Alternatives now gain growing currency in Europe

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The Berliner bills.
The Berliner bills.

Locally printed notes create a parallel economy of sorts

BERLIN: A euro 10 currency note buys a fine organic Riesling at the wine shop in Berlin's bustling Kreuzberg area. Or, as some regular customers do, you can hand the cashier something else: 10 locally printed Berliners.

Same goes for a jar of cinnamon honey, euro 4.20 or 4.20 Berliners, at the organic grocery upstairs, and for an espresso, euro 2.30 or 2.30 Berliners, across the street at the Cafe V vegetarian cafe, with its red ceiling, old chandelier and pipe-smoking clientele. The Berliner, issued by a local environmental group, is one of around 20 local currencies that have begun circulating over the past five years in Germany. Concern about the impact of globalisation and distant multinational corporations on their communities and locally owned businesses is one of the motivations behind making local money that will stay at home, activists say.

About 10,000 Berliners have been issued printed by the Bundesdruckerei, the privatised former state printer, which also produces euros for Germany and they are accepted in 190 Berlin shops, many of them in Kreuzberg, a stronghold of Berlin's counterculture and the environmental Greens Party.

The principle behind a neighbourhood currency is that it will be spent to support locally owned businesses and strengthen the community, said Suzanne Thomas, who leads the volunteer-run Berliner project. "My outlook would be that you should obtain as many of the things you need every day from the local region, because if I have small shops in the street where I live, this adds to the quality of life," she said. "I can walk out the door and get what I need and not drive to some super shopping centre."

She said the currency is not a protest against the euro notes and coins, which some people blame for higher prices on some goods and services after they were introduced in 2002: "We think you should have both in your pocket, euros and Berliners."

The practice of locally issuing micro-currency has been catching on in Germany since 2001, when the Roland was issued in Bremen. It has been joined by the Carlo in Karlsruhe, the Cherry Blossom in Witzenhausen, and the Chiemgauer in Bavaria's Chiemgau region; others have popped up in Basel, Switzerland and in Schrems, Austria.

The practice is not new. Alternative or counterculture communities such as the Christiania hippie enclave in Copenhagen and the Damanhur group outside Turin, issued their own money years ago. The website lists currencies meant to be used alongside national currencies the world over.

In Germany, local notes equal to euro 300,000 (about Rs. 1.7 crore) have been issued, according to an association of regional currency issuers infinitesimal compared to the amount of euros in circulation and so small that it can't affect the euro's value, the Bundesbank says.

Even "multi-culti," green Kreuzberg is not exactly awash in Berliners. At the Cafe V, owner Inci Cemil, 25, said the cafe might take in 10 Berliners a day.

The Berliner is issued by the Gruene Liga, or Green League, environmental organisation, at the wine shop, a cafe, a church, and a local alternative school. One Berliner costs one euro, and the League keeps the euros in the bank so shops that get Berliners from customers can turn them in for euros.

But the shops get only 95 cents back for each Berliner: 3 per cent goes to local causes . Two per cent funds a slightly better exchange rate to spur people to buy larger amounts of Berliners such as 50 or 100.

A key feature of such regional currencies is that it expires after six months and can be exchanged for a new one but minus 2 per cent. That pushes people to spend it quickly and give an added kick to the local economy.

That idea, dubbed "schwundgeld," or "depreciation money,' is based on the writings of Silvio Gesell, a German social and economic theorist who died in 1930. A 2006 analysis for the Bundesbank argued that the schwundgeld idea is flawed and that the local currencies are economically inefficient.

Nonetheless, the Bundesbank said the local notes do not violate German law so long as they are not intended to replace legal currency and don't look like a banknote.

People use the community-issued currency to support a cause, Gerhard Roesl of the Regensburg University of Applied Sciences wrote in his 63-page Bundesbank analysis. "These currencies offer a chance for the holder to demonstratively support the local region and to make a statement against globalisation." AP



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