Europe's single 11-nation basket currency, which began trading in January 1999 with a value of about $1.17 to the USD, fell steadily during the first half of the year but was able to establish a footing, albeit short lived, at just above parity with the USD. In economic terms, the Euro's decline could prove to have little short term effect, however, the psychological impact could have longer term implications because it implied shaky confidence in either the Euro or Europe's ability to achieve sustained growth.

The Euro replaced the local currencies of the 12 members as of 1 January 2001, with the existing currencies to be phased out over the ensuring six to twelve month period. To date the other countries that are not to adopt the Euro as its standard currency shall be the UK, Denmark and Norway.

It is by no coincidence that these three countries form the nucleus of the three strongest economies of the EMU and therefore joining the Euro currency is that there financi

(MacConnell Sneddon, "will the UK join the Euro")

New opportunities and threats will arise for many businesses - especially but not only in countries that join the single currency.

· Timing for changing to the single currency

Businesses interact with public authorities in many ways and it is important that the knowledge of public authorities is active and precise. One important factor determining when businesses will switch to the Euro will be the approach taken by public authorities.

The timing of the changes needed would also depend on the particular business. For example:

But there is some evidence that the effect of the Asian crisis - which reduced growth in both the UK and Europe - has brought the economic cycles closer. And so has the faster than expected economic recovery in Britain.

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Approximate Word count = 3526
Approximate Pages = 14 (250 words per page double spaced)