We knew things are getting worse by the minute in Greece after we learnt that the country needed to plunder its reserve at the International Monetary Fund (IMF) to meet its latest repayment to the very IMF.
So for now, Greece is staying in the euro. But signs are increasing Greece might finally be let go after all. After various media reports German officials are tired of Greece’s games and are making plans for the infamous Grexit, a Canadian company is giving us further clues.
Canadian paper company Fortress Paper Ltd. has had its stock on a rampage since May 5th, rising 74 percent on no news. What does this have to do with Greece? The company and its Swiss subsidiary Landqart AG produce the very paper needed to produce new banknotes.
And if Greece leaves the euro, it will very likely need new banknotes. In fact several plans of a new currency have circulated and Greece’s News 247 has already reported on its new design in 2013.
The former chief economist of Deutsche Bank, Thomas Mayer met with Greek Prime Minister Alexi Tsipras and finance minister Yanis Varoufakis in Athens in April and they talked about a parallel euro currency for Greece, according to German daily Handelsblatt.
Of course, there are other manufacturers of securities paper, however, Fortress was linked with Greece already in 2012. At that time it referred to an order which had been cancelled right when the European financial crisis abated late in 2011.
Now there are no real reasons the stock should go up 75 percent in one week, as the company is making losses and also did not have too many exciting prospects to tell investors when it reported its first quarter earnings on May 8.
A big order of banknotes for the new Greek Drahma would certainly propel the stock price of a company which only had sales of 74 million Candian dollars in the first quarter. The company, however, doesn’t see a specific reason for the increase in the stock price:
“It is unaware of any reason for the increase in market activity in the Company’ stock today,” it states in a press release. Of course the company would have to say this. If there is no order and no reason for the price increase, they would be correct and there is no loss saying this.
If there is something going on and insiders are buying before the news reaches the public, they would also have to say this, as everything else would be admitting to insider trading and admitting Greece is about to exit the euro.
If Fortress is really getting paper orders from Greece, however, it could be for another reason than launching a new currency. Under the rules governing the eurosystem, member countries’ central banks are actually allowed to print their own euro notes in any quantity they want. And that would certainly come in handy for Greece at this moment.