Euro awareness and its impact on business finally appears to be hitting the US. American companies were initially reluctant to take the euro on board due to the political uncertainty in Europe surrounding its future. This coupled with the tremendous amount of Year 2000 preparations already under way meant that euro development was sidelined. That is, until recently. What has become clear to US companies is that the euro is no longer a political issue but a business reality.

In the past few months, there has been an onslaught of articles and conferences centred around the euro theme. It seems that the Americans are seeking to inform themselves to catch up on lost time.

One conference in New York last week had an impressive line-up of speakers. They included Sir Leon Brittan, vice-president and trade commissioner of the European Commission, the Honourable Paul Volcker, former chairman of the United States Federal Reserve and Mr Barton Biggs, chairman of Morgan Stanley Asset Management.

The overall theme of the day-long conference titled US Business & Economic Policy for the New Europe was one of urgency particularly as it related to converting computer systems to handle the euro currency. Both Year 2000 and euro projects involve substantial technical modifications and the Gartner Group estimates that it will cost $30 billion (£20.2 billion) for US companies to become euro-compliant.

Sir Leon's keynote address stressed the positive aspects of Economic Monetary Union. "EMU will create a euro zone roughly comparable in size and economic weight with the US. It will have 300 million inhabitants, and will account for almost 20 per cent of world GDP and world trade. EMU will be good for Europe. But it will also be good for the United States," he said.

Mr John Wookey, vice-president of financial applications at Oracle Corp, a speaker at the conference, said "a phenomenon in the US is the desire to link Year 2000 and euro projects and categorise them the same way". But he warned against linking the two projects saying that other than timing and the need to act quickly, there were very few similarities.

"The Year 2000 is pretty binary - it either works or it doesn't," he said, talking about most computer systems' inability to read dates after December 31st, 1999, and the need to modify them to accommodate the transition to the next century. On the other hand, he said, "the euro is complex. It has a long time line and is unpredictable". On January 1st, 1999, 11 of the 15 member-states of the European Union will introduce the euro to co-exist with their national currencies until July 1st, 2002 when the domestic currencies will be withdrawn in favour of the euro.

The key difference, said Mr Wookey, is that every company needs to define a business strategy for the euro. "It's not an information systems issue. It is about how to do business in Europe: what your pricing policy will be; how you manage your trading partners; and how you package your goods across Europe. You need systems that will support your business strategy, not dictate it," he said.

Oracle was one of the first software vendors to come out with a euro solution two years ago and now competes against companies such as PeopleSoft and SAP in this sphere.

"It takes a long time to understand the euro. It takes a long time to build a system for it. That's why timing was critical for us," he said.

People in charge of euro projects, Mr Wookey stated, should be financial or business people, not technical people.

Some 18 months ago, Mr John Devereaux, a partner in charge of the EMU practice at PricewaterhouseCooper in New York, said he became concerned at his clients' lack of preparedness towards the euro. Based on a survey of 200 Fortune-500 companies, he said, "fewer than half of the multinationals have prepared an EMU strategy".

Other PricewaterhouseCooper data show that 98 per cent of US companies believe the Year 2000 is more important than the euro even though the euro occurs a year earlier. In contrast, 98 per cent of European companies believe the euro is more important than Year 2000. "I'm afraid on this one, the Europeans have got it right!" said Mr Devereaux.

But, he added, "financial institutions are much more prepared than product companies". The reason they're ahead of the curve, he said, is because their business depends on it. "There have been many predictions that only a handful of US banks will remain after transition to the euro," he stated.

Some of the largest US banks certainly plan to be pan-European players. Chase Manhattan, for example, has been preparing a centre in Frankfurt to become its European hub along with a processing centre in Bournemouth, England.

At Citibank, Mr Edward Horowitz, executive vice-president, said the impact of EMU is "doing to business operations what satellites did to television. It is eliminating borders. It is also creating the opportunity for seamless transactions across old borders. The game hasn't changed - just the rules." Mr Devereaux explained that: "There is a massive paradigm shift occurring in Europe and everyone is starting at ground zero. But the Europeans have recognised the strategic impact far ahead of the Americans," he said.

His estimate was that it will cost between 50 per cent and 100 per cent more to convert systems to the euro than the Year 2000. This is because technology and personnel costs would mount over a longer timeframe.

The primary IT issue that companies confront with the euro, said Mr Devereaux, is the installation of a multi-base currency system which entails converting legacy and PC-based systems to recognise the euro.

Some companies are considering changing their systems over the weekend of January 2nd3rd, 1999, in what has been referred to as a bigbang approach. While this may involve cost savings, "almost everyone is looking at a phased approach over three years which will be more costly but less risky," said Mr Devereaux.

The conference at the New York Hilton in midtown Manhattan was the sixth in the Euro Countdown Seminar Series developed by Niche Systems, a euro specialist firm in New York. The conference was organised under the auspices of the Foreign Policy Association, the United States Council for International Business and London's Royal Institute for International Affairs.