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Printing defect plagues new euro notes
BERLIN, July 12: As if the euro's shrinking exchange rate wasn't bad enough, millions of the newly-printed notes turned out to be worthless before even reaching people's pockets, re--ports AP.
The European Central Bank, which controls monetary policy in the 11 European countries using the common currency, on Tuesday acknowledged a problem at a Munich-based printer that reportedly made 325 million 100-euro notes — roughly US $ 32 billion — nothing but scrap paper.
'These banknotes will not be brought into circulation," an ECB statement said, explaining that a security design meant to foil counterfeiting of the money-on color copiers was misprinted.
The printing problem was just the latest blow to the beleaguered euro.
The common currency has shaken consumer confidence across Europe and fallen out of favour with speculators as it slipped in value to 95 cents against the dollar since being launched at $1.16 in January 1999.
The euro is currently used as a non-cash currency by businesses, government agencies and money markets.
But in 2002, euro cash will finally replace national cur-
rencies and be used for everything from vending machines to groceries.
In preparation, printers began running off reams of the new currency in mid 1999, By September 2001, the job will be completed with 14 billion notes in the vault of Europe's central banks.
The error in the 100-euro notes wasn't discovered until most of the money had been delivered to Germany's central bank, the Deutsche Bundesbank.
The ECB said Tuesday that the problem was isolated at its Munich-based printer Giesecke and Devrient GmbH, one of two euro-printers in Germany.
Nine other euro-using countries have their own printing presses: Luxembourg has none.
The European bank insisted Tuesday that the notes will be ready on time, noting that euro notes have tighter quality standards than standard paper money and coordinating production in 10 countries was "a demanding and challenging task."
According to Tuesday's edition of the Frankfurter Allge-meine Zeitung the glitch may have cost 65 million marks ($31.2 million) and could cost another 65 million marks ($31.2 million) for reprinting Ilie notes.