Irish Town Revives Pre-Euro Currency To Boost Economy

By: EW News Desk Team   Date: 27 May 2012

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27 May 2012

Business owners from a small border town in Ireland have begun accepting payment for services in punts – the pre-euro Irish currency – in the hopes of improving the local economy, claimed a report by The Guardian on Sunday.

The town of Clones – just 88km away from Belfast – had been severely affected by the nation’s economic downturn; and decided to resurrect the former currency after discovering a financial loophole in the Irish legal system, which said that any punts stuffed under mattresses, inside piggy banks, kept as souvenirs in shoeboxes, or accumulated in latent bank accounts, can still be considered as legal currency.

“We checked with the central bank in Dublin and we were staggered to find there was around 285 million punts that could still be exchanged as legal currency,” said Ciaran Morgan, a 21-year-old university student who, along with his father, had thought up the idea of reviving the punt.

“I was absolutely bowled over by the amount of punts still out there in the country so hopefully if we got 1 percent of that 285 million it would be great,” added the president of Clones’ Chamber of Commerce Finbarr Dunwoody.

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Morgan said that he was inspired to come up with the plan after seeing a report on the Internet about a village in Spain that had reintroduced the peseta as an alternative to the euro. Any Irish is still holding on to the punt has been encouraged to visit Clones and spend the currency there.

“There have been people coming from as far south as Kerry and as far north as Antrim to spend money in the town since it began this spring," said Morgan, whose family runs a small shop along the road up to the Northern Ireland border.

"In our shop alone we've taken in over 1,000 punts,” he said.

The punts accepted in Clones are exchanged at a rate of 1 punt to 1.20 euros by the business owners. The punts are then collectively sold back to the Irish Central bank at a rate of 1 punt to 1.27 euros.

Morgan stressed that the seven cents made on each transaction was not used for profits by the shops but are “put into a central fund to pay for things like Clones's Christmas lights or the St Patrick's Day parade."

According to Dunwoody, the “experiment” with the punt was a welcome boost to a town where 50 percent of the businesses along its main street had already been forced to close due to the economic crisis.

"If we take one more euro into the town as a result of this scheme then it is surely a good thing,” said Dunwoody.

Ireland will head to a referendum this Thursday to decide whether to support or reject a fiscal treaty with the European Union. Ireland's current EU-International Monetary Fund loans are due to run out by the end of next year, and the treaty specifies that only ratified members will be able to access future EU loans.

Related: Europe’s Currency Conundrum – What Can Save The Euro Now? : Joseph Stiglitz

Related: Ireland: Grim Picture of Austerity "Strategy"

Related: Ireland’s Painful 2012 Budget: 23 % VAT, €3.5bn in Spending Cuts

Clones’ residents, such as candy shop owner Raymond Hickey, though are torn between the benefits of receiving new loans from the EU and the disillusionment that has arisen because of the financial constraints that come with the loans.

"When you start talking about Europe there is the whole thing about them dictating over what you can and what you can't do. People get a little bit sick of that. I am undecided. I would have said yes at the beginning but I am questioning that now,” Hickey said.

Find out more about Clones’ punt movement by viewing their site: embracethepunt.com

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