there. However, it remains uncertain whether such a high level of merger and acquisition activity will continue throughout the 1990s, since there is considerable uncertainty as to the future of commercial activity in the former Soviet bloc countries and because cultural and technical barriers to mergers and acquisitions remain.
The policy makers responsible for the Single European Act realized from the outset that there was a need for merger controls, since the completion of the internal market would precipitate an increase in merger activity. This belief underlay the Preamble to some drafts of the Council Regulation on Control of Concentrations, which were intended to provide the Community authorities with the formal powers of merger control.
European Community policymakers have also realized that the European market does not exist in a vacuum. Many firms which operate in the European market also operate in other markets around the world. Indeed, the competitive structure of many products cannot be examined in isolation within the context of the European Community markets. These products must be examined in light of the world-wide market and in some cases it must be understood that this market can only support a relatively small number of multinational firms.
In fact, the Community economic policies have often been seen as trying to restrict access to the single European market by non-European firms. In response, non-European firms have devised schemes to penetrate the Community market by acquiring existing European firms or by entering into joint ventures with these firms. As a result, American investment in European firms represented the largest source of cross-border acquisitions in Europe during the first two months of 1989. This figure has been interpreted as the harbinger of a future trend. The Commission has said that joint venture activity between European and non-European firms results from the desire...