Don't expect a United States of Europe any time soon. Th European Community's march toward an open market by the end of 1992 has stumbled badly, the result of centuries-old differences and the special interests of massive industrial cartels.
The fact that a number of European nations are already in recession, with others likely to follow, has further slowed general economic progress. The euphoria is also gone from European stock mutual funds, the darlings of Wall Street a year ago.
The European companies whose stocks these funds hold have struggled and a stronger-than-expected U.S. dollar further depressed returns of such funds based in the United States.
Europe eventually will achieve greater economic unity, but it will take longer than expected.
"The lackluster performance of European funds shows there really is a difference between promise and reality," observed Don Phillips, editor of the Mutual Fund Values investment advisory, who noted that virtually all of the big fund companies have introduced European portfolios the past couple of years.
"Europe has been the weak link in the international chain, and I suppose the best that can be said is that there may be buying opportunities."
"Though Europe's growth is slowing, it still provides better current growth than the United States, and these funds give the investor an opportunity to get away from U.S. economic dependencies," said Jerry Mill, portfolio manager for the $77 million-asset Financial Strategic Portfolios -- European Fund.
Mill's biggest holdings include British companies such as Smithkline Beecham and Glaxo Holdings Plc. in drugs; Grand Metropolitan in brewing; and Cable & Wireless in telecommunications.
"We didn't expect the German economy would become as overheated, and now we see all of Europe sliding into recession," said John Hickling, portfolio manager of the $356 million-asset Fidelity Europe Fund.
"But, with prices where they are now, I wouldn't sell a European stock fund, for I see a good possibility for lower interest rates in Europe."
Hickling's biggest holdings include Germany's Bayer pharmaceutical firm; Britain's Grand Metropolitan and Whitbread brewers; France's Elf Aquitaine oil company and Switzerland's Nestle. Although hopes for 1992 were "overdone" and a "fad," with many initiatives such as a common currency pushed further into the future due to disagreements, a lot of positive agreements have nonetheless been made, Hickling pointed out.
Top-performing European stock funds over the past 12-month period, according to Mutual Fund Values, have been:
European Plus Fund, Capstone Group, Houston; $14.5 million in assets; 4.5 percent "load" (initial sales charge); up 6.77 percent.
Merrill Lynch Eurofund "A," New York; $87 million assets; 6.5 percent load; up 2.41 percent.
Financial Strategic Portfolios -- European, Invesco Funds Group, Denver; $77 million assets; no load; up 1.63 percent.
Merrill Lynch Eurofund "B," New York; $506 million assets; 4 percent deferred sales charge; up 1.41 percent.
Shearson European Fund, New York; $29 million assets; 5 percent deferred sales charge; down 0.05 percent.
T. Rowe Price European Stock Fund, Baltimore; $103 million assets; no load; down 1.15 percent.