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WHO said the economy of the southern Balkans was primitive? At an open-air market in Pristina, the concrete jungle from which the UN struggles to administer Kosovo, a load of sand changes hands for a fistful of crisp euro notes. Content with the deal, the elderly buyer plods home in a horse and cart, its red and yellow tassels flutttering in the icy breeze.

For most European states, the right to use the new currency will be (or has been) a hard-won prize, granted only after stringent tests of economic probity. But by an odd twist of fate, the founder members of the euro-zone include two backdoor entrants that are not exactly prize economic pupils. Both are territories that belong at least formally to Yugoslavia, and have spent most of the past decade in the financial wilderness. And both are places where cash is king.

One of these proud euro-zone members is Montenegro, Serbia's junior partner in the Yugoslav federation. The other is Kosovo, notionally a Yugoslav province but in practice an international protectorate. Montenegro adopted the D-mark, with Germany's blessing, in January 2000. And Kosovo's post-war rulers accepted the German currency as the main unit of exchange.

In theory, the switch to the Balkan euro should be an opportunity to smoke out criminal fortunes and pull more savers into the formal economy. In both places, the authorities limited the amount of D-marks people could change for euro notes to DM10,000 (euro5,100, or $4,550) per transaction. For anything larger you had to open a bank account. In Kosovo, the results were spectacular: over 100,000 new accounts were opened last month, compared with 1,000 in the previous 11 months, and more than DM1 billion has been deposited since January 2nd. An impressive vote of confidence, then, for the seven local banks licensed to deal in euros.

Montenegrins, by contrast, were unimpressed by assurances that their “under-the-mattress” savings—estimated by the central bank at DM200m, and five times as much by some economists—could now be taken to the bank without fear of hard questions. Only a few million D-marks have been lodged in banks, but the price of property has risen as people have converted their German cash into bricks and mortar. It is a mystery where the full D-mark savings of Montenegro's 650,000 citizens have ended up: much of them, perhaps, in the relative anonymity of Italy. Street-wise Montenegrins believe their local fat cats off-loaded their D-marks some time ago—and they expect some of this money to return as “foreign” investment.