1961. In the same file, see also R/617 (AGRI 143) and 
VI/COM(61)216final.
  CM2/1962, 496, T/586/61, Proposition de la délégation allemande
au sujet des recettes communautaires, 20.12.1961.
  CM2/1962, 498, T/75/62, Amendement relatif à la proposition de la Commission au 
sujet du financement de la politique agricole commune proposé par la délégation 
allemande, 13.12.1962.
  MBZ, 996 EEG/1955-1964, 1148, Analyse des décisions prises le 14 janvier 1962 par 
le Conseil des Ministres de la Communauté Economique Européenne.
  BAK, B102/14037, Ergebnisbericht über die Sitzung auf Abteilungsleiterebene im 
Bundesministerium für Ernährung, Landwirtschaft und Forsten am 16. Februar betr. 
Vorschläge der Europäischen Kommission zu einer gemeinsamen Agrarpolitik. 
16.02.1960.
  ARA/MLV, DGV, 440, Résolution du Conseil sur les principes à prendre pour base 
d'un système de prélèvements pour un certain nombre de produits à déterminer. In 
Verslag, 2/4, 15.02.1961.
  AMAE [Archives, Ministère des Affaires Etrangères, Paris], DE-CE [Service de 
Coopération Economique], Bd. 653, Note à l'attention du Ministre (Baumgartner), 
16.12.1960; and telegram no. 6463/7, Wormser (MAE) to Hilger van Scherpenberg 
(Director-General of the Federal Ministry of Foreign Affairs), 8.12.1960. Sources in: H. 
MÖLLER and K. HILDEBRAND (eds.), Die Bundesrepublik Deutschland und Frankreich: 
Dokumente 1949-1963, vol. 2, München, 1997.
  See for instance, KNUDSEN, Creating the Common Agricultural Policy. Story of Cereals 
Prices, in: W. LOTH (ed.), Crises and Compromises: The European Project 1963-1969, 
Nomos, Baden-Baden, 2001, pp. 131-154; and E. FREISBERG, Die Grüne Hürde 
Europas, 1965.
  AMAE, DE-CE, Bd. 653, Telegram no. 6463/7, Wormser (MAE) to van Scherpenberg 
(AA), Telegram no. 6463/7, 8.12.1960. Source reprinted in MÖLLER and HILDEBRAND 
(eds.), op.cit.
  BAK, B102/98850, Schnellbrief from Hartig (BMF) to the German delegation in the 
Comité Special, 18/21.09.1961.
  "... zu den Finanzbestimmung der Verordnungsentwürfe deutscherseits noch keine 
Stellung genommen werden können(...) Hiernach besteht zwischen dem BML einerseits 
und den BMF sowie den anderen beteiligten Ressorts anderseits keine 
Übereinstimmung über die Stellungsnahme zu den Finanzbestimmungen der 
Verordnungsentwürfe und über etwaige deutsche Gegenvorschläge" [my translation]. 
Underlining is from the original quote in BAK, B102/98850, Schnellbrief, 
18/21.09.1961.
  "Falls die Bundesrepublik schon jetzt einer gemeinsamen Finanzierung zustimmt, 
dürfte mit Sicherheit eine starke Kritik der deutsche Landwirtschaft zu erwarten sein, 
wenn mit Mitteln des Bundes die Interventionen in anderen Mitgliedsländern und der 
Export von Agrarerzeugnissen finanziert wird (...)" [my translation]. BAK, B116/7870, 
Vermerk, Betr.: Bemerkungen zu dem Vermerk des Herrn Staatssekretärs Lahr vom 6. 
November an den Herrn Bundesminister, 10.11.1961.
  For these views, see: BAK, B116/7870, Vermerk, to Schwarz from MR Schwerdtfeger, 
Betr.: Stellungsnahme der Bundesregierung zu den Vorschlägen der Kommission für 
die Entwicklung einer gemeinsamen Agrarpolitik in der EWG, 13.11.1961. 
  BAK, B102/98850, Erklärung betreffend Beiträge der Mitgliedstaaten zur 
gemeinschaftlichen Finanzierung. 15.12.61.
  Articles 189-191 EEC.
  For instance, BAK, B102/98850, letter from Eberling to Herrn Abteilungsleiter E, 
30.01.1962.
  "Die Frage, ob die Finanzregelung in Form einer Entscheidung oder einer Verordnung 
festgelegt werden sollte, war von Anfang an offen geblieben. Erst im allerletzten Stadium 
der Erörterungen hat der Rat beschlossen, die Form einer Verordnung zu wählen. Dabei 
haben alle Delegationen einem zusätzlichen Protokollvermerk über die Höchstgrenze der 
Beiträge für die ersten drei Jahre der Übergangszeit zugestimmt. (...)Die Ständigen 
Vertreter haben ausdrücklich erklärt, daß ihre Regierungen die zu Protokoll gegebene 
Limitierung als verbindlich anerkennen. Die Limitierung ist auf diese Weise nochmals 
zweifelsfrei sichergestellt" [my translation]. BAK, B102/98850, letter from Harkort to 
the Bundesministerium für Wirtschaft, 26.1.1962.
  CM2/1962, 498, T/141/62 (AGRI), Note, Objet: Extrait provisoire 
du projet de procès-verbal de la 60ème session du Conseil, 16.02.1962; and, T/75/62, 
Amendement relatif à la proposition de la Commission au 
sujet du financement de la politique agricole commune proposè par la 
délégation allemande, 13.01.1962; CM2/1962, 496, T/586/61, 
20.12.1961, cit. See also Lahr's account of the exhausting end to 
the negotiations for the Germans: R. LAHR, Zeuge von Fall und Aufstieg. 
Private Briefe, 1934-1974, Albert Knaus Verlag, Hamburg, 1981, Letter, 
18.01.1962, pp.353-355.
  BAK, B102/98850, Fernschreiben from the Economics Minister to the Brussels 
Permanent Representative, Betr.: Verordnung über die Finanzierung der gemeinsamen 
Agrarpolitik, 25.01.1962. 
  CM2/1962, 498, Extrait du Compte rendu sommaire de la 199ème réunion du 
Comite des représentants permanents, 24-26.01.1962. The German reservation was 
extended in February: CM2/1962, 498, Extrait du compte rendu sommaire de la 
réunion restreinte, tenue à l'occasion de la 202ème reunion des représentants 
permanents, 14-15.1962.
  BAK, B102/98850, Letter from Eberling to Abteilungsleiter E, 26.01.1962.
  Ibid., Letter from Eberling to Abteilungsleiter, 30.01.1962.
  Ibid., Kabinettvorlage, from the Bundesminister für Wirtschaft and Bundesminister 
des Auswärtigen Betr.: Formelle Verabschiedung der Verordnung des Rates der EWG 
über die Finanzierung der gemeinsamen Agrarpolitik, 26.03.1962; also: BAK, 
B126/8909, Kabinettsbeschluss, 28.03.1962.
  Ibid., Letter, Harkort to the Bundesministerium für Wirtschaft, 26.01.1962.
  CM2/1962, 6, P-V Conseil, restreinte, 63, 5-7.3.1962. 
  This evident in the Dutch minutes of the meeting: ARA, MF, BBV 781, 1.88 EEG/x/9, 
doss. 4124, Bijeenkomst van de raad van ministers van EEG (63e) en Euratom (48e) op 
5, 6 en 7 maart 1962.
  After discussion over whether to re-examine Regulation no. 25 according to 
Germany's wishes in the Committee of Permanent Representatives, the request was 
finally declined on 15 March 1962: BAK, B102/98850, Fernschreiben, Harkort, 280, 
16.03.1962; also, CM2/1962, 498, R/131/62, Note, 7.03.1962; and R/133/62, Extrait 
du compte rendu sommaire de la réunion restreinte tenue à l'occasion de la 205ème 
session du Comité des représentants permanents, 08.03.1962.
  CM2/1962/13, P-V Conseil, restreinte, 65, 2-4.4.1962.
  See for instance, Kaiser, Using, pp. 179-80.
  HAEC/BAC, 38/1984, 54, Cab. Mansholt, COM(63)70, Rapport au Parlement 
Européen sur l'état des negociations avec le Royaume Uni, 26.02.1963.
  Quote, Milward, Rise and Fall, p. 432.
  Milward, Rise and Fall, pp. 431-4.
  Quotes, Milward, Rise and Fall, p. 434.
  E. HEATH, The Autobiography of Edward Heath. The Course of My Life, Hodder & 
Stoughton, London, p.222.
  This and the following quotation found in R. LAMB, The Macmillan Years, 1957-1963. 
The Emerging Truth, John Murray, London, 1995, p.174.
  Quoted in LAMB, Macmillan Years, p.198.
  BAK, B126/8909, Note, Hartig to the Finance Minister, 18.08.1962.
  "Sinn und Zweck dieses Papiers ist es, den Artikel 201 des EWG-Vertrags bei seiner 
Anwendung auf die Übertragung der Abschöpfungseinnahmen von den Mitgliedstaaten 
an die Gemeinschaft zu unterhöhlen" [my translation]. BAK, BMF, B126/8909, Note, 
Hartig to the Finance Minister, Betr.: gerechge finanzielle Lastenverteilung unter 
sämtlichen EWG-Mitgliedstaaten im Falle der Übertragung der 
Abschöpfungseinnahmen an die Gemeinschaft, 18.08.1962; also, BAK, BMF, 
B126/8909, Note, Hartig to the Minister, Betr.: Beitrittsverhandlungen mit 
Grossbritannien; Hier: Verordnung Nr. 25, 3.10.1962. 
  "Die nächtliche Vorlegung des Papiers und seine Erörterung im engsten Kreise 
gehören natürlich ebenfalls zu dem Arsenal der bekannten Kniffe französischer 
Verhandlungsführung" [my translation]. BAK, BMF, B126/8909, Note, Hartig to the 
Finance Minister, 18.08.1962, cit.
  "Das Bestreben der Franzosen ging offensichtlich dahin, nicht nur die Engländer auf 
die Verordnung Nr. 25 vom 14. Januar 1962 zu verpflichten (…) Für das Verlangen 
Frankreichs, die anderen Mitgliedstaaten und insbesondere die Bundesrepublik 
weitergehend pflichten zu wollen, als dies in der Agrarfinanzierungsverordnung ohnehin 
schon geschen ist, fehlt jede Grundlage. Das Verlangen ist nicht berechtigt" [my 
translation]. BAK, B102/98851, Letter from the Bundesminister der Finanzen to the 
Statssekretär des Bundeskanzleramtes, Betr.: Gerechte finanzielle Lastenverteilung 
unter sämtlichen EWG-Mitgliedstaaten im Falle der Übertragung der 
Abschöpfungseinnahmen an die Gemeinschaft; hier: Verhandlungen über den Beitritt 
Grossbritanniens. Bezug: Beschluss des Bundeskabinetts vom 28. März 1962, 
29.09.1962.
  BAK, B126/8909, Auszug über die 50. Kabinettsitzung der Bundesregierung am 10. 
Oktober 1962.
  "Hinter dem Vorschlage stehe die politische Absicht, dass Deutschland für den 
Beitritt Englands an Frankreich einen Preis bezahlen solle" [my translation]. 
  BAK, B126/8909, Letter from Schröder to Starke. 20.10.1962.
  BAK, B102/98851, Letter from Lahr to Hettlage, Müller-Armack and Hüttebräuker, 
23.10.1962.
  "Die Verhandlungen mit Grossbritannien kann … in eine ernste Krise geraten" [my 
translation].
  "[Zweifellos wird Frankreich zu diesem Zweck auch davon nicht zurückschrecken], 
eine ernste Krise in den Verhandlungen mit Grossbritannien künstlich zu provozieren" 
[my translation]. BAK, B126/8909, Letter from Starke (via Min.Rat Hartig) to the 
Ministers AA, BMJ, BMWi and BML, November 1962. [Day of the month not specified]. 
  For instance, BAK, B102/98851, Letter from Eberling to Abteilungsleiter E, Betr.: 
Auslegung der Verordnung über die Finanzierung der gemiensamen Agrarpolitik im 
Zusammenhang mit dem Beitritt Grossbritanniens zur EWG, 13.11.1962. 
  BAK, B102/98851, Schnellbrief, From the Bundesminister der Finanzen to the 
Bundesminister der Auswärtigen (- der Justitz, - Wirtschaft, und - Landwirtschaft). 
09.11.1962.
  "[Erfahrungsgemäss gelingt e]s den Franzosen dann meistens, die deutsche 
Delegation zu isolieren" [my tranlation]. BAK, B126/8909, Letter from Feldmann to 
Hartig, 9.11.1962.
  BAK, B102/98851, Fernschreiben, from Starke to the Brussels Permanent 
Representation, 15.11.1962.
  BAK, B126/8909, Vermerk über die Hausbesprechung zu finanziellen, rechtlichen 
und wirtschaftlichen Fragen der EWG-Verordnung Nr. 25. 20.11.1962.
  BAK, B126/8910, Note, Hartig, Betr.: Beitrittsverhandlungen mit Grossbritannien, 
18.01.1963.
  MILWARD, Rise and Fall, p.437; also J.H. MOLEGRAAF, Boeren in Brussel, Nederland 
en het Gemeenschappelijk Europees Landbouwbeleid 1958-1971, unpublished Ph.D., 
Utrecht, 1999.
  "de franse delegatie zal op dit punt geen handbreed wijken. … sur ce point la 
delegation francaise sera tres tres ferme" [my translation, note that the source is a 
telegramme, and there are no accents in the French language in the original, nor any 
capital letters], ARA/MBZ, 996 EEG/1955-1964, 1259, Ontvangen Codebericht, no. 
9452, from the Paris Embassy to the MBZ, 28.09.1962. Another document showing 
Dutch support for the German view of the financing regulation and the British 
accession negotiations: ARA/MBZ, 996 EEG/1955-1964, 1259, Memorandum, no. 919, 
Onderwerp: Financieel Reglement, 12.10.1962.
  ARA, MLV/DGV, 727, Report, Kennmerk 154966, from the Foreign Minister to the 
Minister-President, Chairman of the Raad van Ministers, Onderwerp: Financieel 
Reglement EEG, 25.10.1962; also, ARA/MBZ, 996 EEG/1955-1964, 1259, Nota over 
het financieel reglement, 23.10.1962.
  MBZ, Code 996 EEG/1955-1964, 1259, Memorandum, 990/62, Onderwerp: Brits 
standpunt t.o.v. EEG.Verordening No. 25 inz. financiering van de gemeenschappelijk 
landbouwbeleid, 06.11.1962.
  BAK, B102/98851, Fernschreiben, from Harkort to BMW, BML, BMF. Betr.: 
Beitrittsverhandlungen mit Grossbritannien; Hier: Verordnung nr. 25 über die 
Finanzierung der Gemeinsamen Agrarpolitik, 10.11.62.
  ARA/MBZ, 996 EEG/1955-1964, 1259, Memorandum, No. 1176, Onderwerp: 
Financieel Reglement voor de Landbouw, 23.11.1962.
  Hans van der Groeben has made it clear in print that he was not always in agreement 
with the regulations passed in the Commission concerning financing, and that he and 
for instance Hallstein often disagreed over this issue. See, GROEBEN, Walter Hallstein 
as President of the Commission, in: W. LOTH, W. WALLACE and W. WESSELS (eds.), 
Walter Hallstein. Der Vergessene Europäer, Europa Union Verlag, Bonn, 1995. 
  HAEC/BAC, 187/1995, 8, 9763/IV/62-D, Mitteilung des Herrn von der Groeben an 
die Kommission Mitteilung des Herrn von der Groeben an die Kommission [probable 
date: 16.11.1962].
  LUDLOW, Dealing, p.197.
  BAK, B102/98851, Letter, from the German delegation in Brussels to Müller-Armack. 
Betr.: Beitrittsverhandlungen mit Grossbritannien; Hier: Verordnung Nr. 25 über die 
Finanzierung der gemeinsamen Agrarpolitik, 26.11.62; and, Schnellbrief, from Lahr to 
the Statssekretär des Bundesministeriums der Finanzen, 14.12.1962.
  ARA/MBZ, 996 EEG/1955-1964, 1259, Letter, from Lahr to van Houten (Sts., MBZ), 
St.S1097/62, F/322/63, 29.12.1962. This letter refers to a series of correspondance 
between the German and the Dutch Foreign Ministries about the difficulties 
surrounding the issue of financing the Community and the accession negotiations with 
Britain, especially in relation to the French attempt of show of force towards both 
Britian and the other five EEC member states.
  BAK, B102/99851, Letter from Eberling to Müller-Armack, Betr.: Finanzierung der 
gemeinsamen Agrarpolitik in der EWG, insbesondere im Zusammenhang mit den 
Verhandlungen über den Beitritt Grossbritanniens zur EWG, 07.01.1963. 
  "Staatssekretär Lahr hat Generaldirektor Wormser unzweideutig erklärt, daß es so 
nicht geht" [my translation]. BAK, B126/8910, Note, Hartig, Betr.: 
Beitrittsverhandlungen mit Grossbritannien; Hier: Finanzierungsfragen aus Art. 2 abs. 
1 der EWG-Verordnung Nr. 25, 18.01.1963; This may be the same event referred to by 
Macmillan's biographer, based on British Foreign Office records, described as when 
"Lahr… proposed to tackle Wormser", LAMB, Macmillan Years, p. 198.


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