Toward a Trillion

In its explosive expansion, the Atlantic Community is going to need the vertiginous sum of $1 trillion in new capital over the next ten years. The scarcity of capital is of course greatest in European nations, and the supply is of course greatest in the U.S. Thus, says the Atlantic Council of the United States, Europe is "the world's most promising growth market," and American technology is "the unquestioned key" to Europe's "strength, security and prosperity."

The council, a think group of prominent Atlantic-minded Americans, studied U.S. investment opportunities in Europe in a series of visits and conferences last year, summarized them last week in an analysis that makes it clear that despite Gaullist-type opposition in Europe, U.S. capital is needed and welcomed more than ever. The council's findings:

THE COMMON MARKET as a whole "needs a sustained flow of outside capital because the European capital market is not large enough to meet current and future industrial needs. There is growing resistance to the entrance of U.S. companies into the Common Market area. Adverse publicity has increased. Yet U.S. companies continue to be sought for specific investments or enterprises, particularly those requiring advanced technology. This is expected to continue."

BRITAIN, which has absorbed $4.2 billion in American investment, more than any other country in Europe, has an "excellent" climate for foreign investment, especially American. The British particularly want investment that will bring in new technology and foster progress in Scotland and Northern Ireland. American corporations have an "exemplary" record of good behavior in the U.K., but their executives tend to irritate the British by not adapting to local customs. There is some fear of "U.S. dominance" of key industries such as autos, aircraft, computers.

THE NETHERLANDS, unique in having invested more capital in the U.S. than it has taken from the U.S. ($1 billion v. $450 million), has dropped the special incentives it once offered but does not discriminate against foreign investment. The government favors highly automated new industries that make small demands on scarce Dutch labor, wants more Dutch participation in foreign subsidiaries. Netherlands businessmen feel emotionally drawn to the U.S. more than to any of the members of the Common Market.

BELGIUM offers the American investor an outlook that is "excellent-perhaps the best in the Common Market." The Belgian government "actively solicits U.S. investments which will meet the Belgian need for more technical know-how." Foreign investors are offered a series of incentives, including the lowest corporate taxes in the Common Market. Belgium especially wants the U.S. to bring in electronics, precision op-ticals, nonferrous metal and chemical businesses.

WEST GERMANY, with $2.3 billion in U.S. investments, has a "favorable" attitude toward foreign investment but offers no incentives. Rich and stable, West Germany is an attractive country in which to place a business. But Germans are emotional about U.S. investment. There is fear of American take overs of key industries, talk of forming giant European corporations to compete with American firms.

FRANCE, despite General de Gaulle's campaign to keep "Europe for the Europeans," remains "a high-priority country in which to start a new busi ness." In fact, there have been more new investments in France recently than in any other Common Market country. The French want investments that introduce new technology, raise exports, reduce imports, help develop certain regions.

ITALY continues to have a "favorable" climate for foreign investment, and government policy is to encourage it. "Investments that will bring new technology are especially acceptable, likewise any investment in underdeveloped areas such as southern Italy."

SPAIN "welcomes U.S. capital warmly" and has a wide range of needs involving the creation of basic industries and a consumer economy. The government usually favors Spanish participation in U.S. ventures. Businessmen are warned that because of Spanish pride, incidents that would be minor elsewhere might lead to major failure in Spain.

The report finds that despite signs of prosperity, "Europe still lags far behind the U.S., and in truth the gap-the real gap-is increasing." Thus even greater masses of money are going to be added to the $12 billion in American capital already invested in Europe.

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