Monday, 17 January 2011

The Irish are printing euros now

The Irish Central Bank has admitted that it is effectively "printing" euros. It has provided €51bn of emergency funding to Irish banks, not by borrowing from the European Central Bank but by creating the euros from nothing - a procedure which is allowed on an "emergency" basis provided the ECB is "informed" that it has happened.

This is an electronic procedure; it's doesn't involve literally printing bank notes. However German citizens will be reminded of the Weimar Republic when the Reichsmark was printed in such abundance that at the end it was cheaper to burn the notes on the fire to keep warm than to use them to buy logs of wood.

Readers wishing to avoid Irish euro notes should note that those with a serial number starting with a T were issued in Ireland. The good ones start with X - they were issued in Germany.

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