The stability of channel flow of coextruded elastic liquids having matched viscosities but a jump in elastic properties is studied. Inertia and surface tension are neglected. A short wave disturbance is found, confined near the interface, whose growth rate is independent of wavelength. For dilute Oldroyd-B fluids this disturbance is unstable for any non-zero jump in normal stresses, and has a maximum growth rate for intermediate levels of elasticity in the two fluids. When one or other fluid is highly elastic the growth rare falls. In the concentrated limit (a UCM fluid), the disturbance is unstable only for a finite range of normal stress jumps, and is restabilised if one fluid is much more elastic than the other. Because the short wave disturbance is localised, the results apply for any steadily sheared interface across which the normal stress jumps. The results are confirmed for moderate parameter values by means of a full numerical solution for a three-layer planar flow.