A dramatic rise in the use of the euro by large EU firms is reported by the European Commission in its latest survey of the new currency's use in firms, public administration and among the public.
Some one-quarter of payments made (in value terms) by large companies in the first quarter of this year were in euros, the survey finds, up from 2 per cent in the last quarter of 1999. In Spain and Belgium the bulk of their payments are now effected in euros.
In terms of numbers of transactions the figure is still only 2.4 per cent overall, however, a discrepancy which reflects the effect of a wave of major takeovers and mergers in which euro-denominated shares have been exchanged. In Spain these mergers have resulted in the euro accounting for a staggering 88.8 per cent of the value of national payments.
A speed-up in the changeover to the euro among large firms throughout Europe, however, is also opening up a gap with SMEs.
In Ireland, according to Forfas figures supplied to the Commission, nearly half of trade with the euro-zone is now denominated in euros (45 per cent of imports and 49 per cent of exports). Overall some 23 per cent of firms have made at least one payment in euros while 22 per cent have received one. Of these payments half were made electronically.
The Irish use of euros in dealings with the State is still relatively and absolutely low - the volume of Irish customs declarations in euros is 2.5 per cent and for corporation tax payments is 1 per cent. Less than one company in 100 is making VAT returns in euros.
Some 17 per cent of Irish companies have opened a euro account while another 15 per cent are expected to do so this year. Dual pricing is practised by 30 per cent of Irish firms, a figure which is expected to double during 2000 and which corresponds closely with the euro-zone average.
The Commission cites a KPMG study indicating that some one-fifth of large firms in the euro-zone have moved to accounting in euros with the same proportion planning to do so this year. And there has been a sharp rise in the number of euro accounts in banks, with one in three newly opened non-national accounts now denominated in euros.
German firms are still using the euro very little, the survey suggests, with only 1.2 per cent of the volume of payments and 3.5 per cent of their value denominated in euros. In international transactions, however, the figures rise to 17 and 16 per cent respectively.
Use of the euro by consumers remains low at 2.4 per cent in volume terms in the euro-zone, although up to 10 per cent in value terms (including the purchase of financial securities). Only some 45 per cent of payment terminals can accept euros.
And a survey conducted by Visa found that some two thirds of payments with its card are linked to electronic commerce. After France the UK ranks highest in the value of euro transactions by Visa card because of its booming Internet use.
With one fifth of transactions conducted in euros (in value terms) the Belgian consumer tops the league of euro use.
