Yet in new Europe, countries are queuing up to join. On 1 January, Slovenia, the tiny former Yugoslavian state just across the Alps from Italy, will become the 13th member. Cyprus and Malta, both former British colonies, plan to follow a year later.

While the accession countries are scrambling to get their economies in order and qualify to join, some politicians in Italy are beginning to think the unthinkable, and advocate crashing out of the single currency to reverse the dramatic deterioration in the economy's competitiveness since 1999. Analysts at think-tank the Centre for European Reform warned recently that without radical market reforms, the eurozone could be torn apart. And a run-in between the French government and the European Central Bank last week underlined growing anger that the ECB is mimicking the hawkish Bundesbank, depressing growth by keeping interest rates too high.

Whatever the tensions among the 12 existing members, Europe's newest countries see euro membership as an economic and political badge of honour. Slovenia was the only country to meet the criteria this year. Latvia and Lithuania failed to make the cut, and a number of other countries have had to concede that high budget deficits or runaway inflation will prevent them from joining for some years to come.

'We are very proud that we did make it, there is no doubt about that,' says Slovenia's charismatic finance minister, Andrej Bajuk. 'I honestly believe that the effect of opening up and identifying Slovenia as an EU member that is following the rules in the mainstream is going to be an advantage.'

Mitja Gaspari, governor of Slovenia's central bank, acknowledges the patchy record of some members since the euro's launch in 1999, but insists that his country will still be a winner. 'Among the euro members there are different examples, good and bad,' he says. 'If we are successful, we can join some countries which have benefited quite a lot, and hopefully we wouldn't repeat the mistakes made in some other countries.'

Launching the euro is a huge logistical challenge: Slovenes will be allowed just a fortnight in which they can still use their existing currency, the tolar, before it becomes extinct. Already every retailer, from top-notch department stores to roast chestnut sellers in the capital, Ljubljana, have to display their prices in both tolar and euro. Awkwardly, the euro is worth 239.64 tolars , but the central bank is issuing every household with a small calculator to help them cope.

Slovenia is an economic success story among the accession countries: it has managed to chalk up steady growth of about 4 per cent a year while striking strict, economy-wide wage deals with what the government calls its 'social partners', which have helped to squeeze inflation from more than 10 per cent a decade ago to 2.3 per cent today. There is broad agreement that joining is the right thing to do.

As well as putting his tiny country on the map, Bajuk hopes that cutting out exchange-rate variations against the euro will help to boost trade. 'In an open economy like Slovenia, you are eliminating the biggest uncertainty: when you eliminate exchange rate uncertainty, you are doing a very important job.'

However, recent research has suggested that for old Europe at least, any boost to trade since 1999, when eurozone exchange rates were fixed, has come because of dismantling trade barriers, not cutting out currency wobbles.

Moreover - contrary to the hopes of the euro's founding fathers - instead of increasing the incentive for member countries to carry out pro-growth reforms, the pace of change actually seems to have slowed. The Stability and Growth Pact - meant to keep tight control over profligate governments - has effectively been suspended, as it was broken year after year. Big spenders such as Italy and Portugal are able to hide behind common eurozone interest rates, instead of being punished by the markets for piling up public-sector debt. (Note however that just two more downgrades from the ratings agencies would leave Italian government debt too risky to be accepted as collateral by the ECB, and expose that government to soaring interest rates.)

Without the option of a devaluation to restore their competitiveness, Italy, Portugal and Spain are losing out to Germany, where companies have used the threat of whisking production off to Poland to impose wage cuts in real terms and win market share from their European rivals.

For the east European countries, which are playing economic catch-up, there is a question mark over whether sticking to the strict deficit ceilings of the Maastricht treaty - and living with the same interest rate as the slower- growing mature economies of the west - is the right recipe for growth.

Slovenia is not pressing for looser rules for new members of the euro club. 'This issue was discussed in Ecofin [the gathering of European finance ministers] in the last few months,' said Bajuk. 'We asked; the answer was no, and we didn't waste any time in prolonging the discussion.'

And he is confident that, unlike in Italy, continuing reform will help Slovenian firms to remain competitive.

'The productive sector of the Slovenian economy, for decades, was used to a central bank that would clean up the mess after them with devaluations. As soon as we entered the exchange rate mechanism, they didn't waste any time in trying to get changes in monetary policy - they took it seriously. Instead of complaining, they started adjusting. The trade unions accepted an agreement in which wages were increasing by 1 percentage point less than productivity: everybody accepted, "This is it: let's do it".'

It remains to be seen how long workers will be willing to make such sacrifices, and how strong the pressure will be for Ljubljana to keep up the pace of reform, once it has the seal of approval from the Frankfurt-based ECB. But for Bajuk, a child of the Second World War, any scepticism about the economic tensions within the single currency is outweighed by the political symbolism of joining the euro club.