The euro zone poses threats and opportunities for Irish businesses, according to Mr John Travers, chief executive of Forfas and chairman of the EMU Business Awareness Campaign. Price transparency across Europe because of the euro will greatly reduce price variation in the euro zone, intensifying competition, and the price adjustment will be in a downward direction, he warned.
Such a development could be seen in the car industry already, he said. Mr Travers said Irish businesses had to plan strategically for the introduction of the euro.
Exporters and importers could now plan and trade with increased certainty as the exchange risk had been removed. Significant price differentials that exist within Europe may provide opportunities to sell in higher-priced markets.
The euro provided an opportunity to reduce dependence on markets such as the UK. However, price transparency will highlight higher-priced and uncompetitive businesses. Companies should benchmark their competitiveness in euro-zone markets and take corrective action where necessary.
Business partnerships were increasingly important within the EU, he said. Increased competition and consolidation, driven by the euro, may force small and medium-sized enterprises to consider co-operation to achieve scale and expand markets, he added.
Mr Travers was speaking in Dublin at the launch of Strategies for Competing in the Euro Zone, a guide produced by the Forfas EMU Business Awareness Campaign for all businesses, but especially small and medium-sized companies.
