page_title: Premiership of Margaret Thatcher
section_title: European integration
hierarchical_section_title: Premiership of Margaret Thatcher / Third term (1987–1990) / Foreign affairs / European integration
caption_attribution_description: For documentary purposes the German Federal Archive often retained the original image captions, which may be erroneous, biased, obsolete or politically extreme. 29-30.6.87 Tagung des Europäischen Rates unter Vorsitz des belgischen Ministerpräsidenten Wilfried Martens mit Bundeskanzler Kohl und Bundesminister im Auswärtigen Amt Hans-Dietrich Genscher in Brüssel. 29.6.1987 Familienfoto der Regierungschefs und der Aussenminister anläßlich eines Mittagsessens, gegeben von König Baudouin, im Königspalast.
context_page_description: Margaret Thatcher became Prime Minister of the United Kingdom on 4 May 1979 and served until 28 November 1990. She was elected to the position after leading the British Conservative Party since 1975.
  In domestic affairs, Thatcher is best known for her sweeping policies concerning the affairs of the economy, including the privatisation of most nationalised industries. In foreign policy, she fought a war against Argentina and played a key role with US President Ronald Reagan and Soviet leader Mikhail Gorbachev in ending the Cold War. By the late 1980s, she would alienate several senior members of her Cabinet with her opposition to greater economic integration into the European Community. She also alienated many Conservative voters and members of Parliament with the imposition of a local poll tax. As her support ebbed away, she was challenged for the Conservative Party leadership and persuaded by Cabinet to withdraw from the second round of voting—ending her eleven-year tenure as Prime Minister.
  Although she remains a domestically polarising figure, historians and political scientists generally rank Thatcher as an above-average Prime Minister.
context_section_description: At Bruges, Belgium, in 1988, Thatcher made a speech in which she outlined her opposition to proposals from the European Community for a federal structure and increasing centralisation of decision-making. Although she had supported British membership, Thatcher believed that the role of the EC should be limited to ensuring free trade and effective competition, and feared that new EC regulations would reverse the changes she was making in the UK, stating that she had "not successfully rolled back the frontiers of the state in Britain" only to see her reforms undermined by "a European super-state exercising a new dominance from Brussels". She was specifically against Economic and Monetary Union, through which a single currency would replace national currencies, and for which the EC was making preparations. The speech caused an outcry from other European leaders, and exposed for the first time the deep split that was emerging over European policy inside her Conservative Party.
  In 1987–88 Chancellor Nigel Lawson had been following a policy of "shadowing the deutschmark", i.e. cutting interest rates and selling pounds to try to prevent the pound rising above DM 3.00 (as a substitute for joining the European Exchange Rate Mechanism which Thatcher had vetoed in 1985); in an interview for the Financial Times, in November 1987, Thatcher claimed not to have been told of this and did not approve. By 1989 the economy was suffering from high interest rates (they peaked at 15% in autumn 1989) imposed to temper a potentially unsustainable boom, which she believed had been exacerbated by Lawson's policies. Thatcher's popularity once again declined.
  At a meeting before the European Community summit in Madrid in June 1989, Lawson and Foreign Secretary Geoffrey Howe forced Thatcher to agree to the circumstances under which she would join the Exchange Rate Mechanism. At the meeting, they both threatened they would resign if their demands were not met. Thatcher responded by moving Howe to Leader of the House of Commons (despite giving him the title Deputy Prime Minister he was now effectively removed from decision-making over Europe) and by listening more to her adviser Sir Alan Walters on economic matters. Lawson resigned that October, feeling that Thatcher had undermined him.
caption: The 1987 meeting of the European Council. (Thatcher stands in front, sixth from left.)
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