Common Market: Triumph Over Politics

After a summer that most vacationers would rather forget (see THE WORLD), Europe approached the serious business of fall with high hopes and busy schedules. September marks the end of the somnolent holiday season, the beginning of a new spurt of business and the return to work of the managers who make Europe's industry run. In 1963, it also marks a decisive time for the unique and historic union that is Europe's Common Market. The remarkable fact about the Market, eight months after Charles de Gaulle abruptly barred Britain from membership, is that, in a triumph of economics over politics, it has continued to be a strong and growing force.

"This is a black day for Europe. The Common Market is now only a mechanism and no longer a living thing," West German Economics Minister Ludwig Erhard had cried in his despair over De Gaulle's action. The mechanism, nonetheless, is working very well. While 1963 has not been quite the year that it promised to be in early January, it has been far more successful than European businessmen dared to hope right after De Gaulle's shocker. Among Europe's top managers, there is a continuing confidence in economic growth, and a sense of expectation about where the Common Market is leading.

Psychologically In. The businessmen have continued to raise their production schedules. Despite the most disastrous winter in recorded European history, the Common Market is growing exuberantly at more than 4% for the second straight year. Says one top Ruhr industrialist: "Though the vetoing of Britain was a deep and painful psychological shock, it has had no direct effect on our business." Nor has it affected Europe's tariff-cutting schedule. European governments in July, without fuss or furore, cut tariffs among their countries another 10%, bringing the total tariff reduction to 60% since the Common Market began in 1958.

Faced with thousands of individual decisions that had awaited Britain's expected entry, both British and Continental businessmen took another look at the situation after De Gaulle's veto, decided that they could live with it—and went on from there. Ignoring De Gaulle, the Common Market recently agreed to meet quarterly with British officials to exchange information, work out problems, and devise new ways to bring Britain closer to the Six. British exports to the Common Market were $280 million higher in the first half of 1963 than in 1961's first half, and British investment houses are now included in almost every new Continental banking syndicate. "Psychologically," says a director of a London bank, "Britain already is in the Common Market."

While waiting for Britain to enter in the years to come, the Common Market has expanded its influence in other directions. The Six recently signed a commercial treaty that will tie in their trade with that of 18 former African colonies. Having made Greece an associate member, the Six next month will give Turkey similar status. Among themselves, they have moved well along toward harmonizing their controversial and complicated business turnover taxes and centralizing their banking and budget policies. But the sharpest spur to increasing economic union is the unflagging strength of the huge European market, second only to the U.S. in size.