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             The value of the euro will be determined by economic conditions in the euro area and particularly by maintaining price stability. Countries will only be allowed to join Economic and Monetary Union when their economic conditions have converged toward those in the euro area so that their entry should not impact significantly on the value of the euro. During a three-year transition period, 1999-2002, European companies will convert their accounts to euros. Then, in 2002, euro notes and coins will be circulated in the different countries. There will, of course, be much bickering over the use of national symbols (should the queen's head be conjoined with the body of a bird?), or whether coin sizes will fit into national telephones and vending machines. .

             In May 1998, bilateral exchange rates between participating currencies were introduced. This was done to help guide the financial markets in the time up to the launch of the euro on January 1, 1999 by indicating that the bilateral rates were the proper economic basis for determining the irrevocable conversion rates between the euro and participating national currencies. The currencies not participating in the euro area from the outset did not have fixed exchange rates, either against the participating currencies or against the euro. Presently, they may participate in a new exchange rate mechanism, which will define central rates against the euro with a standard fluctuation band of up to 15% around that central rate.

             With the Jan.1 launch of the euro, the common currency uniting 11 countries, Europe posed the first challenge to the U.S. dollar's dominance of international trade and finance. The euro should not be confused with the European Currency Unit (ECU), which was a just a basket of currencies tied together. The advent of European economic and monetary union, known as EMU, doesn't just change the world's financial landscape; it could also alter the global balance of power.