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Focuses on unemployment as a way of life in Europe in 1998. Governments needing to convince citizens that employment is desirable; The long-term unemployed being Europe's biggest economic and political problem; Reference to a study on unemployment in France by Alain Lebaube in which he looks at the `jobless worker'; The culture of unemployment growing throughout the European Union; Italy's pension to nonemployed workers. INSETS: Europe's gainfully unemployed;France;Germany;Spain

Features some equity analysts at major European asset managers who are rising to new challenges. Reason John Bowler earns praise; Experience that helped Harlan Carere of Fidelity Investments as an analyst; Factor that gives Mark Henderson of Abu Dhabi Investment Authority added insight into specific stocks.

Profiles several analysts at major asset managers in Europe. David Allen at Pioneer Investments; Kamran Baig at Goldman Sachs Asset Management; Robert Alster at Alliance Capital.

Emphasizes the role of high-yield investors in corporate debt restructuring in Europe. Increase in the European default rate; Alternative in managing defaults; Role of the European High Yield Association in managing corporate debt restructuring.

Investment bankers' pay has been pushed through the roof as European firms seek to compete with Wall Street. But in 1998 banks are squeezing costs as they see their growth prospects fade. For all but the very best employees, the days of sky-high salaries may soon be over. In 1998, investment banks, aware of worries such as government regulation, have stepped up their efforts to grapple with weaknesses in their back offices and credit-risk divisions. Investment banks, faced with escalating costs as they seek to compete in a cut-throat industry, are for their own reasons also starting to think twice about hefty compensation costs.

Assesses the performance of the telecommunications market in Europe. European Union's opening of telecommunications industry to full competition beginning January 1, 1998 is what is known as the Big Bang; Entry of Americans to compete in the telecommunications business.

In a time of fierce competition partly prompted by technological change, commercial banks are struggling hard to make decent margins from traditional business. Diversification into investment banking and derivatives trading has led to as many failures as successes. Banks that have lent to Asia are being blamed for bad credit decisions and for threatening the very fabric of the financial system. But they are forced by fierce competition to produce attractive returns on capital in ever tighter markets and are likely to argue that they must take risks to safeguard margins. Commercial banks in the US and Europe have been forced to cut costs and branches while diversifying into such businesses as pensions, insurance, asset management and investment banking. For many banks, this has caused an identity crisis.