Preparing for the euro: survey among Slovak enterprises. Analytical Report

Transcription

1 Flash Eurobarometer European Commission Preparing for the euro: survey among Slovak enterprises Analytical Report Fieldwork: June 2008 Publication: July 2008 Flash Eurobarometer 240 The Gallup Organization This survey was requested by DG ECFIN-R-4: External Communication and coordinated by Directorate General Communication This document does not represent the point of view of the European Commission. The interpretations and opinions contained in it are solely those of the authors. page 1

2 Flash EB Series #240 Preparing for the euro: survey among Slovak enterprises Conducted by The Gallup Organization, Hungary upon the request of the DG ECFIN-R-4: External Communication Survey coordinated by Directorate-General Communication This document does not represent the point of view of the European Commission n. The interpretations and opinions contained in it are solely those of the authors. THE GALLUP ORGANIZATION page 2

3 Table of contents Table of contents... 3 Introduction... 4 Main findings Information campaign Information levels about the euro and the changeover Information needs Preferred distributors for information about the euro and the changeover Printed materials as an information channel Interactive information materials Rather satisfied with the official information activities Anticipated consequences of the euro changeover Preparations for the changeover Preparing for the changeover Preparatory steps for the changeover Euro-coordinator Adaptation of computer systems Cash preparations Prices in euros Dual price displays Price policy The changeover period Annex tables Survey details Survey questionnaire page 3

4 Introduction Flash Eurobarometer 240 Preparing for the euro: survey among Slovak enterprises was conducted by telephone among selected enterprise segments (i.e. those that would be most affected by the euro changeover) on behalf of the European Commission, Directorate-General Economic and Financial Affairs. This special target group Flash Eurobarometer survey was organised and managed by the Commission s Eurobarometer Team (Directorate-General Communication, Unit A-4). The objective of the survey was to study the progress being made by key business sectors in Slovakia ahead of the introduction of the euro on 1 January The main themes of the survey were as follows: consequences of the changeover preparation for the changeover and timing of the related actions methods of coping with the changeover expectations regarding the supply of euro coins and banknotes attitudes regarding the dual display of prices information and the related information channels concerning the changeover awareness of publications and information sources pertaining to the euro s introduction. The interviews were conducted from 16 to 24 June 2008 by The Gallup Organization Hungary s partner in Slovakia - FOCUS. The target sample of 350 enterprises consisted of: 300 enterprises in sectors G and H (trade and hotel sector), of which 20 enterprises had at least 20 employees 50 enterprises in sectors C to K (excl. G and H) all with at least 20 employees. An actual sample size of 358 enterprises was achieved in the survey. The sample lists were developed by FOCUS using local statistical data sources. Sampling was made according to two stratification criteria: company size and activity sector, randomly. The total sample was distributed between these sampling "cells" in a way that does not follow the actual distribution of businesses within the coverage zone: larger businesses were intentionally oversampled in order to get meaningful results for each sample segment. During data processing, the sample was not weighted due to the small number of enterprises in each sector and to the soft criteria of employee size. The person interviewed in each company was someone actively involved in work related to the changeover to the euro. The breakdown in the 358 companies was: CEO or general manager (107) Euro coordinators (2) Head of Finance and/or Administration (107) Head of IT (20) Other relevant roles (122). The interviewers checked the role of the respondent as well as the accuracy of the sample list in terms of number of employees. page 4

5 Main findings The survey showed that Slovak businesses are extremely confident about the current levels of information regarding the upcoming changeover Enterprises predominantly expect information to come from the banking sector (central bank: 74%, commercial banks: 54%) and from the media in general (67%) The official Slovak website for the euro ( is used by quite a few enterprises - 28% have already visited the site. This is higher than the most widely read print publication issued by the National Bank of Slovakia. Overall, three-quarters of those interviewed indicated that they were satisfied with the efforts of the national authorities to provide information about the changeover Almost half (47%) of companies foresee a positive outcome from the changeover to the euro Compared to feelings at a similar time in Slovenia and Cyprus, optimism in Slovakia is high Eighty percent of enterprises said they have already started their preparation as of June This means that, six months prior to the changeover, 20% of Slovak enterprises have not started to prepare for the euro. One-fifth of enterprises (21%) had already started to make arrangements for the changeover to the euro as early as 2007 A decisive majority (89%) of Slovak companies who have significant cash operations (e.g. retail enterprises) are confident that they will be supplied with enough euro cash (coins and banknotes) before the changeover A majority of firms have defined the necessary IT changes (67%), informed their staff (65%) and identified the impact of the changeover (49%) Virtually all enterprises (97%) are aware that they must apply a dual display of prices (in both euros and Slovak koruna) before and after the changeover A relatively large proportion of companies say they will mostly adjust prices upwards (14%) When asked if they knew how long there would be a parallel circulation of Slovak koruna and euros, 38% of respondents correctly said it would last for 16 days page 5

6 1. Information campaign 1.1. Information levels about the euro and the changeover Roughly half a year before a country joins the euro area, information is an essential asset. The survey showed that Slovak businesses are extremely confident about the current levels of information regarding the upcoming changeover. Subjective evaluation of the information level about the euro and the changeover Satisfaction with the amount of information received Not very well; 9 Not informed at all; 1 DK/NA; 1 Very well; 37 not sufficient; 15 not received informati on; 1 DK/NA; 2 Rather well; 53 sufficient; 82 Q1. How well do you feel informed about the euro and the changeover? % all enterprises Q3. Do you think that the information you have received on the euro and the changeover is...? % all enterprises The vast majority of Slovak enterprises feel that they are well informed about the euro and the changeover (90%). Thirty-seven percent even feel very well informed. Only a small minority of companies feel they are not well or not at all informed (10%). Consequently, 82% of enterprises feel they are sufficiently informed about the euro and its introduction in Slovakia six months ahead of the changeover (for comparison, this figure was 93% in Slovenia one month prior to changeover, and 84% in Cyprus three months ahead of the switch). Discounting those who did not have a clear opinion about this matter, this still leaves one in seven Slovak enterprises (15%) that must be provided with the necessary information about life with the new currency after 1 January Regarding the various categories of companies, there are some differences. Those who feel Subjective evaluation of the information level about the euro and the changeover Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95 ) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) % of very well and well informed % of not very w ell and not at all informed Q1. How well do you feel informed about the euro and the changeover? % by enterprise characteristics page 6

7 informed tend to be larger enterprises (e.g. reporting a high turnover and with many employees). In addition, employees who have been given a responsibility of watching the changeover scenario within a company (mostly within the other respondent category) are more apt to be well informed compared to general managers (i.e. CEOs or branch managers). Those in the hospitality industry are the most apt to assess the current level of information as unsatisfactory, with 17% indicating that they have little or no information, Satisfaction with the amount of information received sufficient Total sample (N=358) 82 CEO or branch manager (n=107) 76 Head of Finance/Administration (n=107) 84 Other (n=144) 85 Sector of business Retail trade (n=222) 78 Hotels and restaurants (n=12) 83 Other (n=95 ) 91 Number of employees of the business Self- employed (n=37) (n=154) (n=83) (n=79) 85 Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) 86 not sufficient As to whether the level of information is sufficient, there are no real patterns in the variations; this shows that the differences are more likely to be due to sampling errors with these low sample sizes rather than to real variations across segments. The results show that general managers and those responsible for companies with a turnover between 150,000 and 500,000 euros (both 76%) are the least confident about having sufficient information about the changeover. Q3. Do you think that the information you have received on the euro and the changeover is...? % by enterprise c haracteristics 1.2. Information needs By focusing on enterprises that felt they had insufficient information (16% of the total), the survey attempted to identify and prioritise the areas where additional material was required by Slovak businesses. Considering these enterprises (one in seven in Slovakia, see chart above), three-quarters of them (72%) would like to have more information about conversion (rounding) rules. Following that, 68% would like to receive more material about the actual conversion rate and 60% would appreciate more information about the implications of the changeover on contracts, salaries, etc. Areas where Slovak enterprises need more information Conv ersion rules, including rounding rules Conversion rate Implications of the euro for contracts, salaries etc Important dates of the changeover Dual display of prices Generally, it appears that those who currently lack material about the euro mostly need a general overview: the significant dates within the changeover plan and information about the dual The design and security features of euro banknotes and coins The euro banknotes and coin denominations Other Q4. In which areas would you like to receive more information? Base: % who do not think to have sufficient information page 7

8 display of prices (both 57%), the euro s physical characteristics (appearance, security features: 52%) and the new money s denominations (51%). Finally, a very significant 52% indicated information needs not listed among these major topics. In the annex, Table 4 provides an overview of the various information gaps by company / respondent type. There is a clear reflection of the respondents position in the replies: financial or administrative managers are the most interested in the important dates linked to the changeover, in the conversion rate and in the implications for contracts and salaries. On the other hand, employees in non-managerial positions are more concerned about the practical details regarding dual displays, the looks and denominations of the incoming money, its security features and other miscellaneous information. The breakdowns in other aspects do not provide a sample that is large enough to identify prevalent differences across the groups Preferred distributors for information about the euro and the changeover Slovak enterprises predominantly expect information to come from the banking sector (central bank: 74%, commercial banks: 54%), but also from the mass communication outlets (i.e. the media in general: 67%). Retailers are less likely to directly name the government (37%) or European institutions such as the European Commission or the European Central Bank (ECB) - 35% - as preferred information sources regarding the changeover. They are even less likely to mention consumer associations (27%) or trade unions / other professional organisations (20%) as preferred sources of information, trusting more the official or financial channels mentioned above. Twenty-two percent would prefer to use some other information source: training sessions, peer advice, etc. Preferred distributors for information on the euro and the changeover National Central Bank 74 Media 67 Commercial banks 54 Government, regional and local authorities European Institutions Consumers associations 27 Trade unions, professional organisations Other Q2. Which of the following institutions do you prefer to receive information on the euro and the changeover from? % all enterprises In the annex, Table 2 shows, regardless of their individual characteristics, that enterprises tend to mention the National Central Bank (which is the National Bank of Slovakia) as their preferred source of information about the changeover to the euro. Companies with a turnover in the range 500,000 1 million euros were an exception, as they were apt to mention commercial banks more frequently (although the low sample size of 21 in this segment should be taken into consideration). page 8

9 Media was most often mentioned by micro-enterprises (1-9 employees) as a preferred source of information; larger enterprises were much less likely to expect to be informed via this channel. Also, those in the hospitality sector were less likely than others to prefer the provision of information through the mass media. Compared to others, it was the hospitality sector that mostly prefers to receive information from the European Institutions and from national authorities (i.e. government, regional and local authorities). Companies in the small enterprise segment (10-49 employees) are also more likely to favour these sources than others Printed materials as an information channel Slovak businesses were/are provided with various print materials as well as interactive information sources in order to bring them up to speed about the euro s introduction. As of June 2008, most enterprises possessed a copy of the information material provided by the National Bank of Slovakia (National Bank of Slovakia: Introduction of the euro in Slovakia- Information for Entrepreneurs, 21%, see chart above); the second most likely source of information was the government-provided package (Ministry of Finance of the Slovak Republic: Information with regard to the transition from the Slovak crown to the euro in the areas of taxation, fees, customs and accounting: 9%). Perceived usefulness of the publications regarding the preparation Not at all useful; 0 Not useful; 9 Did no t l ook at it yet; 2 Ra ther useful; 46 DK/NA; 0 Awareness of publications regarding the preparation National Bank of Slovakia: Introduction of the euro in Slovakia- Information for Entrepreneurs Ministry of Finance of the Slovak Republic: Information with regard to the transition from the Slovak crown to the euro in the areas of taxation, fees, customs and accounting European Central Bank: Trainers' Manual or Quick Reference Sheet- Security Characters of Euro Banknotes European Commission: Euro - Ready for Business European Commission: Ready for Euro! Very useful; 42 Q6bis. Do you think th ese publications are useful for your preparations, or not? % those who have a copy of any of the publications Information material provided by the ECB and the European Commission has penetrated relatively fewer enterprises (ECB: Trainers' Manual or Quick Reference Sheet- Security Characters of Euro Banknotes: 6%; Commission: Euro Ready for Business and Ready for Euro!, both 5%). Note: these numbers are indicative; it is possible that the copies that companies received were with another employee within the company and the interviewee was not aware of this. Respondents, on the other hand, were very likely to mention other useful information sources. These could be special issues of business magazines, information leaflets form their own bank, publications from trade associations, etc. the survey did not collect the specific details of these other information sources. Other Q6. Do you have a copy of any of the publications regarding the preparation of the business sector (i ncludi ng el ectronic copi es )? % all enterprises page 9

10 Overall, 54% of the respondents could not confirm the presence of any of these publications at their firm; 32% reported that they had one of these and the remaining 13% possessed two or more of the publications. Five percent have not heard of any of these (this option was offered to respondents). Generally, these publications were deemed as useful (46%) or very useful (42%) by most Slovak enterprises that had a copy; only 9% had an outright negative opinion. This quick survey did not collect specific rating for the various publications, but the general assessment was the best among those who had a copy of the Ministry of Finance publication (50% of these enterprises thought the materials were very useful), followed by those companies said to be in possession of the information material from the National Bank of Slovakia (44%). Heads of finance and administration, in particular, found the materials provided as being very useful during the preparations for the changeover to the euro (50%). It also appears that larger enterprises have a better opinion of the materials at their disposal, with almost one in five (18%) of small businesses (with 1-9 employees) feeling that the information materials were not useful. As these ratings were received from those companies in possession of a copy of at least one of the tested materials, and because only about half of the sample met this criteria, the sample sizes (e.g. according to turnover, or within the hospitality sector) were not sufficient to draw any further conclusions. Perceived usefulness of the publications regarding the preparation Total sample (N=85) CEO or branch manager (n=28) Head of Finance/Administration (n=20) Very useful Other (n=37) Rather useful Sector of business Retail trade (n=46) Not useful Hotels and restaurants (n=5) Other (n=24) Did not look at it yet Number of employees of the business Self-employed (n=5) (n=33) (n=18) (n=28) Turnover of the business (n=15) (n=10) (n=5) (n=6) (n=16) Q6bis. Do you think these publications are useful for your preparations, or not? % those who have a copy of any of the publications; by enterprise characteristics 1.5. Interactive information materials The official Slovak website for the euro ( ) is used by many enterprises: 28% of the survey respondents indicated that they had already visited the site - a number that is higher than the most widely read print publication, see Q6 chart (page 10) above, issued by the National Bank of Slovakia. Also, with half of the enterprises (51%) rating it as very useful, and a further 41% as rather useful, the official euro website is proving to be successful in informing businesses about the euro s introduction and its practical consequences for enterprises. page 10

11 Awareness of the official euro website and its perceived usefulness Have you visited? Is it useful for preparations? Never heard of it; 1 DK/NA; 0 Very useful Rather useful Not useful 6 No; 71 Yes; 28 Not at all useful Did not look at it yet 0 0 Did not start preparations yet 0 DK/NA 3 Q7. Have you visited the official euro website ( [If yes:] Q7bis. Do you think this website is useful for your preparations, or not? % all enterprises and % those who have visited Awareness of the official euro website and its perceived usefulness Awareness Yes DK/NA No Never heard of it Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) (n=101) (n=23) (n=28) (n=50) (n=55) (n=5) (n=29) (n=8) (n=35) (n=29) (n=29) (n=16) (n=13) (n=5) (n=6) (n=22) Usefulness Very useful Rather useful Not useful DK/NA Q7. Have you visited the official euro website ( [If yes:] Q7bis. Do you think this website is useful for your preparations, or not? % all enterprises and % those who have visited; by enterprise characteristics The sectoral breakdown (see chart on the previous page) shows that the popularity of the official website grows as the size of the company increases: those with a turnover of 2 million euros were the most likely to have used the site (52%) as were companies with at least 50 employees (37%). In addition, larger enterprises (especially as defined by the number of employees) were more likely to find the website to be useful. The site s usefulness was generally appreciated by all segments. Those in general management positions had a rather polarised view: they were the most liable to admit that the website was very useful (57%) as well as to claim that it was not useful at all (13%). page 11

12 Enterprises with the smallest income (31%) and self-employed people (38%) were the least likely to find the website useful. However, the low sample size in these groups means that the numbers should be treated with caution. Awareness of the free telephone line and its perceived usefulness Have you used? DK/NA; 0 Never heard of it; 3 Yes; 4 Very useful Rather useful Not useful Not at all useful Is it useful for preparations? No; 93 Did not use it yet Did not start preparations yet 0 0 DK/NA 7 Q8. Have you used the free telephone line provided by the government for enquiries about the euro and the changeover? [If yes:] Q8bis. Do you think this freephone is useful for your preparations, or not? % all enterprises and % those who have used On the other hand, the government-operated telephone helpline was only used by 4% of the interviewed company representatives. With expectations probably being different for a telephonebased information service, users were not as satisfied as with the website: less than half (43%) said the information they received had been very useful and 29% thought it was rather useful. Overall, approximately one in five users thought that the helpline was not very useful (14%) or not at all useful (7%). Due to the low number of users, a sectoral analysis of helpline usage was not possible Rather satisfied with the official information activities Overall, three-quarters of those interviewed in this survey indicated that they were satisfied with the efforts of the national authorities to provide information about the changeover. However, the Satisfaction with the information provided by national authorities regarding the euro Very unsatisfied; 6 Ra ther unsatisfied; 16 DK/N A; 5 Very sa tisfied; 24 satisfaction levels were rather modest: only a quarter (24%) was very satisfied, while half of respondents were rather satisfied with the information received so far. Having said that, the general approval of the authorities assistance in preparing enterprises for entry to the euro area was confirmed by the fact that only 16% were rather unsatisfied and 6% were very unsatisfied with the information support received to-date. Rather satisfied; 5 0 Q5. How satisfied are you with the information provided by the national authorities for you regarding the euro so far? % all enterprises While the predominant opinion was positive across all of the segments analysed, there were some slight differences. Opinions were most polarised among self-employed persons: 30% them were very satisfied, but a quarter was dissatisfied to some extent. Most critical page 12

13 were those in the general management positions: 29% said they were dissatisfied. Satisfaction with the information provided by national authorities regarding the euro Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business Very satisfied Rather satisfied DK/NA Rather unsatisfied Very unsatisfied (n=62) (n=42) (n=21) (n=20) (n=42) Q5. How satisfied are you with the information provided by the national authorities for you regarding the euro so far? % by enterprise characteristics page 13

14 2. Anticipated consequences of the euro changeover The changeover to the euro poses a massive challenge to enterprises within a Member State. However, based on the survey, the Slovak business community tends to believe that the effects will be positive in the medium-to-long term. Consequences of the euro changeover for the enterprise in the medium to long term Very negative; 2 Nega tive; 14 DK/NA; 22 Very positive; 4 Positive; 43 In that time period, only 14% of Slovak enterprises expect negative consequences and 2% very negative consequences. Overall, almost half (47%) foresee a positive outcome from the euro changeover. Among the latter, 4% expect a very positive impact on their company due to the euro within this timeframe. One in six (16%) companies surveyed stated that they do not foresee the euro changeover directly affecting them (either positively or negatively) in the medium-to-long term. A relatively large number of respondents, 22%, of the companies interviewed could not answer this question. No consequen ces; 16 Q11. Which consequences will the introdu ction of the euro hav e for y our enterprise in th e medium to long te rm? % all enterprises Despite this evident reluctance to answer the question in Slovakia compared to similar surveys in Cyprus and Slovenia prior to their entry to the euro area 1, it can be concluded that businesses certainly do expect to see change of some kind. This situation contrasts with that in Slovenia, at the time of the euro s introduction, where the majority of enterprises thought that the changeover would not have any consequences. Secondly, compared to Slovenia What type of consequences will the euro s introduction and Cyprus, optimism in have for your enterprise in the medium-to-long term? Slovakia is very high: the SK CY SI balance of positive and negative 2008 Jun 2007 Sep 2006 Nov responses is +31 (i.e. the Very positive ones difference between those Positive ones managers who expect positive Negative ones consequences and those who Very negative ones expect negative ones is 31 None at all percentage points). The similar DK/NA figures for Slovenia and Cyprus were +25 and +16 respectively. Balance of positive / negative Note: the three surveys were carried out at different stages in the run-up to the euro s introduction. However, while only 8% of enterprises in Slovenia anticipated a negative business outcome as a result of the changeover to the euro, twice as many companies (16%) are concerned in Slovakia. The sentiment that belonging to the euro area will increase opportunities is pertinent across all segments of the interviewed sample. Across the board, there were at least twice as many enterprises / respondents that anticipated positive consequences as negative ones. Companies with the smallest annual turnover (less than 150,000 euros) just failed to reach this two-fold difference: 39% of them expect positive consequences and 21% have a fear of negative ones. Most polarised were the opinions 1 Eurobarometer did not carry out a corresponding survey in Malta page 14

15 in the hospitality sector where the numbers of those expecting positive (58%) as well as negative (25%) consequences were exceptionally high. Expected consequences of the introduction of the euro for the enterprise in the medium to long term % of positive consequences % of negative consequences Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) Q11. Which consequences will the introduction of the euro have for your enterprise in the medium to long term? % by enterprise characteristics page 15

16 3. Preparations for the changeover 3.1. Preparing for the changeover As the preparation for the euro s introduction becomes more intense in Slovakia (although previous experience shows that activities tend to peak after the summer break), 80% of enterprises said that they have already started their preparation as of June This means that, six months prior to the changeover, a significant 20% of Slovak enterprises have still not started to prepare for the euro. Preparation of the enterprises for the changeover to the euro No; 20 DK/NA; 1 In particular, small businesses said they had postponed the preparations to a date closer to the switchover: 37% of those enterprises with an annual turnover of 150,000 euros or less stated that they have not yet commenced euro-related activities. Twenty-four percent of selfemployed persons and 27% of other micro-enterprises also confirmed that they are yet to start active preparations for the euro s introduction. At the other end of the spectrum, 94% of firms employing at least 50 people have started preparing for the changeover, as have 93% of those companies with an annual turnover of over 2 million euros and 95% of those with a turnover of 1-2 million euros. The variations across industries or between people in different positions within a company were insignificant. One-fifth of enterprises (21%) had already started to make arrangements for the switch to the euro as early as As shown in the annex, Table 14, about four out of 10 enterprises with the most reported revenue and the highest number of employees started preparations in 2007, but only 8% of the self employed and 11% of the other microenterprises made such an early start. Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=15 4) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) Yes, have alrea dy started the preparations; 80 Yes DK/NA No Q9. Have you already started preparing your enterprise for the changeover to the euro? % by enterprise characteristics Most of the enterprises, especially the smaller ones, seem to have waited until the date for the changeover to the euro had been confirmed, at least this seems to be the most plausible interpretation of the fact that many did not start preparations earlier. Fifty-eight percent of companies started preparations in the period between January and June page 16

17 Preparation of the enterprises for the changeover to the euro Started the preparations in: 2007 or before January to June 2008 DK/NA when started (80%) Did not start yet, but plan to start in: July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 no plan to make preparations DK/NA when will start (20%) DK/NA 1 Q9. Have you already started preparing your enterprise for the changeover to the euro? [If no] Q9a. When, in which month do you plan to start such preparations? [If yes] Q9b. When did you start such preparations? % all enterprises Two percent said they did not plan to make any specific preparations, and 2% were not sure when they would start. Most of those companies that have not yet started to make preparations plan to do so in July 2008 (6% of all enterprises) and a further 5% will start by September Four percent of companies only plan to start preparations in the three months prior to the changeover Preparatory steps for the changeover Steps taken in preparation for the euro changeover defined the necessary computer adaptation informed y our staff identified the impact in the different areas of your enterprise identified a person or persons in charge of coordinating y our enterprise's changeover preparations evaluated the training needs set up a detailed action plan in your enterprise Yes No DK/NA Three preparatory steps (of the six identified in the questionnaire) have already been taken by the majority of Slovak enterprises. About twothirds of companies have defined the necessary computer adaptation (67%); a similar number have informed their staff (65%) and almost half have identified the impact in the different areas of the enterprise (49%). Concerning the remaining activities, 39% have appointed a euro coordinator, 37% have evaluated the necessary training needs and only 31% have set up a detailed action plan. These latter activities mostly characterise larger companies and many of the small businesses manage to successfully switch to the euro without ever taking these preparatory actions Q10. As regards the changeover to the euro, have you? % all enterprises page 17

18 There is a natural tendency that the larger businesses are more likely to have considered the more complex or comprehensive preparatory actions (e.g. adapting IT systems, creating detailed action plans, appointing a euro-coordinator etc.). However, a significant number of small businesses have also paid attention to informing staff and they are only slightly less likely to have assessed the expected impact of the changeover on their business. The table below provides full details in this regard. Table 1. Steps of preparing for the euro changeover, by size of enterprise (%) (Base: all enterprises) Identified the impact in various areas Defined necessary computer system changes Informed staff Evaluated training needs Set up a detailed action plan Appointed a euro coordinator TOTAL SAMPLE (N=358) NUMBER OF EMPLOYEES Self-employed (n=37) (n=154) (n=83) (n=79) As regards the changeover to the euro, have you...? Further analysis of the responses (see Table 15 in the annex) shows that general managers are usually more aware of, and therefore more likely to report, the preparatory steps taken in their enterprise compared to respondents in lower ranks of the company (but who probably have a good overview of the area that they directly oversee): with the exception of a detailed roadmap of the changeover and the appointment of a euro coordinator, general managers were most likely to confirm each of the actions tested. These two exceptions were most often confirmed by heads of finance/administration. Overall - although the low sample size raises reliability issues enterprises in the hospitality sector have been the most likely to engage in each of the preparatory actions listed in the survey. page 18

19 3.3. Euro-coordinator Sixty-one percent of the enterprises interviewed have not appointed a specific person to be in charge and coordinate all changeover-related activities. Most euro coordinators have been appointed to this role in 2008, but a third (33%) of enterprises indicating that they have someone in this role claimed that the coordinator was already in charge in 2007 (in a few cases even earlier). This is 13% of all of the interviewed enterprises. An early appointment was the most frequent in the hospitality sector, where 50% of those currently having a euro coordinator appointed this person in 2007 or earlier. Small enterprises (with employees, or reporting a revenue in the 150, ,000 euro range) were the most likely to indicate that they appointed this person in the first half of (See Table 16 in the annex). When did you identify a euro-coordinator who coordinates the preparations to the euro changeover Identified in December 2006 or before Identified in 2007 Identified in January to May 2008 DK/NA when No Euro- coordinator Among ALL enterprises Among those who appointed a coordinator Q10bis. When did you identify the person (or persons) in charge of coordinating your enterprise's change over preparations? % all en terprises and % those who i dentified an Euro coordinator Adaptation of computer systems In the reality of everyday business, adapting a company s IT systems to accommodate the new currency is probably the single most important challenge related to the changeover. Not by chance, it is frequently mentioned that businesses tend to start this activity at the earliest possible date. In Slovakia, 70% of the interviewed enterprises informed Eurobarometer that they have outsourced this work to specialised companies; Using their own staff is the most popular choice in the retail trade, in those enterprises with 1-9 employees and those with less than a turnover of 150,000 euros i.e. in enterprises that might operate rather simple systems. On the other hand, outsourcing is the solution most preferred for adapting computer systems to meet the requirements linked to the changeover to the euro among enterprises from the hospitality sector, those with 50 employees or more, and those with an annual turnover greater than 1 million euros. Methods of adapting the computer systems for the introduction of the euro Outsourcing to IT/software companies; 70 Mixture of both; 6 DK/NA; 8 Adaptation by own staff; 16 Q12. As regards the adaptation of your computer systems with respect to the introduction of the euro, how do you (plan to) proceed? % all enterprises page 19

20 Methods of adapting the computer systems for the introduction of the euro Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) Adaptation by own staff Outsourcing to IT/software companies Mixture of both DK/NA Q12. As regards the adaptation of your computer systems with respect to the introduction of the euro, how do you (plan to) proceed? % by enterprise characteristics Most Slovak enterprises do not expect any problems related to the necessary changes to IT systems (82%). However, financial and administrative managers in particular fear that there will be problems: 17% among them are worried compared to the 11% average across all respondents. Expecting problems with computer systems during the introduction of the euro Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) Yes No Part of the system(s) will be ready DK/NA Q13. Do you expect problems with your computer system(s) (e.g. accounting system, invoicing system, payroll system) when switching to the euro on 1 January 2009? % by enterprise characteristics page 20

21 It is noteworthy that the largest enterprises with a turnover of at least 2 million euros are the least confident: 17% have some doubt that their sophisticated business support systems will enable the company to have a seamless transition into the euro era. Of the 12% of enterprises that are concerned about their data processing applications not being ready for the changeover, half expressed a rather general anxiety about the process; specific concerns were mentioned by 5% (i.e. 2% mentioned a lack of internal resources, 1% insufficient finance, 1% late delivery by the contractor and 1% that an external accountant would not be ready). Overall though, an encouraging picture was painted in this regard. Expecting problems with computer systems during the introduction of the euro No Lack of financial means to adapt the system(s) Lack of own staff to prepare the adaptations of the system(s) External IT/software services are provided too late by our contractor Our external accountant will not be ready Other reason DK/NA Why expect problems DK/NA Q13. Do you expect problems with your computer system(s) (e.g. accounting system, invoicing system, payroll system) when switching to the euro on 1 January 2009? % all enterprises Q13bis. Why do you expect problems with your computer system(s) when switching to the euro on 1 January 2009? %, Base: those who expect problems 82 % 1 s m le b ro p g tin c e x p E page 21

22 4. Cash preparations Two-thirds of the companies interviewed receive significant sales revenues through cash these enterprises are subject to the sub-frontloading activities of the national authorities. This implies that euro cash will be provided in advance so they will have enough money for an immediate switchover in terms of their ability to give change in the new currency, etc. Looking at the various dimensions, some significant differences can be seen. Regarding the various business sectors, not surprisingly, we find that enterprises in the sectors of retail trade and hotels and restaurants are more likely to have said that they have direct financial relations with costumers than are enterprises from the other sectors. Considering the size of companies, the micro-enterprises (employing 1-9 people) are the ones that tend to say that they receive sales revenue through cash, while companies with 50 or more employees are Being a retail enterprise or having direct financial relations involving cash operations with consumers Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=15 4) (n=83) 50+ (n=79) T urnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) Q 14. Is your enterprise a reta il enterprise ( e.g. shop, su pe rmarket, etc) or does your enterprise have direct financial relations involving cash operations with consumers? % by enterprise characteristics, Yes sh own0 much less likely to handle significant amounts of cash, as are enterprises with an annual turnover of 1 million euros or more. Companies with the lowest annual turnover were the most likely to say that they use cash. A decisive majority, about nine out of 10 (89%) of Slovak companies who have significant cash operations (e.g. retail enterprises) said they were confident that they would be supplied with enough euro cash (coins and banknotes) before the changeover (during the sub-frontloading process). About 6% were unsure and only 2% were sceptical in this regard 3% did not know of the possibility or did not plan to frontload. The overwhelming majority of Slovak companies stated that they would be supplied with euro cash for the changeover. Eighty-nine percent of enterprises confirmed that they would be supplied with both euro coins and banknotes; 5% could not tell if they would be provided with coins and 6% were not sure about the receipt of banknotes. Six percent of companies do not expect to be supplied with euro coins and 5 percent do not think they will receive euro banknotes before 1 January Among those who think they will not be supplied with cash, respondents cited various reasons: they do not want to receive euro cash before the date of the changeover, they are not aware of the possibility, they do not want to pay for the service, they have storage problems, etc. However, none of these emerged as a prime reason for not counting on a proper sub-frontloading operation (see chart on the following page) page 22

23 Reasons for being not supplied with euro cash before 1 January 2009 by the bank Euro coins Euro banknotes Being supplied with euro cash Not aware of the possibility of early supply of euro cash No need to receive euro cash before 1 January 2009 Not want to pay for the early supply of euro cash Security or storage problems Other reason Being not supplied euro coins 6% Being not supplied euro banknotes 5% DK/NA 5 6 Q15/Q16. Do you expect to be supplied with euro coins/banknotes before 1 January 2009 by your bank? Q15bis/Q16bis. Why will you not be supplied with euro coins/banknotes before 1 January 2009? % Base: those whose enterprise is a retail enterprise page 23

24 5. Prices in euros 5.1. Dual price displays Virtually all enterprises surveyed (97%) were aware that they had to apply a dual display of prices (showing the prices in both euros and in Slovak koruna) before and after the changeover. This dual display must start in August In all enterprise segments, the overwhelming majority of enterprises are aware of the requirement of a dual price display before the changeover. Only a slight variation across the sectors can be observed: the level of awareness ranges between 93% and 100%. Awareness of dual display of prices before and after the changeover Total sample (N=358) CEO or branch manager (n=107) Head of Finance/Administration (n=107) Other (n=144) Sector of business Retail trade (n=222) Hotels and restaurants (n=12) Other (n=95) Number of employees of the business Self-employed (n=37) 1-9 (n=154) (n=83) 50+ (n=79) Turnover of the business (n=62) (n=42) (n=21) (n=20) (n=42) Yes DK / NA No Q20. Are you aware that before and after the changeover to the euro Slovak firms will have to display prices both in Slovak korunas and in euro? % by enterprise characteristics Predominantly, with the survey taking place just a few weeks before the dual display period was due to start, businesses did not foresee difficulties. The most frequent complaint concerned the direct and indirect cost aspects (very costly, 25%; time consuming, 21%), and 17% of respondents referred to technical problems. Fourteen percent expected to deal with related customer complaints as a potential difficulty, 12% indicated that calculation errors made by the staff could be problematic and the same proportion (12%) reported that their hardware (e.g. cash registers) did not comply with the dual display requirements. Finally, 8% indicated problems that were not among those listed (see the chart on the next page). 2 A full timetable for the euro changeover is shown on the official website ( page 24

25 There are no clear trends linked to the type of enterprise in regard to the difficulties foreseen concerning the dual display of prices (see Table 29 in the annex). However, those from the hospitality industry tended to indicate difficulties more often than others. Large enterprises (with at least 50 employees) were more likely than others to report potential difficulties concerning calculation errors by the staff, customer complaints, a process that would be too time consuming and expensive. Technical problems were most often foreseen by micro-enterprises (1-9 employees). Difficulties concerning the dual display of prices Very costly Too time consuming Technical problems (on receipts, price display s, etc) Customer complaints Calculation errors by the staff Hardware not capable of dual display (e.g. old cash registers) Other problems Yes DK/NA No Financial and administrative managers were the most aware of difficulties: they tended to report most difficulties compared to people in other companies. The only exception was customer complaints: this difficulty was most often mentioned by the non-managerial employees in positions related to the changeover preparations Q21. Are you facing any of the following problems or difficulties concerning the dual display of prices? % all enterprises Price policy The majority of companies (45%) currently claim that they do not plan further adjustments in calculating the so-called psychological 3 prices in euros: they will change Slovak korunas to the new currency in exact application of the conversion rules and 22% plan to use an overall neutral approach (to partly adjust prices upwards and downwards). Adjustment of psychological prices when establishing prices in euro Exact application of the conversion rules (without further adjustment) Overall neutral approach (partly adjusting upwards, partly downwards) Mostly adjusting the price upwards Mostly adjusting the price downwards DK/NA Reportedly, more enterprises will use the opportunity of the changeover to increase their prices rather than to make them Q22. When you will establish your prices in euro, how will you proceed for the adjustment of prices, such as 99,90 Sk, w hich due to the application of the conversion rules would result in awkward amounts in euro? % all enterprises more competitive. A relatively large proportion of companies said they have decided to mostly adjust prices upwards (14%). This proportion is significantly higher than it was in Cyprus and Slovenia where similar measurements were conducted. As the table on the following page shows, 6% of Slovenian managers indicated that they intended to use the changeover to slightly increase their prices, while 3% of their Cypriot colleagues had this intention. 3 The question asked was When you establish your prices in euro, how will you proceed for the adjustment of prices, such as 99,90 Sk? page 25