For Q&As on euro basics, click here

Which countries are participating in the changeover to euro cash?

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

When will the first euro coins and notes appear?

Euro coins were available to the public from mid-December at banks in the eurozone in the form of starter kits. However, retailers will not accept them until January 1. Euro notes were not available until January 1, 2002. Although new year’s day is a public holiday and most banks were closed, automated teller machines (ATMs) will be ready to dispense in euros.

How long can existing currencies be used as cash?

In the Netherlands until January 27, 2002. In Ireland until February 9, 2002. In France until February 17, 2002. In Germany, Spain, Greece, Belgium, Italy, Luxembourg, Austria, Portugal and Finland until February 28, 2002. Change, however, will be given chiefly in euros from January 1, 2002.

Can retailers give change in local currencies between January 1 and the end of the dual currency period?

Yes, although this will be officially discouraged. In most countries retailers will be able to give change from existing supplies of local currencies, particularly in cases where the retailer does not have enough euro cash on hand. However, the customer can refuse to accept the old currency.

How long do we have to exchange national banknotes at commercial banks?

In Germany, until February 28, 2002; in France, Luxembourg, Portugal and Spain, until June 30, 2002; in Belgium and the Netherlands, until December 31, 2002; the period has still to be defined in Greece, Ireland and Italy; in Austria and Finland the timetable is to be decided by each bank.

Until when can we exchange national banknotes and coins at central banks?

In Spain, Germany, Ireland and Austria, coins and bills will be exchanged at their respective central banks indefinitely.

In France, banknotes will be exchanged up to February 2012 and coins to February 2005; in Greece, notes until March 2012 and coins to March 2004.

In Belgium and Luxembourg, bills will be exchanged indefinitely but coins only to the end of 2004.

In Finland, notes and coins will be changed to January 29, 2012; in Italy, notes and coins to March, 2012.

In the Netherlands, bank notes will be exchanged until January 1, 2032, and coins until January 1, 2007. In Portugal, the central bank will exchange bills until the end of 2022, but coins only until December 31, 2002.

Will banks be allowed to charge for exchanging national currencies for euros?

It depends where you are and whether you are a bank customer. Banks in Greece, Spain, France, Portugal, Finland and Luxembourg will exchange unlimited amounts of national currencies free for clients.

There will be unlimited free exchange of notes for clients in Belgium until end-February and free exchange of notes and coins via a bank deposit until end 2002.

In the Netherlands, there will be unlimited free exchange until end-April 2002 via a bank account and in Italy free unlimited exchange with one day’s notice.

In Germany, each bank takes its own decision, although some have already announced free exchange. In Ireland and Austria, there are recommended limits to free exchange of respectively 500 Irish pounds per person and Austrian Schillings 50,000.

Non-account holders must expect limits and/or charges although in Luxembourg there will be free-of-charge exchange, subject to limits imposed by each bank.

For exchanges after the end of the dual currency period only state and central banks will guarantee free exchanges.

What happens to credits and debts denominated in eurozone national currencies?

These will be converted to euros, but repayment schedules will not change. All relevant interest rates remain unchanged.

How will the exchange be rounded, up or down?

To the closest decimal, either higher or lower, although in Belgium, for example, the government has pledged to round down taxes.

Who is responsible for providing the new currency?

Each country is responsible for printing its own banknotes and minting its own coins.

What denominations will the coins come in and what will they look like?

One euro is divided into 100 cents. There are eight denominations of coins: 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, 50 cents and 1 euro and 2 euros.

Every euro coin carries a common European face, featuring a map of the EU with the stars of the European flag, but each member state decorates the reverse side with their own national symbol. All the coins, from whichever member state, are valid throughout the eurozone.

What denominations will the banknotes come in and what will they look like?

There are a total of seven notes with face values of 5, 10, 20, 50, 100, 200 and 500. Unlike the coins, the bank notes are the same on both sides throughout the eurozone. The front features windows and gateways to symbolise Europe’s spirit of openness; the reverse features a bridge to symbolise Europe’s willingness to co-operate with the rest of the world.

What measures have been taken to prevent the counterfeiting of notes?

Each note features a hologram-foil stripe or patch. A watermark and a security thread are also clearly visible when the notes are held up to the light.

And the counterfeiting of coins?

The E1 and E2 coins have both gold and metal in them, making them difficult to replicate. For added protection, E2 coins have lettering around the edge.

Will national currencies soon become a collector's item?

It is unlikely that they will gain in value. There are millions of notes and coins in circulation and banks expect about 95 per cent of the notes to be exchanged, but fewer than half of the coins.

How is the euro likely to affect consumers?

The expectation is that consumers will be able to shop around for bargains as it becomes easier to compare prices between countries. The European Commission is always issuing price comparisons and saying that the differences are still too big for what is supposed to be a single market. At the moment, for example, drivers in Germany pay 20 per cent more for the same Volkswagen Polo than their Irish counterparts. This is unlikely to continue and prices should begin to converge.

However, consumer groups are worried that retailers will use the public’s lack of familiarity with the euro to round up prices and charge more overall.

Will it make it cheaper to go on holiday in Europe?

Travellers within Europe used to spend large amounts of money changing from one currency to another. For countries within the eurozone these exchange costs have been eliminated.

It will also make holidays much simpler; it will cut down on those tricky conversions and make it much easier to find the right change in the right currency as you cross borders and pay for road tolls and petrol.

Should the euro affect my investment portfolio?

It is hoped that the introduction of euro coins and notes is one more step towards creating a framework for economic stability in the region. The labour market, for example, may become more flexible and mobile, as people will be able to compare wages and services more easily. Given this, and the current weakness in the US economy, Europe may become more attractive to investors.

Are there any sectors I should avoid investing in?

Analysts suggest that investors may want to avoid sectors with large price differentials between countries, which will become vulnerable to falling prices once the discrepancies become clear. Again, car-makers are the obvious example, although beware that some, such as BMW, have already introduced common pricing. The banking sector may also suffer in the short term because of the additional costs involved, and because they will be liable if anything goes wrong.

Are there any sectors that might be good to invest in?

Security companies might be a good bet as they should do well out of the need to protect the huge amounts of cash in transit. Brokers and asset managers might also be a good play, as they should benefit from an increase in cross-border share buying in Europe as well as from the region’s growing equity culture.

In the long run investors may gain from looking ahead to countries, such as the UK, which might join the eurozone. Interest-rate sensitive stocks, such as retail group Dixons, and the hotel chain Hilton, could benefit from the boost in consumer confidence that a lowering of interest rates would bring.

How will the introduction of euronotes and coins affect interest rates in the eurozone?

Interest rates for members of the eurozone are already set by the European Central Bank, based in Frankfurt. The ECB holds a meeting once a fortnight with representatives from the central bank of every country. They decide whether interest rates should go up or down once a month. The introduction of notes and coins should not make any difference.

Is the introduction of euro notes and coins likely to trigger inflation?

It is too early to predict but it is hoped that the increase in price transparency and competition will limit any inflationary pressure from the changeover.

Will national central banks in the eurozone still have much control?

Although the ECB makes the big monetary policy decisions, national central bank governors share in the decision making in its governing council. The national central banks implement the decisions in their own countries. They will continue to be responsible for the delivery of non-core central banking tasks which vary from country to country.

Will new stamps be produced for the eurozone?

Postal operators have begun issuing dual-currency stamps, with the price denoted both in euros and in the local currency. In Germany, for example, the first such stamps were issued in May 2000, and all German stamps have been dual currency since the start of 2001. However, postal services will remain the responsibility of each of the national post offices and postage stamps and their designs will continue to be produced separately by each of the postal operators.

The postal operators will withdraw old stamps in their possession at the end of 2001 but the public will have several months to use any old stamps they hold – in conjunction with new euro-denominated stamps if they wish. The exact time span varies between countries.

How are businesses within the eurozone affected by the euro?

Companies operating within the eurozone have already enjoyed a reduction in many of their costs, particularly in treasury management, foreign exchange transactions and through the elimination of much foreign exchange risk. With the conversion to euro notes and coins however, increased price transparency should trigger strong competition in some sectors so the cost to consumers of certain goods in certain markets may have to fall. Businesses also face one-off costs in the changing of equipment and staff training.

Which countries are staying out of the eurozone?

The UK and Sweden have decided to stay outside the eurozone for the time being, as has Denmark, which held a referendum to decide the question in September 2000.

Why are they staying out?

Generally, due to their fear of political integration and concerns about being tied to a “one-size fits all” interest rate policy.

What are the advantages of joining the eurozone?

Lower transaction costs and the absence of exchange risk inside the eurozone. Didier Reynders, the Belgian finance minister and current chairman of the 12 nation “eurogroup”, maintains that the single currency has safeguarded the eurozone from monetary turbulence since the September 11 terrorist attacks on the US.

What are the disadvantages?

Loss of monetary independence, with the attendant risk of losing one important domestic policy instrument in difficult economic conditions.