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Tuesday, 11 December, 2001, 15:11 GMT
The eurozone's 13th member
Euro notes
Kosovans will also have to get to grips with the new notes
By BBC News Online's Catherine Miller

When people across the 12 eurozone countries fumble with their new euro change on New Year's Day, they will be joined by the population of Kosovo.

The German mark is the common currency in the internationally-run protectorate. Though all currencies are officially legal tender, the United Nations administration runs its payroll in marks, making it the coin of preference.

When the mark goes in Germany, it will have to go in Kosovo too.

But if the introduction of the euro presents a logistical nightmare to the 12 EU countries involved, how will Kosovo manage, still struggling to find its feet after the 1998-99 conflict?

Secure delivery

"In some respects, Kosovo is better off than some countries because of the large security presence," explains the Mike Todd from the EU's representation in Kosovo.

K-For soldier
The strong security presence will be a help in delivering the cash
Under the auspices of the Nato-led K-For and the UN mission in Kosovo (Unmik), military supply planes will bring in the new currency from Germany and Austria.

Because it is not an official member of the eurozone, Kosovo does not produce its own euro notes and coins.

Officials can only guess at how many euros will be required and top ups will be flown in as Kosovo's needs become known.

The German Bundesbank estimates that about 80 billion Deutschmarks (41 billion euros) - or around half of its notes and coins - are held outside Germany but there is little idea how many of those are circulating in Kosovo.

Distrust

After years of war and economic crisis, few people in Kosovo trust banks with their money and there are only the bare bones of a financial system.

The EU hopes that the advent of the euro will force some of Kosovo's cash out from under mattresses and into bank accounts.

"A lot of effort has been put into establishing a banking system, including one in (the ethnically divided town of Kosovska) Mitrovica," Mr Todd says.

People will be allowed to change up to 1,000 Deutschmarks (511 euros) in cash free of charge. A small charge will be levied on sums up to 10,000 Deutschmarks (5,112 euros) and anything above that must be deposited in a bank account to be converted.

Yugoslav euro poster
People across the Balkans will swap marks for euros
As an individual can only change money once, the scheme is aimed at funneling Kosovo's cash into the newly founded banks.

The international mission sees the euro as a chance to clean up Kosovo's economy, plagued by corruption and organised crime and blamed for spreading drugs and trafficked people to the rest of Europe.

New money-laundering regulations are being brought into force and a special anti-forgery unit has been set up.

Mike Todd hopes increased tranparency will encourage people to invest in Kosovo.

Enthusiasm

The euro brings with it in Kosovo few of the concerns about national identity seen in some of the EU's more eurosceptic members.

"Generally there is quite a lot of enthusiasm about the arrival of the euro," says Mr Todd.

Particularly for the Albanian population it is, he says, seen as "another step in the direction of Europe".

But even Belgrade has been unconcerned by what might have been seen as a further erosion of its sovereignty over Kosovo. It realises that to try to impose the use of the unstable dinar would be unrealistic.

Crisis breeds pragmatism and across the Balkans, people have tended to adopt the most stable and available currency around.

This has historically been the German mark. From January, all going to plan, it will be the euro.


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17 Nov 01 | Europe
30 Oct 01 | Business
04 Dec 01 | Europe
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