Grupo Gowex, a Spanish provider of Wi-Fi wireless services, ismoving funds to Germany because it expects Spain to exit the euro.German machinery maker GEA Group AG is setting maximum amounts heldat any one bank.

“I don't trust Spain will remain in the euro zone,” said JenaroGarcia, founder and chief executive officer of Madrid-based GrupoGowex, which provides Wi-Fi access in 15 countries. “We moved ourcash and deposits to Germany because Spain will come back to thepeseta.”

European companies spent billions preparing for the euro when itwas introduced in 2000 by 11 countries. Contingency planning for anunraveling of the currency involves cutting investment, movingmoney to Germany, transferring headquarters to northern Europe fromsouthern, and even going out of business, according to interviewswith more than 20 executives.

The Bundesbank, Germany's central bank, registered capitalinflows of 11.3 billion euros ($15 billion) from non-banks inSeptember, according to the breakdown of its current accountpublished Nov. 9. That helped transform a deficit of 47.3 billioneuros in Germany's balance of other capital flows in August to asurplus of 700 million euros in September.

In another bid to end the debt crisis, European leaders added200 billion euros to their war chest and tightened anti- deficitrules in what they called a “fiscal compact” at a meeting inBrussels. European stocks dropped and the euro was little changedas the plan disappointed some investors.

“How do you control an explosion in a controlled way?” Fiat SpAChief Executive Officer Sergio Marchionne told reporters inBrussels on Dec. 2. “That's a contradiction in terms. This will bean implosion of some size with potentially disastrousconsequences.”

Companies switched gears from preparing for a possible exit byGreece to some sort of currency breakdown after Italian PrimeMinister Silvio Berlusconi's government collapsed and 10-yearItalian bond yields rose past 7 percent in November.

“A couple of weeks ago I would never have thought about havingconversations on the probability of the euro disappearing, but nowthere is more speculation on such a scenario,” Wolters Kluwer NVCEO Nancy McKinstry said in a Nov. 29 interview at the company'sheadquarters outside Amsterdam.

The board of Wolters Kluwer, Europe's largest tax and legalpublisher with offices in Frankfurt, Milan, London and Phoenix, hasspent more time on scenario planning, she said.

Tapping Reserves

“We obviously have plans in place if something happens,” ABBLtd. CEO Joe Hogan said in Zurich on Dec. 1. “They can never be asrobust as you'd want them to be but we certainly are prepared ifthere is a crisis.”

The Swiss engineering company “updated what we would do” in thepast few weeks, Hogan said. “We just keep updating and making ourplan more and more detailed.'

Bayerische Motoren Werke AG, the world's largest maker of luxurycars, has honed its plans developed following the 2009 financialcrisis and is prepared to act if markets dive, Chief FinancialOfficer Friedrich Eichiner said in November.

The Munich-based carmaker's response would include reducingproduction by as much as 30 percent and using its banking unit todirectly tap central bank reserves. The company also has reducedits leasing portfolio to manage risks in case used-car valuesdecline.

Companies outside the euro region are doing just as muchpreparation as those inside. U.K. Chancellor of the ExchequerGeorge Osborne said yesterday he's seen studies suggesting acollapse of the euro would lead to a “very significant” drop inU.K. economic output.

Kingfisher Plc, Europe's largest home-improvement retailer, hasconsidered plans for the possibility of a collapse of the euroregion and will focus on cash generation to account for thatpossibility, Chief Executive Officer Ian Cheshire said.

The London-based company would start with a focus on workingcapital and making sure planned capital-spending projects reflectthe level of uncertainty, Cheshire said in an interview on Dec. 1.It would probably also stop chasing unprofitable sales or marketshare with promotions, and focus on cash margins instead.

Top of the list of concerns among companies is the collapse ofone or more financial institutions in Europe. Executives saythey're already moving money around to avert that risk.

'Survival Mode'

“We are more careful about investment decisions,” said JuergOleas, CEO of GEA, a machinery maker based in Dusseldorf. “We haveinternally defined maximum amounts that we place with a singlebank.”

K+S AG, Europe's biggest potash supplier, said the company isassessing the counter-party risk of the banks it works with and,should they reach predetermined thresholds, stop the flow of anynew funds into that institution.

“We spread our risk by defining maximum amounts that we allocateto individual bank or issuers of commercial paper and spread ourfunds broadly among many different parties,” said K+S spokesmanMichael Wudonig.

Juan Jose Nieto, chairman of Service Point Solutions SA, aBarcelona-based document-management company, said he would move thecompany's headquarters to the U.K. or Scandinavia in the event of aeuro breakup.

“We've had to reinvent our business in the last few yearsbecause of the crisis,” he said in an interview. “We're in survivalmode. What's happening in Greece and Italy not only affects banksbut also companies like us.”

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