The Frankfurt, Paris, Milan and Helsinki stock markets all hit record highs in early dealings after new peaks were set overnight in Hong Kong, Singapore and Bombay.

``From 0600 (0500 GMT) all Paris bourse derivatives and share markets were operating normally," the Paris exchange said.

After successful simulated trading sessions were held on Sunday at a number of European exchanges, any lingering concerns were dispelled by fault-free tests before the markets opened this morning.

``As before, everything is running smoothly and all systems are able to function,'' said a spokeswoman for the Frankfurt exchange.

Tokyo, Sydney and London stock markets were closed on Monday for holidays.The European Central Bank said all its systems were functioning normally and encountering no millennium bug problems.

The Euro, Europe's single currency, was bolstered by relief over Y2K and optimism about Europe's growth prospects in the new year.

``The euro possess a strong potential to appreciate,'' Bank of France governor Jean-Claude Trichet told RTL radio.

U.S. Futures dealers executed the first trades of 2000 on Sunday and the Chicago Mercantile Exchange (CME) reported a trouble-free start.

``Everything is running smoothly,'' said CME spokesman Bill Burks.

The first major stock, bond and foreign exchange trading of the millennium began in Asia where no Y2K problems were detected. Stock markets in Singapore, Hong Kong and Bombay roared to record highs.``A very exciting start to the new year,'' said Sangeeta Purushottam of SG Asia Securities in Bombay, where stocks rose more than six percent.Only minor glitches reported
Over the weekend, minor millennium computer problems occurred in Japanese nuclear power plants, Swedish medical equipment and Israeli data-processing systems, but were quickly fixed.

Britain said on Monday that the country was functioning smoothly though it remained on the alert. The government's Millennium Centre issued its statement 24 hours before Britons return to work on Tuesday after the long weekend holiday. In France, battered by severe storms in recent days, power, telecommunications, transport and food distribution were working smoothly on Monday.

``Everything is going well and we have no problems this morning,'' said a spokeswoman for Electricite de France.

Some ask why all the fuss?
By the third day of the new year there was such a striking absence of major problems that some were wondering whether the Y2K fuss had been justified.Communist-run Cuba even suggested the millennium bug was a capitalist plot to boost spending on computers.

``The chaos that had been predicted was merely a scare,'' said Cuba's Juventud Rebelde (Rebel Youth) newspaper in an article entitled ``Much Ado About Nothing''.

The billions of dollars spent fixing computers so that they accurately read the date change from 1999 to 2000 `raised the suspicion that the immense investment in computers was due to an audacious market manoeuvre', it said.

Professor Anthony Finkelstein, head of software systems engineering at University College London, described the response to the Y2K bug as panic.``The story is of a panic which scrambled out of the control of all the parties, even those that sought to make money from it. I believe greed was an element of it,'' he told Australia's ABC Radio.

But officials defended the heavy spending.``It's one of those... rare circumstances where you put a tremendous amount of effort into making sure that nothing happens. In other words, we were planning for an anticlimax and a boring event and now we probably have it,'' said Monetary Authority of Singapore Deputy Managing Director Tharman Shanmugaratnam.