What is happening with this new currency, the euro?

The euro will be introduced next January and it will mean only one currency for most of Europe. Eleven countries will participate in the project, which will begin on January 1st, 1999. These are Ireland, Germany, France, Spain, Italy, Finland, Netherlands, Portugal, Austria, Luxembourg and Belgium.

Denmark and Britain have decided to opt out while Greece did not meet the test.

But what will it mean? Is it possible it could be a rip-off?

Many people are sceptical that the launch could turn into the greatest rip-off since "new money" the decimal currency was introduced in 1971, with retailers rounding up at the consumers' expense.

But, remember, we will not actually get the new euro notes and coins until January 2002. Before that, the euro will only be able to be used in "cashless" or paper transactions. With three years before the new euro notes and coins are introduced, consumers will have time to get used to the idea of the new currency.

So the money is not actually arriving for three years, what's all the fuss for now?

Up to a point you're right. Pounds and pennies will stay in your pocket until 2002. But come next January the euro will actually be our official currency and the pound will merely be a denomination of it. More and more consumers will have to become familiar with the new currency, before the notes and coins hit the streets on January 1st, 2002.

How will the changeover work?

For a period of months in early 2002 shops will have to price everything in both currencies and also to run two tills, as national currencies and the euro circulate alongside each other. By July 2002 at the latest pounds will have disappeared.

What about the immediate implications? Does that mean there will be any impact on house prices?

The lower interest rates expected under the new regime have gone some way to creating the current housing boom. Some people argue it could all go wrong if interest rates rise rapidly again, but the chances of that are thought to be remote. Once we enter the euro, interest rates will move fully under the control of the European central bank in Frankfurt; all the member-states will have one representative on the council which decides rate levels.

So will these lower rates mean my mortgage gets cheaper?

If you have a variable rate mortgage then your repayments should come down significantly over the rest of this year rates could fall by close to two percentage points. What happens after the end of this year is anyone's guess, although many are predicting that they will move slowly up again. But it is likely that fixed-rate mortgages will become more common, as they are on the Continent.

What does it mean for my savings?

This is not good news for savers, as deposit rates are likely to fall by up to 2 points over the next few months. At the moment those with shorter term deposits of up to three to four months are doing okay, but these rates will fall over the coming months. Longer term savings rates are already lower than short-term rates and basic deposit rates are at rock bottom. As we enter a lower interest rate environment investors will increasingly consider other options for their savings such as unit-linked funds, tracker bonds or even property. AIB suggests that those wanting to leave their money in the bank consider locking into long-term deposit rates now, as even these could edge down further.

What if my employer asks if I am willing to be paid in euros?

Once the euro is introduced next year some companies will be moving all their accounting systems over to the new currency. This will be particularly the case for large European multinationals, which export mostly to other countries in the euro zone.

Few employers are likely to force their employees to accept payment in euros, initially at least. And even if they do it should not be a problem, as all the main banks have said they will translate from euros to pounds or vice versa. But employees will want to make sure that any rounding of their salary check does not mean they end up with even slightly less money.

So is there anything I will be able to do with euros from next January?

You can ask your bank to change your account into euros, although there will be little point in doing so from the outset. However, most banks will give you your regular statement quoting both in pounds and in euros and also giving the euro value of any transactions or payments. Once January 1st, 2002 comes, all accounts still in pounds will automatically change into euros.

From next January, you will even be able to pay your tax and phone bills in euros, although only the biggest companies are expected to opt for method of payment immediately.

At least it must be useful for going on holidays?

Until the notes and coins come into circulation in January 2002, you will still have to change your money to go on holiday. But with the exact exchange rate already known, it will make it easier to plan. Banks will still probably charge a fee, but their margins will be cut back as there will no longer be a spread or a difference in the rate at which they buy and sell. Travellers to Britain will still have to change into sterling.

Banks are also likely to offer euro credit cards but it is still questionable how quickly they will catch on. It is up to the retailer to decide which cards and currencies to accept, so it may only be in more popular destinations that they will be widely usable.

So will my euro credit card be different to my usual Access or Visa?

The banks are unlikely to be pushing euro credit cards, although they should be available for all those who want them. The one advantage is that the banks will not be able to charge a conversion fee for changing money from one currency to another. Even though they will know the conversion rate in advance, most are still likely to charge this fee on regular credit cards. The exact costings have not yet been decided.

And what about my cheque book? Will I be able to write cheques when abroad?

If you really want a euro cheque book it will be available. And new cheque books will be able to cope with pound or euro transactions. But there will be no euro clearing system and few shops or hotels across Europe will take your cheque when abroad. This is not due to change for at least 10 years although some observers expect it to happen sooner.

Does that mean we won't be quite shopping across Europe?

Well not quite, although you will be able easily to compare the prices across all the participating countries. You may be able to order from abroad and pay with your euro credit card. But no one is quite sure how this will catch on. But it is possible that virtual European shopping stores will open on the Internet just this week chain store, Gap, announced it was moving heavily into this area. Of course this also depends on everyone being convinced that the Internet is a secure place to pass over credit card details.

What about my personal finances?

In theory the single currency means that you should be able to take out a mortgage from a German bank and insurance policy from a Spanish company. But it is still likely to take some time before we see them trading on the streets of Dublin or Cork. More likely, immediately, is that the threat of competition will mean the Irish banks will cut back their margins and offer them on the same terms as the Continental institutions.

If you dabble in the stockmarket it will also make a difference there. All stocks and shares will be quoted in euros from next year, although stockbrokers will still accept payments in pounds. Many companies will also start to report their annual returns in euros, meaning investors will have to get comfortable with the new currency from the start. And as almost everyone has investments through pension funds, if not directly, the extent and speed to which big companies switch over will be important.

Do we know what the notes and coins will look like? And will there be any national identity on them?

The notes will range from 5 euros to 500 euros. They are modern and colourful and look rather like Dutch money. The coins go from 1 cent to 2 euros. The Irish harp will be on the back of all coins issued here.

And how much will one euro be worth?

The exact worth will only be known on January 1st 1999. But as a general guide you can think of a euro being worth 80p, that means a pound would be worth 1 euro and 25 cents.