Click on the map above or scroll down to view country relations with EMU.

Austria's relationship with the EU was put under severe strain in 2000 when the far-right Freedom Party joined the coalition government, prompting some member states to impose sanctions on Austria.

A diplomatic tussle ensued in which the Austrian government threatened to hold a referendum on the sanctions if the EU states did not reverse their decision to suspend bilateral ties with Vienna.

It also threatened to block EU reforms, and delayed one EU decision - to nominate Germany's Horst Kohler as managing director of the International Monetary Fund - arguing that it had not been properly informed because of its diplomatic isolation. The sanctions were finally dropped in September.

Austria had voted by a two-thirds majority to join the European Union in 1994. However, populist support for both the EU and the single currency, has fluctuated. A year before the introduction of the single currency only 25 per cent of Austrians supported joining the euro. But by the time it was launched in January 1999, 66 per cent were in favour.

The issue on Austria's agenda now is enlargement. While the official line is support for expansion of the European Union, popular sentiment is more reticent about the EU's drift eastward and it is widely expected that Austria will be a tough negotiator when it comes to enlargement talks.

As one of the EU's founding members and the self-styled "capital of Europe", there is great support for Emu in Belgium.

Belgians are used to the idea of monetary union, having shared a currency with Luxembourg since 1920. The euro's popularity is undisputed, with 70 per cent in favour of Emu, according to a survey in 1999.

Belgium became a founding member of the European Economic Community in 1957, and Brussels is home to many key European institutions, including the European Commission and the European Parliament.

The country took on the presidency of the EU in July 2001, and has outlined some ambitious plans for its presidency, identifying no fewer than 16 key areas of changes for the planned declaration on the future of Europe.

Even before it assumed the presidency, Belgium attracted controversy when Didier Reynders, the Belgian finance minister, suggested the EU be given powers to levy taxes to help meet its annual budget costs

However, Guy Verhofstadt, the Belgian prime minister, agrees with Luxembourg and the Netherlands that discussion of the EU's powers should not weaken such key policy areas as the single market or the euro.

Denmark voted against the Maastricht Treaty in 1992 but passed the following year after several opt-outs were negotiated, which included staying out of euro.

In a referendum in September 2000, the Danish population rejected the single currency.

The "yes" campaign was attacked for focusing too heavily on the economic arguments and ignoring the the political and democratic implications of further European integration. The economic aspects were deemed less significant as the Danish krone was already fixed to the euro through Denmark's membership of the second phase of the ERM in 1999 which kept the value of the krone within a band ranging up to 2.5 per cent higher or lower than the euro.

Six months before the 2000 referendum, polls had predicted that the euro was supported by 60 per cent of the population, but that support had collapsed to 47 per cent by the time of the vote.

Danish referendum special report

One of the euro's most ardent supporters, Finland shrugged aside the reluctance of its Nordic neighbours Denmark and Sweden and signed up for the euro in 1998, three years after it joined the EU.

Finland's euro-credentials were displayed in full when it held the EU presidency in 1999. During its tenure, Finland secured the widening of the enlargement negotiations from six to 12 mainly east European countries and granted candidate status to Turkey. It also presided over the decision to create by 2003 a 50,000 to 60,000-strong EU-led military capability.

Finland's economy has performed well since the country joined the EU. It has received financial help for its poorer, sparsely-populated regions in the north and east of the country. And the euro provided it with some much needed insulation from the Russian financial crisis of 1998.

France is preparing for the introduction of the euro notes and coins with mixed feelings as its desire to lead European integration clashes with firmly-entrenched national traditions.

In some ways, the switch to the new currency will therefore provide a tough test for French "exceptionalism," the notion that the French are somehow unique and need to preserve their identity from outside pressure.

In the years following the second world war, France was at the heart of the intellectual push for a unified Europe, thanks to people such as Jean Monnet and Robert Schumann, who are considered the architects of the European project. In the 1980s, under President François Mitterrand, France further strengthened its place at the forefront of the European Union, leading the debate in Brussels and benefiting from Jacques Delors' influential years at the helm of the European Commission.

However, France's contribution to the creation of the euro has not been without hiccups. The French only joined European Monetary Union after a hard-fought referendum campaign in 1992, in which just 51 per cent voted in favour of the single currency project.

After the referendum, France put its weight fully behind Europe's new currency, insisting that it should play a leading role in the process. That insistence led to a confrontational episode when the French government felt Germany had broken a pledge to divide control over the euro and let France appoint the head of the European Central Bank in return for putting its headquarters in Frankfurt. In the end, a compromise was reached with the appointment of Wim Duisenburg, a Dutch central banker backed by the Germans, to head the ECB, based on an agreement that Mr Duisenberg would step down early to make way for a French representative, most likely to be Jean-Claude Trichet, the governor of the Banque de France.

France has also been influential in establishing the timetable for the euro switch as well as the degree of political control over the new currency.

As the switch to the euro nears, France considers that it is the best prepared of the 12 eurozone nations and has devoted much energy and resources to insuring that preparations are properly in place. As a symbol of France's readiness, the first euro coins were struck at Pessac, near Bordeaux, in June 1998.

Transition to notes and coins tests pioneering spirit

The German government backs a profound shift in political power within the EU, with general support for some form of European federation. It also backs eastward enlargement.

Gerhard Schröder, Germany's chancellor, wants to see Germany and his ruling Social Democratic party play a central role in developing the EU, and described European integration as one of the "raisons d'etre for the German state as it exists today."

Mr Schröder has outlined ideas to develop the European Commission into a stronger executive force, boost the European Parliament's budgetary powers, and develop the existing Council into a "European chamber of states". These are sure to encounter tough debate from other EU members.

However, there is much wariness about the loss of the solid, strong Deutsche Mark in favour of the euro. For most Germans, the fear of inflation - and the corresponding love for the stable D-mark they have enjoyed for years - remains deep-seated. The country has gone through several currency reforms and a period of hyperinflation within living memory, and many would rather stick with the reliable D-mark, which for them symbolises the country's post-war success.

A separate issue for Germany, is that, as the eurozone's largest economy, it has by far the largest amount of old D-mark cash to collect, including some 350,000 tons of D-mark and pfennig coins, and new euro cash to distribute.

In addition, large amounts of D-mark cash has made its way to eastern Europe, the former Soviet Union and countries like Turkey, through spending by tourists and earnings sent home by foreign guest workers. Latest estimates put the amounts of D-mark cash outside Germany at some 30-40 per cent of D-mark cash, amounting to DM65-90bn. The D-mark is also widely used as a means of payment in parts of former Yugoslavia.

In conjunction with local partners the Bundesbank plans to provide briefings, posters and brochures as well as information on the internet in Russian, Polish, Turkish and other languages starting this autumn, to inform people there that their D-marks will not become worthless overnight.

The poorest member of the EU, Greece sees Emu as an essential step towards achieving its strategic and economic ambitions.

In spite of the euro’s weakness when Greece entered the euro-zone on January 1 2001, opinion polls showed that some 70 per cent of Greeks were in favour of membership.

There is little attachment to the drachma. Europe's second-oldest currency is linked in Greek minds with economic and political backwardness. Greece is leveraging the euro to encourage foreign direct investment with a view to the country becoming a business and transport hub, linking south-east Europe with EU markets.

Membership for Greece, which up until the late 1990s was often still categorised as an “emerging market” also acts as a beacon for central and eastern European countries, which hope they will not have to wait long after joining the EU before they, too, can abandon their national currencies. Greece had been pushing for enlargement. However, it stands to receive less EU aid -which makes up about 3 per cent of GDP - as other poorer countries join.

Since joining the euro-zone Greece’s economy has grown strongly. But membership of the euro has increased the pressure on the Socialist government to push through long-awaited structural reforms, such as pension reforms.

During the 1990s a rapid increase in foreign direct investment and generous amounts of EU regional aid helped transform Ireland into the EU's fastest growing economy.

The Irish have traditionally been one of the most pro-European nations, unsurprising considering the large amounts of financial assistance they have received from Brussels.

But more recently, the mutual affection between Ireland - nicknamed the "Celtic tiger" - and the EU has dwindled.

The first clash came over Ireland's 2001 budget, when EU finance ministers told the government to adjust the budget, which proposed tax cuts and raising public spending sharply, on grounds it would aggravate economic overheating and contravene guidelines accepted by member states.

Ireland and the EU were soon at odds again when the Irish public rejected the Nice Treaty, drawn up to prepare for the enlargement of the European Union, in a referendum.

The "no" vote came as a shock to Ireland's politicians, who now have until December 2002 to secure Irish popular support for Nice. The "no" camp was was made up of Greens, nationalists, anti-abortion campaigners and socialists.

Italy has attracted a great deal of criticism from its European partners over its public spending and its large debt.

On entering the eurozone the Italian economy was the most stretched of all countries by the EU's convergence criteria for membership. By pushing through several reforms, most notably overhauling public finances, the then centre-left government was able to join the euro. However other EU members feel that Italy still has some way to go to meet its' obligations.

Public spending quickly rose above the original deficit target for eurozone countries of 0.8 per cent of GDP and the country hovers near the 3 per cent deficit limit of the stability pact. Furthermore there is concern Italy may try to renegotiate its promise to the EU to reduce national debt to 100 per cent of gross domestic product by 2003.

However, there is growing confidence that the Silvio Berlusconi government will continue with the necessary reforms. Mr Berlusconi, unveiled its five-year economic programme in July 2001 aimed at "stirring up the economy". After its release Antonio Fazio, the governor of the Bank of Italy, said Italy could achieve a 3 per cent growth rate in 2002 and a balanced budget by 2003. This was taken as a positive sign, but a necessary measure if Italy wants to keep its European partners happy.

The smallest member of the EU was one of the EEC's six founding nations in 1957. Luxembourg has provided two of the European Commission's nine presidents, Gaston Thorn and Jacques Santer.

The Grand Duchy is also known for its pro-European loyalty and a former Luxembourg prime minister, Pierre Werner, was one of the intellectual fathers of European monetary union.

The country's government has been a major player in ensuring the swift introduction of the euro. Interestingly, in order to join the euro, Luxembourg had to set up its own central bank.

The euro is a project well suited to Luxembourg's traditions as it has been part of a monetary union with Belgium since the 1920s.

However, enthusiasm for the single currency stretches beyond the confines of the authorities. A survey carried out this year by the European Commission showed that 76 per cent of its population were in favour of the euro.

The country's enthusiasm for the euro arises largely from its unique relationship with its bordering countries. A third of its workforce commute to jobs in France, Belgium or Germany each day; 90 per cent of its industrial output is exported and almost the same percentage of its domestic consumption comprises of imported goods.

The Netherlands is one of the EU's smaller members, with a population of 15m, but also one of its most enthusiastic. From the outset it has embraced the euro, and plans a quicker changeover to the currency than any other country, withdrawing the guilder four weeks into 2002.

The country which hosted the negotiations for the Maastricht and Amsterdam treaties, has benefited from a weak euro. And the outflow of funds through a wave of spending on US takeovers by large Dutch companies such as Shell, Unilever, Philips and ABN Amro, has helped to lower the euro/dollar exchange rate.

Historically, the Netherlands has always been highly reliant on taking full advantage of free and open trade with other countries, owing to the limited nature of its domestic market. Through the 80s and 90s Dutch exports generally exceeded the value of imports, and the majority of these were to fellow EU members.

It is believed Dutch companies of all types and sizes will benefit from the enlarged "home" market and greater opportunities for international trade beyond Europe's boundaries which it is hoped the euro will help foster. The Netherlands is helped in taking advantage of these new opportunities through its flexible labour market and high proportion of English speakers.

Entry to the euro in brought about a brief upturn for Portugal in 1998 as falling interest rates and currency stability triggered economic regeneration in one of Western Europe's poorest countries.

However, initial euphoria gave way to growing gloom as Portugal's economic growth slowed and inflationary pressure persisted, triggering stern warnings from Brussels over excessive public spending.

In 2001 it was forecast that Portugal would take at least another 20 years to catch up with its European peers.

However, European structural funds have been critical in moving this process along and bringing Portugal closer to average EU levels of productivity and income. Portugal has been awarded the equivalent of 3.2 per cent of gross domestic product a year since 1994.

Concurrently, further enlargement has become an increasingly devisive issue. The issue finds favour with the government , but others object loudly to further integration. As a country with low-cost manufacturing, Portugal will be faced by new rivals as a result of EU enlargement.

Spain will be one of the first countries to phase out its old currency after the introduction of euro notes and coins in January 2002 - the peseta will cease to be legal tender on February 28.

Spain has moved mountains economically to ensure membership of the euro.

The centre-right administration of José María Aznar, has overseen a policy of fiscal restraint which drove down the budget deficit from around 5 per cent of GDP in 1996, the year he came to power, to balance in 2001.

Between 1997 and 2000 annual real output growth averaged more than 4 per cent creating 2m new jobs that have brought the unemployment rate down from 21.5 per cent to 13.6 per cent. Once considered an economic backwater, Spain has seen an unprecedented rise in its phone and internet sectors.

Mr Aznar has been a keen supporter of the European Central Bank's cautious interest rate policy as Spain's inflation rate remains one of the highest in Europe.

Spain holds the EU presidency from January to June 2002 and will have an important stake in ensuring the euro notes and coins project is a success.

Mr Aznar will also use the presidency to bring his own agenda to Europe's top table.

Fresh from his reforming vigour in Spain, he has argued vehemently for greater liberalisation among member state economies, especially in the power industry. He sees liberalisation as a process that would strengthen the euro and restrict the dominance of Germany and France in the euro-zone economy.

Spain has received more EU aid per capita than any other country and is sceptical about the benefits of EU enlargement as the entry of poorer countries will reduce the amount of aid available to Spain.

Sweden joined the European Union in 1995 and is one of only three member states, along with the UK and Denmark, not to have entered the euro in the first wave. As with its two non-participating partners, its population is fairly eurosceptic, although the degree of that scepticism has fluctuated significantly in the case of Sweden.

In the run-up to the launch of the euro in 1999 there was a surge of support for membership, with some polls showing more than 60 per cent of Swedes in favour. This was reinforced by the 1998 Russian financial crisis, when both the Swedish and Danish financial markets suffered more acutely than those in the eurozone. Stability in neighbouring Finland, in particular, was observed with some envy.

But after the euro's launch in January 1999 the Swedish economy became the non-euro success story. The effect was to temper support for euro membership again, despite consistent backing for joining from industry. When Sweden assumed the EU presidency in 2001 enthusiasm was revitalised, with polls suggesting those in favour of the euro up from 30 to 36 per cent. However, riots in Gothenburg at the EU summit once again checked any momentum.

As in the UK, the government in Sweden has said euro membership will be put to a referendum when certain economic criteria are met. No likely timetable has been set out, but a vote appears to be been ruled out until after the next general election in 2002.

The UK's disastrous flirtation with the Exchange Rate Mechanism has left a lasting eurosceptic legacy. Polls suggest that the population is one-to-three against joining the euro.

It is the largest EU economy to have held off from joining the first-wave of monetary union, having secured an opt-out clause at Maastricht in 1992.

Tony Blair's Labour government agrees with adopting the euro "in principle". When Labour first came to power in 1997, the government ruled out joining for at least four years and said the UK must prepare for entry only on the condition that it passed five economic tests: interest rate convergence; the flexibility of UK labour and product markets; foreign investment; the UK's position as the financial centre of Europe; and the effect membership would have on growth and employment.

However, these tests have been widely derided for being so vague as to be worthless. Many commentators perceive the tests as a way of delaying a decision to hold a referendum until the euro has gained popularity.

EMAIL THIS PRINT THIS MOST POPULAR