As preparations continue for the launch of the new currency, FDs polled for this week’s Accountancy Age/Reed Accountancy Personnel Big Question survey, showed that opinion on the euro remains too close to separate.
Asked if the single currency would put the UK at a competitive disadvantage, 40%, of FDs polled said no, while the same number claimed it would.
The result, just days after prime minister Tony Blair made his most euro-friendly speech to date, will clearly add to the calls to resolve sooner, rather than later, whether the UK will take on the new currency.
One FD who said damage to the UK economy was certain said: ‘Why would a eurozone company want to trade with a non-euro economy when they have a choice of 11 countries all using the same currency?’
He continued: ‘British companies who want to trade with mainland Europe will progressively become compelled to trade in euros and manage the exchange rate risk, but at a cost’.
Chris Burhop, finance director of BFF Nonwovens, agreed but noted that the euro would make ‘pricing even more transparent’. He added that the UK needs to remain competitive to continue to do well in Europe whether it is in or out of the euro.
He said: ‘We’ve just picked up European business by matching the prices of our European competitors but achieving better service and quality levels’.
Of those who thought the euro launch would not be damaging one FD said the currency would take three to four years to have an effect.
Other FDs demonstrated that they had come to terms with the euro early. One said: ‘We have already been dealing in euros for the last two years. It may have an effect on other UK businesses as they are on the outside looking in and as a result, may not be able to do as much business with Europeans.’
Of the 20% who remained neutral one FD said competitiveness would depend on preparations. ‘We have been at a competitive disadvantage in Europe for years because of our exchange rate anyway.’
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