One reason is that business and the banks are busy making sure we are ready for the opportunities it offers. Euroland will rival the USA as the biggest single currency market in the world. The annual turnover of business in Euroland - even at 1995/96 prices - is a staggering four thousand billion pounds shared among 289 million people. The USA does around 12pc more business - with 8pc fewer folk. But if Britain joins, Euroland will easily be the biggest market in the world. Already investors from Japan to New York are putting money into Europe as a safe hedge against trouble at home and uncertainty almost everywhere else in the world. The euro itself will rapidly become one of the strongest and most bankable currencies in the world, dominating our time-zone and rivalling the dollar itself. Britain will be surrounded by the euro - Ireland to the west of us, France to the south of us, Netherlands to the east of us and a land border with the euro in Ireland. The euro is here.

Bank accounts
Most of the High Street banks will be offering accounts in euros from early in 1999. These accounts will be most use to people who have income and expenditure in euros. Most customers will be businesses. But individuals could need them too.

Jane and Tom have a house in the Cevennes in France. They have to pay local taxes and keep a handyman in the village on standby in case of emergencies. They also employ him to do routine maintenance and decoration. Jane's a teacher and likes to spend at least a month there in the summer. During the rest of the year, several regulars rent it. A German doctor and his family love to spend Christmas there. A Spanish friend loves the springtime. And Jane's sister Mary, who lives in Paris, often finds a friend or colleague who wants a few days there. Overall, Jane and Tom make a few hundred pounds a year out of it.

Jane and Tom are ideal candidates for a euro account. From January they will be able to accept payments in francs and marks which will be converted free into euros at the fixed exchange rate. They can then use that euro account to pay the electricity, the water, the local taxes - even Jaques the handyman though he was a bit doubtful about taking a cheque drawn on a London bank and it did take longer to clear. They also get a Visa debit card so that when they are in France themselves, they can pay for the groceries and petrol. For the first time, Jane and Tom will not be paying a penny for currency conversion costs.

Barclays, NatWest and other high street banks will be offering euro accounts for some personal customers, though early takers will more likely be small businesses and self-employed people. But Citibank is deliberately targeting better off individuals - family income £30,000 or more - who have some interests in Europe. Amanda Iremonger is the bank's EMU country programme manager.

"We've already found a big appetite from people who are internationally minded, who are regular travellers in Europe or have family connections there. We will be offering a debit card and that will be accepted not just in any shop that takes Visa but also in some cases for payments to suppliers and local utilities."

And accounts like that might be a way to move to cheaper loans. Grant Phillips is a director of Corporate Banking Euro at Barclays.

"We certainly talk to our business customers about borrowing in the euro. Here the bank rate is 7.25pc [NB check on 5/11/98] in Germany at the moment it's less than half that and that is where we expect the European Central Bank to set the rate, around 3.5%. So an overdraft on a euro denominated account will be supported by us at those euro borrowing rates and will be charged accordingly - a lot less than the cost in Britain."

All major plastic cards - debit, credit, and charge - will be available in euro accounts from January. Of course, people in Euroland will progressively switch to these accounts and their bills will show the local currency and euros from the start. In Britain it is people like Tom and Jane, who have some euro income, who may want to have the convenience, of a euro credit card. Others will be employees of companies which have already said they intend to embrace the euro from the start. They include Rover, Siemens, and British Steel. Although none of them has said that it will pay any of its staff in euros, Amanda Iremonger already has UK customers paid in ecus. It would be surprising if they shifted back to Sterling! Citibank will even pay interest on positive balances - though at lower euro rates too!

Mortgages
Although interest rates are lower in Europe that does not mean that borrowing money is automatically cheaper. The mortgage market in the UK is very competitive. Money can be borrowed to buy your home at rates which are lower than the official bank rate. So the savings of going to a German or French lender may not be that great and may put you more at risk. Ray Boulger is a manager at mortgage brokers John Charcol.

"In the UK you can get a fixed rate between 6 and 6.5pc with no penalties when you redeem it. Mortgages in Germany you're talking around 5.5pc. But really a euro mortgage would be just like having a mortgage now in French francs or German marks, if you're only saving 1pc or so it would be madness. First there's the exchange rate risk. The pound has fallen nearly ten percent against the deutschmark in the last three months. That would be very painful. And then you have exposure to the asset value. You're borrowing deutschmarks but your house is priced in sterling. If you did want one you'd be talking a minimum of a £100,000 loan and a maximum of 70pc of asset value. If you want a foreign currency mortgage why not go for the yen? The currency risk is probably smaller and interest rates a lot lower."

Other lenders are not so coy. Abbey National is offering a euro mortgage for people resident in the UK who have a euro income. Margaret Schwarz is head of lending strategy.

"We will be offering a euro mortgage in the first quarter of 1999. It will be aimed at a small group of people who are paid in euros. It is an evolutionary product that will grow over time."

The terms of the mortgage are not yet decided though the interest rate is unlikely to be significantly less than those offered on a standard mortgage.

Investing
There is caution too among stockbrokers about investing money in Europe. Although the market will be very big and have growth potential, Jeremy Batstone head of research at NatWest Stockbrokers warns that the cost of dealing in shares directly in other European countries is expensive - though it will come down.

"Charges are considerably higher than they are here. We expect that will change especially with this link up between the London Stock Exchange and the Frankfurt Bourse. But it is fraught with difficulties. It is not so easy to get information or follow company fortunes. Accounting standards are different, a balance sheet may look the same but mean something different. And when past performance in fluctuating currencies is converted at a fixed exchange rate to the euro it could give a misleading picture."

Of course, most people with stock market investments do not deal directly. They put the money into a fund which is either managed or which tracks a stock market index. But Jeremy advises caution here too. Markets in other countries tend to be smaller than ours, less liquid as the experts say, with fewer shares changing hands. That means more volatility and more risk without necessarily producing more rewards. The market here is much more sophisticated and it could be that our share prices have already been marked down to reflect the future slowdown in economic growth. In Euroland the markets may not have reacted to the future yet and their markets may be more overpriced than ours.

But in a recent report the European commission forecast that the UK would have the lowest growth of any member of the European Union in 1999, so isn't it sensible to put some money in Euroland? Jeremy counsels caution.

"I would not be diving in with both feet. Hold back, let the euro settle down for a few months and see how it develops. Then look again."

For those who do want to take the plunge right away, Scottish Widows will be offering a unit trust invested in companies solely in Euroland. Details are still being worked out.

Other financial products
Financial institutions can already sell products within the fifteen countries of the European Union. The single currency will not affect that but it may speed up the inevitable break down of the informal barriers which stand in the way of genuine free trade in financial products. Investments in Open Ended Investment Companies - OEICs - have already adopted the European norm of buying and selling the shares in the company at one price - there is no 'spread' between what you sell them for and what you have to pay to buy them.

If we join
If Britain does join the euro, things will never be the same again. For a start, interest rates will no longer be set in the United Kingdom - they will be fixed by the European Central Bank in Frankfurt. Indications are that they will be around 3.5pc, half our current rate. That should reduce the cost of borrowing but could also hit savers as returns fall. Apart from cheaper loans, which will boost trade and help businesses, the pound will also almost inevitably fall. A level of around DM2.60 is being suggested, though the pound may well go lower before we join. That will help exporters.

However, giving up control to the central bank means the British Government will no longer be able to make key decisions about our economy. Countries in continental Europe tend to have lower inflation, higher taxes and higher unemployment. Economists are divided on whether our economy will also move towards those things. The real danger is that local political pressures will force governments to make decisions for local gains which will act against the interests, and the stability, of Euroland.

However, there are already moves to try to harmonise the way that financial products are taxed and sold. There was an attempt to change the way that life insurance was taxed in the UK. And our pension system - with full tax relief on the contributions and large tax free lumpsums available at retirement - could well be challenged. But these are more to do with free trade and our membership of the European Union than with the single currency itself.

Consumer organisations hope that because companies throughout Euroland will have to price in the same currency that this transparency of what things cost in different parts of the European Union will help keep prices down. And it may well happen on big ticket items such as cars where a difference as big as £8000 can be found around Europe. But it probably will not happen on smaller value goods. Cheryl Kuczynski of Marks & Spencer says the company will continue to have local pricing

"Our pricing structure does differ from one country to another because of employment costs and taxation also property prices and logisitics. At this point we will maintain price differentials."

In one thing the people who are still against our joining are right - Economic and Monetary Union will mean a loss of sovereignty. It is the first step towards what the Maastricht Treaty calls 'ever closer union'. And once taken, it can never be retraced.

Will their currencies disappear?
Not at once. On 1 January the euro will become the official currency of the eleven states and their local currencies such as the franc, the mark and the peseta will be fixed at their closing rate on 31 December 1998. For three years the existing notes and coins will be used and goods will continue to be priced in local currencies, though most shops will start dual pricing in local and euro fairly soon. During the next three years, the euro will be used more and more for accounts, prices, and all transactions that do not involve cash. From 1 January 2002 euro notes and coins will be introduced and local currencies progressively withdrawn. On 1 July 2002 the Euro will reign supreme.

What about Britain?
Britain is not joining the euro - yet. There are two barriers in the way. First, the Government will not join this Parliament. The Conservatives will not join for at least two parliaments, so Labour must win the next Election for a decision in the foreseeable future. Second, the Government has said it will not join unless doing so is approved by the British people in a referendum. That will almost certainly happen after the next election. Many business leaders are getting impatient for something more definite. Nick Reilly Chief Executive of Vauxhall has called for the Government to join no later than 2003. And Grant Phillips of Barclays thinks that is possible.

"We're looking at an election autumn 2001, an early referendum, and full membership with notes and coins by 2003, no more than a year later than the rest of Euroland. It can be done." Meanwhile, the euro will in effect become a parallel currency to the pound almost at once. The stock market, the banks, most companies, will work and account both in euros and pounds. The Inland Revenue and Customs & Excise will accept payments of taxes in euros from the start.

Verdict
Mortgage : euro loans can be cheaper but only think of it if you have a euro-income to repay the loan and the interest.

Bank account : a euro bank account could be useful if you have expenditure in euros or income in euros. An overdraft on a euro account will be cheaper. But remember the currency risk - if you are paid in Sterling a debt in euros will get more expensive if the pound falls.

Investment : don't rush into investments in Europe just yet. Let the euro settle down.

Euro-salary : If your company that has its head office in Euroland or is one that will account in euros from the start you could ask. If you travel a lot in Euroland or have property or regular expenses there, then why not?

Remember:
If your salary is defined in euros, then if the pound falls, your pay will be worth more in the UK.
If you are paid in Sterling and the pound falls, a debt in euros will get more expensive.
The pound is expected to fall and we will probably join the euro at around DM2.60-DM2.65

December 1998

e-mail Paul Lewis on paul@deadline.demon.co.uk