c'mon baby light my feu
18-01-2007, 11:05 AM
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/18/cneuro18.xml
Germans get by without the euro
Last Updated: 1:42am GMT 18/01/2007
There will soon be 65 regional currencies in operation alongside the
EU's, but the financial authorities are not worried yet, writes Ambrose
Evans-Pritchard
# Comment: UK's standoffishness on euro looks better than ever
If you live in the Bavarian region of Chiemgau, you can exist for
months at a time in a euro-free zone of hills and lakes with a
population of half a million people. Restaurants, bakeries,
hairdressers and a network of supermarkets will accept the local
currency: the Chiemgauer.
Notes are exchanged freely like legal tender. You can even use a debit
card. Petrol stations are still a problem, but biofuel outlets are
signing up. Dentists are next.
Map of German and Austrain regional currencies
Map of German and Austrain regional currencies -click to enlarge
The Chiemgauer is one of 16 regional currencies that have sprung into
existence across Germany and Austria since the launch of the euro five
years ago.
Another 49 regios are in the pipeline. They are outside the control of
the political authorities, mostly run by activists, farmers,
eco-enthusiasts, anti-globalists, and citizen committees.
Some are rural, others circulate like underground money in Berlin and
Bremen. Hamburg has two: the Alto and the Hansemark. Italy has its
version in the Valchius Valley, in the Alps.
The phenomenon, not seen since the Great Depression, has left experts
scratching heads at the Bundesbank. The mighty reserve bank, which
issues euro notes and coins worth €146bn for a third of the eurozone
economy, is relaxed about the risk of monetary anarchy. But it is
sufficiently puzzled to publish a 63-page report probing the eruption
of this movement.
Entitled "Regional Currencies in Germany, Local Competition for the
Euro?", it concludes that the tiny scale of this bizarre Schwundgeld -
scrip, or specie - poses no threat to the orderly management of the
euro system.
The rise of the regios dates exactly from the abolition of the D-Mark,
replaced in turn by a stateless technocrat currency ever further
removed from local life.
A pure coincidence, said Prof Gerhard Rösl, author of the Bundesbank
paper. "The assumption that this springs from a general scepticism
towards the euro is not valid."
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Rather, the movement is a rejection of "capitalist globalism", pushed
by idealists fighting to save regional cultures. The currencies are
"luxury" scrip that flourish most in areas with the lowest
unemployment. They offer users a "prestige gain" in their
neighbourhoods, and a glow of good feeling.
School teacher Christian Gelleri launched the Chiemgauer, with the help
of pupils, as an experiment in January 2003 at a rate of 1:1 against
the euro.
Four years later, it spans two districts and is accepted by 550 shops,
firms, and companies, including eight supermarkets and four
co-operative banks. It has 40 issuing offices, and usage is expanding
by 70pc a year. Monthly turnover is still a miniscule €135,000
(£88,000) - or rather C135,000.
"People have taken to it because it is a way of supporting good
causes," said Mr Gelleri.
The Chiemgauer is designed to lose 2pc of its value every quarter,
generating a profit for the issuing body as shops claim back the euros.
Some 60pc of the profit is used for local charities, sports clubs,
kindergartens and such.
Shops accepting the money take a loss of up to 5pc, akin to interchange
fees paid when credit cards are used. "Merchants pay the cost, but they
go along because they don't want to lose business," said Mr Gelleri.
The idea stems from the century-old writings of Silvio Gesell, a German
economist who believed that interest and rent charged on capital is
pernicious. He argued that usury aggravated economic downturns because
the wealthy began to horde cash.
Austria's Tyrolean community of Wörgl launched a scheme based on his
theories, in 1932, reputed to have slashed unemployment at the height
of the Depression. It was watched by Keynes and Irving Fisher, who saw
a fast-depreciating currency as a possible answer to the 1930s
"liquidity trap".
"I came to the idea by studying Keynes and Fisher, but for us it is
more a way to build regional strength. We're not enemies of Europe,"
said Mr Gelleri.
The Wörgl experiment was declared illegal by Austria's central bank
when a further 200 other communities launched copycat currencies,
threatening the authority of the state. Though article 35 of the
Bundesbank's founding law forbids the circulation of
"quasi-currencies", the experiments are being treated as a harmless
eccentricity.
However, they are a remarkable expression of people power, and a subtle
threat to the established order. Would they be sprouting with so much
energy if the Germans still had the D-Mark in their pockets? One
suspects not.
Germans get by without the euro
Last Updated: 1:42am GMT 18/01/2007
There will soon be 65 regional currencies in operation alongside the
EU's, but the financial authorities are not worried yet, writes Ambrose
Evans-Pritchard
# Comment: UK's standoffishness on euro looks better than ever
If you live in the Bavarian region of Chiemgau, you can exist for
months at a time in a euro-free zone of hills and lakes with a
population of half a million people. Restaurants, bakeries,
hairdressers and a network of supermarkets will accept the local
currency: the Chiemgauer.
Notes are exchanged freely like legal tender. You can even use a debit
card. Petrol stations are still a problem, but biofuel outlets are
signing up. Dentists are next.
Map of German and Austrain regional currencies
Map of German and Austrain regional currencies -click to enlarge
The Chiemgauer is one of 16 regional currencies that have sprung into
existence across Germany and Austria since the launch of the euro five
years ago.
Another 49 regios are in the pipeline. They are outside the control of
the political authorities, mostly run by activists, farmers,
eco-enthusiasts, anti-globalists, and citizen committees.
Some are rural, others circulate like underground money in Berlin and
Bremen. Hamburg has two: the Alto and the Hansemark. Italy has its
version in the Valchius Valley, in the Alps.
The phenomenon, not seen since the Great Depression, has left experts
scratching heads at the Bundesbank. The mighty reserve bank, which
issues euro notes and coins worth €146bn for a third of the eurozone
economy, is relaxed about the risk of monetary anarchy. But it is
sufficiently puzzled to publish a 63-page report probing the eruption
of this movement.
Entitled "Regional Currencies in Germany, Local Competition for the
Euro?", it concludes that the tiny scale of this bizarre Schwundgeld -
scrip, or specie - poses no threat to the orderly management of the
euro system.
The rise of the regios dates exactly from the abolition of the D-Mark,
replaced in turn by a stateless technocrat currency ever further
removed from local life.
A pure coincidence, said Prof Gerhard Rösl, author of the Bundesbank
paper. "The assumption that this springs from a general scepticism
towards the euro is not valid."
advertisement
Rather, the movement is a rejection of "capitalist globalism", pushed
by idealists fighting to save regional cultures. The currencies are
"luxury" scrip that flourish most in areas with the lowest
unemployment. They offer users a "prestige gain" in their
neighbourhoods, and a glow of good feeling.
School teacher Christian Gelleri launched the Chiemgauer, with the help
of pupils, as an experiment in January 2003 at a rate of 1:1 against
the euro.
Four years later, it spans two districts and is accepted by 550 shops,
firms, and companies, including eight supermarkets and four
co-operative banks. It has 40 issuing offices, and usage is expanding
by 70pc a year. Monthly turnover is still a miniscule €135,000
(£88,000) - or rather C135,000.
"People have taken to it because it is a way of supporting good
causes," said Mr Gelleri.
The Chiemgauer is designed to lose 2pc of its value every quarter,
generating a profit for the issuing body as shops claim back the euros.
Some 60pc of the profit is used for local charities, sports clubs,
kindergartens and such.
Shops accepting the money take a loss of up to 5pc, akin to interchange
fees paid when credit cards are used. "Merchants pay the cost, but they
go along because they don't want to lose business," said Mr Gelleri.
The idea stems from the century-old writings of Silvio Gesell, a German
economist who believed that interest and rent charged on capital is
pernicious. He argued that usury aggravated economic downturns because
the wealthy began to horde cash.
Austria's Tyrolean community of Wörgl launched a scheme based on his
theories, in 1932, reputed to have slashed unemployment at the height
of the Depression. It was watched by Keynes and Irving Fisher, who saw
a fast-depreciating currency as a possible answer to the 1930s
"liquidity trap".
"I came to the idea by studying Keynes and Fisher, but for us it is
more a way to build regional strength. We're not enemies of Europe,"
said Mr Gelleri.
The Wörgl experiment was declared illegal by Austria's central bank
when a further 200 other communities launched copycat currencies,
threatening the authority of the state. Though article 35 of the
Bundesbank's founding law forbids the circulation of
"quasi-currencies", the experiments are being treated as a harmless
eccentricity.
However, they are a remarkable expression of people power, and a subtle
threat to the established order. Would they be sprouting with so much
energy if the Germans still had the D-Mark in their pockets? One
suspects not.