The European Union's single currency, the euro, becomes available for use in the 12 euro-zone countries at the turn of the year. But with the new currency comes new problems -- like crime. In this second of a two-part series, RFE/RL correspondent Breffni O'Rourke looks at this and other issues associated with the euro introduction.
Prague, 21 December 2001 (RFE/RL) -- Currency-related crime can come in genteel forms. Picture, for instance, a well-dressed businessman paying for an expensive purchase with counterfeit notes. Or it can take violent forms, such as masked bandits brutally robbing a cash delivery van.
Right now, there is a heightened risk of these and other types of crime in much of Europe, coinciding with the introduction into mass circulation of billions of dollars' worth of notes and coins of the common euro currency in 12 of the 15 European Union countries. The 12 euro-zone nations are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The other three EU nations -- Britain, Denmark, and Sweden -- are not yet participating in the common currency.
A top official of the European Union's police arm Europol, Willy Bruggeman, explains that -- even though bank coffers and the safes of big retailers have been filled with euros for weeks -- a lot of money is still being transported around.
"Now it is still a dangerous period because the distribution of euro currency has to continue, and also the collection of the old [national] currencies is now starting. So the security [risk] aspects are actually increasing now, especially at the beginning of the new year."
Bruggeman, who is Europol's senior deputy director, says that as for counterfeiting, banks everywhere are on alert for forged euros, and any found will be passed to the European Central Bank (ECB) in Frankfurt. The ECB will analyze characteristics of the forgeries and will distribute this data to Europol. The police will use this information to identify patterns of distribution and to try to pinpoint the source.
Bruggeman says there is also a special alert around the euro-zone for attempts to exchange false old currencies for euros. He says in this respect there are certain "fields of interest" among the EU member states.
"The German authorities, for example, are very attentive for any criminal activity which can be identified or possibly identified in Eastern Europe, and some other countries have other areas of interest. For example, the French franc is very popular in Africa, so each country has its own geographical area of interest now."
Bruggeman said authorities have identified the Balkans as "the greatest trap" in terms of counterfeiting, with the highest risk coming from Macedonia and Kosovo. He referred to "signals" coming from the region that there is counterfeiting activity under way.
In terms of legitimate business, the countries of Central and Eastern Europe are not directly involved in the euro project, but they are nevertheless affected by it. Much of their trade is with the EU, as Krassen Stanchev, the head of the Institute for Market Economy in Sofia, points out.
"Most of the countries [of the region] have more than 65 percent of their trade with the European Union. Even Balkan countries, they have two major trading partners -- Germany and Italy. Now [with the euro], they will have lower transaction costs for everybody, calculated in one currency, there is no question about this."
Stanchev says familiarization with the new currency should present no problem to Easterners, and he notes that in a number of Eastern European countries, currencies like the German mark and the dollar are in wide unofficial use anyway. In two entities -- the Yugoslav Republic of Montenegro and the UN protectorate of Kosovo -- the mark is the official currency. Monetary authorities in both those entities have been planning for a smooth transition. The Kosovo Banking and Payment Authority says it is particularly alert to the possibility of money laundering.
The chief economist at the Montenegrin Central Bank, Dragana Ostojich, says the authorities have carried out a major advertising campaign to inform citizens of the changeover. She said a dual currency system will operate for three months in Montenegro. She recalls that Montenegro has only recently replaced the dinar with the German mark.
"We have had experience with a double currency system, and that functioned very well for a year, when we introduced the [German] mark. Just as a reminder, we had a double currency system from November 1999 to November 2000, and it worked well, and that is an added assurance that our system will work now."
Far to the west, in the British-ruled province of Northern Ireland, a dual currency system looks set to arise also, although only unofficially. The local parliament formally debated in early December whether to recognize the euro as a second currency circulating alongside the British pound. The idea was rejected.
But as Northern Ireland parliamentarian Alasdair McDonnell explains, the euro will circulate widely in the province anyway. That's because the neighboring Republic of Ireland is dropping its old national currency, the punt, and adopting the euro. Northern Ireland, like the rest of the United Kingdom, is sticking with the pound.
But as McDonnell says, the punt is widely used in Northern Ireland, and the euro is sure to be also.
"The punt is widely circulated in the area along the border, some 20 miles, or 30 kilometers, into Northern Ireland. The punt would be, for all intents and purposes, an accepted currency, as opposed to legal currency."
Of course, not everybody is happy to see their national currency -- an integral part of their national history -- disappear. Some are simply nostalgic, while others fear that part of their financial security is at risk.
For instance, the "Frankfurter Allgemeine Zeitung" reports a poll that indicates two out of three East Germans disapprove of the new currency, having just gotten used to the hard and reliable German mark.
But, inevitably, with the arrival of euro notes and coins, it's farewell to most of the Western European currencies, ancient and modern, hard and soft. Farewell mark, drachma, peseta, and escudo. Farewell franc, markka, lira, and the rest. Farewell.
Prague, 21 December 2001 (RFE/RL) -- Currency-related crime can come in genteel forms. Picture, for instance, a well-dressed businessman paying for an expensive purchase with counterfeit notes. Or it can take violent forms, such as masked bandits brutally robbing a cash delivery van.
Right now, there is a heightened risk of these and other types of crime in much of Europe, coinciding with the introduction into mass circulation of billions of dollars' worth of notes and coins of the common euro currency in 12 of the 15 European Union countries. The 12 euro-zone nations are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The other three EU nations -- Britain, Denmark, and Sweden -- are not yet participating in the common currency.
A top official of the European Union's police arm Europol, Willy Bruggeman, explains that -- even though bank coffers and the safes of big retailers have been filled with euros for weeks -- a lot of money is still being transported around.
"Now it is still a dangerous period because the distribution of euro currency has to continue, and also the collection of the old [national] currencies is now starting. So the security [risk] aspects are actually increasing now, especially at the beginning of the new year."
Bruggeman, who is Europol's senior deputy director, says that as for counterfeiting, banks everywhere are on alert for forged euros, and any found will be passed to the European Central Bank (ECB) in Frankfurt. The ECB will analyze characteristics of the forgeries and will distribute this data to Europol. The police will use this information to identify patterns of distribution and to try to pinpoint the source.
Bruggeman says there is also a special alert around the euro-zone for attempts to exchange false old currencies for euros. He says in this respect there are certain "fields of interest" among the EU member states.
"The German authorities, for example, are very attentive for any criminal activity which can be identified or possibly identified in Eastern Europe, and some other countries have other areas of interest. For example, the French franc is very popular in Africa, so each country has its own geographical area of interest now."
Bruggeman said authorities have identified the Balkans as "the greatest trap" in terms of counterfeiting, with the highest risk coming from Macedonia and Kosovo. He referred to "signals" coming from the region that there is counterfeiting activity under way.
In terms of legitimate business, the countries of Central and Eastern Europe are not directly involved in the euro project, but they are nevertheless affected by it. Much of their trade is with the EU, as Krassen Stanchev, the head of the Institute for Market Economy in Sofia, points out.
"Most of the countries [of the region] have more than 65 percent of their trade with the European Union. Even Balkan countries, they have two major trading partners -- Germany and Italy. Now [with the euro], they will have lower transaction costs for everybody, calculated in one currency, there is no question about this."
Stanchev says familiarization with the new currency should present no problem to Easterners, and he notes that in a number of Eastern European countries, currencies like the German mark and the dollar are in wide unofficial use anyway. In two entities -- the Yugoslav Republic of Montenegro and the UN protectorate of Kosovo -- the mark is the official currency. Monetary authorities in both those entities have been planning for a smooth transition. The Kosovo Banking and Payment Authority says it is particularly alert to the possibility of money laundering.
The chief economist at the Montenegrin Central Bank, Dragana Ostojich, says the authorities have carried out a major advertising campaign to inform citizens of the changeover. She said a dual currency system will operate for three months in Montenegro. She recalls that Montenegro has only recently replaced the dinar with the German mark.
"We have had experience with a double currency system, and that functioned very well for a year, when we introduced the [German] mark. Just as a reminder, we had a double currency system from November 1999 to November 2000, and it worked well, and that is an added assurance that our system will work now."
Far to the west, in the British-ruled province of Northern Ireland, a dual currency system looks set to arise also, although only unofficially. The local parliament formally debated in early December whether to recognize the euro as a second currency circulating alongside the British pound. The idea was rejected.
But as Northern Ireland parliamentarian Alasdair McDonnell explains, the euro will circulate widely in the province anyway. That's because the neighboring Republic of Ireland is dropping its old national currency, the punt, and adopting the euro. Northern Ireland, like the rest of the United Kingdom, is sticking with the pound.
But as McDonnell says, the punt is widely used in Northern Ireland, and the euro is sure to be also.
"The punt is widely circulated in the area along the border, some 20 miles, or 30 kilometers, into Northern Ireland. The punt would be, for all intents and purposes, an accepted currency, as opposed to legal currency."
Of course, not everybody is happy to see their national currency -- an integral part of their national history -- disappear. Some are simply nostalgic, while others fear that part of their financial security is at risk.
For instance, the "Frankfurter Allgemeine Zeitung" reports a poll that indicates two out of three East Germans disapprove of the new currency, having just gotten used to the hard and reliable German mark.
But, inevitably, with the arrival of euro notes and coins, it's farewell to most of the Western European currencies, ancient and modern, hard and soft. Farewell mark, drachma, peseta, and escudo. Farewell franc, markka, lira, and the rest. Farewell.