European leaders knuckle down to save the Community

As the European Community's crucial two-day summit opened here Monday, cautious optimism turned quickly to pessimism as an intransigent British Prime Minister Margaret Thatcher stood firm on budgetary and agricultural issues.

At one point, the negotiation developed into a shouting match when French President Francois Mitterrand, chairing the meeting, sharply told Mrs. Thatcher: ''I thought we had come here to make efforts.''

One British official said the proposed agricultural agreement still ''has some snakes in it.'' British officials also were saying that proposals so far tabled on the overall budget, including the size of Britain's rebate, were inadequate.

Other European officials here are disappointed because of earlier indications that momentum for a settlement was building. So many warnings that this summit represented 'the last chance'' or ''the hour of truth,'' have been issued that the danger of failure seemed to have spurred action. If there is no agreement, the doomsayers' argument goes, the Community will be bankrupt by the end of the year, its spirit broken as much as its bankbook.

One West German spokesman commented: ''It all hinges on Mrs. Thatcher. She is completely unrepentant and inflexible.''

Denmark's Prime Minister Poul Schluter added: ''It looks as if Mrs. Thatcher has extremely little will to make the necessary concessions. The British negotiation point is very disappointing and not very European.''

In trying to avoid a disaster, agricultural ministers had worked over the weekend putting the final touches on a tentative agreement controlling farm spending. At the same time, the French, holding the Community's six-month presidency, circulated a paper of proposals which diplomats here said could be the basis of an overall accord.

The French paper recognizes that Britain should pay less money to the Community. It also reaffirms French willigness to hold down future increases in the EC budget. In an attempt to negotiate the outstanding issues, Mr. Mitterrand has tried to isolate the British. But for the moment, even with nine against one , the Iron Lady - Mrs. Thatcher - is showing few signs that she will give in.

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