Passage 2
Economic Troubles Cloud New Market's Future
But perhaps the major reason is the dark economic clouds now hanging over Europe. One of the central justifications for the single market was its ability to create greater prosperity, but it is making its debut just as Europe traverses one of its roughest economic storms in year.
"We are going to wind up 1992 with just about the same level of unemployed-nearly 10 per cent community wide that we had before this project," says an aide to Mr. Delors. In addition, economic growth is skidding to an anticipated 1 per cent next year, all of which adds up to consumer and business confidence sinking to the same lows recorded during the pre-single market days of Europessimism.
Both EC and independent analysts say that business anticipated the economic benefits of the single market, so that much of the burst of economic activity in preparation for the new market has already occurred.
Business investment, which had been flat for the five years preceding the decision in 1985 to create the single market, soured to a 7 per cent annual growth rate from1985-1990.
Business investment increased at 5% growth rate in 1990s.