Notes and coins for the European Union's single currency, the euro, will enter into circulation in just a few months (1 January) in the 12 member states of the EU. The new money will be replacing national currencies -- from the Finnish markka in the north to the Italian lira in the south. It's the biggest currency changeover in history and also will have an impact on countries to the east which are not in the so-called "euro-zone." In the second of a three-part series, RFE/RL correspondent Breffni O'Rourke looks at one of the problems associated with the introduction of the euro -- the risk of counterfeiting.
Prague, 13 September 2001 (RFE/RL) -- Euro notes and coins worth the equivalent of more than $100 billion are now being moved to banks around Europe in preparation for the beginning circulation of the new currency in January.
The cash shipments are under heavy guard in case of attempted ambush and robbery by underworld gangs. The risk of armed robbery is always present. Last week, more than $1 million in euros was taken by thieves who robbed a cash transport truck in Germany.
But criminals know that as a means of getting rich quickly, such spectacular actions are dangerous -- and potentially deadly. A less spectacular, but often safer, method for criminal elements to make money is to do exactly that: to manufacture false bank notes.
Forgers are already reported to be hard at work printing fake euros on sophisticated laser scanners and color printers. A center of this forging activity is said to be Pakistan, where criminals are reported to have long experience faking U.S. $100 bills.
With this in mind, the European Central Bank, or ECB, has designed the new euro notes with many security features against forgery, including a watermark, a security thread, and a reflective stripe.
Antii Heinonen is the director of the bank-notes department at the ECB in Frankfurt. He tells RFE/RL that the intention is to make it easy for the general public to verify the authenticity of the new notes. He says:
"Mainly, these are features which you can either feel, or you can look at, or you can find them by tilting the bank note [in the light]."
However, the bank's anti-forgery efforts suffered a blow when a secret hologram design for the notes disappeared while being sent by air from Paris to Munich. Heinonen plays down the significance of the loss:
"This happened before we started production [of the money] -- as a matter of fact, more than a year before we started production. It was the test hologram. We were at that time still in the test phase, and naturally when it was stolen -- or at least it disappeared -- we changed the hologram, so this [incident] is not a matter for concern."
The loss of the hologram -- perhaps into criminal hands -- is just one more indication of why it's important for people at all levels to recognize the features of the real euro bank notes. And it is exactly here that potential trouble lies. Surveys show that millions of ordinary Europeans have only a vague idea of what is going to happen in January when the euro is introduced. Lack of familiarity with the new notes means forgers have an ideal opportunity to bring their work into circulation. Heinonen acknowledges the risk:
"In principle, naturally, when you have new bank notes, and people are not very accustomed to them, it's possible that this kind of situation [develops regarding forgeries]. But it's exactly for this reason that we will have this huge [publicity] campaign, in order to inform the public, and especially the professional cash handlers, who will be in the first line of receiving the new bank notes."
Heinonen says that recognition training started in April for senior staff at individual European central banks, and in what he calls a "cascade program," reaches down to the public via a vast publicity campaign that's now beginning in the media.
Europol -- the police organization grouping the EU states -- also knows the risks of counterfeiting. Europol's senior official responsible for combating financial crime, Christian Jacqier, tells RFE/RL from The Hague:
"Of course, we have heard some rumors, like everybody else, but nothing has been confirmed so far, and we are not sure that people have been able to actually make forgeries. But we will wait, and in any case, we are ready to act if something happens."
Jacqier would not go into detail on the police countermeasures. But he said citizens can take simple precautions to protect themselves from forgers:
"The advice we can give to the public is not to trade euros in the street, but to pick up their first euros at the bank, so that in this case, there is no risk at all to have counterfeit euros."
The international police organization Interpol, which has 178 member countries, is also watching the euro situation. The head of the counterfeit documents branch, Ricardo Cases-Ayala, tells RFE/RL from Lyons, France, that counterfeiters will view the new currency as a challenge to their skills:
"Does it create a challenge? Yes, it does. Does it create a unique opportunity? In a way, it does, too, because of the uniqueness of the [euro] note. And for the first time we are going to have a currency common to 12 countries. This is an undertaking that has never happened before. Because of the note itself, which is multicolored with multi security features, it is an outstanding note. And if you look at counterfeiters, what they have done in the past, when they see a challenge, [is that] they try to undertake that challenge. They consider themselves artists in their field."
Cases-Ayala continues to outline some of his agency's steps to meet the danger. He says:
"What we have done here at Interpol is that we have created a new database where we can track the new counterfeits, whether they be euros or any other national currencies. But specifically for the euro, we are in the midst of creating this database which will track counterfeit euros, together with the European Central Bank, which has an outstanding database."
In the Balkans, the Yugoslav republic of Montenegro, as well as the U.N.-administered province of Kosova in Serbia, use the German mark as their official currencies. Preparations are in hand there for the orderly introduction of the euro as a replacement for the German mark.
The chief economist of the Montenegrin Central Bank, Dragana Ostojich, tells RFE/RL that her bank is not overly concerned about the risk of forgery. She says the ECB has issued guidelines on the appearance of the real bank notes, and that her bank will distribute euros received only from commercial banks in Germany, and also from the Bundesbank (German central bank) -- thus ruling out forgeries from that source.
As to the withdrawal of German marks currently circulating in Montenegro and Kosova, she says:
"We have taken special precautionary measures for discovering false bank notes, and we have installed in our sub-offices special machines which can recognize forged bank notes. Until now, we have dealt with German marks, but [to deal also with] other currencies, we are planning special training programs for all staff working in the [relevant] area."
As the Interpol official says, the euro project is unique, and there may yet be surprises in the way things turn out.