Small firms in the crossfire on EMU front line

Date: 23/10/1997

AS THE introduction of the euro creeps imperceptibly forward, the practical implications for small and medium-sized enterprises have only just begun to dawn on them.

Many smaller businesses which have until now taken little interest in the big political picture of economic and monetary union mistakenly believe that they will not be affected until euro coins and notes come into circulation in 200

Walter Borms, who works on economic and fiscal affairs for UEAPME, the SMEs' lobby, says their lack of euro-awareness is a “big problem” since they are the ones in the front line.

“We expect the market will force SMEs to begin the change-over in 1999 as they have an interface function between consumers and big business. They have to make the euro acceptable,” he insists.

In order to gain and keep customers, businesses have to do everything possible to show themselves fit for the euro. They will be the ones having to give clients a feel for the new currency and convince them that there are no hidden increases in prices calculated in euro. UEAPME even predicts that the change-over will lead to price wars.

In fact, there is little enthusiasm for the single currency among SMEs, which will have the same euro obligations as big industry but will not see such benefits as cheaper cross-border trade immediately.

They also want to avoid what they see as the threat of an unnecessary burden of regulation. They are unhappy with the transition period, which looks set to come at a busy time of year, and do not want to be forced into dual pricing as this will be expensive for them.

UEAPME is awaiting final approval from the Commission to set up a scheme to train the trainers on practical aspects of the introduction of the euro. Around 120 advisers will then go out from Brussels to inform up to 3,000 people in the EU.