The world that faced Margaret Thatcher on 4 May 1979 was very different from the one she had surveyed when becoming Conservative Party leader four years earlier. As Britain's newly elected Prime Minister, one of the first briefings she received from the Cabinet Secretary that afternoon concerned ‘European Issues’, and it laid out the great ‘challenge and opportunity’ in Europe that faced the new government in May 1979. The challenge lay in the ‘number of difficult negotiating objectives’ left unresolved from the previous Labour government, despite the renegotiation of 1975. The opportunity came from the ‘greater commitment to Europe expressed publicly’ by the Tory Party, which would ‘ensure a more sympathetic hearing’ from the other Europeans.

Whilst welcoming the opportunities, Thatcher relished above all else the challenge. When the briefing indicated that ‘in the last two or three years, the mood of the Community has changed and there is less emphasis on supranationalism, and a greater readiness to accommodate different national requirements’, she scribbled ‘good’ in the margins. When advised that ‘The last thing we should do is to give the impression that the United Kingdom is now a soft touch, or to arouse exaggerated expectations’, she wrote ‘agreed’. For her first meeting with a foreign head of government, Thatcher hosted Helmut Schmidt, the West German Chancellor. It fell only days after her ascent to the Prime Ministership and had been arranged by the previous Labour government prior to the General Election. Speaking at the dinner in his honour on 10 May 1979, she warned him, ‘It has been suggested by some people in this country that I and my Government will be a “soft touch” in the Community. In case such a rumour may have reached your ears, Mr Chancellor, … it is only fair that I should advise you frankly to dismiss it. … I intend to be very discriminating in judging what are British interests and I shall be resolute in defending them’. Britain once again had a Conservative government, but it was not the pro-European government of Ted Heath.