DATE=3/18/02

TYPE=CORRESPONDENT REPORT

TITLE=CQ BRITAIN / THATCHER (L-O)

NUMBER=2-287688

BYLINE=MICHAEL DRUDGE

DATELINE=LONDON

CONTENT=

/// RE-ISSUING TO DELETE WORD ALLIANCE FROM GRAF ONE, NO OTHER CHANGES ///

INTRO: Former British Prime Minister Margaret Thatcher says it is time for Britain to begin withdrawing from the European Union. V-O-A's Michael Drudge in London reports she makes her case in a new book.

TEXT: Mrs. Thatcher says the European Union is "fundamentally unreformable" and Britain should start pulling out of the 15-nation organization.

The former prime minister says most of the world's biggest problems during the past century can be traced to mainland Europe, most notably Nazism and Marxism.

The 76-year-old Mrs. Thatcher makes her arguments in a new book titled "Statecraft." The Times newspaper is serializing the book.

She says the opposition Conservative Party, which she led from 1979 through 1990, should undertake "fundamental renegotiation" of Britain's relations with the European Union if it returns to power.

As a first step, Mrs. Thatcher says Britain should pull out of the E-U common agriculture and fisheries policies.

As for trade, Mrs. Thatcher says Britain should join the United States, Canada, and Mexico in the North American Free Trade Agreement.

The Times reports that Mrs. Thatcher's views will embarrass the Conservative Party leader, Iain Duncan Smith, who has attempted to negotiate a party truce over Europe.

Conservatives are particularly divided over whether Britain should join the European single currency, the euro.

Mr. Smith has lately steered the Conservatives toward criticizing the government of Prime Minster Tony Blair over accusations of corruption and poor delivery of public services.

The Times predicts that Mr. Blair will challenge Mr. Smith to disavow the Thatcher comments at their next debate in parliament.

A spokesman for Mr. Smith declined to comment on the Thatcher book, but he said it would be read with interest. (SIGNED)

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