Doing Business in a Single European Currency

Abstract

DR. ROGER BENNETT IS WITH THE LONDON Guildhall University, England. Discussion concerning the probable consequences of the formation of a single European currency has focused mainly on macroeconomic issues relating to the need for a European Central Bank and common monetary policies applicable throughout the European Union; on the effects on regional development within particular nations and on the issue of whether Western Europe is, or ever can be, an optimum currency area. Little has been written, however, about the consequeces of common currency trading for the individual small and medium-sized business operating within the proposed common currency area or for small firms in nations that do most of their foreign trade with the core economies of the EU but which, nevertheless are not themselves members of the single currency system. (The latter situation will apply, for example, to small firms in the United Kingdom and Denmark if these countries decide to exercise the opt-outs from the single European currency available to them in consequence of the Maastricht negotiations.) This paper briefly explores the many implications of common currency trading for small to mediumsized commercial enterprises both within and outside the common currency area.