The European Commission's proposals
On 30 May 1980, the Foreign Affairs Council of the Nine instructed the Commission to submit, no later than 30 June 1981, specific proposals on structural reform of the budget and Community policies. The purpose of that mandate was to allow the EEC to emerge from the political crisis generated in particular by the British claims concerning the United Kingdom’s contribution to the Community Budget.
On 24 June 1981, the Commission President, Gaston Thorn, submitted a report to the Heads of State or Government that was to give a new impulse to European integration by creating a ‘Second Generation Europe’. The report was in three parts. It proposed a reform of budgetary expenditure, a redirection of the common agricultural policy (CAP) and the development of common policies.
On 29-30 June 1981, at the European Council in Luxembourg, an ad hoc group was set up to deal with the issue of the Community’s mandate. However, the budget issue and the UK contribution quickly monopolised the discussions, and the task of implementing the Commission proposals came to a standstill.