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EU businesses set to miss euro deadline

22 November 2000  |  703 views  |  0 EU businesses set to miss euro deadline

Business across Europe remain confused about the transition requirements for EMU and some risk missing the 1st January 2002 deadline for the currency change-over warns a report by Cap Gemini Ernst & Young and the Association for the Monetary Union of Europe.

The report's findings stem from interviews with 1000 organisations across nine industry sectors in September and October of this year. The survey found only 23 per cent had completed their euro-related projects, with 10 per cent yet to initiate any IT changes in preparation for the euro.

With thirteen months before the changes take effect, analysis by Cap Gemini Ernst & Young has found that industries like insurance, utilities and the public sector will require a change-over period of at least 12-18 months and the banking industry may require even longer.

The survey found that low levels of preparedness can be linked to a lack of information or knowledge about the EMU transition rules.

Stan Cozon, director of eurotransformation services, Cap Gemini Ernst & Young believes organisations have overlooked the business impact and complexity of the euro change-over and have failed to recognise that euro transformation and e-business programmes will impact the same areas, thereby missing opportunities for linking these large-scale projects.

The survey found significant differences in readiness across the euro zone. In Austria, 45% of the surveyed organisations already use the euro as their base currency, while only 9 per cent of organisations in Portugal report the same. A sector breakdown shows that only five per cent of the administrative and government sector is using the euro as base currency, compared to 30% of the banking and manufacturing sectors.

Leading on from the survey, Cap Gemini Ernst & Young and AMUE have jointly written to finance ministers and participants of the Ecofin meeting in Brussels on 27 November 2000, identifying key issues and suggesting initiatives that could be implemented to stop the confusion.

Bertrand de Maigret, general secretary of AMUE warns: "The authorities responsible for the euro change-over need to confirm the agenda and remove uncertainty; push for an early euro change-over; lead through example by driving the process faster in the administrative and government sector; use the best practice developed by countries like Luxembourg, Belgium and Austria to help other members of the euro zone; and stimulate the use of euro between customers and suppliers."

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