Businessmen: they grow them bigger now in Europe. MULTINATIONAL MUSCLE

Italian financier Carlo de Benedetti cuts business deals right and left, speaks at least five languages, and aims to build a world-class European corporate empire out of bits and pieces of Italy, France, and Belgium. Lord Francis Cockfield, vice-president of the Commission of the European Community, recently met Mr. de Benedetti and describes him as ``a man of the future.'' An associate calls de Benedetti ``a man in a hurry.''

He certainly is not a typical European. He is as brash as any American corporate raider, constantly buying and selling and jetting from capital to capital. He controls Olivetti, the Italian office-machine giant; Yves Saint Laurent, the Paris-based fashion house; and Valeo, a major French auto-equipment company. He owns a stake in London-based Pearson, which publishes the Financial Times, the Economist, and Penguin books. He has companies in Spain, Switzerland, Luxembourg, and elsewhere.

What really made big headlines in Europe this spring, however, was a hostile bid for Soci'et'e G'en'erale de Belgique, a Belgian conglomerate that dominates the economy of that small nation. Last week, after a five-month fight, de Benedetti settled for a minority interest in G'en'erale, a stake in Suez, the giant French financial group - and a $1 billion profit.

De Benedetti is a symbol of the upheaval in European business today. He is also part of the cause. Robert de Bruin, a key aide with de Benedetti's Paris-based Cerus holding company, says his boss ``works as if 1992 exists already.... De Benedetti pushes change, he doesn't like establishment.''

That is very unlike European businessmen of old, who had cozy, protected markets, who enjoyed fixing prices and allocating market share over a five-course lunch at a nice restaurant. They abhored fighting it out at shareholder meetings and on the financial pages. But de Benedetti is different. ``He says if he is really a European there is no reason, for instance, not to meddle in French politics,'' de Bruin notes. ``We are all part of the same country.''

Government might have set the ball in motion, but businessmen such as de Benedetti, Edzard Reuter of Daimler-Benz, the London-based Saatchi brothers, and French publisher Jean-Luc Lagard`ere - who controls Hachette and the arms giant Matra - are just a few of the captains of European industry now competing on a global scale, piecing together European-sized corporations.

The aim, de Benedetti has said, is European companies that ``are Italian in Italy, Finnish in Finland, and European in Europe.'' With all the intra-European deals that he and others are doing today, economists, politicians, and businessmen say the 1992 program of economic integration is already irreversible.

For business, the single market is most welcome. For Philips, the Netherlands-based electronics giant, the single market offers the welcome prospect of making one kind of television set, rather than seven. For truckers, it means shorter lines at borders and less paperwork. For professionals such as doctors, the ability to practice in London, Bonn, or wherever.

It means an end to German beer-purity regulations, Italian pasta protection laws, Belgian chocolate content restrictions, Greek ice cream specifications - all of which bar outside competition.

The EC estimates there are more than 100,000 technical regulations and standards. And too often, an EC report says, ``technical barriers are greatest in high-tech sectors, where market fragmentation in Europe is a major competitive disadvantage vis-'a-vis producers in the United States and Japan.''

It's a hassle for business and for consumers. If a German wants to register his auto in France today, he must change the headlights, the wiring, the windshield. And 1992 promises to change that and more. It will ease nontariff barriers, harmonize standards, free capital flows, bring value-added taxes into line, and cause national governments to procure goods and services anywhere, seeking the best value for the money, not just in sweetheart deals with national suppliers.

``The very fact that business is preparing for 1992 rather than trying to block it is extraordinarily important,'' says Michael Emerson, a European Community economist in Brussels. ``We are in a new phase, something is working in a new way.''

The reason most often given: the threat from Japanese and US businesses. George Hall of British computermaker STC, says the internal market lets European firms ``enjoy the benefits of scale that the Community has always promised but has never before delivered.''

By scaling up internally, he says, European enterprises then can compete against the US and Japan. The affluence and size of the internal market also explain why corporations outside the Community are rushing to get a foothold. British officials, for instance, think Swiss giants Nestl'e and Suchard have tried to acquire British candy companies for just this reason. Sony and other Japanese corporations, meanwhile, are trying to show they are good European corporate citizens by extensive public relations campaigns.

But if 1992 benefits are high, so are the costs. No one has yet estimated plant closings and unemployment after 1992. The EC says more new jobs will be created than old ones lost. But planners in places like France say they recognize that marginally profitable heavy industry could face problems.

Tugging on rubber bands as if to emphasize how flexible British industry must be, Francis Maude, British undersecretary of state for corporate affairs, says firmly: ``Nineteen-ninety-two is about a lot more than trade. It is about a whole range of economic activities - joint ventures, mergers, and acquisitions. This is about how competitive you are.''

Across the Channel, Philippe Combin of the French Employers' Association notes, ``In the past, you have never had in France as many takeovers as in the US or Britain,'' mainly because the French government, through its dirigisme policy, decided which companies would and would not be merged. Now, he says, ``We are getting mergers. This is important because you have to get a European size to compete on the world market.

``We are conscious,'' Mr. Combin says,``that this could be a challenge to many companies, but there is no other solution.'' Global competition, he adds, means ``be European or die.''

It's the dying that might present a problem. Despite the expressed willingness of European leaders to tough it out, big questions remain unanswered about how governments, citizens, and pressure groups will react once their borders are open to competition. If the French auto industry or the Italian steel industry start to sink, will pressure groups force a national bailout?

Jean-Pierre Jouyet, a high-ranking official in the Ministry of Industry, admits that French heavy industry ``has a lagging competitiveness'' compared with that of Britain, Germany, and the Benelux countries. But he adds, ``We must go toward getting more competitive.''

``The whole thing is going to work only if there is a reasonably even distribution of gains and losses,'' says Helen Wallace of the Royal Institute for International Affairs in London. ``But governments can't plan it, and if governments start to rig it they are not going to get the efficiency they want.''

If nothing else, says Pierre Jacquet of the French Institute of International Relations, 1992 is a ``mobilizing myth.'' For France, he says, mobilization ``is very welcome. I don't believe the race to 1992 will necessarily lead to what politicians think. But it has sent a very clear signal to business people.''

Next: Handing over power

In a June 28 article on the European economy a quote about Italian financier Carlo de Benedetti being a ``man of the future'' should have been sourced to Emile van Lennep, minister of state for the Netherlands.