SMEs set to ‘muddle through’ launch of euro changeover

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Series Details Vol.7, No.27, 5.7.01, p17
Publication Date 05/07/2001
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Date: 05/07/01

By Peter Chapman

NEARLY a third of small businesses will ignore expensive EU information campaigns and instead "muddle through" the launch of euro notes and coins, the sector's trade association admitted this week.

But Andreas Henkel, head of UEAPME's euro changeover working group, said no small companies would go to the wall as a result. "Whenever there is a new law or something that affects SMEs, we always find some 20-30% of people are ringing helplines at the last minute," he said. "It's difficult to reach these people. But no one will go bust because he is not prepared."

Henkel said many 'micro-enterprises', such as family construction firms, have such a small daily turnover that they will face few problems - even if they do nothing. The key factor is that their accountants will know how to complete the balance sheets in euros. Computer software packages would also help firms to make a smooth changeover, he said. "Of course, if someone is neglecting the future, then the future will punish him," said Henkel, adding that although UEAPME and its members would try their best to educate firms, they were "not babysitters".

He was speaking at a Brussels conference to highlight the best ways to inform small businesses across the EU about the switch to the new notes and coins.

UEAPME secretary-general Hans-Werner Müller unveiled a 'Eurobest' website, created by Cap Gemini Ernst & Young, offering practical advice to SMEs on the changeover. Some countries - notably Austria, which won two awards at the conference - were congratulated for their success in helping to prepare firms for the changeover.

But several speakers warned that serious concerns remained about a lack of preparedness and information ahead of E-Day. Anne-Lore Kohne, president of EU consumer association BEUC, said a key problem was the public's over-estimation of the time that national currencies and the euro would exist side-by-side. She said many believed the dual circulation period to be six months when in fact it is no more than two. "Many think their national currency will continue to exist alongside the Euro," she added. Kohne also expressed concern that only a low number of SMEs have accounts in euros. "This could lead to cashflow and payment problems," she warned. Xavier Durieu, secretary-general of retail lobby Eurocommerce, said the European Central Bank would make life harder for shop staff and their customers by refusing to issue small amounts of euro notes ahead of the 1 January launch. He said it was asking for trouble to train staff in handling the new currency during the January sales period.

However, Peter Blackie, head of communication policy for DG Economic and Monetary Affairs, said the Commission had "sympathy" for the difficult task faced by the European Central Bank. He said it was not for the Commission to comment on whether the ECB should issue notes via selected ATMs before 1 January, even though ECFIN president Didier Reynders has said this would reduce the risk of chaos.

Their comments came as MEPs in Strasbourg told ECB President Wim Duisenberg that the failure to issue currency in advance - known as 'front-loading' - would lead to greater risks of counterfeiting and fraud. Dutch Liberal MEP Jules Maaten said: "The European Parliament can no longer understand the stubbornness of the ECB in refusing to take this step. Consumer organisations and retailers are anxious that frontloading takes place. Frontloading is a simple way to minimise the problems. Why is this too much to ask from the ECB? A decision is needed and we need it soon."

Maaten said public authorities must take their share of the blame for the lack of urgency in preparations for euro-day. "A general atmosphere of benign neglect has reigned among policy-makers towards the introduction of euro notes and coins, downplaying this event as a mere technicality. It isn't. It directly involves 300 million citizens."

  • Belgian Prime Minister Guy Verhofstadt has promised "a full-scale appraisal" of the changeover to notes and coins at the

European Council informal summit in Ghent on 19 October.

Nearly a third of small businesses will ignore expensive EU information campaigns and instead 'muddle through' the launch of euro notes and coins, the sector's trade association has admitted.

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