The Stars of Europe

50 players in a grand experiment

The determined head of a French energy giant. The popular German Agriculture Minister who's challenging her country's powerful farm lobbies. The co-founder of a group in Cambridge, England, leading a revolution in biotechnology. The dedicated Spanish politician who wants to bring change to the deeply troubled Basque region. With their different mother tongues and professions and cultural backgrounds, it would be hard to choose a more disparate group of people.

Yet all are part of what could be called the European experiment--the cumulative moves under way that are transforming the idea of greater European unity into a political, economic, cultural, and even military reality. This is a process that will spread out over generations. But the pace is suddenly and palpably quickening.

From the rapid transformation of Europe's industrial companies and financial institutions to an exploding constitutional debate about the regions's political future, this is a defining moment for Europe. To borrow the memorable phrase that President Truman's Secretary of State, Dean Acheson, used to describe the birth of the postwar world order, these Europeans are "present at the creation."

Experiments have uncertain outcomes. Consider the physical introduction of the euro as the Continent's legal tender just 28 weeks from now--on Jan. 1, 2002. Manufacturing 140 billion coins and 14.5 billion banknotes and distributing them to 200,000 banks from Helsinki to Athens will be the largest logistical operation ever carried out in peacetime. And although the tonnage can be toted up with accuracy, no one can predict the psychological impact on over 300 million people as they lose their national currencies--long one of the core elements of the traditional nation-state. The francs, marks, and lire that will disappear five months later, on June 1, 2002, are "symbols that are as strong as flags, national heritages, and cultural identities," says Jean-Luc Lagardère, one of France's leading industrialists and a champion of European unity.

Until recently, the laboratory conditions for this great experiment--the new currency, greater political cohesion, and an expansion of Europe to the former Eastern blocs--seemed ideal. Economic growth was buoyant; the markets increasingly confident. In April, European Central Bank chief Wim Duisenberg was still painting a rosy outlook for the Continent's economic fortunes.

It's clear now that the challenges will be much more daunting. Growth is stalling; the International Monetary Fund has just cut its outlook for Europe's growth this year from 3.4% to an anemic 2.4%. Meanwhile, the very European scourge of inflation is roaring back to 3%, a level not seen for a decade. And the Frankfurt-based ECB, which seemed at first to challenge the U.S. Federal Reserve as the world's premier central bank, has watched helplessly as the euro drops relentlessly against the dollar.

If Europe has been spared the worst of the American dot-com implosion, it has been held up by its own technology problems. Billions are being spent on a push into third-generation wireless technology--just as a crisis of confidence is hitting the sector. This trauma has humbled once-proud companies, from Ericsson (ERICY ) to British Telecom (BTY ).

It's a landscape of both uncertainty and great promise. In it, BusinessWeek has identified 50 people it believes are some of the key players in this grand experiment. They are this year's Stars of Europe. The roster shows how adept Europeans can be at mastering change. Paradoxically, the very handicaps of their business environment--from massive overregulation to labor market rigidities--have forced the best European businesses to learn a new flexibility.

The scale of corporate reinvention is evident across Europe. Take France's Vivendi Universal (V ). CEO Jean-Marie Messier has transformed an old-style water and utilities conglomerate into one of the world's most aggressive media players. Up in Finland, Nokia Corp. (NOK )--once a sprawl of uncompetitive businesses--has reengineered itself as the leading player in wireless technology. In the past three years, the head of Nokia's handset division, Matti Alahuhta's unit, with $22 billion in sales, has helped turn the cell phone into the biggest consumer electronic device in history.

With euro-denominated capital markets at hand, European finance is also undergoing an unprecedented change. Ask Henning Schulte-Noëlle, the boss of German insurance giant Allianz (AZ ). He has just spent $20 billion to acquire Dresdner Bank (DRSDY ), a deal that is shaking up European finance. Or take France's Jean-François Théodore. He has taken the once-sleepy Paris bourse and turned it into a cross-border share-trading powerhouse. And bankers such as Italy's Alessandro Profumo are redefining European banking through aggressive international alliances.

Politics is also being reconfigured. Look at how German Chancellor Gerhard Schröder, now the Continent's principal political figure, is pioneering once-unthinkable reforms of pension and fiscal systems. In Estonia, Prime Minister Mart Laar is applying free-market solutions, igniting growth. Italy's Giulio Tremonti hopes to hack away at the jungle of regulations that have held the country back.

Of course, many of these pioneers will stumble, as did some of their stellar predecessors from last year. Once-promising entrepreneurs who miss out on dramatic technology shifts will be stuck in costly dead ends. Political reforms could stall. Europe will probably never be a "finished" national entity like the U.S. It will be a new and distinctive hybrid. Whatever the outcome, the experiment is well under way.

A number of BusinessWeek correspondents contributed to this Special Report. They are: Stephen Baker, Kerry Capell, Christopher Condon, Heidi Dawley, William Echikson, Gail Edmondson, Jack Ewing, David Fairlamb, Emilie King, Monica Larner, Carol Matlack, Stanley Reed, Andy Reinhardt, James Russell, Katherine Schmidt, Philip Schmidt, Christine Tierney, and Bogdan Turek. Rose Brady and Christopher Power edited the report in New York.

By John Rossant in Paris, with bureau reports

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