CRH Plc, Ireland’s biggest company, is making contingency plans for a possible breakup of the euro as the debt crisis crimps sales growth in the region.
While countries leaving the euro was “hopefully unthinkable,” the Dublin-based supplier of building materials is making preparations “as any responsible company should have in place,” Chief Executive Officer Myles Lee said.
“As the market concerns about the euro zone intensified, we have seen that like-for-like sales growth moderating through the back end of the year” in the euro region, he said in an interview with Francine Lacqua on Bloomberg Television.
European leaders begin talks today to frame the fifth “comprehensive” solution in 19 months to the region’s debt crisis that led Ireland to seek an international bailout last year. Germany expressed pessimism about the outcome of the talks, which are scheduled to finish tomorrow.
Last month, Lee said he expected the fourth quarter to be flat this year rather than showing an improvement as the debt crisis affects investment. Europe accounted for 58 percent of CRH’s 8.2 billion euros ($11 billion) of first-half sales.
“We are hoping the summit over the next few days will provide some more concrete solution to the issues,” Lee said. “We’re concerned that if the European authorities don’t get ahead of markets on this that it could have a negative effect on demand in the eurozone in 2012.”
The European Central Bank cut interest rates today for a second straight month, to try to fend off a recession. ECB policy makers meeting in Frankfurt lowered the benchmark interest rate by a quarter percentage point to 1 percent to match a record low.
Ireland’s Central Bank today declined to comment on a Wall Street Journal report that it is considering whether it may need to acquire further printing capacity in case the euro collapses or the country exits the currency and reverts to punts.
“We are not printing punts or any other currency,” said Nicola Faulkner, a spokeswoman for the central bank, without referring to the article. “We are only printing euros.”