Some considerations about 1992

The success of 1992 depends upon entry to industries where there are no natural barriers to entry. Small and medium-sized enterprises have the flexibility and dynamism to represent a permanent entry threat to an integrated market. The liberalization of financial markets will ease their access to credit. The European Commission has taken measures to offset the disadvantages of small size. It is most able to bring some competitive discipline to markets that are now tight oligopolies with artificial entry barriers. However, in industries where barriers are both natural and artificial, it is difficult to predict the changes that will occur in 1992 because the modification of oligopolistic rivalry can have varying effects. Theoretical research in industrial organization suggests that there is no reason to be particularly optimistic about welfare gains from integration in these industries. Also, it suggests that antitrust laws relative to selective distribution channels can act as a countervailing force to such negative changes.