|
TO: ALL THE MEMBERS
FROM: EURO INFO CENTER (EIC CY691)
SUBJECT: Changeover to the euro: Cypriot enterprises are
rather optimistic, but not well prepared for the challenge
Cyprus aspires to adopt the Euro on 1 January 2008. A Eurobarometer survey published in March 2007 shows that most Cypriot companies perceive the effects of the changeover positively, but aren’t well prepared for this challenge yet.
Most companies have a rather positive perception of the changeover
Τhe changeover to the euro poses a massive challenge to enterprises, but the Cypriot business community tends to perceive its effects rather positively.
One out of five companies surveyed do not see the euro changeover as directly affecting them (either positively or negatively) in the medium to long term (20%). Looking at enterprises expecting the changeover to affect them directly, most of them (37%) foresee positive consequences in the medium to long term.
As a tendency, more of self-employed and small companies expect the changeover to have negative effect than larger companies.
Most companies, and especially SMEs, aren’t ready for the changeover yet
The majority of companies have not started preparations for the euro changeover (61%). Only 39% of all enterprises have already started preparations.
As a general tendency, a higher proportion of the largest companies have already taken different steps in preparation for the changeover, while the smallest companies were the least likely to indicate to have taken any of these steps.
As regards the steps taken by those companies having already started preparations for the changeover, many enterprises have identified the impact of the changeover to the euro in the different areas of their enterprise (40%). A relatively large number of businesses also have informed their staff on the changeover (39%) and have defined the necessary computer adaptation (38%). Close to one third of company managers evaluated the necessary training needs (31%).
Most enterprises will not use the occasion of the changeover to raise prices
The overwhelming majority of enterprises are aware of their obligation to use a dual display system of prices prior to changeover, but many have no clear idea about the duration of the dual circulation period when both the old and the new currency will be in parallel circulation.
Reportedly, most enterprises will not use the occasion of the changeover to raise prices, still, there are slightly more companies that will adjust their prices upwards than those who say the opposite.
28% of companies do not plan to change Cypriot pounds to euro in exact application of the conversion rules. The highest proportion of company managers (39%) intend to use an overall neutral approach and to partly adjust prices upwards and downwards. Another 16% of company managers will mostly adjust upwards and 3% will mostly adjust downwards.
Most companies feel well informed, but a lot of information work remains to be done
The majority of Cypriot enterprises feel that they are well informed about the euro and about the changeover (63%).
Yet, more than one third of the companies in Cyprus claimed they did not receive enough information. 17% of these respondents said they are not at all informed and 19% of them said they are not very well informed about the euro and the changeover.
Cypriot Central Bank is considered the most trustworthy source of information
Trust is a key factor in communicating information because people differentiate between sources of information based primarily on their assessments of how trustworthy the sources are.
As for other countries having adopted the euro, in Cyprus, 71% of enterprises prefer the national central banks as source of information. Commercial banks come second; they are mentioned by 69% of the Cypriot enterprises as preferred distributors of information related to the euro.
A clear majority of the enterprises also mentioned the government, regional and local authorities. These institutions came in third place (60%), and were followed closely by media (59%) in fourth place. European institutions came in fifth place (46%), followed by consumer associations (36%).
The changeover, an opportunity for the Cypriot EIC to gain visibility?
As the survey shows, a lot of awareness-raising and information work remains to be done with Cypriot SMEs before January 2008.
While medium-sized companies are generally satisfied with the amount of information received, a lot of small enterprises (20-49 employees) consider it insufficient.
The changeover to the euro could, thus, be an opportunity for the Euro Info Centre in Cyprus to assert itself as a trustworthy source of information on Community issues, and thereby, gain visibility.
|
