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URGENT EEC Summit Concludes Without Agreement

December 5, 1987

COPENHAGEN, Denmark (AP) _ The European Economic Community summit meeting ended today in discord over agricultural subsidies, officials said.

Failure to reach agreement during the two-day meeting means the 12-nation trade bloc has no budget beginning Jan. 1.

The leaders announced an emergency summit will be held Feb. 11-12 in Brussels in a new bid to reach agreement.

The summit failure was widely regarded as tarnishing the international status of the EEC and setting back its grand plan for creating a more united Western Europe.

The community will have to operate on a month-to-month basis financially from next month.

Before the meeting’s end, some leaders had acknowledged that failure would undermine Western Europe’s influence just as the superpowers are preparing an historic summit meeting in Washington.

Earlier today, West Germany, France and Italy, rejected a compromise draft on subsidies drawn up by Denmark overnight.

Many EEC programs, including those covering regional grants and science, will suffer from the lack of a budget.

Frugal Britain, which had been leading demands for stringent spending controls as a condition for providing new funding for the near-bankrupt EEC, had cautiously welcomed the Danish proposal.

Officials said Ireland, Belgium and tiny Luxembourg were generally supportive of the Danish draft.

But the poorer members - Spain, Portugal and Greece - were unhappy at the watering down of a proposal to increase special funds that would help them compete with the more industrialized EEC countries before 1992. That is when all trade barriers are supposed to fall in the 12-nation trade bloc.

″It is a one-sided and unacceptable paper,″ West German government spokesman Friedhelm Ost told reporters as the leaders began a second day of argument. ″We are ready to accept a compromise, but we are not prepared to suffer endlessly.″

France and West Germany both have electorally important blocs of small-time farmers. Italy would have to pay more under proposals to levy contributions based partly on gross national product.

British Prime Minister Margaret Thatcher was returning home to prepare for a visit by Soviet leader Mikhail Gorbachev, who will meet with her at an air base in England on Monday en route to the superpower summit in Washington.

The compromise suggested by Denmark stipulated new limits on grain production, among the most expensive crops, and on funds for poorer members. The draft also left untouched - to West German anger - a rebate for Britain on its contribution. Britain negotiated the rebate in 1984.

Ost complained that the Danish proposal either ignored or gave insufficient weight to West German suggestions for curbing farm spending, including a program that would pay farmers to keep land out of production.

Britain, which has few farmers, wants every commodity curbed by a system of automatic subsidy cut-offs when production exceeds agreed quotas.

The dispute clouded Friday night’s discussions on the chaos in world financial markets, the imminent superpower summit and grander plans for a trade barrier-free, closely knit Western Europe by 1992.

″The point is really what kind of a community do we want,″ said Claus Ehlermann, spokesman for the European Commission, the Common Market’s administrative body.

″Is this all a budget exercise or do we want to lay down foundations for European union, which is ... the goal?″

Financial disagreement was not the only problem.

On Friday night, about 500 left-wing protesters set off firecrackers and hurled rocks outside the converted 18th century warehouse where the leaders met. Demonstrators shouted slogans denouncing the Common Market and capitalism.

Police blocked them from entering the building, but officers were forced to take cover from a shower of stones and bottles. Police said there were no arrests.

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