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Italians Approach Europe's 1992 Single Market With Caution

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BRUNO CALZIA spends a good part of his time helping small Italian companies learn about the European Community and the possibilities - and challenges - presented by the single market of 1992. The young Rome attorney with valuable experience in Brussels says he often shares his concern that many Italian companies won't be ready for the increased competition of one huge European market or the opportunities for EC contracts. The response he often gets is a comparison to Italy's hosting of the 1990 World soccer championship.

``The Italian approach to 1992 will be like planning for the World Cup,'' he says. ``People say, `Look, preparations weren't taken seriously until six months before the games, and everything got done.'

``But I tell them that participating in Europe is like getting on board a train,'' he adds. ``It's easiest before the train leaves. If you wait until the train is moving, it's hard to get on, and then it's hard to find a place because the Germans, French, British, and Spanish got there before you.''

Not everyone agrees that the single market will be much of hurdle for Italian industry. Some economists say that Italians, world traders since the time of Marco Polo, are already heavy exporters and well integrated in the European economy.

Others, however, point out that Italy has already lost market share among its European partners in the traditional manufacturing sectors where it is concentrated. And they worry that without serious efforts to innovate and reduce costs, Italian industries will see that market share fall further.

Despite such worries, economists and business leaders alike expect the overall effect of the single market and further progress toward EC economic integration to be positive, because it will force reform on a public sector that has been particularly loath to accept change.

Already entry of the lira into the tight fluctuation band of the European Monetary System is forcing austerity in government spending. Anticipated competition from European banks after 1992 also helped pass recent bank reform legislation that at least starts modernizing Italy's archaic, patronage-riddled financial system.

``The important impact of the European Community will not so much be the internal market,'' says Confindustria's Alberto Heimler. ``But it will force decisions to be taken,'' he adds, decisions on everything from fiscal policy to infrastructure improvement that have been put off by lotizzazione, the system that awards many jobs based on political party strength.

``That system is a form of protectionism that discourages decision-making,'' says Dr. Heimler. ``But now decisions will have to be made if Italy isn't to fall back.''

Mr. Calzia says one way for small companies to crack the larger market will bu joint projects or mergers.


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