Central Bank dismisses punt rumours

Thu, Dec 8, 2011, 00:00

The Central Bank is not in negotiations with any printing companies in case it needs additional capacity to print punts, it is understood.

The bank said this morning that it was not printing Irish punts - a rumour that has surfaced in recent months. “We are only printing euros,” a spokeswoman said.

The denial follows an article in today’s Wall Street Journal that said the Central Bank was “evaluating whether it needs to secure additional access to printing presses” in case the single currency breaks up and Ireland leaves the euro zone.

It is understood that although there have been some discussions of the possible fallout should the euro crisis worsen, authorities in Ireland have not reached the stage of considering the practical measures, including printing capacity, that would be necessary for a return to punts.

Minister for European Affairs Lucinda Creighton told RTÉ radio she had “no knowledge” of any plan to acquire further printing capacity.

However, Ireland’s biggest company, the cement-maker CRH, has confirmed that it is making preparations for a possible fracturing of the euro zone.

CRH chief executive Myles Lee told Bloomberg Television that while it was “hopefully unthinkable” that countries would leave the euro, the company was considering the kind of contingency plans that “any responsible company should have in place”.

In response to a parliamentary question, Minister for Finance Michael Noonan said in September that Irish pound bank notes had not been produced since 2001.

The latest poll of economists and policymakers conducted by news wire Reuters has found that a slim majority - 33 of the 57 surveyed - believe all 17 countries currently using the single currency will continue to share it.

The same poll also found that two-thirds of respondents believe it is unlikely that the Brussels summit that begins later today will yield a decision solution to the debt crisis.

Willem Buiter, chief economist at Citi, warned today that a full splintering of the euro zone would “create financial and economic pandemonium”, including disorderly sovereign defaults, dramatically weakened currencies and bank failures.

“If Spain and Italy were to exit, there would be a collapse of systemically important financial institutions throughout the European Union and North America and years of global depression,” he wrote.

Additional reporting: Bloomberg / Reuters