Forgers gearing up for euro launch

Notes contain secret security features

LONDON, England -- Counterfeiters in eastern Europe pose an "imminent threat" to the integrity of euro banknotes due to be introduced next month, police say.

Willie Bruggeman, deputy director of the European police agency, Europol, told the UK Financial Times newspaper on Tuesday that forgers in Macedonia, Kosovo and other Eastern European countries could flood the markets with false currency next year.

The 12 EU countries that have adopted the euro are preparing to introduce common notes and coins on January 1. Macedonia and Kosovo among several administrations outside the EU that intend to adopt the euro as their official currency.

Counterfeiters are understood to be concentrating their efforts on copying 100 and 200 euro notes.

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Bruggeman said he was "not so concerned" about 500-euro notes because high denomination fakes were likely to attract suspicion.

There was also a significant threat in eastern Europe, Latin America and the Far East, particularly Japan and Taiwan, that cheap photocopies would infiltrate the market, Bruggeman said. These copies could "look good" but would carry no security features.

Euro starter kits -- containing collections of the new euro coins -- have gone on sale in the 12 eurozone countries.

Wim Duisenberg, President of the European Central Bank, shows off the new notes

The European Central Bank (ECB) decided to limit the sets to coins only, in an attempt to give counterfeiters less of a head start in trying to copy the notes' security features.

In addition to embossed characters, watermarks, and metal strips, the notes contain several secret security features that police say would make them very difficult to forge.

In the new year, shops will still accept the old currencies, but most will give change only in euros. That should quickly remove most of the old money from circulation, with most transactions expected to be all in euros by January 15.

The notes are being printed at 15 sites around Europe. The ECB has taken stringent measures to ensure that the production process remains a secret.

Eurozone members have agreed that the maximum penalty for forging the currency will be at least eight years' imprisonment.

About 52 billion coins and 14.9 billion bank notes have been produced for the launch. National currencies like marks, francs and guilders will still be valid for up to two months, and can be exchanged at banks after that.