FOR more than 40 years, Europe's computer industry has tried and largely failed to build up national or European champions to combat the power of the Americans and Japanese.
It was clear by the end of the 1960s that government featherbedding in research and procurement would not be enough to protect Europe's national champions - Philips, Siemens, Olivetti, ICL and CII/Bull - against the onslaught by IBM and other US companies. The European Commission started to urge the national champions to merge.
In 1969, an attempt by Eurodata - a consortium of ICL, CII, Telefunken and Olivetti - to throw IBM out of the European Space Research Organisation failed. In the 1970s, merger talks between ICL and Nixdorf failed because of ICL's intransigence, and a joint venture called Unidata between Siemens, Philips and the French company CII to develop and market a common range of computers collapsed in wrangling among the partners.
In the 1980s, Europe reacted to these failures by reverting to its old habit of nurturing its national champions. Mrs Thatcher guaranteed ICL's losses when it fell on hard times in 1981. Between 1983 and 1993, Bull received an average of FF1 billion (about IR£115 million) a year in subsidies and capital injections. In 1990, when Nixdorf ran into trouble, there was an opportunity for a crossborder merger, but the German government opted for a "German solution", a takeover by Siemens. In a crisis, the European veneer proved very thin.
That same year, the unthinkable happened. ICL sold out to Fujitsu. Its chairman Peter Bonfield had realised that being British or European was not enough. In a global market like computers, he had to be part of a global company. For his pains, he was thrown off the European roundtable of national champions, despite most of them being heavily dependent on Japanese or American chip technology. The most incensed was HansOlaf Henkel, the head of IBM Germany, who saw no irony in dubbing ICL "Fujitsu's Trojan horse in Europe".
With Fujitsu's money behind him, Bonfield then proceeded to mop up Scandinavia's champions, taking over Finland's Nokia Data, Databolin - one of Sweden's major software companies - and Denmark's Regnecentralen. He proved, paradoxically, that globalisation, not Europeanisation, is the way to rationalise the European computer industry.
In the early 1990s, the other national champions were not doing well. Bull was clocking up massive losses, sacking 14,000 workers and being bailed out by the French government, to the fury of the European Commission.
Olivetti fired its boss, Carlo de Benedetti, as losses piled up.
Philips had left the computer market in despair. Siemens remained the only solid player, despite immense difficulties in absorbing Nixdorf.
A new book by Paul Gannon, Trojan Horses And National Champions, describes vividly how these disasters happened despite the millions of ECUs poured into the research budgets of the national champions. The dream of a Europe of national or European champions has been blown away. So has the view that governments can rescue hightech companies against the harsh logic of global competition.
One man, however, has learnt from these disasters: Martin Bangemann, who became the European industry commissioner in 1993. "We don't need public money; we don't even need new technologies," he argued just before the Corfu summit of June 1994. "We must deregulate, liberalise and privatise... If we do not, the others will - and we will be lost."
In fact, Bangemann's target is telecoms rather than computing. He is forcing the Continent's telecoms operators to open up their markets by January 1st next year - a tough message to hand out to the cosy monopolies who have noticed that privatisation of BT was followed by nearly 100,000 redundancies.
Bangemann is aware that he is opening up Europe's telecoms champions to cut throat global competition, and he relishes the prospect.