The year 2001 will bring hopes that Europe's new currency may find a firm footing on the international money markets after its faltering start. The knocks to the euro have also severely dented the pride of its champions here in Brussels. But most believe things can't get any worse, and the dollar can't continue at its present high.

Undaunted, Greece will be formally accepted into the euro club in January, becoming the 12th country to join. After Denmark's no vote Sweden may postpone its referendum scheduled for 2001 Britain may soon have to decide when to hold a referendum itself, after the general election widely predicted for May.

The year 2001 will of course see the new currency taking on a physical form, with preparations hotting up to put euros in the pockets of most EU citizens by 2002. So there'll be a frantic printing and minting of notes and coins and in September the national central banks will deliver the currency to high street banks and shops - 50 billion euro coins, 15 billion bank notes. A huge undertaking.

Europe's police forces are bracing themselves too for a huge counterfeiting effort from gangs keen to cash in on the introduction of the currency. In particular they'll been monitoring criminals in Britain who they say may be preparing to swamp the continent with phony euros.

Elections

Voters across Europe will be going to the polls next year - some sooner than expected. In Britain the country's relationship with the European Union is likely to play prominently if general elections are called, but elsewhere domestic issues will prevail.

In Ireland there are predictions the coalition government may not survive allegations of sleaze and corruption. In Italy the first four months of the year will be devoted to the general election campaign where the money is on media magnate Silvio Berlusconi to make a comeback as prime minister. In France President Chirac may find himself fighting for his political life surrounded by charges of financial mismanagement and corruption.

Poland is likely to see early elections - with the reformed Communists tipped to win. But the country should remain on course with economic reforms needed to make the grade for membership to the European Union.

Enlargement

Poland will be among those looking for a kick start to the enlargement project in 2001. With a new - and in the eyes of many a rather inadequate - European treaty signed at Nice, the 12 candidate countries from Central and Eastern Europe will at the very least be looking for a firm date to join.

As Sweden takes over the Presidency of the European Union for the first six months of 2001, the 12 hopefuls will look to the summit in Gotenburg in June for a timetable. They are increasingly impatient at what they see as foot dragging - aware too that up to now they've been paying the price and feeling the pain of preparing for membership without getting any of the benefits. Many are worried about an anti EU backlash among their own voters.

Rapid reaction force and the US

The year 2001 will see the setting up of Europe's new rapid reaction force, the concrete proof of Europe's ambitions for seperate defence identity. By the end of the year the EU should be able to call on up to 60,000 troops for peacekeeping and humanitarian missions.

But the arguments are likely to rumble on about the planning of these operations and in particular the relationship with Nato. Much of the fine print will depend on the attitude of the new incumbent of the US presidency and his team.

Europe's leaders are unsure as yet what George W Bush in the White House will mean, not just for the EU's defense initiatives, but also for a whole range of other issues. The gulf between the US and European perspectives are already clear on issues like genetically-modified organisms, hormones in beef, and farming, where the Eu takes a more cautious line. There's some concern that the attempt to avoid all-out trade wars may prove even harder with the new US administration.

But 2001 will also have to address some of the bigger questions about the future of the European Union and where its powers should lie. As Belgium takes over the presidency of the European Union in the second half of the year - it will be pushing its more federalist vision for a future Europe.

Britain and the Nordics will push for a European Union that does less but does it better, as the debate intensifies about the relationship between the national state and European institutions, as well as regional governments. Superpower versus super state may be the theme of the big discussions in the year ahead.

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