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Eurosceptic Bloggers

Tuesday, July 26, 2005

Big Multinational Companies Like Euro

Following premature comments of the Euro’s demise, the heavyweights of European Industry and Commerce are coming out in its defence.
"In the past, all the different currencies in Europe led to higher costs for many companies,'' says Edward Krubasik, a management-board member of Munich-based Siemens. Some people obviously have forgotten that. The euro is a great achievement.''
The euro has cut our costs and boosted sales,'' says Tomat, 48, president of Lotto Sport Italia SpA near Treviso.
Of course both of these companies previously had to juggle a large number of currencies, so they have undoubtedly benefited from lower financing costs. Their comments ignore three important issues however.
  1. The banks lost the value of that business, so good for Siemens, bad for Deutche Bank.
  2. Most companies are small and have few of no customers who pay in other currencies, they have gained nothing.
  3. That which is not seen, is the costs of having the wrong interest rate.
Even its supporters can’t put a number on their gains.
It's impossible to put a figure on how much the euro saves companies, says Thibault de Tersant, chief financial officer at Dassault Systemes SA, the world's largest maker of design software.
So instead they give the same tired clichés that we have heard for years. But the euro is much more than little gains like that. It's belonging to a huge trading bloc. It's the idea of being able to travel without complication. It's the transparency of prices.'' Thery also wade into the critics of the Euro, claiming that our arguments are wrong.
Blaming a lack of economic growth on the euro is nonsensical, says Robert Zolade, chairman for Elior SCA, France's second- largest caterer. Euro members Ireland and Spain grew faster than the U.K., a non-member, in the five years following the euro's 1999 inception.
I suspect they also grew faster before hand, but Two out of Twelve is hardly a resounding success is it, even if the Euro is to be credited. In addition a the other problems that many EU members have, are being made worse by the rigidities of the Euro. If the best he can come up with is Ireland, he's not doing very well.
Being in the euro wouldn't have held back Britain,'' says Zolade, 64.
"They've grown faster because they have labor policies that are more adapted to these times.''
The UK also has the interest rate that is right for its economy, not a compromise one.

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