By Marshall Loeb

FORTUNE — The 1990s may well be the Decade of Europe, an era when that energized and integrated continent offers more challenge and opportunity than either Asia or America. In this new Europe, the leading force — the critical mass — will be a united Germany. Details of how to bring about unification are being worked out now, and not only in Bonn and East Berlin but also in other European capitals and Washington. Just as war is too important to be left to the generals, so German reunification is too important to be left to the Germans. With capitalist-inspired revolution sweeping Eastern Europe and the Soviet Union, what will that part of the world look like as the decade unfolds?

Some remarkable insights came forth at the recent annual World Economic Forum in Davos, Switzerland — attended by some 1,200 chieftains of business, government, and the media. For the first time, the Eastern Europeans were there in large numbers, among them the Presidents, Prime Ministers, or principal deputies of East Germany, Czechoslovakia, Hungary, Poland, and Bulgaria. All the Eastern Europeans are struggling to find some new economic model that will provide both the opportunities of capitalism and the safety nets of socialism. A common plea to Westerners: “Send us your managers. That’s what we need most.” They also need capital, and tried to outbid one another in proclaiming new liberalizations. (For more on what they offer, see The World.)

At the other extreme: a common fear of possible violence, from the newly unemployed or old ultranationalists. Mikhail Gorbachev’s chief economic strategist, Deputy Prime Minister Leonid Abalkin, granted that many parts of the Soviet economy are very backward — but not its military-industrial complex (yes, he called it that). Quick progress could be made by shifting the military machine to produce more consumer goods, he said. Added Nikolai Shmelev, head of the North American Department of the Soviet Academy of Sciences and member of the Congress of People’s Deputies: “All our history, we have preferred gigantic projects. It was almost our national disease. But now it’s much more important to have not one or two or three huge projects involving foreign investment but hundreds or, if possible, thousands of medium-size and small enterprises.”

The Soviets’ most daunting problem: jobs. “Already,” said Shmelev, “we have five million people unemployed. Another 30 million of our personnel are employed, but inefficiently. They must be sacked. But you can understand the danger of social reprisal if they are all let go at once.” And, Shmelev continued, “a lot of our mines should be closed. They are hopelessly inefficient. But how can you retrain a miner?” One of his solutions: Let the Soviets borrow in the West against their gold hoard, about $30 billion, and use the money to finance joint ventures.

West Germany’s Chancellor Helmut Kohl spoke eloquently on the problems of the present and the promise of the future, saying that a unified Germany would be trustworthy and needed to be an integral part of the West. He thanked the U.S. for its postwar support and said that today it was West Germany’s turn to help those in need. Then, referring to the free-enterprising Finance Minister (and later Chancellor) who lifted West Germany from the ashes more than 40 years ago, he said, “Ludwig Erhard has triumphed over Karl Marx.” Now, he concluded, the new Europe must have as its goal the grand vision expressed by Thomas Jefferson: “Life, liberty, and the pursuit of happiness.”

Humor often prevailed at the World Economic Forum too. Eastern Europeans needled the many Soviets present. For example, Czech Prime Minister Marian Calfa demanded, Why did the Russians need more than a year to pull their troops out of his country when “it took them only 24 hours to come in?” Others joked at their own expense. Bulgaria’s new Premier, Andrei Lukanov, said of his job: “It’s terrific. There’s no government to deal with.” Old hatchets were buried, and new relationships created. And for the first time West Germans claimed East Germans as meine Landsleute — my countrymen. That, perhaps above all else, provided a clear look at the face of Europe in the 1990s.