Reunion in Brussels

Europe's progress toward economic unity, halted for eight months by France's boycott of the top councils of the Common Market, got back on the tracks last week. French Foreign Minister Maurice Couve de Murville returned to Common Market headquarters in Brussels and once more sat down with the ministerial envoys of West Germany, Italy, Belgium, The Netherlands and Luxembourg in the mahogany-paneled Salle d'Europe.

Tenuous Compromise. The French presence in Brussels had been arranged six weeks earlier in Luxembourg by a compromise in which France and the other five EEC countries somewhat tenuously agreed to try to smooth over their rift without removing its causes. Still, before the European Economic Community can strip away the remaining tariff barriers to farm and industrial trade among its six members, it must wind its way through a maze of outstanding issues. Foremost among them:

P: FARM FINANCING: A common farm policy requires the Six to tax imports from the rest of the world and use the money thus made to subsidize their own farmers. Part of the subsidy is now paid out by the EEC treasury, part by the individual countries. The EEC commission's proposals to shift to a wholly EEC-controlled subsidy system was the immediate cause of the French boycott. Now a complicated compromise is in the making to pacify Charles de Gaulle, who insists on retaining national control of the funds.

P: AGRICULTURAL PRICES: To let farm produce move duty-free inside the EEC, the Six must first agree on common prices. The old trouble is that French farmers produce food cheaply, while West German farmers, handicapped by a colder climate and pint-sized landholdings, produce inefficiently and expensively. The French--and in this specific case they are on the side of the angels--have long insisted on a low common price. The Germans, for internal political reasons, argue for a higher price reflecting their higher costs and lavish support of German farmers. Still, the ministers have set an optimistic July 1966 deadline for agreement on the remaining unsettled prices of sugar, rice, beef and milk.

P: KENNEDY ROUND: The Geneva tariff negotiations, originally proposed by President Kennedy, and aimed at history's deepest international tariff cuts, have been stalled by the French boycott of EEC. The bargaining cannot resume until the EEC fixes its farm prices, because the U.S. insists that farm as well as industrial products be included. Europe is under pressure to move swiftly, because the law enabling the U.S. to negotiate expires July 1, 1967. Meantime, the Germans insist that they cannot afford to pay the EEC treasury big farm subsidies, which will chiefly enrich French farmers, unless their industries can profit from Kennedy Round tariff reductions. Moreover, all Six, plus Britain and Switzerland, insist that the U.S. must scrap its present method of setting certain import duties before the Kennedy Round resumes.

Revolving Boss. Beyond these stumbling blocks lie squabbles over everything from harmonizing taxes on business to a joint policy on monopolies. France refuses to join in a common credit policy toward the Iron Curtain countries, since such limits on her freedom would cut across De Gaulle's aim of wooing Eastern Europe. France has been striving to oust EEC Commission President Walter Hallstein, a persistent foe of De Gaulle's narrow nationalist design for Europe. With the present nine-man EEC commission shortly due to be consolidated with the Coal and Steel Community and Euratom into a single 14-man executive body, the other five nations have concocted a deal to keep Hallstein on the job two years more. After that, the commission presidency would rotate as the French demand, allowing West German Hallstein to retire gracefully.

As the ministers adjourned, the Common Market's problems looked so complex that only a compromise covering most of them in one package seemed likely to cut through the tangle. But at last all the Common Market members were now willing to make the effort. The EEC ministers agreed to meet four more times within five weeks, hoping to stitch that big package together by July or August.

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