The false-money weapon

Europe's bankers, merchants, police forces, and more than 300 million consumers are on the alert for probable massive forgery of the euro. The new currency has been in daily use since Jan. 1 in 12 eurozone countries, in the remnants of their overseas empires (such as France's Reunion or French Guyana), and in the European microstates, Monaco, the Vatican, Andorra, San Marino, and Malta.

The alert is justified. Clandestine printing shops in Europe, the Balkans, and Latin America have already begun to mimic the products of the European Central Bank in Frankfurt, Germany, and other Eurozone central banks. The counterfeiters' wares, both as fake euros and as bogus banknotes of the vanishing national currencies, are already turning up in shop tills, newspaper kiosks, and vending machines, from Lisbon in the west to Greece and its islands in the east.

The immediate purposes of the false-money purveyors are simple: to acquire big-ticket items such as cars, boats, and big TVs; and to launder the false money in bank accounts automatically converted to euros or in exchange for crisp new and genuine euros.

There's nothing new about this, as the unit created by the European police (Europol) to fight the forgers knows well. Swindlers have been forging money since its creation in ancient Egypt, China, and the Greek city-states. From about 540 BC onward, local rulers, such as one on the Greek island of Samos, fought adversaries - in this case the Spartans - by counterfeiting their gold money. The aim was to destabilize their states and demoralize their societies.

This has continued in modern times. During the American Civil War, the Yankees and Confederates ran their printing presses overtime to falsify and debase each other's money.

In the 20th century, Britain printed false imperial German marks, hoping to undermine Kaiser Wilhelm's state and society during World War I. This was one among many causes of defeated Germany's disastrous inflation in the 1920s, when one needed a wheelbarrow full of banknotes to buy a loaf of bread. It helped undermine the Weimar Republic and assisted Adolph Hitler's rise to power in 1933.

Joseph Stalin dreamed of biting the American hand that was feeding him - President Hoover's food aid to starving Russia in the 1920s - by spreading phony $100 bills.

They were made in Weimar, Germany, and distributed throughout the Western Hemisphere from a Soviet spy center in Harlem, N.Y. The operation failed. Though the forgeries looked authentic, the Soviet secret police and Communist fellow travelers running the operation didn't have enough real American dollars to pay off accomplices and otherwise finance the venture.

During World War II, Hitler forced skilled slave laborers in the Sachsenhausen concentration camp outside Berlin to produce fiendishly accurate copies of British 20- and 50-pound sterling notes, and, toward the war's end, American $100 bills.

Billions in the phony sterling notes were circulated in the British Empire or paid to agents serving the Nazis abroad. Although some were eventually recovered from chests on the bottom of Austria's Lake Toplitz, where Hitler's minions sank them just before the Allied victory of 1945, many never were discovered. British bankers have acknowledged that the bogus sterling caused some trouble to the postwar British monetary system.

When Austrian currency designer Robert Kalina won the competition to design the euro bank-notes, euro-skeptics scoffed at his abstract architectural themes - bridges, arches, and baroque and ultramodern linear schemes - on the five, 10, 20, 50, 100, 200, and 500 euro notes. Not a living plant, animal, or human on them, the cynics observed: "Too easy to counterfeit."

The experts recruited by the European Central Bank in Frankfurt set out to prove them wrong. Nearly 80 different security devices have been built into the notes - holograms, inks that change color when notes are tilted in the light, microprinting, metallic threads, coded designs. These tricks are meant to frustrate even the master forgers of the Italian, Russian, Albanian, and Colombian mafia groups.

Europol believes these groups are gearing up to flood the world with their products. (A joint Colombian-US Secret Service raid that recently hauled in a record $41 million in fake US dollars, already packed for export, rang alarm bells in Europe and Washington.)

The trouble, European bankers say, is that your ordinary shopkeeper or consumer can hardly recognize the presence or absence of many of these security features.

No ordinary digital color scanner or printer can reproduce them. So untrained consumers, if they lack the several detection devices now on the market, have difficulty recognizing even some poor-quality forgeries.

The last big wave of overseas counterfeiting was the high-quality copies of US $100 bills that flooded several continents in the 1990s, apparently originating in Iran and North Korea. These fakes had the dual aim of profit for the producers and distributors and destabilization of the US economy by attacking the world's favorite money, the almighty dollar.

As the euro spreads from its European homeland out into the world of travel, trade, and money markets, its future attackers seem to have one main motive: greed. With vigilance, reinforced by knowledge gained from homework, savvy folks should be able to thwart them.

John K. Cooley, an author and former Monitor correspondent in the Middle East and at the Pentagon, is writing a book on the history of money counterfeiting.

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