knowhow exchange The business of EMU What'sNewS Issue 8' August 1998 9 The introduction of the euro will do more than put the same currency in a couple of hundred million people's pockets. It will open up a whole new competitive playing field in which companies of all sizes will have to evolve in order to survive. The EU has recently been focusing heavily on ^reating a fertile environment in hich small and medium-sized enterprises (SMEs) can flourish in this new marketplace. To do that, the people behind this European legislation and dedicated programs need information. Member of the European parliament Karla Peijs explains what the euro will mean, what the EU can do for our customers, and what we can do for the EU. Easy access Two-way streef Rethinking strategies Surviving EMU While SMEs may not appear immediately relevant to Rabobank tnternational's core business, no one vithin the organization should forget that in its domestic market, Rabobank has around 40% of the total small and medium-sized business market. 'And,' says Karla Peijs, 'no one should forget that Philips started in someone's garage, as did Microsoft and many other of the huge multinationals. SMEs are crucial to alrnost all economies; they generate most of the new jobs, especially in mature economies, such as the US, where 90% of all new employment comes from SMEs.' It was the realization of just how important this group is for everyone's economy that has led the EU to prioritize SMEs and to put in place programs to Hcilitate their access to, for example, capital and financial instruments. 'When I arrived in the parliament,' Peijs says, 'SMEs were not an issue. Everyone was talking to the huge multinationals. In fact, they don't need Europe. If a multinational wants to expand cross border or piek up market share in another country, it buys a domestic company. It is the small firms, the young companies that want to export or build cross-border market share, that need open borders; they need all the help they can get, they need harmonization, they need the easy access to financial instruments in order to export more easily. If we do not succeed in creating an environment in which these companies can expand and grow into any and all the markets of European member states, then we will have failed.' Peijs sees the role of Rabobank and other financial institutions in facilitating this expansion as crucial. 'The banks are in a position to act as intermediaries between companies and the EU,' she believes. 'By establishing a presence in Brussels, you can help build an exchange of information through which we can improve the legislation we write and, for example, the programs created to support SMEs. It is the account managers at banks who are at the cutting edge, who know which companies want to export, what their problems are in growing their business, and so on. That knowledge is truly useful to us in Brussels.' Diederik Conijn and his European Union Advisory Services (EUAS) team are ideally placed to channel this information to legislators like Karla Peijs. Recently, a centre of competence was established for all Rabobank customers looking to tap into EU support programs or merely seeking information. 'In this way,' says Conijn, 'it becomes a two-way street. Obviously, we hope to use our lobby to raise the interests of our customers. But that lobby is also useful for people in Brussels because it can provide them with practical insight.' And these realities should not be underestimated. According to Peijs, the penny - or more appropriately the euro- Karla Peijs - raising euro awareness cent - has still to drop on just how much will change with the arrival of the single currency. 'It will influence every aspect of how we do business,' she says. 'Companies will have to rethink their whole marketing strategies because the market will change dramatically. Prices will be totally transparent. Companies - and suppliers of financial services, for that matter - will have to ask themselves how to ensure customers continue to buy their products, rather than those of a cheaper competitor. And imagine those competitors are all readily accessible through Internet. Imagine that and perhaps you will understand how significant this development is. What every company has to do is think: How can we reach the customer and convince him that our product is better? That our firm can deliver a better service and that is why it is worth paying a little more?' Paying is what we will all be doing if we do not wake up to the significance of EMU. Asked if in her experience people are aware of what the euro will really mean, Peijs says: No. Everyone is talking about price lists and software; too many people think they don't need to worry about EMU until 2002. They couldn't be more wrong and it is very worrying.' Clearly, Peijs is concerned about the seeming lack of urgency in the business world when it comes to the euro, especially in SMEs. For her, becoming euro-proof as quickly as possible and rethinking corporate strategy is imperative. After all, come 1 January 1999, absolute transparency will mean the nature of competition will change, there will be more of it and it will be tougher than ever. Usually we complain about the bureaucracy and conflicting messages coming out of Brussels - this time the signals are as transparent as pricing in euros: anyone who is not prepared may not survive. If you would like flirther information on EUAS, please contact Diederik Conijn on +32 2 S02 4539.

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blad 'What's news' (EN) | 1998 | | pagina 9