How to fight the financial crisis: Print your own cash
Web posted at: 3/9/2009 6:52:58
Source ::: AFP
BERLIN: As stock markets plunge, nations slide headlong into recession and currencies swing wildly, a Bavarian community has come up with a novel way to fight the economic crisis: print your own money.
In the region of Chiemgau, near the southern German city of Munich, the local currency—the Chiemgauer—has been a roaring success since its introduction in 2006 and shows no sign of losing ground to the economic crisis.
“On the contrary, enthusiasm for the project is growing,” Christian Gelleri, the project’s founder, told said. “I think people in the region on the whole are more positive than people in the rest of the country.” The brightly-coloured notes, in denominations of one, two, five, 10, 20 and 50 Chiemgauer, can be obtained at 42 exchange zones around the region and used in 600 local businesses.
The exchange rate with the euro is currently one-to-one, but “the possibility exists to alter the exchange rate if the euro runs into difficulty,” Gelleri said.
Each time a consumer exchanges money, three percent of the amount exchanged goes to support a local project of the consumer’s choice. A wide variety of projects and non-profit organisations have benefitted locally, including nature protection agencies, music schools, rowing clubs, charities and churches. Gelleri said a local sports club was built partially with proceeds from the Chiemgauer exchanges.
Businesses like the scheme as well, as it ensures customer loyalty and encourages use of local produce. “Food shops prefer apples from the region because they can spend their Chiemgauer with local farmers,” Gelleri said.
Alexander Jaeger, a furniture salesman in the region, said: “For me, it is a way to ensure my customers keep coming back and I definitely have more clients with the Chiemgauer.”
He said roughly a fifth of his turnover was now conducted in the regional cash. The currency is one of 28 such schemes throughout Germany and Austria but few has seen such spectacular growth as the Chiemgauer.
From its humble beginnings in 2003 with 130 consumers, 100 local firms and five local projects, the scheme now boasts nearly 2,000 regular users of the money, spending the cash in 600 business and supporting 200 projects.
In the five years since the scheme was introduced, 2.8 million Chiemgauer have been exchanged. Over 300,000 Chiemgauer are now in circulation.
Unlike orthodox currencies, the Chiemgauer has a limited shelf life, expiring after a year. In addition, it loses two percent of its value every three months.
This encourages consumers to spend their Chiemgauer quickly, ensuring the money does not stagnate and keeping the “Chiemgauer economy” ticking along, Klaus Kopp, vice director of the Chiemgauer association said. Other examples of so-called complementary currencies include the Berkshares and “Ithaca hours” in the US and the Totnes and Lewis pounds in Britain.
Gelleri is realistic about the prospects for the project: there is no chance of the Chiemgauer taking the place of the euro, nor does he believe the introduction of a local currency can fully shield a community from the tumult on the global financial markets.