WORLD, Page 40WESTERN EUROPECharging AheadWatch out, Washington and Moscow. Flush with money andincreasingly unified, Western Europe is marching to itsown drummerBy Christopher Redman/PARIS
"We often hear that there is just one Europe," Lech Walesa told
his hosts after arriving in West Germany last week to seek
financial support for Poland's own version of perestroika. "Well,
I just looked out the window from the plane, and there is in fact
just one Europe." From aloft the Solidarity leader could not, of
course, see the very real partition of Europe into East and West.
Nor could he detect the many barriers that still separate the
countries of Western Europe. But what Walesa did discern is that
Europe is changing fast: ideological divisions are disappearing,
borders are blurring, and the Continent is coming together in ways
that are forcing the rest of the world to take notice.
In making Bonn his first capital of call since the formation
of Poland's democratically elected government, Walesa was drawing
attention to a dramatic geopolitical shift: Western Europe is now
the brightest beacon for East bloc countries as they emerge
blinking from the long shadow of Soviet suzerainty. Walesa's
mission also underscored a larger truth. In ways large and small,
Western Europe is becoming a player in its own right on the world
stage, increasingly less reliant on the U.S. and less cowed by the
Soviet Union at the same time as it evolves into a more unified
community. Never again will Washington be able to take Western
Europe and its allegiance for granted. "We have grown up and have
stronger muscles," says Italian journalist Ludina Barzini. "It's
going to be difficult for America to understand that it is not the
only rich Western power anymore."
Western Europe has turned in its best economic performance in
15 years. Stock markets are at record highs, company profits are
surging, and a mood of optimism prevails as the Continent's
businessmen discover a dynamism that many thought had long deserted
the Old World. Look at London's vast Docklands, where a reborn city
with elegant housing and sleek office buildings is rising from what
was once a wasteland of derelict wharves and warehouses, the relics
of Britain's mighty trading empire of yesteryear. Boats rush
commuters up the Thames to the City, London's financial heartland
and center of the world's freewheeling foreign-exchange market.
Or consider Paris, which will soon be several driving hours
closer to London as work on a tunnel under the English Channel
forges ahead. The French capital is fast becoming a major
diplomatic crossroads, a host to economic summits, peace
negotiations on Cambodia and talks to limit the spread of chemical
weapons. In Spain, which will be host to both the Summer Olympics
and World's Fair in 1992, a vibrant mood of enterprise and
enthusiasm mirrors the distant days of another century, when
Spanish ships braved the unknown to discover new lands and
Christopher Columbus reached the Americas. Even Italy is awash in
cash and exuding optimism, despite creaking public services and
revolving-door governments that can be in and out of office faster
than it takes a letter to go from Rome to Milan. "To speak of
Europhoria is right," says Foreign Minister Gianni de Michelis.
"There is a change of perception, not just among governments but
among the people."
What a wonderful word, Europhoria. Western Europe seems to have
rediscovered the political will to advance the stalled process of
economic integration and further the old dream of Continental
unity. In a bold venture eyed warily by the rest of the globe, the
twelve members of the European Community* have pledged to unite
their markets by Dec. 31, 1992, creating the world's largest market
and trading bloc. West Europeans have few illusions about their
ability to create a United States of Europe. Even within individual
countries, regional rivalries are still pronounced, and the
Continent's cultural diversity will continue to be a barrier to
political unification. Only last week the E.C. warned of "worrying
delays" by member countries in implementing single-market
legislation. But Project 1992 has given fresh momentum to a process
that has taken Western Europe further down the road to unity than
could have been imagined in the aftermath of World War II.
At the same time, East bloc decolonization appears to be in
full swing, creating the conditions for a rapprochement that
promises a safer, less divided Continent. The process could yet end
in instability and repression, but Europeans on both sides of the
ideological divide are seizing a precious opportunity to end four
dangerous decades of armed confrontation. A Europe freed from the
threat of military aggression would also be a Europe with resources
freed to speed growth and augment its geopolitical clout. Last week
both sides pursued that chance in Vienna, where negotiations for
reducing conventional armed forces in Europe resumed, with both
NATO and the Warsaw Pact pushing for substantial cuts in men and
materiel.
Europe's new assertiveness poses a special challenge for
Washington, which has long been accustomed to treating Western
Europe as a junior partner, particularly when it comes to managing
the global economy and East-West security. At last May's NATO
summit meeting, President Bush asserted traditional U.S. leadership
with his proposals for an accelerated timetable of reductions in
conventional arms. But he was forced to bow to West German demands
that the alliance postpone a decision on deploying a new U.S.
tactical missile to modernize NATO's nuclear arsenal.
In the coming months and years Washington is likely to be
confronted by European contrariness and even defiance on subjects
ranging from arms control to international economic cooperation.
At the summit of the seven industrialized powers in Paris this
summer, the E.C. sought and secured the lead role in coordinating
the West's efforts to aid Poland and Hungary. At the
conventional-arms talks in Vienna, the U.S., NATO's erstwhile
champion, now sits alongside other alliance members at the
negotiating table. In the Middle East, France seems to be bidding
to take a lead role, seeking to negotiate a cease-fire in Lebanon
while a French aircraft carrier cruises offshore.
As 1992 approaches, there is fear that Western Europe will
erect protectionist ramparts to shelter its rich new market.
Dependent on global trade for their prosperity, most Europeans
recognize the need to prevent such an outcome. But even if Western
Europe remains open for business, the Continent's growing stature
is bound to produce further strains in its relationship with the
U.S.
As Western Europe pursues the promise of a more prosperous and
safer era, the recent past seems impossibly remote. Only a few
years ago, the area's decline seemed assured. Euro-Communists
loomed large, Spain's infant democracy was threatened by a military
coup, and terrorists operated so boldly that a former Italian Prime
Minister was kidnaped and murdered. West Europeans seemed trapped
in a twilight zone of economic entropy and declining international
influence. After the deep OPEC-induced recession that ushered in
the 1980s, millions of workers remained sidelined, victims of an
affliction dubbed Eurosclerosis -- a hardening of the business
arteries caused by overregulation, underinvestment and waning
competitiveness.
Predictions of Western Europe's demise, however, proved to be
premature. The U.S. recovery and appetite for imports helped spur
the Continent's economies. But self-help played a major role as
well. With one eye on the impact of the Reagan Revolution in the
U.S., the area's governments reduced taxes, scissored red tape and
encouraged investment. A new breed of hard-driving
Euroentrepreneurs has emerged, bent not only on streamlining the
Continent's industries but also on spearheading a European invasion
of corporate America. Last year British raiders alone spent $32
billion on U.S. companies, compared with $12.7 billion by the
Japanese.
For Eurotycoons the U.S. may be an attractive investment, but
for most West Europeans home is now where it's happening. Vice
President Dan Quayle's campaign claim that the U.S. "is the envy
of the world" puzzled many prosperous West Europeans. Though still
much admired, America, with its violent streets, racial tensions,
drug addiction and homelessness, is no longer the beckoning place
it once was. Says Jean Manuel Bourgois, vice president of Groupe
de la Cite, France's second largest publishing house: "The magic
of the American dream has gone. Today Europeans find less to envy
in America."
Portuguese fishermen or Welsh hill farmers may not endorse that
claim as they struggle to wrest a living from sea and soil. Like
the U.S., Western Europe has its rust belt and its regions of rural
poverty. Nor has Western Europe totally escaped the scourges of
drugs and violence. Yet many West Europeans are not only matching
Americans in material wealth, but they also believe themselves to
be enjoying a better quality of life. "I don't know what America
has to offer me that I haven't got already and that I would envy,"
says British architect Ian Grant. "There's no intellectual
challenge at all. The only challenge is making money."
In full pursuit of the good life themselves, few West Europeans
would second that harsh assessment. The centerpiece of the
Community's comeback is the E.C. plan to put in place something
that Americans take for granted: a single marketplace in which
goods, services and workers can circulate freely, and where
competition can reward efficient enterprise. In 1957 the E.C.'s
founding treaty promised just such a common market, but although
member states dismantled intra-Community tariff barriers, they
retained a bewildering barrage of regulations to restrict trade and
curb competition. Although Western Europe has no immediate plans
to create a common currency, E.C. countries have already made
significant progress toward their goal of unstitching the area's
patchwork quilt of protected national markets by 1992.
If Project 1992 succeeds, Western Europe -- on paper at least
-- will be an economic superpower to be reckoned with in global
markets. Last year the E.C.'s output was worth some $4.7 trillion,
roughly equal to that of the U.S. and greater than that of Japan
and the Asian "tigers" -- Hong Kong, Singapore, South Korea and
Taiwan -- combined. A unified E.C. would not only account for 37%
of the world's commerce but also, with 324 million consumers, would
become the largest market in the industrial world.
But economic integration is not the only force fueling the
resurgence. Western Europe has recognized that the post-World War
II status quo is rapidly changing in ways that require a response
if its own interests are not to be trampled upon. Warns French
President Francois Mitterrand: "Only Europe can stand up to the
other powers that dominate the world." For the past 30 years
Western Europe has been part of a tense triangular relationship,
with one corner occupied by a mighty and menacing Soviet Union, the
third by a powerful protector, the U.S.
Now the sides of the triangle are buckling, freeing up Europe
to pursue a more independent role. A troubled Soviet Union is
pulling back its military claws and is looking to Western Europe
for assistance in getting its economy in order. Mikhail Gorbachev's
beguiling call for a "common European house" attracts not only West
Germans yearning for their country's reunification, but many other
West Europeans anxious for a new era of East-West rapprochement.
Other jolts to Western Europe have come not from its old
adversary but from its prime protector. Ronald Reagan's Star Wars
initiative, with its promise of a shield to shelter the U.S. from
Soviet missiles, looked to West Europeans like the apotheosis of
American self-interest. Then, during his 1986 meeting with
Gorbachev in Reykjavik, Reagan dismayed his West European allies
by coming close to trading away, without alliance consultation, the
missiles that have formed the basis for NATO defensive strategy and
West European security. Ultimately a reluctant Europe accepted the
resulting INF agreement, but the damage was done. Says a top NATO
diplomat: "West Europeans suddenly realized that U.S. and European
security interests might not be identical." Now the roles are
reversed, with West Germany, supported by other Continental NATO
countries, pushing -- against U.S. objections -- for the
elimination of Europe's arsenal of battlefield nuclear weapons
whose employment would destroy the very territory NATO is pledged
to defend.
Although the Soviet threat appears to be receding, fears of
American waywardness and Gorbachev's political perishability are
encouraging West European governments to seek new security
arrangements. France and Germany have stepped up their defense
links, and French forces, though still outside NATO's military
structure, are working more closely with NATO commands to boost
battlefield cohesion. The Western European Union, a defense
grouping of most of the European members of the NATO alliance, has
been reinvigorated. The unspoken objective: an insurance policy
against U.S. isolationism. "We must take our own destiny
increasingly into our own hands," says French Defense Minister
Jean-Pierre Chevenement. "How could we imagine Europe being reduced
to a Europe of merchants?"
Amid these shifting security sands, Western Europe is also
seeking to adapt to a changing world economic order in which
America's pre-eminence has eroded as fast as its foreign debt has
grown. Project 1992 is a response both to a global economic
leadership vacuum and to the growing commercial challenge posed by
North America, Japan and the fast industrializing economies of
Asia. The opening up of Western Europe's protected national markets
will hurt inefficient firms, but the hope is that enough
competitive winners will emerge to ensure that Western Europe has
its champions in the 1990s and beyond. West European governments
are curbing their interventionist instincts and freeing businesses
to make profits. Even when a socialist government was returned to
power in France last year, it conceded the benefits of free
enterprise by pledging not to renationalize the enterprises that
its conservative predecessors had shifted to private control.
In the strategically vital field of computers, no European firm
is capable of competing with America's IBM or Japan's Fujitsu. "We
know very well that European companies still are a long way away
from having the critical mass necessary to stand up to the
competition," concedes Gianni Agnelli, chairman of Italy's Fiat.
Still, some success stories show that Western Europe has not been
entirely eclipsed at the high-tech end of the market, where the
battle for survival will be keenest. Airbus Industrie has emerged
as Boeing's main competitor in the lucrative commercial aviation
sector. While the U.S. struggles to regain momentum in its space
shuttle program, Western Europe's Arianespace, the commercial arm
of the 13-nation European Space Agency, has completed 33 launches
and has $2.1 billion worth of contracts on its order books. On the
research front, Western Europe is poised to leapfrog the U.S. in
the esoteric but strategically important field of high-energy
physics. Funded by 14 European countries, the European Center for
Particle Physics in Switzerland has completed construction of the
world's most powerful particle accelerator. Last month the $660
million 16-mile supercollider began yielding results that promise
to place the new frontier of physics firmly in Western Europe.
Fearful of being frozen out of a revitalized European
Community, nonmembers like Austria and Norway are considering
joining the club, and even neutral Switzerland is worried about
being left standing on the platform as the 1992 train pulls out of
the station. East European countries are cozying up to the
Community via bilateral trade and aid deals while Moscow watches
with envious desire. "What is going on in Western Europe is a
serious challenge for us," says Vitali Zhurkin, director of the
Soviet Academy of Science's recently created Institute for Europe.
"It is a positive process that shows us perestroika should be
moving quicker. We too are behind."
At E.C. headquarters in Brussels, where the Community's own
perestroika is being spearheaded under the watchful eye of European
Commission President Jacques Delors, officials claim Project 1992
could generate up to 5 million new jobs and speed overall growth.
In the short term, however, critics charge that unemployment,
currently running at 9.7%, could rise to 15% or more as the economy
sheds inefficient enterprises. Sir John Harvey Jones, former
chairman of Britain's giant ICI conglomerate, cautions that the
next decade could see half of Western Europe's factories closed.
"The road from here to there is going to be a very stony one," he
warns.
West European leaders are understandably nervous about the
political consequences. Polls suggest that a majority of E.C.
citizens support further integration, and in a recent survey
carried out by the European Commission, 5 out of 8 favored creating
a European Union. But once the E.C.'s perestroika gathers momentum,
the Community's citizens, like their Soviet counterparts, may find
there is more pain than gain in the initial stages of the process.
There is also widespread concern in Western Europe that the main
beneficiaries of 1992 will be large Japanese and American
multinationals already geared up for Continent-wide operations.
Roger Fauroux, France's Industry Minister, has issued an
unapologetic call to protect such sensitive sectors as agriculture,
automobiles and textiles, which together account for one-third of
the E.C.'s nonservice jobs. Protectionist measures, however, would
produce other ills. At a time when the U.S. needs exports to help
reduce its trade deficit, higher E.C. import barriers are likely
to provoke resentment and retaliation that may not be confined to
the trade front. "If we create a fortress Europe," warns an E.C.
diplomat in Brussels, "then we should not be surprised if the
Americans say, `Defend it yourselves.'" If that happens, Western
Europe may have to stand on its own feet faster than it bargained
for.
Could it do so? A few years ago, most West Europeans would have
said no. Some still say the Continent cannot stand alone. But a
growing number of West Europeans think otherwise. They like to
quote the words of Walter Hallstein, the first President of the
European Commission: "Anybody who does not believe in miracles in
European affairs is no realist." The reality is that Western Europe
has finally found its feet and is once more marching ahead.
