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Paper Co. Cuts Off Supply of Zimbabwe's Bank Notes

Secretive German firm caves to pressure
By Dustin Lushing,  Newser Staff
Posted Jul 2, 2008 12:46 PM CDT

(Newser) – The German company that supplies Zimbabwe with the paper for its hyper-inflated currency has caved to pressure from the German government and stopped doing business with embattled dictator Robert Mugabe. The secretive Bavarian firm, Giesecke & Devrient, had been airlifting tons of special blank bank notes—fortified with watermarks and other antiforgery features—to Mugabe so that new currency could be printed, adding more zeros,  every couple of weeks.

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The influx of paper money has allowed Mugabe to pay his army and supporters, while the cost of a loaf of bread has soared to 30 billion Zimbabwean dollars. "The business of printing bank notes is comparable only to the arms trade," a currency expert tells the Wall Street Journal. "It's discreet, highly political, and based on long-term relationships." The supplier yielded reluctantly to pressure after Mugabe outraged most of the world by sabotaging recent presidential elections. (Read more Robert Mugabe stories.)

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