Shining success of unified market emerges from EC failures New economic ties defy fragmentation

January 02, 1993|By Paul Hemp | Paul Hemp,Boston Globe

BRUSSELS, Belgium -- For the European Community, 1992 was a terrible year.

Originally envisioned as a historic milestone on the road to European unity, 1992 instead has seen the collapse of both the EC's currency exchange-rate system and the so-called Maastricht treaty, the foundation for future monetary and political union. As European leaders haggle over farm subsidies and a response to the war raging on their borders in the former Yugoslavia, Europe seems as fragmented as ever.

But all this bad news overshadows a surprising success: the achievement, more or less, of a single European market.

"There's a tendency to take a flash look at today and say that this or that doesn't work," said Michael Niebel, the chief spokesman on industrial affairs at the European Commission, the community's executive body. "But when you look at what's been done in the past seven years, it's really a remarkable achievement."

Indeed, the ambitious plan to remove internal trade and other barriers among the 12 EC countries by Dec. 31, 1992 -- the target date that made "1992" a shorthand label for European unity -- was widely viewed as a pie-in-the-sky scheme when it was BTC proposed in 1985.

Now companies, U.S. as well as European, are praising the accomplishment and heralding the opportunities it creates for doing business on the continent. For example, beginning Jan. 1, banks licensed to do business in one EC country may set up branches anywhere within the community, creating a free market in banking that doesn't even exist between states in the United States. This benefits not only the banks but also their suppliers as well.

"Because the single market makes our customers' lives easier, it makes our life easier," said Colin Allan, the Brussels-based director of European Community relations for Digital Equipment Corp., which sells computer systems to banks.

The list of achievements under the program, which brings a unifying structure to a continent beset for 1,000 years by war and national rivalries, is impressive. They include:

* The harmonization of most technical standards, so that a company need not make 12 different versions of its products for 12 different countries.

* The mutual recognition of health and safety standards for consumer goods, which in the past allowed a country such as Italy to decree that only spaghetti made a certain way -- the Italian way -- could be sold in Italy.

* The liberalization of restrictive procurement procedures for national governments, opening most public works contracts to companies from any country in the community.

* The elimination of border formalities that in the past required a trucker to fill out more than 30 documents before carrying goods from one country to another.

* The mutual recognition of professional qualifications, so that workers can practice trades and professions anywhere in the EC.

* The disappearance of national capital restrictions, enabling banks, individuals and companies to invest money in the currency or market of their choice.

Not all barriers to the free movement of goods, services, money and people were flattened Thursday.

Perhaps the most conspicuous symbol of a frontier-free Europe -- the elimination of internal passport controls -- won't be achieved for at least another year in Britain, Ireland and Denmark.

And if differences between EC nations grow into deeper political divisions, the countries could retrench again behind trade barriers.

But it is generally agreed that the economic links forged in Europe are here to stay. The eventual completion of the internal market is taken for granted.

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