2012 EuroFinance conference in Monaco The fate of the euro was uppermost in the minds of delegates at the International Cash and Treasury Management conference held by EuroFinance at the end of September. According to an interactive poll, 57% of the finance executives at the conference say their company is prepared for a country exiting the euro, although only a third believe that there will be fewer countries in the euro by this time next year.

Patricia Greenfield, head of treasury operations at AstraZeneca, said the pharmaceutical company has put in place a eurozone task force and taken measures including setting up contingency bank accounts in legacy currencies in case the need arises.

Jörg Bermüller, head of cash and risk management at Merck KGaA, another pharmaceutical company, said his company launched a new IT project to ensure its systems could handle new currencies and the respective exchange rates if necessary. Bermüller said that while Merck is prepared for a breakup of the euro, he is optimistic that the common currency will survive.

Marianna Polykrati, group treasurer of Vivartia, a Greek food company, gave some sobering insights into the challenges Greek companies face in the current climate. Vivartia has swept half of its surplus cash out of the country, but is keeping the other half in Greece in case the government introduces FX controls, which could prevent the company from bringing money back into the country.

Other contingency measures Vivartia has taken include setting up electrical generators and back-up servers in case of a significant electricity outage. The company is also looking at the possibility of paying employees using a barter system.

Polykrati noted that treasury's role within the organization has been “upgraded” as a result of the crisis.

She challenged the merits of keeping the euro together at all costs. When asked for her personal views, Polykrati said that she thought Greece should have defaulted two years ago when it still had cash on hand to grow the country again.

A panel session at the EuroFinance conference explored the range of possible outcomes, including a significant breakup of the euro, a continuation of the current situation or substantial political integration within Europe. The overwhelming consensus of the panelists was that it was impossible to predict what was going to happen.

European politicians have had some form of fiscal union on the agenda for the past 19 years, but the process was mishandled at the outset, with clear design flaws, said Stephen Boyle, head of group economics at RBS. Europe is now moving towards the right kinds of structures and solutions, Boyle added, but doing so will take time.

In a later session, John Micklethwait, editor-in-chief of the Economist, argued that a common mistake is to believe that unsustainable situations will continue indefinitely, such as the existence of a single European currency without a fiscal union. Micklethwait predicted that the euro will survive, but said some sort of federal union will be necessary, and pointed out that the consequences of such a union would be significant for countries and businesses across Europe.

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Treasurers Focus on Euro Concerns

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