BRUSSELS. Dec 31: Europe's dream of monetary union becomes reality Thursday when 11 nations irrevocably lock their currencies together to form the euro and create an economic giant whose boundaries stretch from beyond the Arctic Circle to the shores of the Mediterranean, says AP.

The euro's birth is being hailed as a historic turning point in international finance and is arguably the greatest single step in the drive to create a united Europe from the ruins of World War II.

On what Europeans are calling "E-day." economic and finance ministers from the 11 nations will huddle at European Union headquarters to agree to the rates at which German marks. French francs and the rest are absorbed into euro.

There will be solemn speeches and champagne, then schoolchildren will release thousands of blue balloons bearing the "e" symbol which may soon become as familiar as the dollar sign.

The euro will formally come into existence at midnight on New Year's Eve. It will be worth about $1.17.

As the euro-balloons float into the skies above Brussels.

employees at banks, stock exchanges and other financial Institutions around Europe will start a race-against-time to adapt computer systems and convert countless financial holdings — from Dutch government bonds, to Italian shares and Finnish bank accounts — into euros before markets reopen Monday after the long holiday weekend.

"It is a major logistical effort. We have catering facilities. We have booked hundreds of hotel rooms. We have hired mini buses." said Vendeline Von Bre-dom, euro project manager at Merrill Lynch.

After Thursday, the old currencies will no longer be traded in foreign exchange markets around the world. Stocks and bonds will be quoted in euros. The euro will increasingly be used for bank transactions, business deals and public finances.

The European Central Bank will set a common interest rate of 3 per cent for all 11 nations. For the first time in decades the US dollar will have a rival as the world's reference currency.

Euro cash will only be Issued to replace the old coins and bank notes in early 2002. Until

then, the euro will only be used for non-cash transactions.

Consumers will see prices marked in euros making it easier to shop across frontiers and they'll be able to buy in euros using checks or credit cards. But they 11 still have to change money for cross-border cash purchases.

Citizens will start to see euro figures alongside national currencies on pay checks, phone bills and bank statements. On Wednesday, winners of the French and Irish national lotteries will have their prizes announced in euros.

French Riviera flower sellers. Belgian supermarkets and trendy Viennese cafes where among businesses who jumped the gun and began posting euro prices before the official launch.

In the euro tempo store selt-" ing souvenirs in the shadow of the EU’s Brussels headquarters, there was a brisk trade in pocket calculators programmed to convert to and from euros.

"It's a real success, people have been buying up dozens at a time to offer as gifts." said sales assistant Isabel Fernandez. The store's shelves also contained neckties and alarm clocks adorned with the euro symbol.

and chocolate euro coins.

Plans to forge a common European currency date back to the 1960s, but only after then German Chancellor Helmut Kohl and late French President Francois Mitterrand threw their weight behind the project in the late 1980s did Economic and Monetary Union or EMU. take flight.

Supporters say euro-zone's 290 million people will give European companies a huge, secure home market like that of their American rivals. Ex-change-rate costs and currency fluctuations within the euro zone wall disappear.

Germany. France, Italy. Spain, the Netherlands, Belgium, Austria. Portugal, Finland, Ireland and Luxembourg will join the euro, hoping their combined economic weight will give Europe a greater voice in world affairs.

For some the price to pay was too great.

Britain. Denmark and Sweden opted out of the euro because of public anxiety that dropping the national currency means giving up too much independence. Greece failed to meet economic conditions for joining but hopes to be in by 2001.