A Europe without borders is not a Europe without barriers Unification remains elusive

May 19, 1993|By Ian Johnson | Ian Johnson,Staff Writer

PARIS -- When British citizen Dana McEvans decided to mov to France this year, she figured it would be little problem. She speaks excellent French and had a job tailor-made for the new Europe: studying pan-European marketing and advertising trends.

Add to this the fact that a borderless Europe has been in place since Jan. 1 and that Europe was moving toward greater integration under the Maastricht treaty, and her confidence was understandable. A few formalities and she could start work.

"I was completely wrong," the 28-year-old marketing researcher said.

"It took me three months to get my work permit, and several times I left the [French] government offices in tears. I have never felt more frustrated in my life."

Ms. McEvans' experience highlights one of the paradoxes of European unification:

Five months after formally knocking down trade barriers between the European Community's 12 members and just as the Maastricht treaty seems likely to be adopted by all member states, a truly unified Europe appears as elusive as ever.

Although evidence abounds suggesting that progress is being made toward unity, the failures have dominated the public view of integration.

For example, moves toward a common currency have been stalled, directives to harmonize European economies have not been passed, and differences in tax laws have forced companies to engage in costly bookkeeping.

But what is most glaring about Europe's current state of integration is that there is no free flow of labor, something that economists consider a precondition for a united economic system.

Despite the red EC passports that are gradually replacing the 12 national passports, the national governments still restrict pan-European job hunting.

Ms. McEvans, for example,found that she not only had to register with the French police, a process that took 12 hours spread over three days, but also had to fill out innumerable forms proving that she had a job. The rules also meant forfeiting some of the money she had acquired for her pension because of differences in the French and British national pension systems.

Despite her ordeal in petty officialdom, she does believe that common European traits are emerging. Companies such as Renault and Colgate-Palmolive, for example, are spending large sums on pan-European advertising campaigns.

"It certainly is worthwhile for many companies to promote their products with one advertising campaign for all of Europe. Many tastes still divide Europeans, but the trend is there," she said.

More concrete signs of this trend toward pan-Europeanism can be seen at the borders between countries, where truckers can shave hours and even days off their trips from one end of the European Community to the other.

Consumers in high-tax countries also have taken advantage of the changes by driving into neighboring countries to buy cheaper wares.

Germans living near the Netherlands and Belgium, for example, can avoid high alcohol taxes by driving across the border for spirits.

While this cross-border trade provides ample anecdotes of integration, it actually masks a more serious problem. By Jan. 1, EC members were supposed to have settled on a common value added tax, but this has been ignored, leaving some countries with much higher rates than others.

While the open borders allow consumers living in border regions to hop across the border to hunt for bargains, businesses are not so lucky.

At Karnasch & Sons Ltd. in the southwestern German town of Darmstadt, owner Michael Karnasch found the open market

caused more trade barriers than it lifted when he tried to ship his precision products to France.

In the past, Mr. Karnasch had to pay tariffs at the French border, a time-consuming and costly practice that he was glad to see go. But because of the different tax rates, he now has to pay the difference between German and French tax rates and calculate the exact costs -- all at the factory.

Christian Weise, an economist at the German Institute for Economic Research in Berlin, said a key to understanding Europe's current state of unification is to scrap all preconceived ideas that Europe somehow would have united Jan. 1 or that it will do so when the Maastricht treaty comes into force.

"We're looking at a slower process than we imagined in the days after German unification and when the Maastricht treaty was signed [in 1991]," he said.

"But the 'Euro-doom' that is in vogue is just a sign that the pendulum has swung too far in the other direction."

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