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1 JANUARY 1999


• Monetary union of 11 European countries begins. The Euro becomes the legal currency. A single monetary policy strats.
• Conversion rates of currencies with the euro irrevevocably locked

1 JANUARY 1999 - 31 DECEMBER 2001


• National currencies remain legal tender, but governments issue dept only in the euro.
• Wholesale financial markets move to the euro.

1 JANUARY 2002


• Euro notes & coins are introduced. The change-over at the retail level begins.

30 JUNE 2002


• End of legal transition period.

1 JULY 2002


• National currencies cease to exist. The euro becomes the only legal tender.

Here are the conversion rates within euroland and indicate exactly how much the new currency is worth. The euroland currencies are fixed irrevocably against the euro. All other currencies including the $ will trade against the euro.

While the Euro will become legal tender from January, 2002, in the meantime the national governments and the european commission face two critical challenges.

• To complete the massive industrial operation of 60 billion coinsand printing 13 billion bank notes
• To educate publicabout it's new currency

Companies will have to think of a regional pricing strategy rather than a national pricing strategy because once prices start converting in to Euros, which will happen very quickly, they immediately become comparable.

There is a bigger single market but competition in any given sector will intensify.

• 11 European countries joined to create single currency
• As on today 40% of their trade is between themselves
• India's single largest trading partner
• Second largest export destination for India
• Euroland has a GDP topping $20,500 trillion, on a per capita GDP that is 70% of USA
• Accounts for one fifth of world trade
• The financial market is second largest in the world
• The Euro is presently backed by an economy of $6.3 trillion, 290 milllion people as opposed to 270 million in the US.

For banks to streamline cash management in the region. Typically, banks hold several accounts in some of the major european currencies in which they may have payments or collections. These accounts can be consolidated into fewer accounts with the Euro, making for better reconciliation and easier operations. Further, the Trans-European Automated Real Time Gross Settlement Express Transfer system(TARGET) will process payments across eleven countries , making where a bank holds its accounts virtually immaterial.

Banks will have greater bargaining power when negotiating with correspondent banks for credit lines.

European corporations and other multinational enterprises make huge savings on foreign exchange transactions.

The Euro creates a massive new business opportunity, by removing many of the obstacles associated with trading in 11 nations each uses diffrent currencies, and instead establishes a new single European market of approx. 380 million consumers.

The Euro is expected to reduce transaction costs, greater integration of capital markets and result in a higher level of growth in the euroland.

The large business opportunities are however, emerging in thecomputer software field. The entire process of re-engineering involved in the introduction of EURO is much more complex than the current large business associated with the Y2K problem.

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