NEWS
18/05/2012 09:51 BST | Updated 18/05/2012 10:24 BST

Greek Crisis: British Money Printer De La Rue 'Draws Up Plans' To Print Drachma Banknotes

British money printer De La Rue has drawn up plans to print drachma banknotes should Greece crash out of the eurozone, according to Reuters.

The news comes amid fresh concerns that the political turmoil in Athens, where a caretaker government has stepped in to steer the debt-ridden country into repeat elections next month, will end in the country leaving the euro.

On Thursday, ratings agency Fitch downgraded Greek debt to level CCC, the lowest possibly rating without being in default.

On Friday, EU trade commissioner Karel De Gucht said the European Central Bank and European Commission were working on contingency plans should Greece leave the eurozone. The EU Commission subsequently denied that contingency measures were being drawn up.

According to The Times, the Hampshire-based De La Rue still has some of the Greek moulds for banknotes, despite having not made the currency for more than a decade.

Greece is scheduled for fresh elections on the 17 June, with the outcome likely to determine whether Athens accepts EU-imposed austerity measures or rejects them.

If it’s the latter, the EU and ECB could cancel the loans and liquidity currently keeping the country on life support, leaving Greece with little alternative but to revert to the drachma.

Although Greek printers would likely be used to print money, foreign firms such as De La Rue could be called upon for help.

Speaking to Reuters, Panmure analyst Paul Jones said "If they (Greece) decide to pull out of the euro the first thing is it won't be an overnight job, partly because of the implications of what they are trying to do but secondly because of the sheer number of banknotes that are needed to replace a currency."

De La Rue have declined to comment.

On Thursday, Ratings agency Moody’s downgraded 16 Spanish banks, stoking fears that the Greek financial contagion could spread to Spain.