Survey finds poor preparation for EMU

Only 5 per cent of small businesses are well-informed on the far-reaching consequences of EMU and the switch to a single currency, a new survey has found. Almost half were unaware of what impact the euro - the new single currency - will have.

The survey, carried out by Ulster Bank and the Small Firms Association (SFA) found that almost 60 per cent admitted that their knowledge of the euro was poor. A further 5 per cent said they were indifferent while one-third claimed to be fairly well-informed. And although EMU is less than a year away, almost three-quarters (73 per cent) said they had not even appointed someone in the company to advise them on the issue. One in 10 firms said the matter was under consideration, while 14 per cent said they had already delegated responsibility on the issue to a staff member. Last night, SFA national director, Mr Brendan Butler, said the survey results emphasised the need to encourage greater involvement from small firms in preparing for the introduction of the euro. He pointed out that the euro will "impact on every small business in Ireland, from the larger exporter to your small corner shop."

The survey found that almost one in three firms said the euro would have a positive impact on their business while less than 5 per cent said its impact would be negative. Over 40 per cent said they did not know what impact the euro would have.

Interestingly, the majority of companies felt Ireland should join the new system at 2.53 deutschmarks. Only one quarter felt the pound should enter EMU at its central rate of 2.41 deutschmarks. The majority also felt that Ireland should join EMU at between 90p and 95p sterling.

On the issue of the cost of introducing the euro, the vast majority of firms - 75 per cent - said they believed it would be less than £10,000. Almost 12 per cent estimated the cost at between £10,000 and £50,000. Just 5 per cent said it would cost them £50,000-£100,000.

Mr Pat McArdle, head of EMU Planning at Ulster bank, said: "We expect to see a lot more companies develop their specific preparations for EMU during 1998."

He said his company was recommending that businesses should "think through the broader consequences of EMU now and then decide how best to get ready for it and, indeed, to gain advantage from it."

Mr Brendan Butler said they were recommending a three-point approach to ensure small firms will be ready from EMU. He said small firms must be encouraged to adopt a more proactive approach in enhancing the euro.

Mr Butler also said that Government authorities have primary responsibility to inform small businesses and to ensure the appropriate conditions are in place.

He added that accountants, banks and trade associations had a key role to play in assisting small business clients.

The survey was responded to by 356 firms. Of these, 45 per cent were in the services sector, while almost 20 per cent were engaged in manufacturing and 27 per cent in retail. The remainder were in the distribution sector.