British firms ignore the ecu

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The Independent Online
THE receptionist at British Steel sounded puzzled when asked for the company's ecu officer. "What's that?" she asked.

Ecu stands for the European currency unit, she learned. "I think you need investor relations," she decided.

Investor relations was only slightly less stunned on hearing that the European Commission has advised businesses to appoint an ecu officer to draw up an ecu introduction strategy.

"Have you tried our treasury department?" asked investor relations. "You should talk to David Vine."

After repeating the question to the treasury department, adding that it had to do with monetary union and the creation of a single currency, there was a long silence.

"There isn't a single currency, so how can you prepare for it?" was the eventual, logical response from the person answering Mr Vine's phone.

The European Commission has a slightly different view. In a Green Paper issued last week, it argued that a single currency should be phased in over three years beginning on 1 January 1999.

For British businesses, it will mean new mechanisms in vending machines, revised price lists and restated accounts. Modifying computer systems across the country could take three to five years.

But British Steel is not alone. Lulled perhaps by the opposition of Europhobes in Parliament, few UK businesses are laying the groundwork for what the commission calls the "monumental upheaval" of monetary union.

"The situation is not quite shambolic, but it's close to it," said Malcolm Levitt, the European Union adviser at Barclays Bank.

The problem is that few companies are prepared to spend large sums of money getting ready for a conversion that may never happen. The contrast with Britain's move to a decimal currency is stark. The legislation was passed in 1967, giving companies four years to prepare for the change in 1971.

"There was a clear decision, a precise date, massive public education and close co-operation between the public and private sectors," said Mr Levitt.

British bankers have tried to tell the bureaucrats in Brussels about the difficulties of changing a currency but are only now being taken seriously.

"At first they thought we were just being British, then after we got German and French banks involved, they said we were afraid of losing our foreign exchange fees," Mr Levitt said. "This is far more complex than UK decimalisation."