Strong euro ‘will mean job losses’

ISME, the Irish Small & Medium Enterprise Association, warned yesterday that the strong euro is causing major problems for exporters.

Jobs are under serious threat as the euro stays strong against sterling and the dollar, it said.

“If this situation continues hundreds of jobs will be lost and many firms will have to close,” the association warned.

ISME says a new survey, carried out in the last two weeks, confirms CSO export figures published last Friday, showing a sharper weakening in Irish exports.

Of the 47% of Irish companies who sell into the British market, two thirds said it was their key overseas destination for their goods and services.

Up to 40% of total SME exports go to Britain. Two thirds said the near 20% fall in sterling to the euro is undermining their business.

A further 68% said their domestic market is now finding it very hard to fend off growing pressure from British firms in the home market mainly due to price differentials.

Up to 16% of respondents who export to the US are encountering similar problems, ISME said with half saying the stronger euro to the dollar was damaging sales to that market and 49% said they were also tempted to source raw materials from the US.

However as the debate of the Lisbon Treaty hots up the survey found no loss of support among Irish firms for the euro, with 91% still in favour of the single European currency.

Commenting on the results, ISME chief executive Mark Fielding said: “The survey quite clearly shows that Irish SME Exporters, particularly those exporting to the UK and US are still extremely exposed.”

While a growing number of firms regard the euro as their currency of choice he warned “the longer the euro remains at present levels or higher, the greater will be the damage to the economy in terms of competitiveness, lost business and lost jobs”.

The euro has appreciated by 17% against sterling and by 16% against the US Dollar in the last 12 months.

Since the start of the year the currency has appreciated by 9% and 8% against sterling and dollar respectively.

The new reality is that most Irish firms are suffering lower margins resulting in losses for many of them, he said.


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