The euro celebrates its first birthday next weekend. It is still fragile, still wobbly and occasionally sprawls headlong at the feet of amused adults such as the British pound or the US dollar. But in its first year it has changed Europe's corporate landscape forever. The new coin of the 11 realms is not even in circulation. All euro transactions are still either paper or electronic. Yet the continent's stock exchanges are all engaged in an increasingly tense battle for domination of what is fast emerging as a genuinely single market, where shares can be bought and sold on several different exchanges at once. In the corporate world, the arrival of the single currency induces fear and enthusiasm in equal measure. A year ago, companies might never have considered their counterparts across one of the continent's international borders as competition, let alone as a potential partner. Now they are caught up in a rush of hostile takeovers and friendly mergers. In the new Europe, size matters and borders do not. Even from outside eurozone, takeover bids from the giants of telephony have begun to disturb the peace. If anything proves that a country's frontiers are defined by its currency and not by lines on political maps, it is the birth of the euro. Admittedly, some of the biggest takeovers are still outside the eurozone, but even in Britain the same conclusion can be drawn. It is easier for two Scottish banks to offer rival bids for the London-based National Westminster Bank than for a Spanish or Italian bank to invade the pound's strongholds. Two countries, one currency has made business sense for many years on both sides of the Anglo-Scottish border. And the days are long gone when a giant bank or telephone company could be regarded as a national champion, proof against foreign ownership. True, many national symbols - from French banks to Italian telecommunications companies and the Frankfurt stock exchange (now to be called the Euroboard) - already have foreign pension funds and institutional investors on their boards, but the trend towards cross-border investments has accelerated dramatically in the past year. And it is only a matter of time before foreign groups force their way into positions of control. Politicians, labour unions and managements on the receiving end of a hostile bid tend to campaign against the new trend. For the politicians a hostile bid from a foreign company offers plenty of scope for stirring nationalist rhetoric and knee-jerk chauvinism. Labour unions fear cross-border takeovers, because managements are less attuned to local sensitivities than the home-bred variety and will be more ruthless than domestic companies in slashing jobs. And the bigger the merger the bigger job losses. After all, what are the 'synergies' and economies of scale companies look for in a merger, but opportunities to end duplication and save labour costs? Meanwhile, incumbent managements have a vested interest in blocking outside control. Outsiders bring in new techniques, new strategies and above all a different attitude. Increasingly, big European companies are moving towards the so-called Anglo-Saxon model of putting the shareholders interest first and dispensing with the old 'Rhineland model' of management by consensus between shareholders, management and workers. All too often, the Rhineland model brings with it a less than dynamic approach to profit-making, and managements in any takeover fear replacement by more ruthless operators. This is happening anyway, but it is always easier to blame a foreign predator. How much of this sudden activity is genuinely caused by the business world's perception of currency union as a threat to protected national markets and how much is simply part of a fashion for bigger more aggressive conglomerates is hard to judge. There is certainly an element of following the herd in the rush to become the biggest, most potent force on the European market in each company's specialist field. Not everyone can be number one or two, but it is hard to make a case for eliminating the rest of the field in the competition for the top. As national and European Union competition authorities have come to realise with increasing concern over the past year, to allow such no-holds-barred expansion can lead to market domination, and abuse of power, not to more efficient markets. But the sudden disappearance of national frontiers has certainly shaken old notions of acceptable behaviour and national identity. With a single currency and a single market, the angry rejection of foreign ownership by governments of all political stripe and colour and the defensiveness of European managements looks increasingly out of date and pointless. Ironically, the arrival of the euro has proved the catalyst for a change in continental European thinking which brings it more in line with British attitudes, while Britain remains doggedly outside the eurozone and takes a nationalist pride in its determination not to take part in the single currency experiment. But Britain will change as the eurozone changes. By the time the infant euro is big and strong enough to compete with the dollar and the yen, staying outside the eurozone will be a source of weakness and big brother pound will begin to look less like a protector and more like a liability.