The eurozone crisis - a remedy
The eurozone crisis - a remedy
The Greek electorate – after two years of drastic austerity measures – has voted clearly against the cuts, the bailout and the political mainstream. Chaos in the eurozone seems one step closer. So we take this opportunity to outline how just one of the proposals from this book can be applied now, in Greece, Spain or any other country facing this kind of crisis. It’s a solution that mainstream financiers and media avoid discussing, but it’s elegant and simple. It would work, and the necessary (Open Source) software is available now.
Current monetary orthodoxy says that 100% of the Greek (or any other) economy must be either ‘in’ or ‘out’ of the eurozone. Everybody knows that either option will entail even higher unemployment and yet more misery. But it doesn’t have to be that way! The core principle of complementary currencies, as set out here, is that they run alongside the main currency, increasing resilience and flexibility for the entire socio-economic system. Here’s our systemic solution in a nutshell:
Greece continues to use the euro for all international business: tourism, shipping, exports and imports, etc. Taxes are levied in euros on profits made in these activities, and used to service the country’s national debt.
In addition, any Greek city/region wanting to participate issues its own local currency (generically called ‘Civics’ in the case study in chapter 8). Civics are used to pay for important local social and environmental programmes. In our example, 1 Civic is issued to anyone who completes 1 hour of approved service to the community. Projects for which Civics are paid should be decided democratically and locally.
The issuing city/region requires payment from each household of, for example, 10 Civics per quarter.
Households that have not earned enough Civics can use an online (eBay-style) market to buy them with euros – or any other agreed good or service – from those that have earned more than they need.
Civics exist only in electronic form, issued by the city/region, using mobile phones as a payment mechanism (as happens in Indonesia, S. Africa and Kenya now). So Civics are 100% traceable and their use is transparent.
A new type of non-profit organisation will audit the validity of the Civics in circulation.
There is no fixed Civic:euro exchange rate. This is determined in the online market. To increase the value of its Civic, a city simply requires more of them from each household. As the local economy recovers, this number can be reduced, and could even drop back to zero when full employment is reached.
This approach allows the Greek economy to retain the benefits of the euro, while the Civic helps each community solve its own social and environmental problems, while mobilising every household (with appropriate exceptions for disability) to participate.
(A business-to-business currency called C3 – see chapter 7 – could also inject working capital into small businesses and accelerate the recovery of mainstream jobs paid in euros. Similar approaches could be used in other European countries struggling with the consequences of current austerity programmes.)
Bernard Lietaer, Christian Arnsperger, Sally Goerner, Stefan Brunnhuber
(Extracted from Money and Sustainability: The Missing Link by Bernard Lietaer, Christian Arnsperger, Sally Goerner and Stefan Brunnhuber – published by Triarchy Press:
Money and Sustainability: The Missing Link by Bernard Lietaer, Christian Arnsperger, Sally Goerner and Stefan Brunnhuber was published by Triarchy Press in 2012. Visit:
More about the book:
The Eurozone Crisis
People Money: The Promise of Regional Currencies