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This article looks at the expected political and economic changes in Europe as of September 1989 and its possible implications for the countries' foreign relations. The future shape of Europe will depend heavily on whether the European Community can achieve sufficient cohesion and prosperity in the next decade to accomplish two tasks: first, to generate centrifugal forces in Eastern Europe strong enough to draw reform-minded nations there more closely into its economic and political orbit, but without threatening Moscow to the point that it intervenes to reverse the process; second, to create centripetal forces in Western Europe strong enough that the West Germans will see any future association between their country and East Germany as taking place in a Community context. Inevitably, U.S.-European relations will be altered as the West Europeans seek to reduce their political dependence on Washington, as tensions with the Soviets ease and as progress is made in rolling back the division of the continent. In the years ahead, Western Europe can be expected to explore actively what it sees as dramatic new political possibilities in Eastern Europe and the USSR that were unavailable in the past due to its own lack of coherence and Soviet intransigence. Western Europe will also assert more boldly its international commercial interests and demonstrate its independence of the U.S. on a number of foreign policy issues.

Predicts that the number of corporate mergers, alliances and acquisitions will continue to increase as the economy continues to grow. Challenges the new companies will face, including competition and reorganization; Examples of mergers in Europe, including YPF and Repsol; How Asians are beginning to participate in mergers; Importance of the multicultural human-resource policies that will be enacted by the companies.