Personal Finance – Time to lose that loose change.

Mountains of marks, piles of pesetas and loads of liras are destined for the currency scrap-heap early next year. In their place will come new euro notes and coins, produced to a standardised design throughout the 12 Euro nations (see box).

The arrival of the new currency presents some challenges for this year’s traveller – and for the rest of us who have spare foreign currency stashed away in piggy banks, desk draws or holiday folders. It is important not to get stuck with money that will be worthless the next time you pack the suitcase and head for the sun.

New euro notes and coins will start circulating from January 2002. There will be a short period when they can be used alongside existing currencies. But within a matter of weeks, the old currencies will go and only the euro will circulate freely.

In France, for example, the franc will go by 17 February. Ireland is planning to phase out punts by 9 February. The majority of euro nations have set the end of February as the deadline for getting rid of the old notes.

After this, hotels, restaurants, shops and taxis will accept only the new currency. Banks will continue to swap old notes and coins for euros, but not indefinitely. Most nations are planning to run this exchange service only until next June. And banks will be free to charge a fee for swaps.

Holidaymakers and business travellers are being advised to empty their pockets of local currency before they return.

Jane Smith, spokeswoman for bureau de change Thomas Cook, says: ‘Try not to buy more than you need for this year’s holiday and spend all the currency you have while you are away. This might also be a good year to consider taking sterling travellers cheques, because any left over can always be used next year once the euro has come in.’

Another option is to buy your foreign currency from an outlet which guarantees to buy back any unused bank notes at no further commission. Thomas Cook, Barclays, the Post Office and NatWest, for example, will all swap unused currency back to sterling for free, provided you have the original receipt for their purchase.

Alternatively, more and more travellers are relying on their ordinary hole-in-the-wall cash card to keep them going abroad. They use it in overseas ATMs to draw money from their current account, only taking out what is needed. This avoids some of the guess work on how much you will spend on a trip.

Look for either the Cirrus logo or the Visa symbol on your normal ATM card and then search for a machine with the matching sign. Your own bank will levy a fee of between 2-2.5% of the value of the cash withdrawn, and the host ATM network may also add a charge.

Barclays bank recently struck a deal with a network of overseas banks so that its customers can use international ATMs free. European partner banks include Deutsche Bank and BNP Parisbar.

It could also profit you to have a rummage around at home and exchange any left-over European currency while it is still easy. The UK bureaux de change hope to be offering a service to swap historic currencies well into next year, but they are dependent upon how long central banks in euro nations keep accepting old currency from them.

Research from Thomas Cook indicates that one-in-three travellers return home with an average #30 of leftover currency. And personal financial website The Motley Fool says that UK travellers have #1.4bn unconverted foreign currency stashed away.

While banks and bureaux de change will happily buy notes back, there are fewer outlets for coins. A handful of specialised machines at ports and airports will automatically swap the coins – though at outrageous rates of exchange. As much as 40% of the value can be commission.

For most of us, the only option will be to donate foreign coins to charity.

Several of the big banks are running specialist collection schemes, anticipating an avalanche of coins in the run-up to the euro change-over.

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Twelve out of the 15 European Union nations have embraced the euro and are scrapping their existing currencies next year.

Austria, Belgium, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain are all in.

The euro notes and coins share a common blueprint. Each euro is split into 100 cents. There are eight euro coins in denominations of one and two euros, and 50, 20, 10, five, two and one cents.

The design on one side of each coin will be common throughout the euro zone. The other side can be customised to allow for different national identities. But each coin can be freely used throughout the euro nations, no matter what design is on the reverse.

Euro banknotes will come in seven values, worth five, 10, 20, 50, 100, 200 and 500 euros. The designs are standard, using a theme of windows, gateways and bridges.

At current exchange rates a 10 euro note is worth #6.10. This and the 20 euro note will be the most commonly used by tourists. Do not expect a happy reception if you hand over a 500 euro note to pay for your postcard.

This monster is worth #305.

Popular destinations in Europe remain outside the euro zone. Turkey and Switzerland, for example, are not EU members and have nothing to do with the new currency.

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