Siemens chief warns UK will lose business without the euro

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The Independent Online
British companies will lose business if they refuse to do deals using the euro currency, regardless of whether the UK signs up to European monetary union (EMU), Siemens, the German electronics and engineering giant ,warned yesterday.

Bernd Euler, the finance director of Siemens UK business, said suppliers prepared to offer quotes in Euros would gain a competitive advantage over rivals which quoted prices in sterling. "Whether the UK is in the European Monetary Union or not, if UK companies are not prepared to quote in euros they will lose out long-term, if their competitors are prepared to quote in euros," he said.

Siemens is embarking on seminars for some of its 12,000 UK suppliers to explain the change in policy and said that none had so far said they would refuse to quote prices in euros. Though Siemens insisted it would not force suppliers to switch to the single currency, Mr Euler made clear that all companies would be expected to pass on any cost savings from a single currency through to lower prices.

He said customers would ``demand these savings to be reflected in prices, whether or not the suppliers in question are capable of achieving these cost savings. They just have to squeeze their other costs harder in order to bridge the gap."

The warnings came as Siemens revealed a 35 per cent surge in sales from its UK operations to pounds 2.02bn last year, the first time its turnover had topped the pounds 2bn mark. Employee numbers also surged by almost a quarter, to 13,600, though exports fell by 20 per cent, to pounds 261m.

Meanwhile, FI Group, the computer outsourcing specialists, warned yesterday moves by Britain to join EMU could be scuppered by companies' lack of preparation for the switch. Hilary Cropper, chief executive of FI Group, said most British companies have only just started to think about the problem. "If Britain decided to join EMU in the first wave there would be no way any company could do it," she said. Ms Cropper said that companies dealing with the public, such as utilities, retailers and financial services groups, still have a lot of work to do to get ready.