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Tight timetable for euro

The UK faces a tighter timetable to enter the euro than countries in the first wave, leading to distribution difficulties for providers that fail to make preparations, warns Cap Gemini Ernst & Young.

It says adoption of the euro would be the second-biggest compliance programme ever undertaken, after the pension review, and is estimated to cost more than twice as much as the Y2K conversion.

The Government&#39s national changeover plan gives a timetable of 24 to 30 months from the date of a referendum to the adoption of the euro, compared with the 44 months enjoyed by the initial entrants.

If there is a yes vote in a referendum, sterling would be locked to the euro nine months later and 12 months later, retail use of euros would come in, running parallel with sterling for nine months to complete the conversion. If the Government called a referendum in May and won the vote, the euro would replace sterling by the first quarter of 2006.

CGE&Y warns that providers with outdated and multiple legacy systems which failure to make contingency plans will find themselves unable to focus on core business propositions. Problems will include displaying valuations in euros and sterling through the handover period and revaluing data.

CGE&Y consultant Peter Havelock says: “If a referendum is called and votes for entry, there will be a lot to do in a short space of time. Providers failing to deal with euro technology issues now will be putting their distribution at risk.”

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