By Ian Moncrief-Scott

Arguably the most significant change to the world's money markets took place on Jan. 1, 1999, when 11 European nations replaced their currency with the new Euro. The move spelled the end of the Franc and the Mark.

Great Britain, though not joining initially, has not ruled out membership should suitable economic conditions prevail. Ultimately, the step could signal the end of dozens of independent countries and signify a United States of Europe.

Article 105a (1) of the Treaty on European Union, popularly known as the Maastrict Treaty, gave the European Central Bank exclusive right to authorize the issue of banknotes and coins within the participating member states.

Also established by the Treaty, the European Monetary Institute Council (EMI) formed by the National Central Banks, has two main tasks: 1) To contribute to reaching State III of Economic and Monetary Union (EMU) and 2) To prepare the European System of Central Banks (ESCB).
In December 1995, the European Council in Madrid set the framework for banknote and coin production. Euro currency will circulate by January 2002, the exact date announced by the ECB Governing Council before January 1999.

ECOFIN, the European Council of Finance Ministers, entrusted coin production to the Working Group of Mint Directors, consisting of the heads of the National Mints. Eight coins, rising in value from one cent to two Euro, will feature in the range. One side of each coin will bear a national design, while the obverse will depict a common pattern. In June 1997, the Amsterdam European Council endorsed the design for the common side of the coin and invited ECOFIN to adopt the draft Regulation.

Even before the EMI was constituted, long lead times for banknote production led to the committee of the European Central Bank Governors to establish a Working Group on the Printing and Issuing of a European Banknote (BNWG). Comprising Chief Cashiers and General Managers of the NCB printing works, their first decision was to propose a range of seven denominations: 5,10, 20, 50, 100, 200 and 500.

The EMI Council, on advice from art historians, graphics and marketing experts, selected two themes for a banknote design competition in June 1995; 'Abstract,' of the creator's imagination, and 'Ages and Styles of Europe,' both bearing the EU flag. The latter topic represented the architectural history of Europe over distinct periods: Classical, Romanesque, Gothic Renaissance, Baroque, Rococo, the Age of Iron and Glass, and 20th Century.

Launched on Feb. 12, 1996, the design competition lasted seven months. After checking for printability and compliance, the NCBs sent the approved designs to a notary in Frankfurt am Main, where authorship identification was replaced by a three-digit secret code number. On Sept. 20, 1996, the now anonymous designs were released to the EMI.

A jury of 14 independent experts from a wide range of disciplines, including marketing art and advertising, and representing each EEC country except Denmark, which had not ratified the Maastrict Treaty, met at the EMI on Sept. 26-27, 1996. Under the chairmanship of Hanspeter K. Scheller, EMI Secretary General, the designs were appraised for creativity, aesthetics, functionality, public perception, avoidance of national bias, and a balance of men and women depicted. Five of each of the two themes provided a shortlist.

Between Oct. 7-13, 1996, Gallup Europe organized a series of focus groups in all EEC countries to evaluate public reaction, consulting 1,896 individuals. The results, the jury appraisal and a technical assessment conducted by the BNWG were submitted to the EMI Council of Governors on Dec. 2-3 that year.

The winning sketches in the Ages and Styles of Europe theme were developed by Robert Kalina of the Oesterreichische Nationalbank. These emphasize windows, gateways and bridges. Blending historical developments, the designs illustrate Europe's common cultural heritage, and epitomize the new dawn and the vision for the future.

On the front, gateways and windows symbolize openness and cooperation. Twelve stars represent dynamism and harmony of contemporary Europe. Bridges typify European development on the obverse, ranging from pre-Christian constructions to sophisticated suspension bridges, a metaphor for communication among the people of Europe and the world.

Other aspects include the currency name in Latin and Greek, the European flag, the issuing authority initials: BCE, ECB, EZB, EKT, EKP and the ECB president's signature.

Development of the artwork has been ongoing, turning the winning sketches into sophisticated designs and incorporating the many public and covert security features of a modern banknote.
Dominant colors were chosen by scientific research to assist in recognition. Different note sizes for each denomination with large, bold numeral and tactile features in specific areas, were agreed with the European Blind Union to aid the visually impaired.

Modern day technology offers counterfeiters good results at low cost. To protect banknotes, many security features have been incorporated into the specification. The paper has fluorescent fibers and both a multitone and barcode watermark, which the forger has difficulty in reproducing. Security thread, intaglio printing and reflective foils are included to help the public.

Several other concealed, machine-readable features enable the NCBs and the note-handling industry to verify authenticity. All aim to detect forgery with the minimum of attention.

Thirteen member states have printing works. In Belgium, Denmark, Greece, France, Ireland, Italy, Austria and the United Kingdom, they are part of the NCB. Finland and Sweden have limited companies wholly owned by their NCB, while Spain has a public company, FNMT. Netherlands has a private company, Enschede. Germany's private company is Giesecke & Devrient, Munich, and its public company, Bundersdruckerei, Berlin. Portugal buys sheets of partly printed and finishes them itself. Luxembourg sources its banknotes from De La Rue, Gateshead.

These 14 printers produced nine billion banknotes in 1996, seven billion for domestic use, the rest for issuing authorities outside the EU. With an average life of two years, 12.7 billion banknotes are currently in circulation.

In February 1998, the EMI Council endorsed the final designs together with a full technical specification.

The world now awaits the arrival of the Euro.