Tuesday, November 29, 2011

Business and the eurozone: Looking for the exit

by Tony Barber

Financial Times

November 29, 2011

Companies that operate in the troubled 17-nation single currency area want it to survive but are starting to concede that simply hoping for the best is no longer an option.

From his base in the Königs­allee, the canalside boulevard that is Düsseldorf’s premier shopping street and one of the smartest German office addresses, Andreas Schmitz is well placed to monitor European economic progress – or lack thereof.

Not only does he head HSBC Trinkaus, a German subsidiary of the UK financial group that helps look after the wealth of the surrounding Rhine-Ruhr industrial heartland and beyond. As president of the BdB, the country’s main banking association, he is also a frequent visitor to Frankfurt, the commercial capital and home to the European Central Bank.

As the ECB and Europe’s national leaders grapple with a sovereign bond crisis that threatens the continent’s nearly 13-year-old monetary union, Mr Schmitz’s corporate clients are among those questioning its durability. “There is no blueprint for anything,” he says. “You do discuss certain scenarios with customers, but it is like poking around in the fog.”

For months it has been the best-kept secret of European business. In spite of the most solemn declarations from the continent’s political leaders that they will move heaven and earth to save the euro, are more and more companies quietly trying to protect themselves against the possible disintegration of the 17-nation currency? The general opinion of dozens of business executives interviewed by the Financial Times this month is that although a eurozone break-up would be both undesirable and fiendishly difficult to plan for, to cross one’s fingers and hope for the best is emphatically no longer an option.


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