For the many Irish businesses, the use of the euro as an alternative to the Irish pound will be minimal during the transitional period, between 1999 and 2002.

The advantages of using the euro early lie mainly with firms which transact in foreign currencies or which deal extensively with others who are likely to use the euro from an early date.

We expect, however, that businesses which deal mainly or only in Irish pounds will have little, if any, need for extensive euro facilities until well into the three-year transitional period and the vast bulk of personal customers are likely to delay the switch until they have to.

While the majority of European governments have been pushing hard to ensure the smooth introduction of EMU, the small to medium-sized business (SME) sector has generally adopted a wait-and-see strategy. Some recent surveys indicate that Irish firms are better prepared than most. Just over half of Irish businesses think that the euro will have a positive impact as compared with one third in the EU 11 area.

About 40 per cent say they are making changes to company strategy in Ireland as compared with only 17 per cent in the EU 11. More than three-quarters of Irish SMEs expect to be paying their bills in euro by the end of the year 2000 but a majority believe that there will be no change in either purchase or selling prices and only 40 per cent feel that it will stimulate competition.

For retailers and the general public the main impact will not be felt for a further three years. At this stage, however, it is important that retailers, too, should begin to form a plan of campaign ensuring that they have a strategy to deal with the eventual changeover.

The great unknown is the pace at which the bulk of companies will switch to invoicing in euro. It is clear that this will not be significant at the outset. Our experience, however, is that companies who engage in cross-border trade, once they began to examine the situation, rapidly realise the advantages of invoicing in euros in their dealings with other participating countries. There is a significant risk that companies across Europe are underestimating the pace at which euro activity will pick up.

The ability to more readily compare prices across countries is may spur competition to a much greater extent that hitherto foreseen. For instance, it has been found that prices for some products vary by up to 50 per cent across different countries. This will likely be unsustainable. Companies, which maintain varying prices, expect price differences to disappear by falling rather than rising. It is unfortunate, however, that the last great change, decimalisation, is inextricably linked to inflation and higher prices.

This will impede the Government's campaign to assure the people that the euro will not be a negative change. We should not give up. There is a good chance that the euro will herald a more, not less, competitive environment with lower rather than higher prices. This will benefit the consumer but is a further reason for business, small and big, to sit up and take notice of the euro.

Pat McArdle is head of EMU planning at Ulster Bank.