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Hours to go – and still not ready for the euro.

The single European currency will almost certainly have launched on 1 January by the time this magazine is being read, but surveys of Europe’s preparedness for the euro still show a woeful “make-do-and-mend” approach. Moreover, some of the most important and far-reaching implications – even some of the most obvious implications – are being ignored by many businesses in the UK and on the continent. The third annual preparedness survey from KPMG Consulting says that 40% of the largest companies in Europe have yet to estimate the cost of adapting to the euro. It adds that, while almost all companies (94%) have a euro strategy, only 47% have a budget: “A budget is an absolute requirement of a strategy,” the report warns. It suggests that many companies may not have a budget because Emu costs are being funded elsewhere, such as maintenance budgets. Of those businesses that had an Emu strategy, only 12% said that it covered pricing policy, and only 8% said it covered branding. The survey shows that, at this stage, European businesses are concentrating on internal ramifications such as accounting and IT systems, and seriously underestimating the importance of issues concerning customers and suppliers. In a separate survey from PeopleSoft and Deloitte Consulting, conducted by research group Spikes Cavell, more than three-quarters of European banks and retailers claimed that they fully understood the implications of the euro, but that only 12% had yet achieved compliance. Predictably, perhaps, Germany led the pack in this regard. More than half the respondents expected to be able to pay and receive euros by 1 January, but a key message that emerges is that businesses did not consider 1 January 1999 as a real deadline. Indeed, the idea of gradual, rolling take-up of the euro throughout Europe may itself cause problems. The KPMG survey suggests that full implementation of the euro – in terms of pricing, purchasing, paying wages and preparing accounts – is more likely to happen in the Benelux countries before it happens in the euro’s “powerhouse” nations, France and Germany. “Serious mismatches between countries could have repercussions for all companies undertaking significant international trade,” the survey says. Meanwhile, back in Britain, the Business for Sterling group has produced a 68-page book entitled The case for keeping the pound. It argues “Our soulmate is the dollar, not the mark” and argues that “Britain is in danger of being smuggled into the single currency by the back door.” The report was prepared with editorial and research assistance from the Institute of Directors. Members of the Business for Sterling group council include IoD director general Tim Melville-Ross, Dixons chairman & chief executive Stanley Kalms, Lord Hanson, and Lord (John) Sainsbury of Preston Candover, former head of the eponymous supermarket chain and cousin of Lord (David) Sainsbury, who relinquished the chairmanship of J Sainsbury to become a government minister last year.

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