Major Faces Tough Bout With Party Over Maastricht

EUROPEAN UNITY

A POLITICALLY weakened Prime Minister John Major will call for changes to the Maastricht Treaty and to Europe's currency arrangements when he chairs an emergency summit of European Community leaders in London early next month.

But the present chairman of the EC council of ministers is bound to run into opposition from powerful EC countries, led by Germany, eager to cite the "yes" vote in Sunday's French referendum as a reason for moving swiftly to ratify the treaty. Those countries include France, the Netherlands, Italy, and Belgium, British officials forecast yesterday.

Mr. Major and his senior ministers appeared certain, however, that the EC will be unable to forge ahead with ratification of Maastricht while Denmark opposes the accord and Britain's House of Commons has yet to vote on it.

In a newspaper article yesterday the prime minister called for a "profound look" at Europe at the special summit. It was time to "reflect hard" on the future direction of the EC, he wrote.

Norman Lamont, chancellor of the exchequer, and Foreign Secretary Douglas Hurd, expressed similar sentiments. Mr. Lamont said the narrow "yes" vote in France showed it was time for European governments to "pause on the road to integration and consider the wishes of their peoples." He spoke as the pound continued to slide against the German mark and the dollar.

Mr. Hurd insisted in a radio interview yesterday that the provisions of the Maastricht Treaty itself would have to be changed. "A way must be found for the EC to go forward, but right across Europe anxieties have surfaced, and these have to be addressed," he said.

One government minister said privately: "Mr. Major is likely to find himself caught between European leaders clamoring unreasonably for swift treaty ratification and Conservative MPs determined to block a parliamentary bill proposing that Britain ratify Maastricht."

London-based analysts agreed that Major's credibility in his own party has been heavily dented by Britain's forced devaluation of the pound last week and withdrawal from the European exchange rate mechanism (ERM).

Roger Bootle, chief economist at Midland Montagu, said strong anti-Maastricht sentiment, fueled by the humiliation of having to devalue the pound, meant that when EC leaders meet in London next month Major will be forced to demand basic changes in Europe's currency arrangements.

Major's position is threatened also by a deepening split within the Conservative Party over European integration.

Opponents of Maastricht have been offered renewed leadership by Baroness Margaret Thatcher, the former prime minister, who said over the weekend that there would be "chaos and resentment" if Major did not make a "policy reversal" over Maastricht "as complete as his reversal over the ERM."

Government parliamentary managers, preparing for an emergency Commons session this Thursday to debate sterling devaluation and withdrawal from the ERM, said there was no chance of Major placing a ratification bill before Parliament in the immediate future.

Conservative back-benchers opposed to Maastricht are forecasting "trench warfare" for Major if on Thursday he tries to argue the merits of Maastricht.

"It must be obvious to Major that he would not have a majority in the House of Commons for getting the treaty through," says Nicholas Budgeon, an influential Conservative Eurosceptic on the government benches. A British opinion poll on Sunday showed a two-to-one majority against Maastricht.

THE political difficulties facing Major appeared to increase yesterday when the exchequer's Lamont crossed swords with Major on the need for an early cut in British interest rates to boost the economy. Within hours of Major saying that Britain's battle to achieve zero inflation must continue, Lamont hinted of an interest-rate cut.

Significantly, in the aftermath of last week's ERM debacle, Lamont, who was heavily criticized over his handling of last week's run on the pound, has begun speaking of the need for a "British economic policy."

Pressure on Major to sanction an interest-rate cut as part of a "Britain first" approach to the economy is likely to increase in the run-up to the annual conference of the Conservative Party, which is also scheduled for early next month.

Conservative MPs tend to agree that the French referendum outcome faces Major with an acute problem of parliamentary arithmetic. Before the collapse of the pound, Conservative opponents of the Maastricht Treaty numbered between 30 and 40 in a House of Commons in which the government has a clear majority of only 21 seats. One senior government supporter said the number of Euroskeptics had "probably doubled" in the last few days.

Also, the opposition Labour Party leadership has made it plain that it will oppose Maastricht so long as it contains clauses permitting Britain to opt out of EC employment legislation and a commitment to a single European currency.

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