Enab Baladi – Amir Huquq
On March 16, the acting head of the EU mission in Syria, Mikhail Unmacht, told Enab Baladi that the Syrian currency will be printed in the European Union.
He explained that the EU has suspended sanctions on several sectors, such as transport, energy, and financial exchanges between the Central Bank and other official banks, which will provide additional opportunities for economic cooperation.
EU countries approved the suspension of a group of sanctions imposed on Syria on February 24, which were enacted during the rule of the deposed president Bashar al-Assad. The suspension includes the transport and energy sectors, including oil, gas, and electricity.
The EU also removed five entities from the list of frozen financial assets and resources: the Industrial Bank, the Popular Credit Bank, the Saving Bank, the Agricultural Cooperative Bank, and Syrian Airlines. They allowed the provision of funds and financial resources to the Central Bank of Syria (CBS).
Enab Baladi contacted the Central Bank for an official response regarding Syria’s intention to print its local currency in Europe and the possible agreement that could be established, but received no reply.
The reality of the Syrian currency reflects the difficult economic situation the country is going through, and it is an important topic for discussion regarding the economic solutions needed to revive the Syrian economy and stabilize the currency.
Enab Baladi opened the file “Printing the Syrian Currency in Europe” to analyze the economic impact and the main implications and prerequisites needed.
Printing contracts carried out in Russia
Syria received a new shipment of its local currency printed in Russia on March 5, and more shipments are expected in the future, according to Reuters.
The contract for printing the Syrian currency was signed several years before December 8, 2024, between Russia and the former regime, which explains the current authorities’ delay in printing new currency, as Russia had a remainder of the contracted stock of 5,000 pound notes, which were recently supplied.
Abed Fadliah, Professor at the Faculty of Economics at Damascus University
Dr. Abed Fadliah, a professor at the Faculty of Economics at Damascus University, mentioned that the last batch received a few weeks ago was claimed to be printed in Iran, which is incorrect.
Fadliah told Enab Baladi that the contract dates back to several years ago, and that is why the current authority’s delay in printing new currency has occurred, considering that Russia had the remainder of the contracted stock of 5,000 pound notes that have recently been supplied.
He confirmed that all printing contracts were executed in Russia, as printing in any other European country was impossible due to Western economic sanctions on Syria, which have been in effect for several decades prior to the Caesar sanctions.
Future printing operations will likely take place in one of the European countries, and Austria is expected, according to Fadliah, based on what the acting head of the EU mission in Syria mentioned, indicating that negotiations are underway.
On February 14, the first shipment of Syrian funds from Russia arrived at Damascus Airport, without the bank announcing the quantity or source, whether it was a result of printing or confiscated funds.
Design of the new currency
Researching the form and design of the printed currency is crucial for multiple reasons, including security, cultural visibility, national identity, and economic impact. A well-designed currency is not merely a matter of aesthetics but plays a key role in enhancing stability and confidence in the country’s financial and economic system.
Dr. Abed Fadliah believes that printing new banknotes is more necessary now than ever, and there is no doubt that the current government knows this and wants it; however, the challenge is that new banknotes in all denominations will not be identical to the currently used notes but will require changing the images and writings displayed on both sides of the note to create a new, developed design.
He pointed out that the design of the Syrian currency should reflect the face of Syria today. It is not just a paper used for payment and purchase; it is considered a virtual national document.
He mentioned that design is one of the most challenging steps in the contract between Syria and any country, but after completing the first printing process, subsequent printing operations become easier, faster, and less costly.
Fadliah envisions that among the key features the banknotes should possess are:
- High-quality design, making counterfeiting difficult or impossible.
- Durability, resistant to wear and tear, and not easily damaged by water.
Repercussions and conditions of printing in Europe
Printing currency requires technology that is currently unavailable in Syria, and attracting it requires a long time, according to economist Adham Qudaimati.
Qudaimati argues that currently, if specific support for currency printing does not reach Syria, it cannot print its currency internally as this would be costly. At the same time, he points out that printing it abroad has future repercussions.
While printing the Syrian currency in Europe may provide some quality and confidence benefits, there are significant challenges associated with national sovereignty, economic policies, and sanctions that need to be considered.
Any type of cooperation of this nature requires a comprehensive and strategic study of financial economic policies, taking into account all influencing factors.
One of the main motivations for printing the Syrian currency in Europe is the scarcity of sufficient expertise for local currency printing and the lack of printing machines and equipment in Syria.
Adham Qudaimati, Economic expert
Qudaimati believes that one of the primary motivations for printing the Syrian currency in Europe is the lack of sufficient expertise for currency printing locally, as well as the absence of printing machines and equipment in Syria.
However, the determination of the printing authority is made through studying the offers submitted and examining the political stance of each country, in his opinion.
He added that external printing is an inevitable step for a certain period, considering Syria’s exclusion from the global financial system, and this should be accompanied by joint studies from the Syrian state and the state that prints its currency to ensure a unified study for both parties to provide the service correctly and to issue specific quantities of currency, as it is an emergency situation.
He further explained that European countries have substantial experience in printing currency, as they print their currency internally, and this expertise is essential and necessary for the Syrian currency printing file.
Printing local currency domestically is a strategic step that enhances national sovereignty, supports the economy, and improves the level of security and confidence in the currency.
It also contributes to developing the cultural identity and enhancing financial independence, rendering it a vital element in stabilizing and growing the national economy.
The shape of the agreement
Undoubtedly, printing the local currency of Syria outside the country will require establishing an agreement based on thorough study and multiple strategic considerations. The cooperation between Syria and the country printing its currency is a fundamental element for the success of the process and achieving the economic goals sought, with an emphasis on security and quality.
Economist Qudaimati stated to Enab Baladi that printing currency outside Syria should be subject to conditions, the most important of which are that this file should not be used as a pressure tool on successive governments in Syria, followed by the cost of printing it, as well as the quality and difficulty of counterfeiting and manipulation; these are conditions that must be considered to reach a correct agreement.
Qudaimati dismissed the possibility of any agreements being signed regarding printing the Syrian currency abroad, as this requires a degree of stability for the Syrian economy and a knowledge of the true value of the Syrian currency to commence printing. During this period, which may last a year or more, the proposals from various countries are studied, and this aspect is left to those responsible at the Central Bank and the Ministry of Finance.
He continued that the agreement should include essential conditions agreed upon by both sides because the matter concerns the economy of an emerging state. Any flaw in printing the currency and supplying it to Syria, including the volume of printing, would generate future economic problems, thus, conditions and terms should be studied appropriately.
The contract for printing the paper currency is a contract with a national dimension for those who will receive the currency and a commercial one for those commissioned to print.
Abed Fadliah, Professor at the Faculty of Economics at Damascus University
Dr. Abed Fadliah views that the contract for printing the paper currency is a contract with a national dimension for those receiving the currency, and a commercial one for those tasked with printing.
Denominations of currency: Between proponents and opponents
Regarding the change in the denominations of the printed Syrian currency, experts disagree between those advocating for larger denominations than those currently in circulation and those opposing it.
Dr. Abed Fadliah believes that the previous Syrian government did not consider printing larger denominations than the 5,000 pound note an important issue, as the problem with the low value of the largest denomination is that citizens are forced to use a lot of notes to pay for ordinary items, leading to the rapid deterioration of the currency.
Economist Adham Qudaimati has a different opinion; he believes that the currently circulating Syrian currency sufficiently meets the demand to a certain degree, and it is possible to maintain the current currency form and denominations for a while, and to print new currency with new denominations. No one advises printing larger denominations like the 10,000 pound note as this exacerbates inflation.
He indicated that when printing currency, a corresponding amount of cash should be withdrawn, and the remaining denominations should be sourced from Russia in Syrian banknotes for circulation. He noted that the previous regime issued large denominations without studies or data, which plays a significant role in determining the currency’s value; therefore, the Ministry of Finance needs to conduct studies to rectify the imbalance.
The Central Bank of Syria had proposed the new cash denomination of 5,000 pounds to be circulated alongside other currently circulating denominations since January 24, 2021.
In the past period, the Central Bank of Syria relied on a liquidity-tightening policy, achieving a false increase in the value of the pound, a policy that leads to a shortage of available cash in the markets, whether in the hands of individuals or companies or even banks.
History of printing Syrian currency
Until the mid-1950s, the Syrian paper currency was not independent from the Lebanese paper currency; both countries used the same currency, which was printed in France as an extension of the French occupation period, according to Dr. Abed Fadliah, a professor at the Faculty of Economics at Damascus University.
Fadliah added that after the separation of the two currencies, Syria began to print its currency in European countries, including Austria and Switzerland. After 1970, Syria’s currency was primarily printed in the Soviet Union and later in Russia, where it continues to be printed to this day.
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