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Thursday, 25th April 2024 |
| Treasurers warn Irish companies against euro complacency |
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| Back office systems are expected to take the brunt of euro changeover problems and could be the source of bottlenecks after January 1st. But treasurers remain confident that financial services and top corporates will be able to cope. |
The country’s top banking treasurers believe some Irish companies may be too complacent on euro changeover issues. The view is that some Irish companies may not have their administration systems and accounting procedures in place to sufficiently deal with the task of euro changeover.
According to Gerry Roseingrave, country representative of ABN AMRO, ‘I think there has to be concern over the changeover to the euro. We’re less than 90 days away from the changeover and it doesn’t seem as if Ireland is fully prepared.’ He referred to a European Commission document - the Quarterly Review of the Use of the Euro - which showed euro usage at the end of June 2001.
According to the report ‘Use of the euro by Irish businesses continues to grow: it is now used in 8.4 per cent of both volume and value of national payments (the previous volume percentage was 7.3 per cent).
While this figure actually places Ireland in the top four in Europe in terms of volume of euro transactions, banking treasurers believe the figure indicates there is still much work to be done. According to Roseingrave ‘These figures show) that we’re either very confident with the transfer or else it is not viewed as a priority by many corporates - I think there is something askew.’
Echoing this sentiment was Mick Purcell, head of treasury at AIB Corporate & Commercial Treasury. He said ‘There is still a degree of reluctance among the corporates (to address the euro changeover issue). I believe there is going to be a shock, but what that is going to do to the financial markets I’m not so sure. I think there is going to be a degree of heartache on a reconciliation of accounts basis as people try and reconcile payments in and out.’
He also believes the degree of preparation varies considerably, ‘Banks are there, high level corporates are there, but as you come below the higher corporate level we don’t have evidence of the same standard of preparation among the SME sector. This may be due to resource issues.’ However he remained confident that the main problems were administrative rather than technical. ‘I don’t think the changeover is going to impact overly on the financial markets but I do think it is going to create a lot of difficult cases for accounts payable and receivable. The admin areas are going to be severely stretched, but I don’t think that in a purely financial sense there is going to be an issue.’ |
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| Article appeared in the October 2001 issue.
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