Balkans slip quietly into eurozone

It is feared that fake euros could flood the Balkans

By Paul Anderson in Belgrade

The euro is now the official currency in Kosovo and Montenegro but banks report only a slow trickle of people changing old notes for new.

Few people have bothered to buy the new currency

This could be more a reflection of the sanctity of the New Year public holiday than of any lack of faith in the new currency - many people here earnestly believe will improve their chances for membership of the European Union.

At the very least, there are hopes that the euro will become a symbol of stability in Yugoslavia less than a decade after bank swindles, pyramid saving schemes and hyper-inflation wiped out people's savings.

It is also hoped the new currency will revitalise banking systems shattered by mismanagement and plunder.

Until 1 January Kosovo and Montenegro were using the Deutschmark as their official currency.

An estimated 15 billion Deutschmarks - or about 7.5 billion euros - are hidden under mattresses, up chimneys and in the brickwork.

Fake worries

Euros were shipped to Kosovo amid tight security

Despite people's wariness of the banking system, officials still hope much of that money will be deposited in banks, providing a boost to local economies.

Stocks of the new notes and coins were shipped into the Balkans in December under extremely tight security.

For all the benefits of the euro, there are also considerable risks, which experts have been trying to minimise.

One of these is forgery. Officials have warned of the danger of Balkans-based Mafia outfits flooding the market with crisp, new, fake euros.

And there are worries that the changeover months will be used by criminal organisations to launder massive amounts of illegally-earned money.