The announcement of the rates represents the final founding act of the single currency before it supercedes national currencies starting at 2200 GMT on Thursday, New Year's Eve.

European Central Bank (ECB) president Wim Duisenberg boldly proclaimed that nothing could go now wrong with the single currency before the introduction of notes and coins in 2002.

The final rates, unveiled at a ceremony in Brussels, are as follows. 1 euro equals:

• 1.95583 German marks
• 6.55957 French francs
• 1936.27 Italian lire
• 166.386 Spanish pesetas
• 2.20371 Dutch guilders
• 40.3399 Belgian francs
• 13.7603 Austrian schillings
• 200.482 Portuguese escudos
• 5.94573 Finnish markka
• 0.787564 Irish pounds
• 40.3399 Luxembourg francs

The rates are very similar to the exchange rates of the eleven currencies to the existing European currency unit (Ecu) which disappears in favour of the euro.

The Ecu will convert to the euro on a 1:1 basis at the changeover.

The birth begins

This is the final step in what has been a regular process of adjustment since the eurozone curencies were tied together in May 1998.

The opening values of the euro against other major currencies have also been set.

This is also the final daily reference rate for the Ecu against other currencies - £0.705455 (70.45p), $1.16675 and 132.8 yen.

Approval of rates by the Council of EU Finance Ministers at the ceremony begins a frantic weekend for thousands of staff at banks and financial institutions across Europe, including London, as they prepare computer systems for the euro's trading debut on Monday.

'At long last'

EU president Jacques Santer said "the euro is at long last with us" and paid tribute to the "subtle alchemy" that has led to the advent of the single currency against a background of a closer Europe that can "direct its own future" in a unified way.

"The euro is now in your hands, it is in your interests to use and to give it life," Mr Santer told the 290m people of the eurozone which stretches from the Arctic Circle to the Mediterranean.

The birth of the euro confirms the emergence of a powerful new currency bloc centred on the industrialised economies of Europe. The euro will join the US dollar and the Japanese yen as the major trading currencies on international financial markets with its architects hoping for a stable unit that will encourage economic expansion in Europe.

Mr Duisenberg said after the launch that the ECB will "do its utmost to ensure the euro is a currency in which European citizens can put their trust and which will keep its value over time."

Time differences

The rates agreed take full legal effect at midnight local time in each of the eurozone countries. It will happen first in 2200 GMT in Finland, which is one hour ahead of most of the other eurozone countries. The majority of EMU countries will join monetary union one hour later while Ireland and Portugal will follow two hours behind.

However, with no financial markets operating over this period, the real start of the euro will come with the resumption of market trading on Monday.

Baby bonus

To mark the occasion, the French Government will give 100 euros to each babay born on January 1.