The effect of the Eurosystem's euro banknote anti-counterfeiting measures on the money-users in Malta

Abstract

The single European currency is considered to be one of the greatest achievements of European integration. It has brought about a number of gains, but being an international currency, it has also attracted international counterfeiters. Just like the dollar the euro has become a profitable and attractive 'business' niche for organized crime involved in the activity of counterfeiting. In this respect the Eurosystem (through the European Central Bank), the European Commission and other international organisations, such as the Group of 10 Central Bank Deterrence Working Group), have adopted anti-counterfeiting measures in order to protect the integrity and credibility of the euro, so important for a currency to survive. Therefore, this study will analyse, 'The effect of the Eurosystem's euro banknote anti-counterfeiting measures on the money users in Malta', expanding research and analysis from the macro to the micro (national) level. The Literature review provides a clear picture of the anti-counterfeiting legislation, suggestions in academic literature for the way forward and measures taken to safeguard other currencies. It provides an overview of set measures to promote education and awareness, and the importance of the upgrading banknote authentication devices, and banknote handling machines. Moreover, it highlights a number of euro banknote counterfeiting cases, illustrating that despite legislation, measures and initiatives, counterfeiting persists in the real world. This dissertation is based upon a case-study with a focus on Malta, and adopts the constructivist approach. It relies on both quantitative and qualitative data, evaluating the relevant situation both at the EU level at the macro level, and the situation of Malta - at the micro level. The third chapter is meant to provide a situational analysis. It clearly outlines institutions and organizations responsible for the protection of the euro currency both with regards to the international scenario (the European Union and other international entities) and at the micro/national level involving the National Central Banks and other institutions (such as the police authorities) meant to monitor and fight counterfeiting. This chapter also analyses strengths and weakness and the effects of counterfeiting on various levels/sectors of society - the general public, the retail sector and other important stakeholders. This chapter analyses the implementation of international anti-counterfeiting legislation and measures at the micro/national level, which measures are completed by initiatives taken by local organisations, such the Central Bank of Malta's Certification of Cash Handlers' Programme. Moreover, the chapter is also meant to provide and detailed picture of the counterfeiting scenario both at the EU level, and in Malta, outlining relevant gaps. The fourth chapter provides results and analysis of the primary data collected through the administration of questionnaires with retailers from four particular localities in Malta, and an interview with a leading figure in the field from the Central Bank of Malta. This chapter represents a collection of observation and findings, whilst analytically answering the four research questions outlined in the methodology. The conclusion of this study is includes a list of recommendations meant to address the gaps outlined throughout the analysis, observations and findings. These recommendations are meant to ensure and enhance a sounder protection of the credibility and integrity of the euro, and provide an ambitious strategic way forward.