The Europe of 1992

Giovanni Agnelli

From Foreign Affairs, Fall 1989

Article preview: first 500 of 3,618 words total.

Summary:  In my frequent visits to the United States these days, I am asked most insistently two questions about Europe: "What will happen in 1992?" and "Can a united European market work?" Many Americans are either skeptical about the future of Europe or nervous about it. Some predict that when put to the test a united Europe will quickly splinter under national and local political pressures. Others fear that Europeans will drop their internal trade barriers only to erect a higher new external wall, creating a kind of "Fortress Europe."

Giovanni Agnelli is chairman of Fiat, s.p.a., of Turin, Italy.

In my frequent visits to the United States these days, I am asked most insistently two questions about Europe: "What will happen in 1992?" and "Can a united European market work?" Many Americans are either skeptical about the future of Europe or nervous about it. Some predict that when put to the test a united Europe will quickly splinter under national and local political pressures. Others fear that Europeans will drop their internal trade barriers only to erect a higher new external wall, creating a kind of "Fortress Europe."

I have reason to believe that neither of these doomsday scenarios will come to pass. My hope is not mere irrational optimism, but is rooted firmly in the history of the last forty years. Who would have believed that the very same nations that twice in this century nearly destroyed each other would be as closely united as they are now? If we are able to travel a similar distance in the next forty years, a truly united Europe is well within our grasp.

When I think of the progress we have made, I always remember the first trip I made to America in 1939-perhaps the most important journey of my life. Eighteen years old, having just graduated from high school, I was sent by my grandfather to learn as much as possible about the United States and the Detroit auto industry.

The world was so much larger and more divided then. My ocean voyage took four days; now such an excursion takes four hours by plane (and is often made entirely unnecessary by the multitude of electronic ties that bind us). The cultural distance was even greater than the physical divide. I felt then that I had left behind a small and badly split Europe, on the brink of war, and arrived in a country that was the world's center of finance and industry-and yet viewed itself as politically isolated from the rest of the globe.

At the time of that first trip, Italy was a small, largely agricultural nation and Fiat was almost exclusively an Italian company. Now Italy has grown into the world's fifth-largest industrial nation, and Fiat-the 34th-largest corporation in the world-is the largest in Europe and is traded on the New York, London and Frankfurt stock exchanges. My belief in the possibility-indeed the necessity-of a united European market comes directly out of this increasingly internationalized experience.

II

The current unity of Western Europe is not so much the result of a utopian dream as it is the political recognition of economic reality: the reality of global markets, the reality of economic interdependence and the reality of competitive pressures-all of which make cooperation essential.

Since the act creating a single European market was signed in 1986, progress has exceeded expectations. Some 279 directives must be put in place by 1992 for the common market to work as planned; agreement has already been reached on 107 of these. The reason that the project has continued to progress ...

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