By Louis Proyect, who has written for Sozialismus (Germany), Science and Society, New Politics, Journal of the History of Economic Thought, Organization and Environment, Cultural Logic, Dark Night Field Notes, Revolutionary History (Great Britain), New Interventions (Great Britain), Canadian Dimension, Revolution Magazine (New Zealand), Swans and Green Left Weekly (Australia). Originally published at Louis Proyect: The Unrepentant Marxist
One of the things that’s been nagging away at the back of my mind in this ongoing discussion about leaving the Eurozone is what that means in terms of following through. I think that the average person on the left who considers this to be a sine qua non for Greece moving forward has no idea of what’s involved. It is not just printing new currency and delivering it to the banks. It is also a mammoth undertaking from the IT standpoint. Think in terms of what it would take to reverse engineer something like this:
NY Times, March 9 1998
A Year Before the Millennium Bug, There’s the Euro Problem
By ANDREW ROSS SORKIN
LONDON, March 8— Amid the rush to reprogram the world’s computers so that they will function after Jan. 1, 2000, a little-known computer problem looms as large with a deadline that is even earlier.
On Jan. 1, 1999, the European Monetary Union will introduce the euro, a new currency that could have serious consequences for the computer systems of financial institutions and just about any company that deals in foreign currencies and exchange rates.
Compared with the much-publicized year 2000 problem, which can set computer clocks back to 1900 instead of recognizing 2000, the euro poses a greater number of technological problems.
Exchange-rate and tax software will need to be upgraded, financial statements redesigned, automated teller machines revamped and historical data converted — and that is just scratching the surface.
”The magnitude of the problem the euro poses is unbelievable,” said Nick Jones, research director of the Gartner Group Europe, part of the Gartner Group Inc., a technology advisory and research firm. ”In terms of cost to fix, it is comparable with the year 2000.”
The Gartner Group estimates that it will cost European corporations, many of which have operations worldwide, $150 billion to $400 billion to upgrade their systems. Add to that the expenses in fixing the millennium bug, and that cost almost doubles. Mr. Jones said the cost of fixing each line of code is estimated at $1.10, with billions of lines of code having to be changed.
As someone who worked in IT for 44 years and on some very large scale projects such as developing a completely new system from top to bottom for Goldman-Sachs, this is a huge project that would require banks and any other large-scale corporations in Greece to manage. And that does not get into the problems that the civil service would have to deal with. Pension systems, the tax system, et al would have to be reprogrammed.
I now realize that when people were demanding that Syriza conduct a two-tier operation, one that sought an end to austerity within the Eurozone, and another on a parallel track that would switch over to the drachma, they had no idea what this would entail. Frankly, I don’t think that Greece is capable of converting to the drachma today even if the government voted for it. Billions of dollars would be required to do such a conversion and the cash-starved government agencies would even have less money for such a project than private corporations.
I have heard what seems like dozens of leftists complaining about Alexis Tsipras’s failure to deliver a contingency plan. These are people who almost certainly have never sat in cubicle and programmed a financial system in COBOL as I did for twenty years before I moved over to UNIX based systems at Columbia University.
My good friend Liza Featherstone complained on Facebook this morning: “Seriously every dude is a Greece expert now. How’d you all get so smart so fast?” Boy, was she ever right.
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Journal of Information Systems, Vol. 13, No. 2, Fall 1999
The Impact of the Euro on Information Systems
Daniel E. O’Leary, University of Southern California
Accounting Information System Requirements Brought About by the Euro The introduction of the euro will have a wide range of changes in requirements for accounting information systems (e.g., Dekker  and others).
1. Legacy systems will require multiple updates. Unlike present day relational database systems, many legacy systems redundantly store data items (e.g., currency figures). In these systems, all instances of each redundantly stored currency data item will need to be updated to the same euro figure.
2. Systems must do triangulation. All those systems using processes related to currency exchanges, will have to be updated to reflect changes in the way conversion is done, using triangulation, rather than traditional inversion conversion.
3. Multiple currencies. Since both euro and local currencies can be used during the transition period, systems will need to allow recording and display of both home currency and the euro for each transaction. Inventories of both currencies will need to be kept as long as both are used. The existence of multiple currencies potentially exposes a company to the risk that payments are made in the wrong amounts of a currency. For example, as in Table 3, a bill for 302,706 euros incorrectly might be paid as 4,211,213 euros if clerks use the wrong currency amount.
4. Minor payment differences. Systems will need to be changed to accommodate minor differences in payments. Since customers can pay their bills in either euros or the home country currency, triangulation rounding can create a situation where there are differences in the equivalent between what is billed and what is paid when different currencies are involved. Few systems have been built to accommodate differences in payments and what is billed. Further, few systems currently accommodate billing in one currency and payment in another (Software Echo 1997). In addition, such differences will carry forward to the general ledger, which will also have to accommodate minor differences.
5. Restatement of financial reports. Firms must restate previous financial statements in euros, which raises other questions including the following: Who determines whether historical numbers will need to be restated? How much of the historical data will be restated? Will firms have the restated historical numbers attested to?
6. Inconsistent use of decimals. In some monetary systems, e.g., Belgium and Italy, decimal places are not used. As a result, systems designed for these currencies will need to be updated to accommodate the euro’s decimal places.
7. Number of decimal places. Not only is the existence of decimal places an issue, but also the number of decimal places is an issue. In order to assure that rounding is done at the appropriate level, six decimal places are required to accommodate the euro.
8. Input validation will need to accommodate multiple currencies. Input validation will need to change to accommodate the existence of a new currency and multiple currencies. Reconciliation tests will need to allow for and accommodate differences due to rounding.
9. Internal documents. Typically, most of a firm’s documents, input, and output will need to be changed to accommodate the multiple currencies.
10. Reporting capabilities. Reporting capabilities will need to be examined closely. For example, reports are often based on currency values exceeding some “threshold” amount. In some cases firms will need to change the bases of those thresholds to accommodate the euro. In addition, reports will often need to have the ability to display two or three currencies simultaneously.
11. Currency fonts will need updating. Finally, currency fonts will need to be updated to include the new symbol for the euro. Apparently, Microsoft has announced that it will accommodate the euro symbol in its 32 bit applications, but not in legacy applications, such as Windows 3.1 (http://www.microsoft.com/windows/euro.asp).