Following three years of economic struggle and several bailouts totally nearly $800 billion, Greece could reinstitute its old currency should they pull out of the Eurozone.

Hartmut Grossman, an analyst at ICS Risk Advisors, said these plans have been in place since Greece’s first major debt crisis in 2009.

“A lot of the firms, particularly in Europe and also here, have been looking at that for a long time,” he told Reuters. “But there really has been contingency planning at all of the financial institutions for that to happen … Greece leaving the euro zone is not a new idea.”

For their part, the European Union said it wanted Greece to stick with the euro, a multi-country common currency.

According to an article written for the Associated Press by David McHugh, the “great fear” is that if Greece leaves the euro, other troubled Eurozone countries may follow suit.

If the country does return to the drachma, however, it is not a process that can take place over night.

Before banknotes can be processed, they have to be designed, developed and equipped with security features to prevent counterfeiting. These elements must be assembled before being shipped to the paper maker, which can take three to four months. After that, the notes are sent to the security printer who must undergo at least six to eight different processes to get the notes ready for circulation.

Even in the case of a crisis, the minimum time frame to introduce new banknotes into circulation is close to a year.

SOURCES:
Reuters: “Banks Prepare For The Return Of The Drachma”
The Chronicle Herald: “Greece’s Exit From Eurozone On The Table”
The Globe and mail: “Can Printing New Currencies Keep Euro Zone United?”

Increasingly sophisticated techniques with counterfeiters are throwing up a huge challenge to authorities and money exchange houses with to forge notes with most of the security features used in real currencies, said forensic experts in Dubai.

According to the American Foreign Press (AFP), hundreds of people lined up at the offices of France’s central bank on Friday to exchange old francs for euro banknotes as it was the last day mandated by the bank to make the exchange.

When the country first instituted the euro in 2002, the Bank of France set up a three-year period in which citizens could exchange franc coins and old-series banknotes for euros. The exchange period for newer francs, however, lasted until this year – ending Friday.

The bank saw more than 1,000 people stop by its offices on Thursday, and by Friday a lineup to make exchanges spilled out into the streets of Paris “extending halfway down the block,” the AFP reported.

The exchange wasn’t instant either. Those who dropped off their old notes will have to wait until March to receive notification of when and where to pick up their new euros.

In order to remind people to make the final exchange, a series of advertisements aired in France in advance of the deadline and the Bank of France set up a website to help citizens locate their nearest central bank branch.

However, not everyone who wished to make the exchange was so lucky.

Restaurateur Didier Montanari, ventured to the central bank after hearing about the deadline on the news but left disappointed after his three 100-franc bills from the 1980s were deemed too old to exchange.

“They don’t exchange the Eugene Delacroix,” he told AFP, referring to the French artist whose likeness graces the bills.

It was estimated that at the end of 2010 there were still 50 million franc notes at large, worth the equivalent of 602 million euros, the AFP reported.

SOURCE:
AFP: “Hundreds Queue In Paris For Last Chance To Cash In Francs”

If Scotland gains independence, they will have to choose whether or not to continue using the British pound – the currency used throughout the United Kingdom. Other options could see Scotland joining the euro or launching its own currency.

Scottish National Party (SNP) leader Alex Salmond said the most likely scenario would see Scotland retaining the pound temporarily.

“This would allow Scotland to control taxes, spending and borrowing while the Bank of England would continue to set monetary policy,” Reuters reported this week.

However, supporters of Scotland’s quest for independence aren’t all sold on the idea of retaining ties to the Bank of England.

“The answer to the currency question goes to the heart of what independence really means, because the lesson from the eurozone crisis is that sharing a currency means compromising, co-ordinating and losing independence, rather than gaining it,” wrote Douglas Fraser, BBC News Business and Economy Editor in Scotland.

Still, the most likely scenario proposed by the SNP is that Scotland would hang on to the British pound until they could join the euro. Doing this poses several challenges, according to Andrew Hughes Hallett, professor of economics at St Andrews University.

First, Scotland would have to go through the process of joining the Eurozone and ensuring that the Scottish currency (the pound) maintained a degree of stability against the euro for the last two year.

“How to maintain a stable relationship with the euro when you don’t have your own currency and when the inherited currency does not have a stable relationship with the euro. This would be messy,” wrote Hallet.

The least likely scenario seems to be that Scotland would launch its own currency should independence occur, as the country “has no gold or foreign exchange reserves,” said economists.

SOURCES:
Reuters: “Pound, Euro or Groat: Scotland’s Currency Options?”
BBC News: “Salmond’s Rate of Exchange”

Marred by what the European Commission deemed “fiscal and macroeconomic imbalances built up over the decade,” many financial analysts say the euro is in trouble. Countries such as Ireland, Spain and Italy have all been marked by high debt levels and threats of recession, particularly in the last three to four years.

As recently as this week, Greece announced it would be looking for bailout money to the tune of 130 billion euros. “The bail-out agreement needs to be signed,” said government spokesman Pantelis Kapsis told Greek television outlets. “Otherwise, we will be out of the markets, out of the euro.”

However, if countries such as Greece attempt to discard the euro and return to their original national currency, this is not a process that can take place overnight. In fact, experts in the banknote industry say it will take a minimum of one year before any particular countries can revert to another currency.

Before banknotes can be processed, they have to be designed, developed and equipped with security features to prevent counterfeiting. These elements must be assembled before being shipped to the paper maker, which can take three to four months. After that, the notes are sent to the security printer who must undergo at least six to eight different processes to get the notes ready for circulation.

“When we look at the eurozone it is very challenging to contemplate the logistics behind that,” Chad Wasilenkoff, CEO of Fortress Paper – a company that manufactures banknotes – told BNN in December. “It could be easier if one country such as Greece were to fall off, but if the whole thing were to come crumbling down it’s just not logistically possible.”

Despite the length, an article published by RT.com last month said central banks throughout Europe are preparing contingency plans evaluating their needs for additional printing capacity should the euro come to an end.

SOURCES:
The Malta Independent: “Little To Celebrate As Eurozone Marks 10-Year Anniversary”
RT.com: “Highway To Hell? Greece Barrels Toward Euro Exit”
RT.com: “Plan B: Printing Presses on Standby To Beat Euro’s Demise”
The Globe and Mail: “Video: Can Printing New Currencies Keep Euro Zone United?”

According to an article published by RT.com, central banks throughout Europe are preparing contingency plans evaluating their needs for additional printing capacity should the euro – a singular currency shared by seventeen countries – come to an end.

The Central Bank of Ireland, for example, is assessing the capacity of their banknote facilities where they currently manufacture new euro bills. Last year, Ireland printed 127.5 million 10-euro notes.

“The bank’s printing capacities may not meet demand should the country need to come up with a hasty replacement for the euro,” RT.com said. “Officials are discussing reactivating old printers or
enlisting a private contractor to do the job”

Last week, in a segment that aired on PRI’s The World, banknote manufacturers and economists also said the industry could see some increased businesses if the euro collapses.

But it’s not all good news. A source from the Bank of England told the Wall Street Journal they were “concerned that if the eurozone unravels, the plant would be overwhelmed with orders and would not be able to print pounds. Britain is reportedly considering steps to ensure that such contingency would not cause damage to the UK’s own interests.”

Among other countries, Switzerland, Montenegro, Bosnia and Latvia are all beginning to look at post-euro plans should the currency bloc fail. To do that, RT reports, “they are now casting around for a new reference point – probably the German mark.”

SOURCES:
RT.com: “Plan B: Printing Presses on Standby To Beat Euro’s Demise”
PRI’s The World: “Making Money by Making Money”

Wasilenkoff said that even though countries may pull out of the eurozone and revert back to their old currency, that process is lengthy and cannot happen overnight.

“Typically a national bank will take anywhere from three to four years to develop a new currency to be able to push it out into circulation in a normalized fashion,” he said Tuesday.

Before banknotes can be processed, they have to be designed, developed and equipped with security features to prevent counterfeiting. These elements must be assembled before being shipped to the paper maker, which can take three to four months. After that, the notes are sent to the security printer who must undergo at least six to eight different processes to get the notes ready for circulation.

Even in the case of a crisis, the minimum time frame to introduce new banknotes into circulation is close to a year. This is the biggest challenge countries face with regards to re-introducing country-based banknotes as opposed to the multi-country unified currency of the euro, said Wasilenkoff.

“When we look at the eurozone it is very challenging to contemplate the logistics behind that,” he said. “It could be easier if one country such as Greece were to fall off, but if the whole thing were to come crumbling down it’s just not logistically possible.”

Currently in the eurozone there is close to 15 billion individual euro banknotes in circulation right now, valued at nearly 875 billion. This represents about 30% of the total global supply of banknotes, Wasilenkoff said.

Watch the whole video HERE.

SOURCE:
The Globe and Mail: “Video: Can Printing New Currencies Keep Euro Zone United”

The counterfeiters, who were set up in a small shop near a pig farm in Central Bulgaria, possessed highly sophisticated forging equipment and were printing fake euro and US dollar banknotes.

The case was a high-profile one for both the Bulgarian government and Europol. Police had been on the lookout for this particular printing press – believed to be owned an operated by a criminal ring – for over six years.

“The award that Borisov got is a special symbol of the cooperation and joint efforts and our determination to fight corruption and organized crime,” said the Europol director, who also gave special letters of recognition to Interior Minister Tsvetan Tsvetanov and Chief Secretary of the Interior Kalin Georgiev.

According to Tsvetanov, the counterfeiters printed bills for 24 countries, including France, Germany, Spain, and Italy totaling nearly EUR1.5 M in forged banknotes. Police seized a total of EUR80,000 and USD27,500 in the raid on the printing shop Friday.

The euro contains many security features to avoid counterfeiting, such as holograms, security threads, watermarks and raised printing.

Recently, the United States announced a new line of banknotes with high-tech security features such as 3D holograms.

SOURCES:
Novinite: “Europol, US Pile Praise on Borisov for Shattering Money Forging Ring”
Global Paper Security

An arial view of the Landqart Mill in Switzerland.

Fortress Paper owns and operates two paper mills in Europe – the Dresden Mill and the Landqart Mill. Each with a specific task, the mills are responsible for Fortress’ output of paper products including wallpaper, banknotes, security paper, and more. This article takes a closer look at the Landqart Mill in Landqart, Switzerland.

For over 100 years, the Landqart Mill has been responsible for the production of security and specialty papers. Encompassing products such as banknotes, visa papers, tickets, passport paper, watermarked paper, bristol board and more, the Landqart Mill has developed a strong reputation for being a leader within the security paper industry. The mill has also become a global player in the growing market for trademark protection.

LANDQART, A SHORT HISTORY
The Landqart Mill was originally constructed in 1872 with one paper machine, with a second one being added almost 25 years later. By the twentieth century, the Landqart Mill saw a steady increase in business, adding yet another paper machine to maximize output.

With Europe thriving under a technology boom in the 1960s, Landqart was able to confront the world market more efficiently. The existing mill merged with other paper factories on the Sihl River and switched their focus from a manufacturer of graphic paper to a reputed supplier of security paper. The production of banknotes was key to the new developments at Landqart – so much so that the mill became the sole provider for the Swiss currency in 1979.

In 2003, the Landqart Mill opened a high performance heat embossment plant for the application of film in strips or as patches onto security paper. This technology was implemented into banknote production, allowing the mill to produce high-tech, anti-counterfeit bills.

In 2007, Fortress Paper – a Vancouver-based security and specialty paper company – purchased the Landqart Mill and has been developing, testing, and producing new innovative security products on site ever since.

LANDQART TODAY
The Landqart Mill produces banknotes of over 100 currency denominations for more than 25 countries around the globe. In addition to still being the sole provider of the Swiss currency, the mill is one of only nine suppliers of banknote paper for the Euro currency.

Using its extensive knowledge of security papers and features, the mill also develops products for more commercial purposes, such as electronic passports. This January, Fortress Paper announced the signing of a contract that will see the mill produce approximately 2,500,000 e-passports over the next five years (read “Fortress Paper Announces EPassport Contract”).

On top of that, Fortress also announced in February that it had received funding to rebuild one of its primary paper machines at Landqart, the PM1. Currently used for lower margin specialty papers and low to medium security papers, the rebuild of the machine will increase the mill’s production capacity four times over – from 2,500 tonnes per year to 10,000 tonnes per year (read “Fortress Paper Announces Signing of EUR18.5 Million Loan for PM1 Rebuild”).

USING STEAM TO GO GREEN
Producing security papers and banknotes aren’t the only innovations with which the Landqart Mill engages. The mill has also developed a unique strategy to combat its environmental emissions with the use of steam.

Steam is an important component of creating paper. It’s used as a primary source of heat in the process of converting pulp to paper and while many paper mills would burn fossil fuels on-site to generate this steam, Landqart actually re-uses steam that comes from a nearby refuse incinerating plant.

The steam has to travel nearly 7km through a pipeline that connects the plant to the mill. Landqart agrees that the pipeline is perhaps “unconventional,” but is going a long way – literally – to protect “natural resources and reduce CO2 emissions into the environment” in the production of paper which they are using to create – among other things – banknotes.

SOURCES:
Landqart: Swiss Special Paper
Fortress Paper Ltd.
Landqart: “Responsibility for Nature and Environment”

Irisafe is a modern security device developed that cannot be copied by scanners or photocopiers

*This article is the last in a three-part series on counterfeiting. Read the first two articles in the series: Part 1, Part 2

Anti-counterfeiting technology in and on banknotes has been evolved more over the past 30 years than it has in the entire history of money.

Today’s banknotes are not just used as currency; they are also becoming high-tech anti-counterfeiting devices.

Because copying technology like scanners, colour photocopiers and digital imaging software not only increased in popularity but also dropped in price, the act of counterfeiting banknotes became easier in the late twentieth century. In the United States alone, it is estimated that nearly $10 billion in counterfeit bills were circulated between 1990 and 1995.

In the face of this surplus of bogus bills, the US government began improving their designs and embedding security devices in their banknotes. The US Department of Treasury’s Bureau of Engraving and Printing, the division of the US government that is responsible for the actual design and printing of money crafted new 10, 20, 50 and 100 dollar bills with bigger faces, multi-coloured paper, holograms and reflective inks that change color depending on the lighting.

Around the same time, Europe was developing its single currency – the euro. Given the history of counterfeiting, and the increase in counterfeit bills in the US, officials involved in the creation of the euro to great lengths to protect the currency. Detailed images of the new banknotes weren’t publicized until almost the last moment.

The euro featured four layers of security. The first layer, watermarks and security threads, was announced to the general public. The second layer was a set of seven or eight measures that were announced to about five million professional money handlers. The third layer was another set of features to help machines spot bogus banknotes. The fourth layer still remains a secret.

Creating banknotes with multiple layers is now a common strategy to prevent counterfeiting. Fortress Paper, a leading international supplier of security and specialty papers, recently announced the launch of their multi-layered banknote paper called Durasafe, for example.

Durasafe is a hybrid banknote substrate that consists of a polymer core sandwiched between two 100 per cent cotton paper layers. The outer layers also contain “traditional” security features such as a watermark, security fibres and security threads. In addition to all that, Durasafe banknote paper also features a transparent window through all three layers maximizing the paper’s security potential.

Fortress Paper has also developed a feature called Irisafe, an iridescent striped coating that is integrated into security papers and is characterized by brilliant and changing colours when you change the angle of view. A colour copier cannot reproduce either the brilliancy or the change of colour present in this feature. At best, a photocopied forgery will show spotty stripes instead of the trademarked Irisafe qualities.

Many other security features have been introduced to banknotes around the world. Microtext (tiny repetitive letters or numbers), intaglio printing (raised lettering), holograms, and protection ornaments (markers next to the note’s denomination) are just some examples.

Intricate re-designs of banknotes every few decades, and consistent development of new security measures also provides surety that counterfeiting, while it may still exist, is definitely by no means an easy task these days.

SOURCES:
Banknotes of the Modern World: “Security Features”
“A Short History of Money”
“History of Counterfeiting”
Fortress Paper Ltd.
Global Paper Security: “The Launch of Durasafe Banknote Paper”
Global Paper Security: “Fortress Paper’s Irisafe”