The Edinburgh Summit: How Major found the cube route to success

JOHN MAJOR paved the way for his Edinburgh success with a carefully prepared gamble. The Rubik's Cube of interlocking issues was to be solved by tackling all the problems at once.

The UK presidency had talked up the possibility of a summit failure perhaps the better to snatch victory from the jaws of defeat. Although deadlock was always a possibility, a senior official confided even before the delegates had arrived, 'everyone is aware that the stakes are high: that without Denmark there will be no treaty'.

The implication was that the 12 could not afford not to cut a deal. Mr Major had merely to stand his ground and remember his own maxim that success depends on not blinking when the negotiation gets tough. A deal on Denmark and ratification of the Maastricht treaty was the key that would unlock a deal on future financing.

The Community's poorest members - Spain, Portugal, Ireland and Greece - had, in turn, let it be known that if their demands for an increase in development spending and the creation of a special cohesion fund for infrastructure and environmental projects were satisfied, they would not block the start of formal negotiations on opening the Community to new members.

An accord on Denmark, though legally complicated, was politically not too difficult to achieve. Many countries were, however, anxious to tie Britain down to a specific ratification date. After some wrangling they were finally persuaded by Mr Major's assurances that he would speed the bill through Parliament as quickly as possible.

The Prime Minister was thus able to go into the second day emboldened by the knowledge that he had already scored what was probably the summit's most significant victory. One down, one to go.

Saturday began with a head-banging session of bilateral meetings: a tactic the Dutch Prime Minister, Ruud Lubbers, had used a year ago at Maastricht to force his collegues to show the strength of their negotiating hands.

The key player, the Spanish Prime Minister, Felipe Gonzalez, was going to be the hardest to win round. He, on behalf of the so-called Cohesion Four, was leading a charge for a budget increase of 1.32 per cent of Community wealth by 1999. More importantly, that money should include a doubling of the money devoted to development spending over that period and a cohesion fund of 15bn ecus.

Mr Major's allies were the Community's other paymasters, especially Germany, the Netherlands and, to some extent, France. The initial session ended acrimoniously with Mr Gonzalez threatening to walk out.

Lunch was a sombre affair. Jacques Delors, the European Commission president, took the opportunity to remind everybody of the continued turbulence in the currency markets and the likely effects of a divisive EC split over money. Chancellor Kohl then rolled the first dice, suggesting 1.27 per cent of GNP as a workable compromise and talks began on the basis of that figure.

To get there required squeezing the budget lines for research and development, and administrative costs, and reducing the contingency fund, which France may have hoped to draw on at some later date to help farmers hit by falling prices as a result of the recent agricultural reforms and Gatt deal. France started to squeal, and the Benelux countries, who host the main institutions, complained.

By now it was dark and the summit was already hours over schedule. 'We are in no hurry,' a Spanish spokesman told a news-starved press pack, who wearily cancelled their flights home.

The brinkmanship began in earnest. As positions neared, Italy threatened to sabotage progress by resisting a change in the way the EC raises its money rather than spends it, which would have redressed a recognised imbalance for Spain but left Rome paying more. Tempers frayed, experts were sent to draw up reworked proposals. The heads of government amused themselves by going back over a deal on the siting arrangements of the EC's main insititutions.

Suddenly, the Netherlands raised an objection: it must be made clear the accord did not prejudge any future agreement as to the siting of the EC's embryonic central bank. To block a deal on sites would wipe out an agreement to increase Germany's representation in the European parliament to take into account the newly assimulated eastern German regions. 'This is not for discussion. Otherwise I walk out and you can forget about your package,' said Chancellor Kohl.

No one could afford to let Mr Kohl go. Europe's senior statesman, Francois Mitterrand, 76, and sick, had left the talks to rest. Mr Delors, his dauphin, Ruud Lubbers, and Mr Kohl took up the reins to broker a final compromise between the UK presidency and Spain.

From there the sides of the Rubik Cube started to turn to solid colour. Mr Major agreed to meet the demands of the Cohesion Four almost in full. France got a declaration on the importance of agricultural spending, which could prove a useful bargaining chip in the upcoming Gatt negotiations. Britain kept its rebate, which will certainly lessen the impact of the relatively modest growth in EC contributions that the budget increase implies. And Germany, well, Germany got its 18 extra MEPs.

But almost unnoticed in the detail of the package that so pleased the Cohesion Four is the fact that the lion's share of the increased development spending will go to areas struggling to recover from industrial decline. All five formerly East German Lander fall into this category. In proportional terms, the Edinburgh budget deal is worth more to Germany than the cohesion fund is worth to Spain, Greece, Ireland or Portugal.

Leading article, page 18

Andrew Marr, page 19