With all the recent talk of the impending demise of the euro, international companies with a presence in the UK are planning ahead for the breakdown of the single currency euro and are thinking of ways to work around it should that happen.
It is said that huge conglomerates such as Diageo and GSK (GlaxoSmithKline) are preparing for risk management in the event that the single currency euro falls apart. As part of the plan they are looking for ways to provide an uninterrupted flow of capital should there be a need to continue operations whilst nations transition back to sovereign currencies.
Such companies as Vodafone are watching each individual country during this time and have already reduced Spanish tariffs because of the weakening economy there and the constraints it is placing on spending amongst consumers. A spokesperson from that company noted that there are contingency measures in place should the situation there degenerate much further.
Most companies are not ready to discuss what they will do if the euro does break up, but financial analysts concur that this would create a catastrophe financially. Although unwilling to discuss what plans are in place, they are currently looking at ways to continue operating should the euro totally break down.
In fact, companies like Diageo with labels such as Smirnoff and Johnnie Walker are running computer models to analyse various scenarios if and when the euro should implode and how they could continue to operate under those conditions. Devaluation of those currencies would make imports extremely expensive.
In the end, many UK companies have begun taking action to move out of countries within the eurozone, fearing worst case scenarios. They are not taking chances on the transition to sovereign currencies with nothing more than a ‘promise to pay.’ Whether companies are holding for now or taking proactive measures, all eyes are still on the eurozone.