As this Editor’s Letter is being written, there are just 99 days to go to the launch of the euro, the single European currency – just 99 days to the start of the single most important economic event to hit Europe since the war.
Which is all the more reason why the level of debate currently taking place in the UK appears to us to be so distressingly juvenile. With less than four months to go, the government has only now dared launch a business advice campaign on television to make sure that industry has some idea what it’s all about. Hague’s Tories, meanwhile, tie themselves in knots wondering whether a refusal to take part in the euro for the foreseeable future leaves them with the right political combination of grass-root support and escape route options.
Meanwhile, the CBI seems unsure whether its own members support the leadership’s pro-euro stance – while the Business for Sterling group looks on with glee. Today, the tabloids are screaming that eurocash will not carry the Queen’s portrait – conveniently forgetting that Her Majesty’s image does not appear on Scotland’s banknotes, either.
Yet not one of these organisations appears to have fully grasped what the euro is capable of doing: in its electronic form (which is all we’ll have until 2002) the euro can and probably will live side-by-side with sterling, effectively turning the UK into a dual-currency country. More likely than not, such a twin currency regime will not be a sham: sterling is strong enough to co-exist with the euro in a commercial environment; Britain will not be turned into a kind of Mexican border town that gratefully accepts the gringos’ cash while using the domestic currency to line the bird cage.
This prospect carries huge implications for business management, budgeting, debt and equity finance, marketing, purchasing, staff training and currency hedging (forex hedging a sale to Sunderland?), and they start in 99 days.
Politicians – professional and amateur, alike – can debate whether or not Britain should go into the euro. But in the meantime, British industry must prepare for the euro coming into Britain.