BUSINESSES must be getting a little fed up with the legions of ministers and business organisations urging them to "get ready for EMU". Hardly a week goes by, it seems, but another survey comes out saying that Irish business is strongly in favour of monetary union, but is doing little or nothing to get ready for it.

This is hardly surprising. Managers, after all, have generally had better things to do than plan for something that may or may not happen. But it is time to start getting serious about monetary union. One clear message from 1996 was that there is strong political momentum behind the EMU timetable; the odds are that it is going to happen.

It is hard to overestimate the impact that the introduction of a single currency will have. Think, for example, of the financial services industry. If the euro takes off, then financial institutions will be expected to provide euro accounts and services to clients, long before the actual notes are introduced in 2002.

A period of major rationalisation in the sector is in prospect as foreign exchange commission income drops sharply and capital markets across Europe become ever more closely integrated. Slowly but surely consumers will start to look beyond national frontiers for products such as mortgages and with interest rates moving close together across Europe it is the most efficient organisations offering the best value products which will survive.

The impact in other sectors might not be quite so dramatic. But moving to the euro is the greatest challenge for businesses over the next few years. The key date is January 1st, 1999, when the qualifying currencies are due to be locked together irrevocably.

Carried along on the crest of the economic wave, the Government has yet to start seriously assessing what monetary union may mean for the economy and how it will have to adjust its policies. Some businesses - particularly the banks - have put a lot of work into assessing its implication, but overall a huge amount of preparatory work remains to be done.

The danger is that we will land with a bump into monetary union. At the moment Government policy - and possibly the plans of many companies - are based on the continuation of the economic boom. We have got used to budgeting for economic growth rate of 7 to 8 per cent.

Maybe the boom will continue into next year, or even spill over into 1998. Perhaps the economy has moved to a new level of productive performance, and can sustain growth rates of 4 to 5 per cent into the next millennium. But experience would suggest that it is unwise to bank on the bright side.

Let's sketch another scenario. Moving into 1998, and economic growth is running out of steam. Growth continues at a respectable 3 to 4 per cent, but the boom has run its course. The Government is struggling to keep borrowing within the Maastricht guideline, and also faces a lower level of EU transfers from 1999 on. Businesses are finding the domestic market harder to cope with, and growth in European markets is slow enough as states struggle to meet the Maastricht rules.

Unlikely? Who knows? But the point is not the precise forecast but the need to allow some flexibility to respond if things change. And this need for flexibility will become even more crucial if monetary union goes ahead and the exchange rate and interest rate policy instruments are no longer available.

It is a pity that the new national agreement - Partnership 2000 - did not recognise this. Instead it relies on continued strong growth and builds in absolutely no flexibility to respond to adverse developments.

If the economic party is to continue in monetary union, then both Government and business will have to start getting serious about the idea. At the moment the most likely development is that we will enter monetary union but Britain, our biggest trading partner will stay out, at least initially. Standing back and looking at what is planned, we are planning to tie ourselves to a powerful group of economies with which we have significant economic ties but which are in many ways very different.

This brings two challenges. One is the ability to respond to economic shocks which hit Ireland more severely than the other members of the union - say a fall in sterling, a crisis in the computer sector or in agriculture. And the other is the ability to grind out the kind of strong economic performance which we have managed over the past couple of years in the long term - to be able to play for the full 90 minutes.

When this is recognised the policy implications are clear. The Government simply must plan to allow itself more room for flexibility in the national budget, which will be the only vehicle left to it to influence the overall performance for the economy. At the moment we are budgeting on the boom continuing. And national policy must refocus on all the key areas of competitiveness from the tax system to the telecommunications infrastructure and all the other areas of the economy.

In each business sector, companies will have to face the new competitive environment which the euro will bring, which in many cases will mean competing in an evermore open market against the best companies in Europe.

There is at last some evidence that these issues are starting to be addressed. But we are still a long way from being ready for the euro.