Small and medium sized companies (SMEs) may be significantly underestimating the impact the euro changeover will have on their business, says a new survey conducted by AIB Bank and the Chambers of Commerce of Ireland (CCI).
Nine out of 10 SMEs surveyed have not analysed the effect of potential post EMU changes in customer and competitor behaviours on their future competitiveness.
The chief executive of the Chambers of Commerce Ireland, Mr Simon Nugent, believes companies must be more prepared. "Irish firms must plan not just for the transition to the euro, but for the different competitive landscape which will follow. For most firms, the advantage of the euro is seen as being purely lower interest rates and there is almost blind faith in those rates remaining low in the long term," he said.
Almost three-quarters believe the EMU will have a positive effect on their business over time.
The threat of increased competition does not appear to be an issue. "An amazingly optimistic 47 per cent of respondents saw no competitive threat for their sector arising from the new common currency. It is striking for example, that 61 per cent of tourism businesses interviewed did not expect increased competition," said Mr Nugent.
The trend shown by the survey is worrying. "There's a certain amount of faith that needs to be informed," said Mr Hugh Bancroft, project executive at CCI. "It shows that they don't know how much it is going to cost them."
On the subject of banking requirements, six out of 10 businesses surveyed said that they require dual functionality from their bank accounts, or the ability to operate in both euros and pounds on their existing accounts. Mr David Roberts, EMU programme manager for the business sector with AIB Bank said: "These research findings confirm what we've been hearing during our seminars right across the country over the past 18 months. Once business owners and managers become aware and understand the wide ranging impacts of both EMU and the euro on their operating systems and future plans, the better able they are to determine the required course of action and associated cost."
For the survey, 560 chamber member businesses, ranging from retail to property, were surveyed across the country. MRC Ireland carried out the survey.
