Joining the ERM, and other issues

Article Abstract:

The European Monetary System (EMS) has been a successful vehicle for reducing inflation and exchange rate volatility for member nations. Business support for UK entry into the EMS' Exchange Rate Mechanism (ERM) has grown due to a recognition that a major barrier to participation in the single European market of 1992 is exchange rate volatility. Fifty-two percent of UK exports are to European Community (EC) members, and the ERM is designed to reduce exchange rate volatility to foster inter-EC trade. UK participation in the ERM would benefit UK business in three areas: exchange rate volatility would be reduced; prices would be stabilized; and planning would be made easier. Reduced exchange rate volatility would: allow UK business to predict export prices; allow EC nations to make purchase decision based on product quality and commercial efficiency; and open up the public procurement markets of EC members.

Author: Tugwell, John
United Kingdom, Analysis, Prices and rates, International trade, Foreign exchange, Foreign exchange rates, Great Britain

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Preparing for E-day

Article Abstract:

The launch of the single European currency, the euro, in Jan 1999 is expected to bring significant changes to the way business is conducted in the European Union. As the euro becomes the legal tender, as a wholesale currency in Jan 2002 and as a retail currency in June of the same year, companies doing business in the region will have to make appropriate changes in the finance systems affected. These systems include those used in such areas as accounting, consolidation, human resources, pricing, management reporting, treasury management and multi-currency conversion. Companies will need a thorough examination of their priorities and requirements that are related to the single currency. Unfortunately, it is difficult for many business organizations to make preparations because of the EU countries' varying definitions of euro-compliance.

Author: Sinclair, John
Management, Planning, Europe, Economic policy, Computer system conversion

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Subjects list: European Union, European Monetary System
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