INTEREST rates going up or down? The introduction of a new currency in the UK? Thanks to Gordon Brown, we don't have to worry about the euro for a year or two, do we?

Well for most individuals that's right; they can treat the euro as just another currency when it is introduced next January.

However, a recent survey by NatWest Bank showed that nearly 72 per cent of small businesses still had a poor understanding of EMU and the euro. Some businesses will need to do some planning ready for next January.

So what is EMU and the euro? Economic and Monetary Union (EMU) is part of the process towards achieving a single market, and the creation of a common currency across its member states; this new currency will be called the euro. Only 11 of the 15 European Union member states will join EMU in wave one, which begins with the introduction of the euro on January 1 1999.

Austria, Belgium, Finland, France, Germany, Ireland, Italy, Portugal, Luxembourg, the Netherlands, and Spain will join in wave one. Denmark, Greece, Sweden and the UK will not join in wave one.

While the UK has opted out of joining at the outset, however, Chancellor of the Exchequer, Gordon Brown, has stated that providing economic conditions are right at the time, the UK is likely to join in the first term of the next Parliament, which could be as soon as 2002.

UK entry would be subject to the support of the Government, Parliament and the UK people via a national referendum.

Although the UK has opted not to join in wave one, the euro will be launched as a new currency on January 1 1999. It will be used in a non-cash format for things such as electronic payments, electronic receipts, cheques and so on.

The euro is likely to be widely adopted by businesses within wave one countries, and those UK companies who have dealings with these businesses or their UK subsidiaries, may have to consider dealing in euro. It is those businesses which import, export or trade with large UK companies adopting the euro who are likely to be most affected.

If a UK small business is likely to have only occasional euro payments or euro receipts, these transactions can be made through their existing sterling bank account. For those businesses who have regular payments and receipts in euro, and need to hold value in this new currency, then NatWest will have available a full range of euro related products.

John Hamilton, NatWest area small business adviser for the Hull area, has put together for the bank's small business customers the top 10 questions regarding the things they need to ask themselves.

John added: "If any business is unsure of the effect the euro will have on them, they should contact their local manager for appropriate advice."

The questions small businesses need to ask are:

1 Do I trade with any companies that are likely to adopt the euro for payments or receipts?

2 Will payments and receipts of euro create an exchange rate risk? How will I manage this risk?

3 Will the euro stimulate trade?

4 Should I start making payments in euro?

5 Will the euro impact on the price of goods and services I sell?

6 Will there be increased competition in the marketplace?

7 How will the euro affect my computer systems?

8 What training will my staff need?

9 How will the euro affect my existing contracts?

10 What plans do I need to make in the future?

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.