Read FT.com's Q&As on changeover to euro notes and coins, click here
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How much is a euro worth in sterling?

The exchange rate between sterling and euro varies. To find the latest rate, view ft.com's data - currency converter.

Which countries will use euro cash from January 1 2002?

Austria, Belgium, Finland, France, Germany, Greece, the Republic of Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.

Will euro cash be used anywhere outside these 12 countries?

Euro coins will be used by Andorra, Monaco, San Marino, and Vatican City, and the euro will be legal tender in these countries. In addition several overseas territories of the 12 eurozone countries will also be using the euro. These include the Canaries, Madeira, the Azores, and the French Outre-Mer territories (Guyana, Martinique, Guadeloupe, Reunion and the collective territories of Mayotte and St Pierre and Miquelon).

Can I spend euros in the UK?

The euro will not be legal tender in the UK. However, several major retailers, including Harrods, Marks and Spencer, Selfridges, John Lewis, Dixons and Virgin have said that they are prepared to accept euro cash, just as they accept other major foreign currencies, such as the dollar.

Will this lead to eurocreep?

Euro-enthusiasts have long predicted that eurocreep - the penetration of the European currency into Britain's domestic economy - would chip away at public opposition to UK entry. But the evidence so far does not point to this. KPMG, the professional services firm, set up a eurocreep index, but abandoned it after finding the numbers were insignificant. However, this may change after the introduction of euro notes and coins and as more retailers accept payments in euros.

Euro notes and coins are likely to become a common sight in Northern Ireland, which has the only land border with the eurozone. The euro will replace the Irish punt, which is already widely used in deals between Northern Irish businesses.

What shall I do with with my old eurozone currency?

Different countries have different rules but the latest date that they can be used is February 28. See FT.com's timetable for the cut-off dates for old or "legacy" currencies.

Banks in the UK will change legacy currencies at least until the respective country's cut-off dates, but after that it will depend on whether banks can still change the currency themselves economically. After those dates, it will become increasingly difficult to change those currencies and customers should change any leftover currency as soon as possible.

Banks will generally only accept foreign currency notes but some ports and airports do have machines that will change a limited range of foreign coin to sterling. Alternatively leftover coins can be donated to charity and many banks will offer that facility.

Can I get euros from UK banks and bureaux de changes on January 1 (first day of euro introduction)?

Banks will be closed for New Year. However from January 2 it will be possible to obtain euros from banks. Most major bureaux de changes will be open on January 1 and will be ready to exchange currencies for euros.

Should UK businesses prepare for the euro?

About half of all small and medium sized enterprises say they have trading links with Europe. They need to be aware of, and prepare for, a range of issues including the effects of increased competition; marketing and pricing; methods of raising finance; price transparency, and market changes generally.

Preparations for possible UK entry

Will the UK join the euro?

The arguments for and against are complex and often confusing, but essentially they fall into two groups. One group claims the case is pragmatic and that no matters of principle are involved; the other claims the opposite, that principle over-rides whatever other advantages there may be.

The first group say that entry is purely a question of where Britain's economic interest lies. If it can be shown that the country's material well-being will benefit, then we should go in and vice versa.

The second group says that, on the contrary, the future of the country, its identity and freedom to make its own decisions are at stake, since entry will inevitably lead to a loss of British sovereignty to European institutions.

Tony Blair's Labour government belongs to the first group. It has declared that there are no political barriers to entry and that the only tests to be applied are economic.Gordon Brown, chancellor of the exchequer, said the government was pro-euro "because . . . we believe that, in principle, membership of the euro can bring benefits to Britain."

The government has set five tests, against which to judge whether Britain would benefit. The conditions set out in the tests will be assessed by June 2003. If the government decides they have been met it will put British entry to a referendum soon afterwards. Membership could be completed with the euro becoming Britain's currency, the government believes, within 40 months of deciding to go ahead with a referendum.

The five tests are: · Is there sustainable convergence between UK and the eurozone economies? · Is there sufficient flexibility to cope with economic change? · Will it encourage or discourage companies from investing in the UK? · What will the impact be on the financial services industry? · Will it be good for employment?

Clear distinctions between the pragmatists and the opponents on principle are easily muddied. For instance, critics of the government's five tests claim they are too vague to be meaningful. You could argue, they say, that the tests have already been met or, on the other hand, that they never could be.

Besides, supposedly objective economic criteria can easily be manipulated as, it is said, was the judgment on Italy's financial soundness at the time of the euro's launch. So why wait for a referendum until 2003? Why not have one now or, alternatively, rule out the whole project, now being as good a time as any for either decision.

Here we come to what is perhaps the key issue for the government. Opinion is divided, as much in business as the unions, on the political left as well as the right. Polls suggest that the UK population is divided three-to-one against entering the European currency.

Whatever its judgement of the five economic tests may be, the government will have to make a sixth judgement, on whether it dare risk defeat in a popular vote on such an important issue.

Has the UK passed the five tests?

Are business cycles and economic structures compatible?

If problems emerge is there sufficient flexibility to deal with them? Both the British and eurozone economies have become more flexible in recent years, but there are still rigidities in European labour markets and policy-making.

Would joining eurozone create better conditions for firms making long-term decisions to invest in Britain?

Britain is still the most popular destination for overseas investment in the EU. However, some inward investors have called for euro entry.

What impact would entry into eurozone have on the competitive position of the UK's financial services industry?

The City appears not to have suffered from being outside the eurozone, and may not be greatly affected either way. The main regulatory initiatives are at an EU, not eurozone level.

Will joining eurozone promote higher growth, stability and a lasting increase in jobs?

Growth and employment would be helped by the end of exchange rate uncertainty and the enhancement of the single market from joining the euro, but damaged if Britain gets the wrong interest rate and exchange rate. The balance is impossible to prove either way.

Can any country join the euro?

In order to join the euro a country must be a member of the European Union and be able to pass economic tests set out by the Maastricht Treaty.

The Treaty requires economies to have achieved certain levels of performance on inflation, public deficits and debts, exchange rates and interest rates. These targets ensure not only stable economic conditions but also a degree of convergence between participating member states which allows EMU to function smoothly.

The terms of the treaty are that:

· Annual government deficit must not exceed 3 per cent of GDP

· Total outstanding government debt must not exceed 60 per cent of GDP

· Rate of inflation within 1.5 percentage points of the three best performing EU countries

· Average nominal long-term interest rate must be within 2 percentage points of the average rate in the three countries with the lowest inflation rates

· Exchange rate stability, meaning that for at least 2 years the currency has kept within the "normal" fluctuation margins of European Exchange Rate Mechanism (ERM)

The final judgement on whether a member state fulfils the necessary conditions for the adoption of the euro is made by the European Council.

Can you change your mind once you've joined?

There is no provision in the Maastricht Treaty to give up the currency once you have joined.

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