SIR ELDON GRIFFITHS, Member, British Parliament, and president, World Affairs Council of Orange County

This may be remembered locally as the year the recession came to roost in Orange County. But Sir Eldon Griffiths will remember it, among other things, as the year when many U.S. banks and other companies left Europe at a time when opportunities were opening up. The 12-nation European Economic Community will unite their economies and political systems the first day of 1993. Griffiths spoke with Times staff writer Cristina Lee about the opportunities in Europe for companies here, even amid the uncertainties of the global economy.

What are the opportunities for Orange County businesses in Western Europe? The kind of exports that Orange County in particular and Southern California in general ought to be going for are not the low value-added, labor-intensive industries of yesterday. What you have to sell are the high value-added, capital-intensive, leading-edge technology goods. What will happen when Europe’s economy integrates on Jan. 1, 1993? The Single European Act calls for a complete economic union. That means there will be free circulation of people, money, goods and services. It’s a Europe without frontiers. What would a united Europe be like? At the moment, a truck driver traveling from Copenhagen to Madrid has to cross five frontiers. He brings with him documents that weigh five pounds because he needs them for each crossing to reach his destination.

As of 1993, just one paper (will be required), and he will be able to travel more easily across Europe--like your truck drivers can in the United States. It will be a single paper issued by his own government, which is recognized immediately as a so-called “Eurodocument.” That Eurodocument, in effect, is a passport to travel freely.

In banking, a complete European banking office will be established before 1993, so that a Dutchman or Italian will be able to put his money in any bank he chooses in the community without restrictions.

The most dramatic change will be the liberalization of financial services. It will mean that the banking and insurance industries in Europe will be more liberal than they are in the United States. Those Europeans who live in the most protected markets, such as Spain and Italy, will see the real cost of financial services come down sharply. The British market, which is wide open in this area, will have a greater opportunity to sell its financial services anywhere in the Community. What recent developments would adversely affect Orange County companies doing business in Europe? I regret very much that the American banks in recent years have retreated from Europe. We’ve seen virtually all American commercial banks--with the exception of Chase Manhattan Bank and Citibank, which are still hanging in there--go home largely because of domestic problems.

But it means that they’re leaving Europe at exactly the moment when this huge market is opening up.

Of course, every American company operating in or planning to go into Europe will have to decide for itself what it wants and needs.

But I think they would be more comfortable if they’re operating with their own banks.

What advice would you offer Orange County companies seeking to enter the European market? If they’re a mid-size company, they’ve got to have a market survey on their particular products or services because it’s a very tough market. They’ve got to ask themselves: Is there a demand? Or can a demand be created by creative marketing?

There’s a great opportunity there, but it also requires good financial advice and, above all, finding the appropriate partners. Companies can get a lot of help from the various chambers of commerce and the American embassies in Europe. Is a joint venture or partnership essential?

I don’t think it’s essential, but it can provide a shortcut to the market. You can buy familiarity with the marketplace, with labor laws, political conditions, etc. If you’re going in there absolutely raw, it won’t be easy plugging into the European market, banking system and so forth. Which country would be a good place for California companies to invest? I think people should certainly look at Spain, because it’s a large country where a market is rapidly developing. For Californians, space and sunshine are important. Spain has a lot of both; it is (economically) behind, but it’s made a lot of headway.

However, one’s got to recognize that you’re not going to get local management talent quite so easily. Some (managers) may not have the skills you want. You’ve got to work out very carefully things like visas and work permits if you’re bringing in your own managers.

Also, infrastructure is terribly important:

* Does the local banking system deliver what you need, when you want it?

* Does the telephone system operate?

* Is the transport system working well so you can get your goods in and out?

* Is the arrangement of local government on land-use planning--such as the delivery of water, gas and other things--suitable to your company’s needs?

All those things are crucial. People from Orange County take these things for granted. Spain has a future, but it is an underdeveloped part of Europe. It’s like walking into a sophisticated part of Mexico. What are your plans? I’m not going to run for parliament in the next election, which happens before June, 1992. I’ve done 27 years and that’s enough. I plan to set up my own financial and commercial consulting company here and in England. I want to help American companies enter the European market and I also hope to . . . help United Kingdom companies come to California. I also want to help both the American and European companies go to the Far East.

On entering the European market. . .

“You’ve got to do what you do best and tailor your products to the marketplace, using marketing methods and distribution systems very much like European companies.”

On Europe’s unification. . .

“The Common Market doesn’t just happen. It’s a process. It’s going to take 10 or 15 years before the actual homogenization takes place.”

On Europe’s new consumers. . .

“There’s a new generation that thinks European, and I think you can advertise to them all the way from Naples to Copenhagen. It’s almost as if there’s a ‘hyphenated Europe’ coming into being--such as Euro-Dutchman and Euro-French.”

On trading with the new Europe. . .

“For the first time, companies don’t have to deal with each member of the Community. You can sell through the Eurovision television network, which encompasses the community.”