In the 1970’s, when the European Community was failing to advance its objectives, “Eurosclerosis” was the buzz word of the day. It looked as if Europe might become a permanent economic and technological backwater. Since then there has been a remarkable turnaround. Now, Europe is pervaded by a sense of excitement as the December, 1992, deadline for the removal of barriers to the free flow of trade, goods, services, and people between the twelve member countries of the EC approaches. This will make the EC the largest trading bloc in the world and a formidable rival to the United States and Japan. By 1999, the EC will have a single currency and a regional central bank. In INSIDE THE NEW EUROPE, Axel Krause, who is corporate editor of the INTERNATIONAL HERALD TRIBUNE in Paris, describes earlier attempts to unify Europe, from Charlemagne to Hitler, and analyzes how Europe shook itself out of its doldrums and began to take on the United States and Japan in global economic warfare. Much of Krause’s analysis is in terms of the economic impact of the new Europe on the United States. He sounds a warning, for example, that the United States is in danger of being left behind in the race to invest in newly democratic Eastern Europe.
Will the 1990’s be the Decade of Europe, as some observers suggest? Krause predicts that over the next decade, growth rates in the EC will outpace the United States but trail Japan. He also expects that the driving force in the EC with remain the Franco-German alliance, but that Britain, fearful of being left out, will become a far more active participant. Krause acknowledges that the EC will face problems of high unemployment, racism, drug-trafficking, and organized crime, and will also have to deal with a rise in protectionist sentiment.