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Essay Subject: Role of France, history of EC, economics & politics, industry, French views on Japan & reunified Germany, future.... More...

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Paper Abstract: Role of France, history of EC, economics & politics, industry, French views on Japan & reunified Germany, future. Paper Introduction: INTRODUCTION The dream of those promoting the integration of Europe has been a Europe without trade barriers, providing new opportunities for joint economic action that (it is hoped) could make the European Economic Community (EEC) into an economic powerhouse capable of competing with the Japanese and serving as a trading center. Some even dream of a Europe unified politically as well as economically, though getting the twelve nations of the EEC together on trade issues has been difficult enough given their different attitudes, jealousies, and rivalries. France is a key player in the integrated Europe that is emerging, and much of the world waited anxiously as France considered the Mastrecht Treaty that signaled acceptance of the controls of the European Council. France approved the treaty last year after much argument, but Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. "Tangle of Vested Interests Frustrates EEC CAP Reform." Financier, pp. Although free trade promises many new economicopportunities for the industries and nations in the region, the changeshave also created a vast amount of confusion due to the many newregulations affecting trade. The French Industry Ministry, pressured by the Frenchautomobile manufacturers, Renault and Peugeot, called for an 8 percentlocal content test. She will take unilateral measures if necessary. France stated that it would treat the cars asJapanese until less than 2 percent of the value of the cars was derivedfrom components imported from Japan. France wasopposed to German reunification not primarily from a fear of Germanmilitary power in spite of the experience of two world wars but morebecause of a fear of German economic dominance. Smallbanks and food processing companies would be forced to consolidate.According to panelists from UBS-Phillips & Drew, 1992 would be as much of athreat as an opportunity for the information-technology sectors because ofincreasing competition with Japan and the U.S. The growth in the European car market is expected to beno more than 1 percent per annum, so the price of larger market share forJapanese producers can only be the demise of one of Europe's existingmanufacturers. "French Banks Face Challenge of a Single Financial Area." European Trends (3), pp. France approved thetreaty last year after much argument, but the approval was narrow. C1."When "Made-in-Europe" Isn't" (1988, October 8). "The European Community Faces 1992." Current History, pp. Second, he states that the process of intensificationthat will take place in the EC need not necessarily clash with itsextension if the new countries of Eastern Europe warrant inclusion becausethey develop their economy and political stability to a sufficient degree.Third, the unity of the Germans strengthens the European process ofintegration within the EC framework (Langguth, 1991, 42, 137-146). A consensus was built by the1992 plan that led as well to talks on total political union, with commonforeign and security policies. Francehas also been in the forefront of concern about the economic power of Japanand about allowing Japan make in-roads into the newly integrated Europeanmarket. This monetary issue has proven to be one of the most difficult facingthe countries of the EC. New York: St. Theidea was to develop a Europe without frontiers, one without physical,fiscal, or technical barriers to trade. The singlemarket is supposed to be drawing European nations closer, but it seems toalso be dividing them instead. & B. Support for the integration effort has been strong from mostFrench government but not necessarily as strong in the business communityor among the people, and opponents have played on the fears of the publicabout certain issues of autonomy, concerns about specific industries, and ageneral fear of losing control of the borders that fits with recent anti-immigration actions in France and in other countries of Europe.Integration itself has created a number of contradictions and uncertaintieswhich trouble member states and external observers alike. In therecent Gulf War, for instance, the nations of Europe did not act withunity. The French response to any perception that the playing field is notlevel has been toward protectionism, as can be seen in the French responseto Japan noted above. TheFrench banks worried that they would end up the losers in such a change,but they participated in a number of ways with new instruments such ascommercial paper, certificates of deposit, and Treasury bills appearingrapidly in the money markets (14 -144). Nevertheless, the win-win situation within Europe. Franceappears to want a central bank since it would like to reduce the Germanpolitical and economic dominance of Europe (Adam, 1988, 39-4 ). 25 -253.Riemenschneider, R. Economist, pp. M. (1992). (1988). The United Kingdom has been more willing than France to open thedoor a little wider to foreign imports because it does not have a largenational car builder ("When 'Made in Europe' Isn't," 1988, 63-64). France is also seeminglyobsessed with issues related to the economic power of Germany. Sjogren. In the late 198 s, there were events taking place that added toFrench concerns about the effect Germany would have on the French economyunder the EC. McCarthy (199 ) also finds increasing Europeanism in France as 1992approached. Europe 1992: A seminar on the legal, business and political ramifications of the integration of the European Economic Community in 1992. "The Two Souls of Marianne: National Sovereignty versus Supranationality in Europe," In M. "A United Germany: The European Context." Vital Speeches of the Day, pp. If the EC were to give in to French pressure on thisissue, however, it could have a detrimental effect on foreign investmentinto Europe. The French minister has thus asked for a ten-year breathing space before the European car market is fully opened tooutsiders, and during this time quotas would be observed that would includethose cars produced by Japanese manufacturers within the community or inthird countries. The United Kingdom remainedskeptical but did develop plans to launch an awareness campaign to includeconferences and seminars on the significance of 1992 (44-46). . The U.K. Wright (1991) reports on the progress toward this dreamand finds that full implementation of the enabling legislation is behindschedule, though it was still believed that it would be implemented. (1991, February 1). The EC also undertook toensure the free movement of persons, services, and capital by abolishingmember state laws which discriminate between natural persons or legalentities, services, and capital originating in other member states on thebasis of nationality or origin. 21-22.George, S. If a genuine European government were to be formed,69 percent of the French people in 1985 would have accepted a West Germanprime minister, and only 19 percent would have rejected one. Langguth (1991) also examines the unification of Germany and what itwill mean for the EC and agrees that Germany will have an expanded role inthe EC. Langguth indicates a number offactors in the developing European environment that will impinge onquestions of defense and economic stability. We are ready to open the market, but not at any price (Maclean, 1992, 31). A 199 survey shows that amajority of French people (55 percent) feared the economic muscle of Japan. However, as Ahlstrom notes, the issue goes beyond trade and economicintegration to involve issues of defense. (1987 August). 21-39.McCarthy, P. The SEA now regulates all the activities of the EC. Oxford: Oxford University Press.International Law Sections of the Los Angeles Bar Association & the State Bar of California. 8-9, 2 -36.Maclean, M. In preparation for the single market, Paris set up theCompetition Council, an independent, 16-member decision-making teamdesigned to improve the competitiveness of French industry. Williams (1991)notes that this was inevitable given that the process of integration islargely capital-driven and that there were sharp divergences of interestbetween member states from the beginning, even with respect to economiclogic. Nigel (1987)noted that as of 1992, the modernization and liberalization of France'sfinancial markets was to become a reality. If two currencies reach theirlimit, their central banks are expected to intervene in the foreignexchange markets. Langguth also finds that the most important trends in Europe todayhave been influenced by the fact that the East-West conflict that shapedthe post-war period is disappearing. Such was the case when the valueof France's franc dropped precipitously due to student and labor unrest,and stronger currencies, particularly Germany's deutsche mark, rose invalue, creating concerns in France once more about the effect Germany wouldhave on the franc. The move started in earnestin 1985, aspiring to full economic integration by the end of 1992. He finds that France has been adapting to the changes takingplace. Maclean feels that what is needed is not protectionism but forFrench firms to establish themselves in the new, expanding markets of theEast, and she also feels that there are numerous opportunities for theFrench to do so if they will seize the moment. Politics and policy in the European Community. Calleo & C. The other soul strives for a European mission for France, for the genuine construction of Europe, for integration leading to political union (Riemenschneider, 1992, 142).Riemenschneider cites public opinion polls which show that the technical,complicated, and opaque mechanisms of the EC and its politics are notpopular in France. Rather, the reunification process is areminder to the other nations of Europe of what happened twice before inthis century with a unified Germany. Pro-Europeanattitudes on the part of the French seem to have increased throughout the198 s (Riemenschneider, 1992, 145-147). This process was startedin 1952 under the Treaty of Paris signed the year before, creating theEuropean Coal and Steel Community between France, West Germany, Italy,Belgium, the Netherlands, and Luxembourg. Ahlstrom (1991) notes that the move toward the European Community wasspurred by economic need as Europe found herself unable to competeeconomically with Japan and the United States. 44-46.Cairncross, F. (1991, February 25). Germany will become the major economic power inEurope to an extent even greater than it already is. France had just announced that Japanese car manufacturers wouldnot be allowed to garner larger sales (maintaining a registration limit of3 percent on new Japanese vehicles) until French automakers were givenreciprocal access in Japan. With the Soviet Union and communistEurope both changed to a different economic structure and removed as directand immediate threats, the issues have changed somewhat. After the approval of the Single European Act,which allowed for majority voting instead of unanimity on internal marketmatters, even the most skeptical governments realized that the plan wasserious. However, maclean alsopoints out that France has been slower to react to such opportunities thanhave other EC countries. One major change that must be faced by Western Europe today and thatis also fraught with uncertainties is the advent of a reunited Germany.Germany was a question mark in the development of the EC from the beginningbecause the German economy appears to be so superior to those of the othercountries in the EC, ranking with Japan and so standing as a nebulouseconomic threat to the rest of Europe. Itnow appears that the single European market may never fully materializebecause the EEC's members have been unable to agree on adopting a singlecurrency ("A Unifying Europe Tries to Dot Its 'I's'," 1992, C1). The European Monetary System (EMS) was created in1979 to give stability to the exchange rates of the European EconomicCommunity in the absence of a fixed value for the dollar. (1988 April). Participatingcountries pledged to keep exchange rates of their currencies within aband of plus or minus 2.25 percent, except the Italian lira, which ispermitted a swing of 6 percent either way. This is very much what happened, and France has continued to try torestrict Japanese imports as a way of protecting the French automobileindustry. HISTORY OF THE EC The European Communities were established after World War II toprevent further war between the major Western European nations byintegrating their economies on a sectoral basis. She states that France has hadtrouble coming to terms with her role as a second-class world power overthe past forty years, and the result at the governmental level has been atrue commitment to the EC, in marked contrast to Britain. Some even dream of a Europeunified politically as well as economically, though getting the twelvenations of the EEC together on trade issues has been difficult enough giventheir different attitudes, jealousies, and rivalries. This intervention, however, is often at odds withgovernments' political or economic needs. New York: St. According to Liscio (1988), France was in a unique position to be amajor beneficiary of integration. Specific industries raised specific concerns, and the bankingindustry in France had an important role in integration while it was alsoraising important questions and experiencing some fears. France is not the only country faced with this issue, though.The European auto industry as a whole has been hampered by announcements oflayoffs and temporary plant closings in the Federal Republic of Germany(before reunification), the Netherlands, and Belgium, and in 198 theindustry received a poor prognosis for recovery over the next 5 years.Prospects were that the steady decline in the production and export of carsfrom Western Europe would continue until at least 1985, and it was thoughtthat the unavoidable result would be increasing calls for the protection ofdomestic car industries and the jobs they provide. "The EC Single Market in 1991--Status Report." Business America, pp. In 1988, the United Kingdom petitioned the EC to intervene in adispute with France regarding imports of Nissan Bluebirds built in afactory in Northern England. Ramm (1991) considers the issue ofa unified Germany in the context of the EC and notes first that the area ofthe existing Federal Republic of Germany has been expanded by 44 percent,while its population has grown by only 26 percent. An analysis of the development of the EC and the view of thatmovement taken in France will show some of the fears the French haveexpressed toward this change and also indicate some of the areas whereFrance is likely to hold back even though approving the Mastrecht Treaty inprinciple. Advocates argue that a common EECcurrency managed by an EEC central bank should be the EEC's main goal, andthere already is a European Monetary System (EMS) in place thatsuccessfully keeps 8 of the 12 EEC currencies within a narrow exchange rateband. Martin's, pp. (1988 January). The SEA containspolicy development based on the intention of having a single market inplace by the end of 1992, and it also introduces, or strengthens, otherpolicy fields, including: 1) responsibility towards the environment; 2) the encouragement of further action to promote health and safetyat work; 3) technological research and development; 4) work to strengthen economic and social cohesion so that weakermembers may participate fully in the freer market; and 5) cooperation in economic and monetary policy.SEA also brings foreign policy cooperation into scope and provides it witha more effective support than existed previously. However, the EEC countries show differing attitudes toward thisconcept, and many have doubts that such an institution would work. (1987 June). Pressure for reform built up unremittingly after 1982, and itwas thought that change would most likely be brought about by pressurefrom within the EEC. What allthis means is that as a result of the reunification, the balance of powerwithin the EC will shift. For differentindustries within these countries, the opportunities and the threats weredifferent. For the most part, France complied with suchrequirements as long as they related to competition with other Europeancountries. (1992). By December 1989, some 8 joint ventures hadbeen formed by public actors from the East and private companies from thewest and had been established in the Soviet Union, but France was involvedin only 35 of them (Maclean, 1992, 29-3 ). Nissan said foreigncontent would fall from its then current 3 percent to less than 2 percentby 199 . Maclean saysthis is so "precisely because she has come to see Europe as a means ofachieving national objectives, political and economic" (1992, 3 ). CONCLUSION There is evidence that France is getting over its phobia aboutGermany and learning to cope with the issues that phobia has raised. Howorth (eds.) Europeans on Europe. ReferencesAdam, N. The only EC nationthought to have the prospect of continued growth in auto output wasFrance. World Business Weekly, pp. CONDITIONS IN EUROPE TODAY Europe today faces a number of opportunities and challenges relatedto changes in conditions in Europe, changes in areas contiguous to Europe,and changes in international economic relations affecting all of Europe.The dissolution of the Soviet Union, a development completely unexpectedwhen talk of a Europe without borders started some years ago, has alteredthe security needs of the European member-states. The original member statessubsequently extended their integration plan to all major economic sectorsand atomic energy specifically. The European Community: The Contradictions of Integration. 39-4 .Ahlstrom,. (1989 April 19-21). Oxford: Blackwell.Wright, D.R. A united Germany standsonly behind the United States in terms of economic power, and it is fearedthat the unified Germany will dominate the newly unified Europe. "Bend but Not Break?: The Common Market Tries to Shape Up Its Currencies." Barron's, pp. (1991). Thesystems to make this a reality are in place, but there has been someresistance to the idea, notably in Great Britain and France. This would be something like a UnitedStates of Europe, where national borders are transparent and yet where eachnation retains its individuality, with a single, coherent financial andforeign policy, with all states contributing to pan-European security. The dispute pointed to the disparity in rules within the ECregarding local content, with 6 percent local content the result inseveral decisions. The EC has doubled in membership from theoriginal six states to twelve with the addition of the United Kingdom,Ireland, Denmark, Greece, Spain, and Portugal. The problem continued because of the strong dollar andbecause reform turned out to be more difficult politically than the EEC hadexpected. Europe 1992 & the New World Power Game. In 1989, Japanese firms held a 1 percent stake in the European carmarket, and this could rise to 25 to 3 percent by the year 2 if presenttrends continue. and Germany are the two countries thatshould be most interested in reforming the EEC's budget, but the U.K.'sreform efforts have been muted recently, while Germany stands as the mainopponent of reform. First, he finds that the ECis and will remain the truly stable factor within the framework ofpolitical change and will be the decisive center of gravity for politicalchanges in Europe. The issue facing France--and other members of the EC--was whetherGerman success would help or hurt her trading partners in the EC: In fact, German economic strength is unlikely to increase Europe's share of world markets after 1992 because those sectors in which she is dominant tend to be markets of the past, no characterized by low growth (cars and machine tools), while her share of high technology markets, the high-growth sectors of the future, is in decline. France is a keyplayer in the integrated Europe that is emerging, and much of the worldwaited anxiously as France considered the Mastrecht Treaty that signaledacceptance of the controls of the European Council. "Over the Horizon: A European Central Bank." International Management, pp. (1991). The European Economic Community's Common AgriculturalPolicy was in need of radical reform. According to Sutton (1988), inFebruary of 1988, the European Community Commission published the proposedSecond Banking Coordination Directive, intended to have the followingeffects: 1) remove the remaining intra-EC barriers to freedom ofestablishment in the banking sector; and 2) allow for full freedom of banking services across intra-ECnational frontiers.In order to comply with the Directive, France had to remove the currentceiling on franc-dominated lending to nonresidents by French banks andallow all French residents--individuals and businesses--to open bankaccounts abroad (56-61). 13-15.----------------------- 24 The cornerstone of the effort hasbeen the Single European Act (SEA), signed by the 12 member states in 1986as the first substantive alteration of the Treaty of Rome which establishedthe European Economic Community in 1957. Maclean (1992) states: One of the great French fears, heightened by the single market program, is that of being left behind at the starting-block while her German partner and rival trail-blazes her way to the finishing-post (29).Maclean says this is not a groundless fear and offers statistics to showthat Germany is indeed ahead of France in terms of a number of economicdimensions. The Dutch government emphasizedissues that have a maximum pan-European impact, and the business communitylaunched a program to educate its corporate members about the risks andopportunities of a single-market Europe. 16-2 .El-Agraa, A.M. Maclean & J. It wasalso considered certain that calls for protection against Japanese importswould increase in Europe ("Europe's Auto Makers Are Losing the RaceAgainst Time," 198 , 1 -11). No EEC member country came closeto matching the French initiative, though many were doing what they could.The Netherlands was among the most active. By the early 198 s, the EEC wasregularly producing more cereals, dairy products, sugar, and wine than itcould consume. R.P. "1992 'Is Upon Us.'" International Management, pp. 14 -144.Adam, N. Jacques Delors, president ofthe European Economic Community (EEC) Commission, hoped as well to havetotally eliminated restrictions on capital movements within the EEC bythen, meaning unbridled competition among Europe's capital markets. Whenthere was still a Soviet threat, a unified Germany was seen as being in aposition to exploit the drive to modernize communist Europe and the SovietUnion (Silva and Sj?gren, 199 , 151). 374-378.Bruce, L. (1987, January 19). 141- 159.Silva, M. Riemenschneider refers to Marianne,the symbol of France and of the French Revolution, and says that two soulslive in her heart: One is directed at the preservation of national independence, at the assertion of France's position in the international power hierarchy, at the painstaking preservation of national sovereignty. Ramm also believesthat in the coming years, Eastern Europe will achieve economic growth ratesthat are far higher than in the rest of the industrialized world, givingthis former Eastern bloc nation the greatest potential for making a strongrecovery of any other nation in the former Warsaw pact region (Ramm, 1991,25 -253). Morgenstern (eds.) Recating Europe's Economies. A majority expressed willingness to abandon the principle ofunanimity and a willingness to transfer national sovereignty to theEuropean institutions. "Germany, the EC and the Architecture of Europe: the German Question in the Context of the EC." Aussenpolitik, pp. Theway France held back approval and the threat of rejection in Great Britainare reasons for this failure to meet the original schedule. However, therealready exists the European Monetary Cooperation Fund, which aids infinancing intervention by individual central banks within the EMS. (199 ). The franc received a de facto devaluationagainst other EMS currencies that revalued (Forsyth, 1987, 21-22). This was the Single European Act (SEA) that took effect July 1, 1987and that was intended to streamline the EEC's decision-making processes andto broaden the bases of the Community institutions' competence to legislatein areas vital to completing the single internal market, thus enabling themember states to meet their self-imposed objective of completing the singleinternal market by the end of 1992 (Williams, 1989, 2-3). In addition, there are old rivalries withGermany, as well as revived fears of a unified Germany, that make theFrench less than eager about the prospect of an integrated Europe. (199 ). Maclean finds that there is an esteem component in France's attitudealong with economic and political forces. Those interviewed attached particularimportance to the role of the Franco-German partnership in the integrationprocess. France is opposed to trade concessions tothe United States, though they are supported by the rest of the EEC. Howorth (eds.) Europeans on Europe. Commuter airlines stood to prosper from deregulation. The Economics of the European Community. The small farmers of Germany's South were probably themost visible supporters of the Common Agricultural Policy (CAP), but it wasthe rich farmers of Northern Europe who benefited the most from the EEC'sfarm policy. In spite of the concerns of the French banking industry, France hasbeen willing to support a central bank in Europe as a way of reducing thepower of banks in other member states. As will be seen, though, this is not the view taken by France, and itis important to note that one of the concerns about a reunified Germany hasnothing to do with the EC as such. (1991). Martin's, pp. "Europe 1992: A Truly Common Market?" Barron's, pp. Great Britain quickly supported the United States, while Germanyresisted doing so and France joined the battle for her own politicalreasons (Ahlstrom, 1991, 374-378). The creation of a common market between the member states was startedwith the establishment of a customs union through the elimination of customduties and quantitative restrictions (non-tariff quotas) on goodsoriginating in the member states and the application of a Common CustomsTariff (CCT) to goods orignating from third coutnreis, after which thelatter enter into free circulation within the EC. At the same time that European markets are opening, themarkets of Japan remain virtually impenetrable--for every 3 small andmedium-sized Japanese cars imported into an EC country, only one Europeancar manages to enter Japan. Political and economic differences coulddiminish the benefits associated with the free-trade zone. Edith Cresson, French Minister for European Affairs, seesprotectionism as playing an important role still for France: France will never let its car industry be destroyed. . Any move that seemed to enhance theposition of the Japanese was opposed as detrimental to French automotiveinterests. New York: Philip Allan."Europe's Auto Makers Are Losing the Race Against Time" (198 , December 15). Japanremains a nemesis in French thinking, however, and the EC integrationeffort itself has come under attack in a country increasingly concernedabout immigration, foreign workers, and any perception at all that Frenchintegrity or pride is being challenged. (Liscio, 1988, 8-9, 2 -36). Moreover,France's European affairs junior minister, Bernard Bosson, spent over $1million on public relations designed to spread the message beyond thebusiness community and into French homes. 42, 137- 146.Liscio, John (1988, October 3). The overall goal is true economiccohesion, common levels of tax and excise duties, and the free circulationof capital, people, and services across national boundaries. The SEA reinforced the obligations of theCommunity to adopt measures aimed at ensuring a single internal market, anarea in which goods, persons, services, and capital move freely (Williams,1989, 5). Riemenschneider (1992) notes that the issue for France is also boundwith ideas of national sovereignty and with reluctance to surrender some ofthat sovereignty to an external body. England has a "voluntary" agreement with Japanese carmakerslimiting its imports to between 1 and 11 percent of the English carmarket. New York: University Press of America, pp. FRANCE AND THE EC As noted, France was one of the first member states in the EuropeanCommunity. can only be achieved if Europe is to pull together to counter growing economic threats from the USA and especially Japan (Maclean, 1992, 3 -31). 63-64.Williams, A. In other EC countries, however, it was thoughtthat production would decline as Japan's market share increased. Francehas a number of trepidations about turning over so much economic controland discretion to another body. Los Angeles: Los Angeles County Bar Association.Langguth, G. New York: John Wiley & Sons.Sutton, M. McCarthy also finds that the Germanquestion still has potency in the French context and that it has emerged ina new form as the EC has developed, with an economic as well as a securitycomponent (McCarthy, 1992, 27). Germany would seem to be more aneconomic than a military threat today, but that fear does exist at acertain level just the same. These twelve member statesadopted an instrument amending the original Treaties for the first time in1986. Even in terms of economic goals, the Community has been faced with incompatible objectives: there has been an uneasy relationship between fostering competition within the EC and the need to develop large efficient companies able to compete on the global scale. Anational consensus has emerged that conceives of the single market as anopportunity for France to reaffirm her historic role in Europe and in theworld. "France Faces Reality," In D.P. Regional economic goals have also clashed with the overall growth aims of the community (Williams, 1991, 113). France, along with other EC member states, demonstrated a dedicationto the principles of economic integration in the years leading up to 1992.Bruce (1988) notes that member states could see by the late 198 s that theEEC was intent on eliminating all remaining barriers to trade within theEEC by the end of 1992. 56-61."A Unifying Europe Tries to Dot Its 'I's'" (1992, November 16), p. In addition to thedissolution of the Soviet Union and all that it implies, Europe is thusfaced at the same time with the reality of an attempt at cohesion throughthe European Community, a cohesion which was supposed to provide not onlyeconomic cooperation on a grand scale but also social and politicalagreement as well. One French industry that raised a number of issues was the automobileindustry, and this industry had particular qualms about allowing Japanesecompetition into any of the EEC countries, viewing this as a directchallenge to the French industry. The original idea behind CAP was to make France Europe's"food factory"; instead, the CAP has cut off France's obvious markets(Cairncross, 1987, 16-2 ). A meeting of EMS finance ministers was necessary towork out a solution that revalued the deutsche mark and the Netherlands'guilder upward by 3 percent. However, thereunification is boosting the German economy in terms of growth. The general view of the French economy during the 198 s waspessimistic, and this attitude extended back at least as far as the oilshock of 1973 (McCarthy, 1992, 25-26). Liscio reports on a study undertaken bya panel of four London-based economists and strategists who discussedimplications of the European Community's barrier-free trading plan.According to David Roche of Morgan Stanley, France appeared more preparedthan other countries because it had relaxed many internal controls.Portugal and Spain stood to benefit because of their low labor costs andopen markets. Williams writes: The contradictions of integration run much deeper than a conflict between the divergent interests of member states. There has been a gainin economic potential of about 1 percent, showing that the per capita GNPof East Germany is less than half that of West Germany. 25-41.Ramm, U. The building of Europe was supported by 85 percent in May 1984, 15percent more than in 1979. George (1991) finds that a certain pictureof French policy towards the EC emerges under both conservative andSocialist governments, an image of a state determined not to be forced out of the central economic core of Western Europe by the West Germans, and intent on using the EC wherever possible as a means of getting the Germans to support some of the cost of French policies designed to keep France up with its economically powerful neighbor (George, 1991, 98). England argued that a car with 6 percent local content should be considered European. Maclean & J. (1991, November). 1 -11.Forsyth, R.W. Widespread agreement has been found among the Frenchpublic. "The Unfinished Chrysalis: Market forces and protectionist reflexes in France," In M. Maclean further notes the French obsession with Japan, whichheightened as the 1992 deadline approached. Besidesthe political obstacles, there has been the failure of the EuropeanCurrency Unit to gain widespread acceptance in Europe. (199 ). "Over the Horizon: A European Central Bank." Euromoney, pp. FRANCE AND GERMANY Japan has been a concern for most of the European countries in oneway or another, and one of the main forces propelling them towardintegration has been the conviction that this will make it more possiblefor them to compete with Japan in world markets. PROGRESS TOWARD INTEGRATION In addition to this sort of policy that seems to discriminate againstmember states--and specifically in this case against France--generaldiscord among the member states has reduced the effectiveness of theintegration effort. It was agreed that theEuropean Council would make decisions on qualified majority vote inrelation to the internal market, research, cohesion, and improved workingconditions and that in these cases the European Parliament would share indecision making (El-Agraa, 199 , 474-475). INTRODUCTION The dream of those promoting the integration of Europe has been aEurope without trade barriers, providing new opportunities for jointeconomic action that (it is hoped) could make the European EconomicCommunity (EEC) into an economic powerhouse capable of competing with theJapanese and serving as a trading center. Germany seemed the least committed to the goals of 1992due to the attitudes of unions and the government. In addition, asnoted above, a reunified Germany is not as strong as some have feared--atleast, not at the present time, though if the former West Germany can bringthe former East Germany along into a stronger economic structure Germanycould be a major economic threat as a unified country. These divergences were related to the balance of economic interestswithin each member state and to each state's role within the European andthe larger world economy. 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