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Have faith in the ECB - EMUbusiness - Issue 6

EMUbusiness - Issue 6
31 October 2000
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EMUbusiness top stories
1. Have faith in the ECB
2. Tips for companies from the Finnish government
3. ECB has monetary policy stance 'about right'
4. Feeling informed about the euro often translates into support for euro
5. Publicising the ability to trade in euro

Publisher's Note
It should be a truism by now that companies need to prepare for introduction of the euro. Even the smallest companies need to conduct an impact analysis. The implementation of euro means everything from a change of base currency in the accounts to upgrading the office franking machine, from reviewing pricing to deciding whether there are good reasons for waiting until the last minute - a course which is not generally recommended.

Yet surveys continue to show that this advice is not being heeded. Either companies think they do not need to prepare or they are underestimating the extent of preparation which is required. A recent Belgian survey, for example, shows that preparation for the use of the euro inside companies, as opposed to use of the euro in invoicing, appears to have hit a plateau at around one in five businesses. Yet Belgium is one of the countries where companies are generally felt to be most advanced. Italy appears to be even further behind.

Only 2% of small and medium-sized businesses have completed their conversion to the euro. Fewer than half of these companies can get the date right on which the lira will finally disappear. Finland has wisely used the launch of its changeover plan for the final stage of introduction of the euro as an opportunity not just to talk about the
logistics of note and coin introduction, but to remind companies of some of the basics. Nor is this an issue which solely affects companies inside the participating countries as a new initiative in the U.K. to raise awareness about the importance of mastering the basics of trading in euro is - with reason - seeking to point out.
Companies wanting to highlight their readiness to use the euro should go to http://www.tradingineuro.comfor information on a logo they can use.

Marion Bywater
Publisher, EMUbusiness

EUbusiness Week and EMUbusiness reach a global community of over 9,500 business people interested in doing business in Europe. For details of how to reach this audience:

1. Have faith in the ECB
'Trust us' was the message which European Central Bank Executive Board member Otmar Issing sought to convey in a recent speech. The European public needs to demonstrate if not blind faith, then at least good faith and good will as the ECB seeks to establish itself as a credible entity. Issing, who was seemingly being implicitly critical of some of the ECB's recent bad press, sees good reasons to
believe 'reasoned faith' in the ECB is justified. The edifice on which it is building price stability over the medium-term, and thus maintaining the value of money, is built on firm foundations, he said.
Full story:

2. Tips for companies from the Finnish government
There are some handy tips for all companies in the Plan for Adoption of the Euro published recently by the Finnish government. While the Plan essentially deals with the logistics of the changeover in the public sector and with the introduction of the euro notes and coins, there is a special section on companies and organizations with advice
which is valid for wherever a company is located.
Full story:

3. ECB has monetary policy stance 'about right'
Fears that the euro-area's monetary policy is too restrictive are exaggerated according to the Association of German Banks. The monetary policy stance is currently neutral and there is no reason to be too pessimistic about future growth prospects. While it is true that higher commodity prices are dampening purchasing power and
creating investor uncertainty, tax cuts in some large euro-area countries and further expansion in employment will largely offset the impact of these.
Full story:

4. Feeling informed about the euro often translates into support for euro
Support for the euro is highest amongst those who feel well informed about the euro according to the results of the Spring 2000 Eurobarometer released this month. This confirms what earlier surveys in this six-monthly series have shown. The correlation is not perfect, but it is clear: the average level of support for the euro in the EU is 58%, but it is 71% amongst those who feel very well or well informed and only 47% amongst those who do not feel
informed. Of the 33% who oppose the euro, 25% feel informed, but 41% do not.
Full story:

5. Publicising the ability to trade in euro
U.K. companies which wish to signal to their eurozone partners that they are ready to deal with them in euro can now use a special logo thought up by the Scottish Euro Forum, one of twelve regional fora in the U.K. sponsored by the British Treasury. Though designed for U.K. companies, use does not have to be restricted to the U.K. and the
EuroInfo Centre network will be used to promote this logo across the eurozone. The Scottish EuroInfo Centre is a co-sponsor of the scheme.
Full story:

Other stories on EUbusiness in October

Euro falls to new record lows
Another week, and the euro has fallen to new record lows against the dollar and the yen. The single currency, which has weakened consistently since its launch in January 1999, on 25 October dropped below 83 cents for the first time. This is well below its 87 cents level, which last month sparked intervention by the world's main central banks. This time, however, there seems little chance of a repeat of the joint intervention.
Full story:

August industrial production up 0.2% in euro-zone
Industrial production increased by 0.5% in the euro-zone in July compared with the previous month, according to latest Eurostat figures. Production across the whole of the EU also rose by 0.5% in July, after a fall of 1.1% in June and an increase of 1.1% in May.
Full story:

Securities settlement links - new list
The European Central Bank (ECB) has approved two further links between securities settlement systems (SSSs), which can be used for the transfer of foreign collateral in the Eurosystem's monetary policy and intraday credit operations. This latest link brings the total number of currently eligible links to 64.
Full story:

EMU diary
Why price stability? Conference organised by European Central Bank,
November 2/3, Frankfurt
ECOFIN Council, 7 November, Brussels
ECOFIN Council, 27 November, Brussels
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Any Answers?
* Peter Sutton asks: what are the impediments to a UK SME considering opening a branch office in Spain?

* Kim Armstrong is looking for a listing of the top European Web Agencies.

And many thanks to Aileen Kane for her comments on Croatian views on EU aid for Yugoslavia

Answer these questions, or post your own, in our Any Answers section.

Business Forum
* In 'Find a Business Partner', Alexandra Lambert has posted a message on behalf of a French Web Agency in Paris looking for a partnership (US investor).

* In 'Find a supplier', Alexander Krehbiel is trying to find a scanning service for approximately 1000 slides. High quality scans needed.

If you're looking for a business partner, a buyer, a supplier, or a job visit our business-to-business forum.

134 people have now voted in our enlargement poll. 49% believe enlargement should be a top priority for the EU. 34% think expansion should be delayed until applicant economies are fully ready. 13% think more public consultation is needed on the issue. New poll next

Our next three online discussion forums will cover Innovation in Europe (probably November 22), regulation on the Internet (January) and euro notes and coins (February). If you are interested in taking part, or would like to be one of our panel of experts, please email Wendy Jones at

Suggest / provide a Link
If you know of a web site which you think would be helpful to EUbusiness users, send us your suggestion, either from the relevant section page, or at:
EUbusiness also welcomes inbound links. Please contact Hazel Daniells at .

Two new additions this week to our popular Special Focus factsheets.
The first gives you background info on eEurope, in preparation for our Wednesday workshop. The second has some excellent documents and links
on enlargement

Let us know what you think of EUbusiness, where you would like to see improvements, and where your particular interests lie.

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