Which countries are taking part?

Eleven of the European Union's 15 countries -- Germany, France, Italy, Spain, Austria, Finland, Belgium, Luxembourg, Portugal, Ireland and the Netherlands -- launch the euro on January 1, 1999.

Why are only 11 countries taking part?

Three EU members -- Britain, Denmark and Sweden -- effectively ruled themselves out from joining the euro at its birth. Greece was judged not ready to join, although it would like to eventually.

The 11 countries launching the euro were deemed to have met economic tests for participation set out in the Maastricht Treaty - criteria on debt and deficits, inflation and membership of the European exchange rate mechanism (ERM).

When will the "out" countries be "in"?

Greece has said it wants to be ready to join by 2001. Britain, Denmark and Sweden are at the moment all non-committal about a possible date, though most observers expect membership by all three by 2003.

Why is Europegetting a single currency?

A single currency has been a goal of European politicians since the 1950s and became official EU policy in 1991. The reasons given for why it is needed have remained unchanged. First, one currency is seen as essential to smooth trade and investment within Europe. Second, it is believed it will give Europe a greater voice in the global economy alongside the United States. Third, and most controversially, it is seen hastening political integration by forcing decisions on economic issues to be taken jointly, thereby helping Europe avoid another major war.

Whose idea was it?

No timetable existed for a single currency at European level until 1970, when EU leaders asked former Luxembourg prime minister Pierre Werner to prepare one. The "Werner Plan" set a 10-year deadline for creation of a single currency by 1980, but was pronounced dead in 1974. Former British European Commission president Roy Jenkins relaunched the idea in 1977. A year later, under French and German leadership,the EU set up an exchange rate mechanism (ERM) centred on a new currency, called the Ecu. But it was not until 1988, when the Commission was headed by Frenchman Jacques Delors, that today's monetary baby was conceived. The plan succeeded mainly because of the political will of former German chancellor Helmut Kohl.

When will it arrive?

The euro single currency will be officially born at 0000 local time on January 1, 1999. Because of differences in time zones, this means Finland will be the first euro zone country to get the euro, while Ireland and Portugal will be one hour behind Germany, France and the others.

Is that when EMU starts?

Yes and no. EMU, standing for Economic and Monetary Union, began on July 1, 1990, with the liberalisation of capital movements in most countries. A second stage began on January 1, 1994, with the setting up of the European Monetary Institute (EMI), the forerunner of the European Central Bank. Only the third and last stage begins on January 1. However, EMU has becomeshorthand for what will happen this weekend.

What happens then?

From that moment, exchange rates between 11 European currencies will become sub-divisions of the euro. The rates at which these currencies can be converted into euro will be announced by finance ministers on the afternoon of December 31. At the same time, the Ecu, an artificial currency made up of fixed amounts of 12 currencies, which is used by the EU in its accounts and in financial markets, will cease to exist. It will be replaced by the euro on a one-for-one basis even though not all the Ecu's components will be in the euro. On financial markets, the euro will become reality immediately. Shares in much of Europe will be quoted in euros from January 4, when stock exchanges reopen after the New Year break. Euro payments, using credit and debit cards, will also be possible from 1999.

Why is it called the euro?

The euro name was chosen by EU leaders in December 1995 because they could not agree on something better. The Maastricht treatyreferred to it as the Ecu, after the European Currency Unit created in 1978. But the ecu was also a French coin minted in the Middle Ages, and Germany objected to it being used as the name for the new money. Alternative names were also rejected because of possible national associations, They included the thaler, which America adopted under the name "dollar", the crown and the s(C)hilling. A German member of the European Parliament even suggested the Frankfort - a play on the name of Frankfurt, the location of the European Central Bank, and the French franc.

Will I still have to change money when I go on holiday?

Yes, because euro notes and coins will not be introduced until after January 1, 2002. You will still have to pay for the costs incurred by banks and bureaux de changes in handling cash, meaning you may not be able to change notes exactly at the fixed euro conversion rates.

So what will the euro be good for between now and 2002?

EU politicians and central bankers claim the arrival of the eurohas already protected European industry and consumers from the fallout of the Asian financial crisis, during which euro zone currencies remained stable against each other while those outside were subject to speculative attack. Euro bank accounts are already available to people whether or not they live in the euro zone. From January 1, 1999, euro zone residents will also be able to make payments in euro for no extra charge. Everyone will also be able to compare prices across borders more easily for big ticket items, such as cars and electronics. It should make comparing prices when on holiday easier because many shops are already displaying prices in both national currencies and euro.

What does it mean for my mortgage?

The process of preparing economies for the euro has already brought interest rates down across the euro zone to German levels, meaning house loans in former high-inflation countries such as Italy, Spain and Ireland now cost substantially less than they did. ECB president Wim Duisenberg sayshe recently told a London taxi driver that if Britain were joining the euro, mortgage rates there would be about three per cent lower than they are. After January 1, 1999, it should in theory be easier to shop around for cheaper mortgages from anywhere in the euro zone, but in practice, banks say, different national tax breaks for home owners and differences in laws on repossessions mean this is only an option for financially skilled people with time on their hands.

What does it mean for my pension?

Again in theory it should be easier after January 1, 1999, to buy a supplementary pension from a fund provider based anywhere in the euro zone. But again differences in national tax treatment of pensions, depending on whether contributions are made domestically or abroad, mean no change for now. Most social security systems will only fully switch over to the euro in 2002, meaning most state pension payments will continue to be made in national currencies until then.

Why don't we get notes and coins inJanuary?

The designs for the euro coins and bank notes were only approved finally in autumn 1998. The mints and the European Central Bank say it will take three years to produce enough to replace existing national units of account, and shortening the so-called transition period is not an option. When finished, there will be around 50 billion coins in the 11 nation euro zone and 13 billion notes.

Will notes and coins be the same everywhere?

The seven notes, ranging in value from five to 500 euros, will be the same after the ECB in October overturned an earlier decision to reserve a small place for national symbols, such as the heads of monarchs. But one side of each of the eight euro coins will have a national design. Italy has the prettiest designs, having drawn on its wealth of artistic and architectural heritage.

How much is it going to be worth?

Because Ecus will be converted into euros on a one-for-one basis, today's Ecu rates are roughly the same as tomorrow's euro rates. On December 29 thesewere roughly as follows: 1 Ecu = 1.95855 German marks, 6.56849 French francs, 990.480 Italian lira, 166.663 Spanish pesetas, 200.820 Portuguese escudos, 0.78847 Irish pounds, 13.77938 Austrian schillings, 5.95399 Finnish markka, 2.20700 Dutch guilders, 40.4039 Belgian and Luxembourg francs. Also on December 29, the Ecu was worth about $1.17, and roughly 135 yen and 0.7 pounds sterling.

Will it lead to inflation?

Over the European Central Bank's dead body. The ECB has pledged to keep consumer price inflation in the euro zone below two per cent. At the moment, euro zone inflation is around 1 per cent. Analysts expect only a slight rise in prices in 1999 and 2000, meaning official short-term interest rates -- currently at 3 per cent -- are likely to stay low for some time to come.