Hungary finds creative solution to help the poor

Nick Thorpe Mar 9, 2012

Jeremy Hobson:Greece appears to have avoided a messy default — for now. Private investors agreed to take 75 percent losses on their loans to Greece, allowing Greece to get more euros in a new bailout. In another part of Europe, where they don’t use the euro, they’re burning through cash — literally.

From Budapest, Hungary, here’s the BBC’s Nick Thorpe:

Nick Thorpe: In a suburb of the Hungarian capital, behind barbed-wire fences bristling with security cameras, stands the Cash Centre of the Hungarian Central Bank. Almost all the $7.5 billion worth of Hungarian banknotes in circulation pass through here annually, to make sure they are clean, untorn and suitable to be used to buy and sell things. One in four bills are judged unfit, and shredded.

Barnabas Ferenczi, director of cash logistics, showed me round.

Barnabas Ferenczi: But you can also see the small shreds of banknotes flying around — as if it was snowing.

Thorpe: And this is your favorite part of the process?

Ferenczi: Yes, this is my favorite part. I can really feel how we actually destroy banknotes.

The shredded bits are then crushed into briquettes at high pressure, each containing about $30,000. And they’re donated to charity, as fuel. This year two childrens’ homes won the open tender — and saved thousands on their heating bills.

In Budapest, I’m the BBC’s Nick Thorpe, for Marketplace.

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