WRITTEN QUESTION E-2937/97 by Nikitas Kaklamanis (UPE) to the Commission (17 September 1997)

Subject: Cost to European businesses of adapting to the 'euro'

According to European press reports the cost of adjusting to the 'euro' could be anything up to ECU 100 000 (over Dr 30 m) for small EU enterprises.

This is an excessively large amount particularly in view of the very small turnover of the companies concerned and the problem is even more acute for those situated in the outlying Member States without direct access to the Union's chief markets, in view of their modest revenues.

Has the Commission calculated the exact costs to small and medium sized EU enterprises of adjusting to the new currency and is it envisaging aid of any kind under EU programmes in meeting such costs?

Answer given by Mr de Silguy on behalf of the Commission (20 November 1997)

Evaluations which have been carried out on the costs to enterprises of introducing the euro have produced widely varying results, which depend on the nature of the enterprises actually investigated and the different assumptions on the modalities for the changeover. The Commission has not carried out such an evaluation, but in this context emphasises that:

- while the costs to companies of introducing the euro are one-off, the benefits are much more durable: creation of a stable macroeconomic framework; completion of the single market, thus significantly facilitating trade within the Community by eliminating exchange rate uncertainty and promoting price transparency; savings on administrative expenses related to foreign currency dealings such as hedging;

- as a result of the above, all companies will be better able to exploit the potential of the single European market. These benefits will be particularly pronounced for small and medium sized companies since larger firms typically have the resources to manage and negotiate international financial transactions.

The Commission is making two specific contributions to help enterprises to prepare for the introduction of the euro. First, it is reducing the uncertainties which inhibit companies from preparing and investing for the euro through, for example, the changeover scenario agreed in Madrid in December 1995, and the Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro ((OJ L 162, 19.6.1997. )). Companies can therefore plan ahead and as a result reduce costs. Furthermore, the Commission is working in a variety of consultative fora to deal with any outstanding issues (with national administrations, for example on the fiscal and accounting aspects of economic and monetary union (EMU) and in a series of expert working groups, one of which is devoted specially to examining the needs of small and medium enterprises).

Second, the Commission is contributing to the diffusion of information to companies. This is being achieved, for example, via the publication of guides and the sponsorship of conferences. Special attention has been paid to the concerns of small and medium-sized enterprises, and in June of this year the Association for the monetary union of Europe, in collaboration with the Commission, published the results of case studies on the preparations of six small and medium-sized enterprises (SME)s for the euro. In 1997 also, the Euro Institute issued a practical guide for the preparation of SMEs. In addition, the Commission is planning further studies and information programmes.