Euros Arrive With New Worries

The biggest currency changeover in history occurred January 1, 2002 when 12 European countries began distribution of coins and paper euro currency, and with the arrival came new opportunities for counterfeiters. Europe is using some of the same tools the U.S. uses in fighting those opportunities.

Banks and companies in the countries that chose to use the euro have been using its value for accounting purposes since January 1, 1999 when the euro was officially born, and some stores have been putting euro prices on products. But the coins and currency did not begin distribution until this year. People had two months to use up their old coins and paper bills, though European central banks will still exchange old currency for euros for some time. Meanwhile, all prices, wages and bills are expressed in euros only.The 14.9 billion crisp new paper bills use some of the same tools as U.S. currency to fight possible counterfeiting including a security thread, special paper, raised printing, and color-shifting ink. It lacks one of the oldest and simplest devices this country has, however, because the bills depict no human face. All euro bills look the same, though euro coins depict national figures from the separate countries.

European officials have expressed concern that criminals will take advantage of unfamiliarity with the new money to pass off fakes. Banks began selling starter kits to give people a chance to see the new currency late last year and the European Central Bank has been running a public information campaign on how to detect fakes.

Police in Bulgaria, which is known as a major counterfeiting center, have already broken up three major counterfeiting rings and several million euros were stolen in robberies of an armored car in Germany and a postal depository in Italy.More than 305 million people began using the new currency January 1. The next largest such exchange occurred when Germany became a unified country in 1873 melding six currencies into one and affecting over 50 million people. The last time Europe had a common currency was during the Roman Empire.

Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 3, 4/02