Euro conversion is self-interest - EMUbusiness - Issue 20

EMUbusiness top stories
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1. Companies should convert completely to euro out of self-interest
2. Jospin calls for euro-area economic government
3. On target for medium-term price stability
4. Commission seeks clearer picture of SME preparation
5. French accountants to take to the rails with euro information
6. Euronext becoming reality

Publisher's Note
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If repetition is the secret to good communications and does not merely engender more apathy, then small and medium-sized businesses across the euro-area should be getting the message loud and clear that they have only seven months left to prepare for the euro - a process which even a micro-enterprise should expect to take at least three months if it does not want to do a rush job. The signs are that SMEs are listening more than they were, but levels of concern
are still high enough that the message has been hammered home from a number of quarters again in the last few days.

Regards,
Marion Bywater
Publisher, EMUbusiness
mailto:mbywater@eubusiness.com

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1. Companies should convert completely to euro out of self-interest
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It may in theory be possible to keep using the euro-area legacy currencies for some internal record-keeping even after the beginning of next year, but it is nevertheless in a company's own self-interest to be fully ready by December 31, Goeran Tidstrom, President of the European Accountants' Federation (FEE) told the 10th FEE euro conference in Brussels on May 28. Any company which is not ready risks losing financial control of its operations, Tidstrom warned, and/or find itself embarking on cumbersome and time-consuming manual conversion or reconciliation.
Full story: http://www.eubusiness.com/item/48265

2. Jospin calls for euro-area economic government
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Euro-area states should consult their peers and give careful consideration to their recommendations before taking major economic policy decisions, French Prime Minister, Lionel Jospin, has argued in a major foreign policy speech. This proposal should be music to the
ears of the current President of the Eurogroup, but is likely to be less well received in a number of other euro-area capitals, where it will be seen as moving too fast too soon. It is also likely to be criticised for possibly creating a two-speed economic Europe which leaves non-euro-area members out in the cold to too great an extent and could alienate them and their public opinion, thus damaging the prospects of them participating in the euro at some point.
Full story: http://www.eubusiness.com/item/48266

3. On target for medium-term price stability
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Current interest rate levels should ensure price stability in the medium term without damaging the currently rather poorer growth prospects than had originally been anticipated, European Central Bank President, Wim Duisenberg, has told the Economic and Monetary Affairs
Committee of the European Parliament.
Full story: http://www.eubusiness.com/item/48267

4. Commission seeks clearer picture of SME preparation
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In order to get clearer picture of the corporate world's state of preparation for the euro changeover the Commission organised a roundtable with the euro project officers of 19 large European companies on May 22. The discussion focused in particular on the state of preparation of small and medium sized enterprises in the supply chain of large corporations. The Commission is trying to act as co-ordinator and broker between different economic players in the countdown to January 1, 2002, and it believes large companies can act as catalysts by urging their suppliers and partners/distributors to prepare in time.
Full story: http://www.eubusiness.com/item/48272

5. French accountants to take to the rails with euro information
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The French accountancy profession is taking to the rails and to the provinces to spread the word and information about the need to convert businesses to the euro before January 1 next year. A euro-train will set off from Paris on September 3 and finish its journey in Bordeaux on September 19 to coincide with the profession's annual
conference which is being held in Bordeaux this year.
Full story: http://www.eubusiness.com/item/48273

6. Euronext becoming reality
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Successful migration this month of the Brussels stock exchange to a single share trading platform with the Paris stock exchange this month was the latest step in ensuring that Euronext, the joint venture of these two exchanges with the Amsterdam exchange, is a reality. Amsterdam will migrate to the Euronext platform in September. Without the euro, it is highly unlikely that there would have been a Euronext, which is now close to rivalling the London
Stock Exchange in market capitalisation.
Full story: http://www.eubusiness.com/item/48274

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These articles are provided by Euro-impact. Euro-impact is a monthly newsletter on the regulatory, practical and strategic impacts of the euro for companies. Articles may be reproduced with acknowledgement of the source and Euro-impact. Every reasonable effort has been made to ensure the information is correct at the time of writing.
http://www.euro-impact.com
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SPONSOR'S MESSAGE
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Coming up in Euro-impact
Test, test, test is the message from those who have completed euro conversion; unions to lobby Commission about potential problems with introduction of cash; general public and small business still largely ignorant of basics of euro notes and coins; Dutch consumer federation starts to name and shame companies getting euro conversion rules
wrong; French still not very interested in using euro cheque books.All these items will be covered in the next issue of euro-impact. For subscription information:
http://www.eubusiness.com/finance/euroimpact.html
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Other stories on EUbusiness in May
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Financial services on Internal Market Council menu
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Preparation for the euro changeover and distance marketing of financial services are on the menu for ministers meeting at the Internal Market, Consumer Affairs and Tourism Council on 30-31 May. The Swedish Presidency wants to hear how plans for introduction of euro notes and coins is going and what measures are being taken to ensure the introduction of the euro is not used as cover for
increasing prices. The amended proposal for a Directive on distance marketing of financial services sets clear rules for distance marketing of financial services.
Full story: http://www.eubusiness.com/item/48162

Euro-zone current account moves into deficit in March
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The euro zone had a current account deficit of EUR 2.8 billion in March, compared with a balanced account in March 2000, the European Central Bank said on Tuesday.
Full story: http://www.eubusiness.com/item/48152

Euro changeover set to cost up to 51 billion euros, says ECB
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Euro-zone countries are set to spend up to EUR 51 billion in total on the changeover to euro notes and coins, the European Central Bank said on Monday. The bill would total 0.3 to 0.8 per cent of gross domestic product, ECB president Wim Duisenberg told the European Parliament's economic and monetary affairs committee.
Full story: http://www.eubusiness.com/item/48066

British bosses opt for euro
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Seven heads of Britain's top 100 companies came out in favour of the euro on Monday. The bosses said in a letter to The Times that "we support the UK joining the euro at a competitive exchange rate because it will deliver inward investment, jobs, trade and prosperity."
Full story: http://www.eubusiness.com/item/48000

Euro debate dominates British election campaign
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Britain's opposition Conservative Party launched an assault on the British government's pro-euro policy on Saturday with a warning to voters that they have only until the election on June 7 to "save the pound". The Conservatives hope to tap into the British public's euro-scepticism focusing voters' fears that a second Labour term would
make membership of the single currency a 'fait accompli'.
Full story: http://www.eubusiness.com/item/47962

Taxation: Commission calls for more harmonisation
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Internal Market Commissioner Frits Bolkestein has refuted allegations by Britain's Conservative Party that the Commission wants to harmonise European income tax. Tax questions, he said, particularly income tax, are essentially the domain of national governments, and "will remain so for the foreseeable future". However, the
Communication he was presenting also called for an EU fiscal strategy of 'co-ordination' of European tax policy favouring business and private citizens, as well as a large measure of 'harmonisation' of indirect taxes.
Full story: http://www.eubusiness.com/item/47683

Euro-zone inflation is too high: Bundesbank president
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Euro-zone inflation is too high, partly because the euro is weak, president of the German Bundesbank Ernst Welteke said in an interview with the Frankfurter Allgemeine Zeitung. Welteke is a member of the governing council of the European Central Bank. Inflation in the euro-zone reached 2.9 per cent in April on a 12-month basis, well above the ECB's medium-range target of 2.0 per cent.
Full story: http://www.eubusiness.com/item/47869

Euro-zone shows EUR 4.3 billion trade surplus
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Euro-zone trade with the rest of the world in March 2001 showed a EUR 4.3 billion surplus, a EUR 700 million rise since the same month last year, according to the EU's statistical office Eurostat. But for the first three months of 2001, the euro-zone recorded a trade deficit of
EUR 1.7 billion.
Full story: http://www.eubusiness.com/item/47674

Euro-zone monetary reserves rise
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The net foreign currency reserves of the European System of Central Banks (ESCB) rose EUR 1.5 billion to EUR 266.5 billion in the week to May 18, the ECB said last week. The increase in reserves was due to a rise of 1.7 billion euros in IMF credits while assets denominated in other currencies fell by 200 million euros, it said.
Full story: http://www.eubusiness.com/item/47549

'Few firms' switching to euro accounting: EU report
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Less than one per cent of businesses in most euro zone countries are doing their bookkeeping in the euro, the Commission said. Luxembourg tops the list with 21% of companies; but elsewhere the numbers slide from 4.8% in the Netherlands to 1.5% in France and less than 1% Ireland.
Full story: http://www.eubusiness.com/item/47396

Commissioner slams 'exorbitant' bank charges
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The 'exorbitant' charges levied by banks for transferring small amounts of money within the EU should be reduced, EU Consumer Commissioner David Byrne demanded on 18 May. The Commissioner told a meeting of consumer groups in Berlin that consumers were being charged an average of 17% to send money from one EU country to another. His comments came less than a week after the Commission's latest report on preparations for the single currency criticised the high price of making small electronic money transfers between
countries.
Full story: http://www.eubusiness.com/item/47250

Industrial production down 0.2% in euro-zone
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Industrial production fell by 0.2% in the euro-zone in March compared to February, according to figures released today by the EU's statistical office Eurostat. The indicator meant further bad news for the European Central Bank just a few days after the latest data showed that annual inflation in the euro-zone had risen to 2.9% in
April.
Full story: http://www.eubusiness.com/item/47253

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This newsletter is produced in association with FEE, the Federation des Experts Comptables Europeens. FEE is the representative organisation for the accountancy profession in Europe. It is a "non profit" organisation which groups together 38 professional bodies from 26 countries, including all 15 Member States of the European Union and the 3 main member countries of EFTA. The FEE Euro Information Service is at: http://www.euro.fee.be
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Internet Monitor
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Are international deposits tax-driven?
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The Commission's Financial and Economic Affairs DG has published Economic Paper 152 (June 2001) on the impact of tax policy on international depositing.

Price and cost competitiveness report
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The report for the first quarter of 2001 gives an overview of international and intra-EU price and cost competitiveness positions, as well as graphs and tables for the euro area, for each Member State.

Economic Papers No 151, May 2001
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Evaluation of confidence indicators based on harmonised business consumer surveys (Study contracted to IFO, Munich).

Development of the use of the euro - quarterly note
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A synthesis of studies on the development of the use of the euro by customers, businesses and public administrations in the Member States participating in EMU. The note also presents the results of a regular Commission survey among European banks on the share of the euro in the payments and bank accounts.

EMU diary
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5 June, ECOFIN Council, Luxembourg
19 June, ECOFIN Council, Luxembourg
25 June, Economic and Monetary Affairs Committee, European Parliament
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Community
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Counterfeit Detection Workshop - 30 May - Today
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Don't miss the EUbusiness online discussion on 'Counterfeit detection during the cash changeover', today Wednesday 30 May, 4.30-5.30pm (CET), 3.30-4.30pm (GMT+1, UK). Forum panellists include Jean-Michel Dinand from the European Central Bank, senior expert in Banknotes; Yannis Xenakis of the European Commission, responsible for Transition Issues related to EMU at the Economic and Financial Affairs
Directorate; Dietmar Thiele, Bundesbank, Counterfeiting Department; Guillaume Lepecq, The E-Consulting Group; Catherine Edenborough, De La Rue Cash Systems, Senior Product Manager of the Desktop Products branch; Hans Joerg Klock of De La Rue Cash Systems, technical engineer expert in counterfeiting. Organised for De La Rue.
http://www.eubusiness.com/workshop/

Any Answers?
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* Manuel Carmona Yebra is trying to find a directory with the names and addresses of consultants in EU affairs in both Madrid and Barcelona.

Answer questions, or post your own, in our Any Answers section.
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Poll
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In our poll on labour migration from EU candidate countries after enlargement, a perhaps surprising 47% believe labour migration should only be subject to current EU rules, 30% believe there should be special restrictions on workers from these countries, while 23% believe there should be no rules at all. Any ideas for a new poll to mailto:hazel@eubusiness.com .
http://www.eubusiness.com/poll/

Factsheets
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EUbusiness' euro factsheet is one of our most-read articles, and our EMU top page gives you an overview of single currency developments likely to affect your business.
'Countdown to the euro' factsheet: http://www.eubusiness.com/item/37785
http://www.eubusiness.com/emu/

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