As the new year dawned the euro has became a reality. But the transition was not at all a smooth affair, with euro-phobia gripping many a nation like Germany. Listen to Silke Weiss, a German sausage-stand owner: "Of course, its more stressful, but we try to keep smiling."

Though the introduction of the new notes and coins went almost smoothly on 1 January 2002, There are vivid indications of potential problems in store. The European single currency, in the coming days, will face its real test as businesses in 12 European Union (EU) countries have started trading after the New Year break.

In France and Italy there are indications that the business days to follow would be marked by strikes in banks and post offices. Already a bitter political debate over the euro has erupted as Europe Minister Peter Hain has indicated the launch of the currency made it inevitable that Britain would scrap the pound.

Hains comments immediately ignited speculation that British Prime Minister Tony Blair would be seeking to use the introduction of the currency in the 12-member eurozone to bounce the public into an early referendum on the issue. On 2 January, anti-euro campaigners in the UK took their protests to the city of London. Members of the Campaign for an Independent Britain demonstrated outside the Bank of England and other key city locations.

But not all are skeptic. Says European Commission President Romano Prodi: "I am convinced that the euro will be a success." Concurs Irish Prime Minister Bertie Ahern: "It has already been a tremendous success."

The 12 European Union nations (Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland) that adopted the euro are parting with currencies that have long histories from Irelands punt, or pound, around since 1928, to Greeces drachma, with a history that goes back some 2,600 years.

National currencies will circulate side by side with the euro for up to two months to help ease the transition, but European Central Bank officials are hoping that most people are using only euros after the first two weeks. Reports suggest that the foot soldiers in the switch will be Europes retailers, who are expected to take in the old and hand out the new in change to help remove national currencies from circulation.

The appearance of the notes and coins on new years day was the culmination of the EUs most ambitious project to date, giving Europeans tangible, everyday proof that they share more than just an accident of geography with their neighbors. Automated teller machines will provide only euros, and stores are expected to offer change in the new money, the death knell for such familiar currencies as Germanys Deutschemark, the French franc and the Italian lira.

In a mammoth logistical exercise, some 15 billion banknotes and 50 billion coins have been distributed for the launch and the EU has reported that the complex changeover appeared to be going like clockwork. Politicians hope the euro will stimulate trade and investment by eliminating foreign exchange costs. It is also expected to fuel competition and tame inflation by making it easier to compare prices across the continent.

But whatever the economics, the euro owes its conception to politics. France pushed a common currency plan in 1989 to bind wealthy old rival Germany into an unbreakable alliance as the fall of the Berlin Wall gave Germans a new dominance in Europe. The euro was introduced on the financial markets in 1999, when the national currencies ceased to trade independently. But for many, the psychologically important moment was the appearance of the real cash.

Some Europeans had hoped that the euro would gain global currency supremacy, but it has received a beating on the markets over the past three years, falling from $1.1747 when it started trading in 1999 to around $0.90 at the end of 2001. Politicians believe the everyday use of euros will boost its worth as people around the world come into contact with it and accept that it is here to stay.