All you need to know about the euro, and what it means

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The Independent Online

This morning a new currency is born: euro notes and coins become legal tender in 12 countries, the first step towards the end of their national currencies.

This morning a new currency is born: euro notes and coins become legal tender in 12 countries, the first step towards the end of their national currencies.

Why a single currency?

Fans of the euro say that having all prices in one currency will bring down the cost of goods and services because price differences between countries will be more noticeable. Travellers moving across the euro countries will not have to pay commission to change money.

Who will have it?

Twelve out of the European Union's 15 members. They are: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

Who isn't joining?

Britain, Denmark and Sweden.

That means?

More than 300 million EU citizens will have the euro. And 73 million will not.

Does that mean we won't be able to spend old money such as the franc and peseta?

Not immediately. There will be a transition period of up to two months when the national currencies will be legal tender alongside the euro. Some people will have less time; France abolishes the franc on 17 February, and the Irish punt becomes history on 7 February. The German mark can be used until 28 February.

How much is a euro worth?

The 12 countries fixed their rates in 1998. The euro has always been worth 1.95583 German marks. But British travellers will still depend on the exchange rate. At present, about 60p buys a euro. Because 100 cents make up a euro, 50 cents will be worth about 30p.

What banknotes and coins will there be?

There are seven euro bills: five, 10, 20, 50, 100, 200 and 500. There are eight coins; one cent, two cents, five cents, 10 cents, 20 cents, 50 cents, one euro and two euros.

What do they look like?

All notes in the 12 countries will have windows and gateways on one side and bridges on the other. The coins have one side with a similar design and one side with an emblem which varies from country to country.

Where can I get them?

Like the old national currencies, euros should be available in this country at banks and bureaux de change.

Can I use the same euros in all 12 countries?

Yes. It'll be like English and Scottish banknotes in the UK. Any note or coin can be used in any eurozone country. So euros saved from a summer holiday in Spain can be taken to Austria for a skiing holiday without paying conversion costs.

What about the cash left over from our last holiday?

You can still spend it on the continent until 28 February, at the latest. Banks and bureaux de change in the UK will swap the outgoing notes for euros until then, although some might charge a fee. After that it will be very expensive and difficult.

Could I donate it to charity?

Old money can be donated to charity at banks. Some are running their own appeals:

* Barclays: Macmillan Cancer Relief;

* HSBC: Unicef, the UN's children's charity;

* Alliance & Leicester: NSPCC;

* Nat West/Royal Bank of Scotland: Save the Children.

All banks are taking money for Age Concern.

Will the old coins and notes become collectors' items?

It's unlikely. Around 5 per cent of all existing notes are expected to languish in people's cupboards. One exception might be small-territory currencies, such as the Vatican lira.

How many euros will be introduced?

Almost 15 billion banknotes and 50 billion coins weighing 250,000 metric tons are going into circulation.

What could go wrong?

Getting billions of notes and coins to banks and shops is a big job. Portugal, Finland, Greece and France are thought to be struggling. There are also fears criminals could rob lorries carrying the money across Europe. And counterfeiters will try to exploit unfamiliarity with the new money.

What will it be like doing business in foreign shops?

Buying anything during the first two months of this year could be slow, because shop assistants and customers will be juggling with two currencies, and those in border shops could be faced with three or four. Southern European countries, which use plastic less, could have the longest queues. There are fears some shops could round up prices, which will hurt consumers and encourage inflation.

Can the euro be used in Britain?

It will not be legal tender. But a third of big retailers will take it, though not in all branches. The list includes Boots, Dixons, Harrods, John Lewis, Marks & Spencer, Selfridges, WH Smith, Tie Rack, and Virgin.

Will I still be able to get old currencies at the bank?

Yes, for a while. But why would you want to? The euro is here.