The quick and dirty way into Emu

Euromoney Limited, Registered in England & Wales, Company number 15236090

4 Bouverie Street, London, EC4Y 8AX

Copyright © Euromoney Limited 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

The quick and dirty way into Emu

During the 1990s central European countries were taught that patience, self-discipline and the narrow road to convergence was the only way to qualify for Emu membership. It was a sign of progress when increased confidence in local currencies drove dollars and Deutschmarks off the streets of Prague, Budapest and Warsaw. That's what the European Central Bank wants them to believe. But the Czechs and Croatians now suspect that by dumping their own currencies for the euro straightaway, they can take a short cut into Emu. The ECB is desperately looking for a way to stop them. Laura Covill reports.

The man at the Bundesbank (by tradition he wishes to remain anonymous) gestures with a grin towards a pile of official folders on his desk, each containing a letter from a concerned German citizen and awaiting his reply. "Dear Mr President Welteke," writes one Johann Public. "I am utterly dismayed to read in the press about plans to introduce the Deutschmark in Kosovo. Is this legal? If it goes ahead, I may well lose my faith in the Deutschmark and the euro."

In his habitually courteous reply, this Bundesbank economist will explain that, unlike in east Germany nine years ago, bundles of Deutschmarks will not be handed out free in Kosovo. US dollars ­ or a lot of dinars ­ will be needed to pay for them. And there'll be no bail-out clause.

By decreeing that the Deutschmark becomes legal tender in Kosovo, the UN administration in the war-battered province is simply accepting the status quo. The Deutschmark has been the street currency throughout Yugoslavia for decades, the principal medium for transactions of any real value. The dinar, which has lost 22 zeros in eight years, is good only for the purchase of local-brand cigarettes and Serbian newspapers.

Gift this article