UK/EC: Time for the single market shakes.

UK/EC: Time for the single market shakes. - The promises and threats of 1992 are beginning to worry the biggest and the smuggest, says Peter Wilsher, and no one can feel impregnable.

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Last Updated: 31 Aug 2010

The promises and threats of 1992 are beginning to worry the biggest and the smuggest, says Peter Wilsher, and no one can feel impregnable.

Listen hard and you will hear a croaking and a groaning all around. In many cases it is still faint and far off, but in others it is beginning to swell to a low, insistent roar. It is the sound of 1992, the signal that the Single European Market is now genuinely struggling to get itself born. And although there remain plenty of unreconstructed laggards happy to delay the accouchement for as long as humanly possible, they are starting to realise that history, economics and the probing, competition-fostering logic of Sir Leon Brittan are hurrying even the sleepiest of overprotected state monopolies towards the labour ward. Parturition, like it or not, is at hand.

As this realisation grows, there is a noticeable quickening of the corporate pulse. Strategy committees, long on the back burner, are geared up for almost continuous session. The chairman and chief executive, previously too busy to concern themselves with anything beyond the Channel, suddenly insist on attending in person. All those yellowing draft Directives sent over by the Brussels office find themselves moved overnight from "pending" to "urgent". Trade directories are nervously thumbed as some previously unheard-of set of initials from Baden-Wuerttemburg or the Veneto is rumoured to be bidding for a potentially damaging slice of the UK market.

It is happening everywhere. IBM, for example, which for years acted, quite justifiably, as if Europe was its own unchallenged backyard, shows all the signs of succumbing to a major fit of nerves and is busily, not to say frenetically, overhauling every aspect of its European Community operation. And what it is doing, and the reasons why it is worried, should be of interest to every firm which is trying to develop a Community-wide business. For what it is seeking, after several disappointments and false starts, is to maximise the economies of scale which should be achievable in a continent-wide marketplace while retaining the greatest possible degree of local identity.

It is a debate that no ambitious contender will be able to escape, whatever the trade he is hoping to cultivate. Where precisely do you draw the line between cost-saving impersonality (one brand name, one advertising pitch, one company style from Liverpool to Leipzig) and the kind of flexible, small-office autonomy that can flatter all the idiosyncracies of national customer taste? It will be the people who most successfully solve this riddle who emerge as the trading (and profit-generating) giants of the coming United States of Europe.

The IBM solution is far from cut and dried. The basic decision has been made: to centralise a lot more of some things (like concentrating the present 150-odd, not entirely compatible management data centres into three to five number-crunching megaliths) and diversify a lot more of the others (like those dealing directly with the purchasers). But the details remain firmly in the melting pot. A year ago (last July) all of the top-level personal computer executives in the group were moved out of their Paris headquarters and told to get better acquainted with the regions for which they were responsible. But the result was so much getting in the hair of local managers that most of them have been quietly relocated back to the French capital for a rapid rethink.

Few others, however, can be confident enough to laugh at such misfortunes. Similar planning sessions re going on in boardrooms everywhere as single-market life starts to impinge.

Britain, it goes without saying, is coming under a lot of pressure even in a variety of once-cosy, parochial niches like mail order. All of those ladies with their downmarket catalogues and their discreet credit deals with the neighbours are looking like an increasingly endangered species as their territory is invaded by the likes of Otto Versand from Germany and La Redoute from France. Otto already owns Grattan, and if Littlewoods and Empire Stores also fall into non-UK hands, as is likely, then nearly half of this until-now rather dowdy business will be in hands of sharp, fashion-conscious continentals with aggressively ambitious new ideas. These can only be testing times for that headscarfed giant, Great Universal Stores.

These anxieties, though, must be more than paralleled in the banking parlours of Frankfurt and Duesseldorf as they contemplate the marauding march of our beloved Barclays. Up to now the Germans have been able to shrug off the credit card revolution and restrict their captive customers to the kind of plastic that has to be paid off once a month. That is the opportunity which Barclays reckons will catapult it into the big time in Europe's biggest, but in many ways frowstiest, financial market. Watch out, Deutsche Bank. Even champions sometimes discover they suffer from an Achille's heel, and 1993 will be the year that identifies the weaknesses.

(Peter Wilsher is assistant editor of the Sunday Express.)

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