Euro threatens the Pope's head

THE ARRIVAL of the single European currency could claim a new victim - the Pope's head on Vatican coins.

The design of Vatican coinage has emerged as one unresolved issue in thorny discussions on whether the Holy See is to be brought into the euro.

Most of the Vatican's coins feature the Pope's head on one side and biblical scenes on the other, raising the prospect that one would have to be sacrificed should the Vatican issue euro - instead of Italian lire - coins.

The Vatican's status was raised at a recent meeting of Europe's monetary committee, made up of central bankers and treasury officials, and was due to be discussed by finance ministers next Monday.

It has now been taken off the agenda because of legal confusion surrounding the position of the Vatican and two other micro-states that mint coins, San Marino and Monaco. Although Monaco's coins circulate only in the state, those minted by the Vatican and San Marino are accepted throughout Italy.

The Vatican City is not part of the European Union, a central criterion for membership of the single currency. However, it has an international agreement with Italy - which will join EMU in January - and issues coins of similar size and denomination to the lire.

Last month, the European Central Bank decided that euro notes will not have space for national symbols, provoking complaints in Britain that the Queen's image would be barred from the national currency if Britain joined.

Under an agreement sanctioned by heads of government, the design of one side of euro coins must feature a common design. The other will have a space for national symbols, although it must include 12 stars, the European symbol.

A Vatican official said yesterday: "We have a problem as to whether or not the Vatican participates in the common currency. The Vatican City has an international agreement with Italy and this problem is being discussed between the Italian government and the Vatican."

The design of coins would not be decisive in resolving the issueof Vatican membership of EMU, he added.