Adapting Your Software for the Euro

Your product or application will most probably have to be modified to handle the new "euro" currency unit. Here is a summary of the issues you should take into consideration.

• Euro Compliance Strategy
• Currency Conversion
• Complying with the Euro in the Transition Period
• Software Modifications

Check the European Union's official euro site for complete information on the euro and the Association for the Monetary Union of Europe for information on the practical and legal aspects for companies of the changeover to the euro.

Euro Compliance Strategy

There is no official "standard of compliance" with the euro that we are aware of, although some organizations, such as the London-based Business Software Association, provide services to test your products. How your product complies with the standard really depends on what features your product offers and how "euro-friendly" you want your software to be.

You need to decide the euro strategy you want to follow in your product or application. Choose one of the following strategies, listed in increasing order of complexity:

• Treat all currencies as equal and, therefore, don't add any special treatment for the euro.
• Treat the euro as equally important as the US dollar. Therefore, if you provide a symbol for dollars ($), then provide one for the euro as well.
• Provide a switch to operate your software all in one currency--and add the euro as one of the currencies.
• Everywhere currency is used in your application, provide a dual display in the national currency and the euro.

Remember that commercial customers will need to provide information and reports in both euros and local currencies until the national currencies are phased out, so the more euro support you provide in tandem with national currencies, the better.

Currency Conversion

Effective January 1, 1999, the European Commission has established new regulations regarding conversions between the national currencies of participating countries. You will probably have to modify existing applications that perform currency conversions to conform to these new rules.

There are some basic concepts behind currency conversion during the transition period. The primary concept is that, as of January 1, 1999, each of the participating national currencies are "subsets" of the euro. For instance, a sum of 300 French francs is actually not French francs anymore, but rather represents 45.73 euros, under another name.

The second major concept is that the exchange rates of the participating national currencies no longer fluctuate. The fluctuating exchange rates are now replaced by a fixed exchange rate in relation to the euro. For example, the fluctuating rate between French francs and German marks is now replaced by a fixed rate between the French franc and the euro and a fixed rate between the German mark and the euro. In addition, the fluctuating rates between the participating national currencies and non-participating currencies are also gone. Instead, the euro now fluctuates against the currencies of all non-participating countries. Therefore, the French franc no longer fluctuates against the US dollar. Instead the euro fluctuates against the US dollar or other currencies such as the British pound or the Russian ruble.

With that in mind, the following are the new regulations regarding currency conversion.

• Triangulation
  Conversions between two national currencies must be done "through the euro" with rounding of intermediate results to three decimal places. For instance, an existing application most likely converts French francs to Italian lira by using a direct exchange rate between the two currencies. This is no longer permitted. Instead the amount in French francs must be converted to euros using the fixed exchange rate established on December 31, 1998. This intermediate result must be rounded to three decimal places using the rounding off rule. Then the euros must be converted to Italian lira, again using the appropriate fixed exchange rate.
  
• Renominalization
   Prices of shares, bonds, debts, and other commercial paper should be repriced to avoid awkward amounts. For instance, if a local government has been issuing bonds as, for example, 100 Deutschmarks, they will not need to quote that price in euros only. The equivalent amount in euros is not an even number of units. One hundred Deutschmarks is worth 511.29 euros. Under the renominalization regulation, this bond should be repriced and reissued at a price of 500 or 1000 euros instead.

  Prices of commercial goods are often set just below an even number of units--for example, 9,995 French francs. The equivalent price in euros is 1523.73, which does not have the same psychological appeal. The company should probably alter its product offering so that it can reprice this item at 1995 euros to achieve the same effect. However, during the transition period, it is illegal for commercial companies to charge a customer more for the same goods priced in euros than priced in the national currency.
   

Rounding Off -- If 0.5 or greater, round up;if 0.4 or less, round down.
 

• Number of Decimal Places -- Conversion rates between national currencies and the euro must be held to six decimal places.

Complying with the Euro in the Transition Period

Even if your product or application doesn't handle prices directly, you should be aware of the environment in which your software will be used during the transition period:

• All public prices should be shown as a dual display of the price in the national currency and in euros during the transition period.
• Companies are legally required to accept payment of debts in euros or national currencies during the transition period.
• Tax returns, corporate financial reports, etc. need to be stated only in euros by the end of the transition period.
• Historical financial data needs to be converted to euros--for instance, past company reports, stock price data, etc.
• Companies or customers who pay bills in euros cannot be charged an extra fee for doing so.

Software Modifications

The following are two lists of the minimum modifications you must make to your software and optional modifications you may make to have your software work with the euro.
 

Required

• Character sets in operating systems, databases, and any software that maintains character set information must be updated to include the euro.
• The ISO 8859-15 character set (based on ISO 8859-1) has been newly created to include the euro and must be supported.
• Character attribute tables must correctly accept the euro as a currency symbol.
• Computer and printer character sets must be updated to display the euro currency symbol glyph.
• Character set conversion tables need to accurately convert the euro symbol from one character set to another.
• Edit masks for currency amounts must accept the euro currency symbol or use the new abbreviation EUR.
   

Optional

• Add conversion tables to software to enable conversions between national currency amounts and euros.
• Increase the size of currency fields, as necessary, to comply with the requirement to hold conversion rates to six decimal places.
• Include "dual display" of national currency amounts side-by-side with its equivalent in euros.
• Add a switch that allows you to turn off the dual display once the euro transition period comes to an end.
• Add a prefix before stored currency amounts to identify which are euros are which are not.
• Convert historical data from older records to euros before the data is used in an application.