Most firms are ill prepared for EMU

MOST Irish companies have yet to begin detailed preparations for European Monetary Union according to a confidential report prepared for Forfas.

The report, prepared by Arthur Andersen, found that owner managers of SMEs and senior management from large and medium sized companies were aware of the broad macroeconomic implications and timetable for EMU.

However, many companies had not done a detailed assessment of the business impact and practical implications of EMU.

The preparation of the report involved interviews with top executives and managers from, among other organisations, the Central Bank, AIB, the Smurfit Group, Glen Dimplex, Guinness Ireland, Water ford Foods, Rubber Maid (a US multinational), Aer Lingus, Campbell Bewley, and smaller companies such Glennon Bros, Kenmare Salmon Co, and International Spawn Laboratories.

Banks were found to be very aware of EMU, to have set up project teams and to have completed assessments of strategic effects and functional implications. They had also started to plan the functional changes required for their organisations.

Among large enterprises, most were aware of the EMU process but some had not considered in detail how it might effect them. In many firms a project leader had been given responsibility for determining the impact of EMU and making recommendations.

However, "relatively few firms have begun preparations by assessing the functional impacts and recommending, changes," according to the report.

With SMEs it was found that almost all managers are aware of the EMU timetable but "very few" had considered in detail how it would affect them.

"A few medium sized firms have assigned responsibility to a manager. The MD is usually responsible in small firms, but typically has spent little time collecting information."

Very few SMEs have yet considered the overall business impact and potential opportunities arising from EMU. "For most firms preparations have not yet begun."