Twenty years on from the signing of the Maastricht Treaty, which paved the way for the creation of the euro, research from the Grant Thornton International Business Report (IBR) reveals that, despite the ongoing sovereign debt crisis, business leaders remain very supportive of the single currency.
The research reveals that almost four in five (78%) business leaders in the eurozone believe joining the euro has had a positive impact on their business. The main positive impacts cited are the boost to trade with other euro countries (23%), the elimination of exchange rate risk (15%) and greater transparency on prices (12%).
Business leaders were also asked about the drawbacks associated with joining the single currency – 57% cited a rise in costs and prices – but when asked if they would like to see the euro survive, an overwhelming 92% agreed. Businesses in Finland (90%) and Belgium (84%) are the most positive about the impact of the single currency, with those in Italy (48%) the least. The two regional economic heavyweights, Germany (79%) and France (71%), remain solidly supportive.
Ed Nusbaum, CEO of Grant Thornton International, said: “If a referendum on the future of the euro were held today amongst business leaders, then the result would be emphatically to keep it going. This represents economic realism on the part of businesses; Europe may have already gone back into recession but a break-up of the single currency could take the global economy down with it.
“Despite the sovereign debt crisis and the uncertainty this has caused, businesses remain supportive of the single currency. Politicians should take heed of the wishes of businesses as they search for resolutions that secure the future of the euro, and map out plans for future European integration.”
The future of the eurozone
The IBR reveals that business views on further European integration are more mixed. Less than one in three eurozone businesses said they would like to see the single currency expand (31%), although interestingly, those in the troubled economies of Greece (62%) and Spain (53%) are most keen to welcome new entrants.
Meanwhile, almost a quarter of eurozone businesses (24%) would like to see some countries drop out of the single currency. This is a popular option in the only remaining eurozone members with AAA-rated sovereign debt: Finland (50%), Germany (40%) and the Netherlands (24%).
Outside the eurozone the picture is also varied; the majority of business leaders in Poland (64%) and Denmark (62%) would like their country to join the single currency. But few of their peers in the UK (12%) and Sweden (28%) agree. Outside the EU, 88% of businesses in Turkey would like their economy to integrate further with Europe, but just 32% would like to join the euro.
Ed Nusbaum added: “The next few months could be the most significant in the history of the single currency, and arguably of the EU itself. The good news is that business support for keeping the euro intact remains robust.
“However, many substantial challenges lie ahead. Perhaps the most important is reducing government debt – which exceeds the 60% threshold for entrance into the single currency set out in the Maastricht Treaty 20 years ago in Belgium, France, Greece, Italy and Ireland – whilst ensuring that austerity does not strangle business growth prospects.”
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Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of over 11,500 businesses per year across 40 economies. This unique survey draws upon 20 years of trend data for most European participants and nine years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com.