Euro monetary union is causing great divide

The single currency remains the great sticking point, polarising opinion in the marketing community

Not only is Europe the issue on which John Major and Tony Blair have both outdone each other on the sceptic front, it also represents the most important divide in the UK marketing community.

The divide falls between those supporting European monetary union (EMU) – who want to see less scepticism – like Unilever – and those who wholly oppose it, such as Dixons chairman Sir Stanley Kalms. He believes that “being choked to death by the bureaucratic weeds that grow from Brussels” is the biggest single issue facing the electrical retailer after May 1.

Business is already divided over the possibility of introducing the Social Chapter. Lining up against are the service sector and finance directors, while they are balanced by those elements of the marketing community who see it as an opportunity to stimulate consumer demand and therefore support it.

Several key marketers have already come out publicly in support of EMU. Niall Fitzgerald, the Unilever chief executive, has lent support to the plan, though with reservations about timing and criteria. He has declared Unilever would have to reconsider future investment in the UK if it failed to take part in EMU.

Broadly the division arises between two camps: those companies doing most of their business exclusively in the UK, which are worried about the threat from overseas competitors and fear more Euro legislation; and those with operations in other markets – for instance the Unilever operating company Lever Brothers pays for many of its supplies in Deutschmarks.

On the single currency side, EMU would provide currency stability for businesses which carry out multibillion pound transactions across European markets.

“Adoption of the single currency is important to retailers trading across Europe,” says Chris Williams, head of corporate communications at the Dutch-owned C&A. “There is an inevitable fear of the unknown but companies will have to get used to the idea.”

Among those lining up with Unilever are British Airways, BP, BT, Guinness and Toyota. Last year, the Japanese company also raised doubts about future investment in the UK and is now expected to build its third European car plant in France.

US companies such as Ford, General Motors, Kellogg, Procter & Gamble and Coca-Cola are believed to privately share the worries of the pro-European UK companies.

But banks such as Barclays and Abbey National have come out against joining the first wave of EMU adopters in 1999, fearing that the pound will not be strong enough and that adoption will shift the financial centre of Europe from London to Germany.

This Thursday may resolve the question of which party will run Westminster, but the issue of who governs Britain will not go away.


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