Case Study: The large Italian company Merloni Elettrodomestici, white goods manufacturer

'You face big disadvantages if you remain outside the eurozone'
Click to follow
The Independent Online

Vittorio Merloni, the founder and president of Merloni Elettrodomestici, Europe's third-biggest manufacturer of white goods, admits that the euro has had its ups and downs.

"It's like democracy," he says, "which has disadvantages as well as advantages, but the pluses outweigh the minuses, because it brings stability. I'm an entrepreneur, and as such I must be competitive, and competitiveness depends on innovation; and currency stability is fundamental to innovation, for the future. These are the factors that make a country economically successful.

"I believe all entrepreneurs are in favour of stable currencies, because we are not bankers, playing and making our money from currency exchange differentials."

Dr Merloni says that Britain must join the euro. He says: "I believe the euro is a currency of great stability, on a par with the dollar. I strongly believe that Britain should enter the eurozone, because there are great disadvantages, also for the UK, in staying outside. I say that from personal experience: we have 5,000 employees in Britain, working in the four Hotpoint factories that we bought from General Electric and Marconi. As the biggest centre of financial services in Europe, Britain potentially has a very big role to play in Europe."

Dr Merloni's father founded the family firm in 1930, manufacturing gas cylinders. After graduating from Perugia University, Dr Merloni began transforming itinto one of Europe's most dynamic white goods manufacturers. He is also a driving force within Italy's version of the CBI, Confindustria.

In recent years his firm has become deeply involved in Britain, with its two-stage takeover of Hotpoint, formerly owned by GE and Marconi, which produces refrigerators and freezers, kitchen equipment, washing machines and tumble dryers. In April 2003 he was appointed honorary CBE.

"Britain is now our biggest market in Europe," says Dr Merloni, "but the products of our British factories are also exported to Europe - the value of exports and imports of our products into and out of the UK is roughly balanced." His firm also has factories in France, Portugal, Turkey, Poland and Russia.

Dr Merloni now has a home in Britain - 10 Down Street in Mayfair. And he has no hesitation in giving advice to the odd couple with very similar addresses a few hundred yards away. "Gordon Brown says that Britain is not ready to enter the euro, but what I would say to him is that no country is ever ready for it. It's a novelty and a new experience, but it has been enormously positive for us. And it is going to be very positive for the new members of the EU as well, such as Poland. When she was Prime Minister, Lady Thatcher had the reputation of being anti-European, but I was very impressed by one thing she said on the subject. 'I connected Britain to Europe with the Channel Tunnel,' she told me, 'because the future of the UK is its services and the future of our services is in Europe.'

"It is too strong to say that Britain's future is dark if it does not join the euro, but it will certainly be a handicap. After all, the UK is the biggest capital market in Europe: insurance, banking, financial services, all are concentrated in Britain. Therefore the UK must be connected to Europe, and if it is it will play a very important role."