Europe 1992. A shrewd publicity campaign and a manoeuvre to keep old Europe going.
Written in 1990, 2 years before laucnhing 1992 Europe.
Evidence of the shrinking of the Europe’s industrial basis, for instance, is disguised with artifices such as the integration of Europe 1992. A shrewd publicity campaign and a manoeuvre to keep old Europe going.
Britain’s Big Bang is another example of artificial booms created out of rosy predictions. Britain’s 1986 Big Bang was designed to deregulate brokerage commissions, and bank and securities houses from around the world were allowed to compete freely against each other. Thus making London the most open market in the world.
Big Bang caused millions of losses to American and European banks. Three years later the City’s major players had lost $2 billion. In 1988 Citicorp’s global securities business lost $50 million in London. Chase Manhattan pulled the plug of its equity operation in the beginning of 1989, taking a $40 million write-off. Philips & Drew lost $200 million in less than two years. National Westminster PLC’s investment banking lost $98 million in 1988.
Europe’s decline is unmistakable. “In 1984, Japan overtook West Germany to become the world’s largest exporter of manufactured goods. In every year from 1979 to 1984, Southeast Asia contributed more than did Western Europe to the overall increase in world trade. In 1976, for example, half of the an¬nual increase in world imports comprised goods shipped to Western Europe. By 1984, that amount had dropped to only 13%.” Feather, F., G-Forces, Re-inventing the World, Toronto, Summerhill Press, 1989.
The International Civil Aviation Organization (ICAO) forecasts a fall of more than 5% points to 25% of European share of total world traffic by 2000. “In the case of freight, the European share is expected to fall to 29% from 34% while Asia/Pacific share rises to 40% from 27% surpassing both Europe and North America.” African Business, Dec. 1989.
“Europe is developing a peculiar sort of post-industrial economy. As manufacturing industry declines in importance in rich countries, production is supposed to switch to profitable services. Instead, the fastest increases in production in Western Europe this decade have been in heavily subsidised farming. According to the World Bank, agricultural production in most European countries grew by more than 3% a year from 1980 to 1985—led by Holland (7.8%), Denmark (5.1%) and West Germany (4%). Services grew by barely 2% a year. In little over a decade, the EC’s sugar regime has turned the community from a major net sugar importer to the world’s largest exporter.
Britain has shared in this unexpected trend, and seen agriculture-led growth for the first time since the early eighteen century.” The Economist, Oct. 3, 1987. Around this time Britain started assembling—in Ireland—the Brazilian-produced Tucano aircraft to train Royal Airforce’s pilots.
An study of the Electronic International Corp. (EIC) made public last year (1990) the Europeans have an import deficit in electronics of $34 billion. According to EIC this defict can increase to $50 billion in 1995. Der Spiegel, Apr. 14, 1991. P 119
Philips one of the three big MNCs of Holland is an example of a giant company returning to its ‘natural’ size. Philips’s recent debacle shows Holland in its way to its ‘natural’ size. Philips already got out of computers, chipmaking, defence and traffic businesses. And there are rumours that it will sell its music division. Philips eventually will become what it was 99 years ago and still its official name. A ‘incandescent-lamp factory’.
The global economy which is forcing companies from developed countries to reorganize is the result of competition from Low developing countreis. The carnival of mergers and acquisitions of the 1980s was essentially defensive moves by sluggards to resist these nimbler competitors.
The time will come for Europe’s national champions to show of what they are made of. “European champions" such as Siemens, ABB and CGE, trying to get control of large shares of the European market; aim to limit the risk of going under. It is a hedge against disaster.
By been marred with ‘industrial nostalgia’, agricultural idyl plus an introspective perspective of na-tional pride; the more developed countries are unable to face reality. We watch them more and more trying to cover their decline as the bald man tries to cover his baldness by combing his few remaining hairs across his head. |
