Managing the Impact of the Euro

Citation

Lascelles, D. (1999), "Managing the Impact of the Euro", European Business Review, Vol. 99 No. 1. https://doi.org/10.1108/ebr.1999.05499aad.002

Managing the Impact of the Euro

Managing the Impact of the Euro

Simon SearGowerAldershot122 pp.Hardback ISBN 0-566-08146-6£45. 00

Keywords Currency, EMU, EU

All the business surveys claim that British business is woefully ill-prepared for the Euro: there is a lack of information, a belief that since the UK is not joining it does not matter, and what difference does it make anyway: it is just another currency?

To some extent these viewpoints are correct. In their eagerness to boost the single currency, some commentators have deliberately exaggerated the impact and the difficulties. Businesses trading with the Continent, we are told, will be "forced" to deal in the Euro. The Euro will take over from the dollar as the international trading currency. All this is highly debatable.

What is not in doubt, however, is that any exporting and importing business will need to understand what the Euro is, what makes it tick, and how to incorporate it into its accounts. This book is a valuable guide to precisely that. All the key business issues are clearly laid out and explained. Frightening concepts like redenomination are described in straightforward terms. So are the impacts on companies' back offices, their systems and their trading environment, such as banks, stock exchanges and payments and settlements. Some comforting examples are given of large companies' preparations for EMU: such as Barclays and Marks & Spencer.

In particular, the book lays emphasis on the need for careful planning. Making the transition to the Euro is such a fundamental move that it cannot simply be left to the accounts department. Successful firms will create centralised, strategic groups to ensure company-wide implementation. This book contains much useful advice in this area.

Simon Sear is a great Europhile: he thinks that the Euro will stretch from Scandinavia to Turkey by 2020 and that a world currency, the Euro Dollar will be launched by 2025. Prudent firms would be wise to take a more cautious approach. EMU was always a gamble, and the events of recent months suggest it will be launched into stormy waters. Some companies are building what they call "reversibility" into their EMU plans. Mr Sear might have added this piece of advice to his otherwise very comprehensive handbook.

David LascellesCo-Director, Centre for the Study of Financial Innovation (CSFI)