Europhile companies should concentrate on performance
October 7th, 1998
A letter to the Business & City Editor of the Times which was published on 7th October 1998.
As a director of an SME [small or medium-size enterprise] – a technology transfer and consultancy company “spun out” of university research – I see the Treasury’s euro message which Rachel Bridge reported (September 23rd) as hype.
Over the years my company has invoiced clients in different parts of the world in sterling and they have found no difficulty in remitting payments in that currency. Pari passu, if I purchase a service in the US I expect to be invoiced in dollars.
What is so different about the euro? For those companies already invoicing their euroland customers in marks, francs, etc. life after next January 1st will automatically be easier since they will need to take notice of only one rate of exchange instead of 11. Companies know that. If they invoice in pounds, why should euroland customers not continue to remit payment in pounds?
If British companies such as ICI and Rover try to insist that their suppliers in the UK invoice them in euros rather than in pounds, the legal tender of our country, they may well be breaking the law. In any case such companies will stand accused of abusing their buying power to impose an exchange risk on British suppliers which their euroland suppliers will not be subject to, a gratuitous, unpatriotic act that will be scorned and resented. They will also get short shrift if they try to impose euro-accounting on US suppliers.
One would think that the management of both these and other large companies with Europhile chairmen would be better employed in concentrating on improving their companies’ performance, rather than doing the present Government’s work for it.