Category Archives: Practices

Eurocat: Interest-free money to finance Catalan small businesses


This event took place on 04th April 2014 at PIMEC, Barcelona with the aim to present Euro-cat, a new complementary currency which will start working in June all over Catalonia (Spain).

The first speaker who appears after welcome greetings was Ernest Maragall, Vice president of the Fundació Catalunya Europa, who gave the presentation titled “Money and bank: cause or effect of the crisis?”. He started by mentioning that the productivity growth in the US in the last 20 years doesn’t correspond to the median family income, showing that employees in Spain are less paid than European average in terms of the compensation and in the US the percentage of top 10%’s income has increase from 35% to 50% between 1982 to 2007.  He argued that the concentration of the wealth created the bubble and therefore the crisis, criticising the cowardness, spider web effect and the lack of regulation.  He also presented that Germany improved its commercial balance while Spain worsened it after euro was introduced and finished by underlying the importance of regulations and institutions.

The second speaker was Marcel Coderch i Collell, former vice president of the CMT and an Eurocat promoter, who told about “What is money? Where does it come from?”. He started by quoting the phrase of Mayer Amschel Rothschild, founder of the Rotschild family: “Let me issue and control a nation’s money and I care not who writes the laws” and that of Henry Ford: “It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning,” implying the currenet system’s unfairness. His presentation was based on the two books: “Where does money come from?” and “Modern Money Theory,” said that the Bank of England has just published two reports, i.e.: “Money in the modern economy: an introduction” and “Money creation in the modern economy” in which it admitted that most money is created as debt, accentuating also the fact that the commercial banks decide which projects will be financed and criticising the current trend to insist on slashing government debts.

Then followed Jordi Griera Roig, co-founder of the Instituto de la Moneda Social (Social Currency Institute) and president of the Fundación INEVAL, which showed the words of Joan Casals (1925-1998), co-founder of PIMEC and former president of Ecoval, as he foresaw that the fiscal separation between the North and South of Europe would churn out unbearable tensions into the Euro due to the diference in productivity, just as what has happened.  He also told that neither the European Central Bank nor the Bank of England has the goal to make monetary policies serve to reduce unemployment while the Federal Reserve in the US does have it as main goal and therefore US has decreased the unemployment while Europe has increased it.

After the pause came Bernard Lietaer, global expert on social and complementary currencies based in Brussels (Belgium), who gave his lecture titled “Economic Crisis and Regional Initiatives”. He started by summarising the contents of his book “The Future of Money” and addressed the current four challenges of “Aging wave“, “IT revolution“, “Climate change and destruction of biodiversity” and “monetary unstability.” He highlighted the importance to balance between the efficiency and resilience (diversity) in the ecosystem, applying this idea also to the monetary system, proving that the financial system is structurally unstable with the excessive number of crises which have taken place in the last few decades in the world.  He presented the case of WIRBank (the Switzerland) which works to balance small businesses (trades in WIR increase when the Swiss Franc economy stagnates and vice versa) and finished by comparing the patriarchal societies of competitive economy with the single currency with matrifocal socieities of cooperative economy with parallel currencies.

And finally, the new Catalan currency Euro-Cat was presented by Susana Martín Belmonte, author of the book “Nada está perdido(Nothing is lost)” and an Euro-cat promoter, and Fèlix Simon Paraiso, president of the Plataforma Vegueria Penedès and an Euro-cat promoter. Each business which enters the system will have a credit line and the balance increases and decreases as it sells and buys.  Individuals are also welcome to join the system and will change euro into Euro-cat to spend it at local businesses.  The fundamental difference between loans in euro and credit lines in Euro-cat is that the former ones need to be repaid in euro while the credit line can be settled by offering equivalent goods and/or services.  Although Euro-cat will work all over Catalonia, eight territorial networks will be set up to strengthen regional economic activities.  Founding members are accepted up to 04th May and then a work will be done to reach the consensus on the definition among these participants about different aspects before the official launching, plannedfor June.

Commemorative Congress on the 10th anniversary of Chiemgauer (Upper Bavaria, Germany)


A congress in commemoration for the 10th anniversary of Chiemgauer took place from 03rd to 05th May 2013 and at Traunstein, Upper Bavaria, Germany. Some 200 people joined from different parts of Germany, Austria, France, Hungary, Italy, Japan, Spain (me) and the Switzerland to discuss on complementary currencies.

Chiemgauer started in January 2003 as an initiative at a Waldorf school (a private school under its own educational guideline proposed by the anthroposopher Rudolf Steiner) and is an euro-backed currency. Each one chooses a social or environmental project on becoming a member, exchanges euro into this regional currency in parity (100 € > 100 Chiemgauer), pays at local businesses which accept Chiemgauer and 3% of his/her expenditure goes to this social or environmental project. Businesses can spend it at other local businesses or redeem euro with 5% of commission (100 Chiemgauer > 95 €) and the non-profit Chiemgauer pays its administration costs with the rest of 2€. This regional currency works at two counties (Landkreise) of Rosenheim and Traunstein, on top of the Rosenheim City which is out of the homonymous county, and 651 local businesses and 262 projects join this system, with 703,332 Chiemgauer in circulation (as of May 2013). Its statistics say that in 2012 there were 2,573 consumers, the member businesses’ annual turnover is 6,452,279 Chiemgauers, e55,934 € was donated to social projects and this social currency circulates 11.22 times per year, in other words 2.78 times quicker than euro, stimulating the regional economy.

The congress started with the presentation by Christian Gelleri, Chiemgauer’s founded, titled as “Chancen und Grenzen” (Chances and Limits). He made clear that by using this complementary currency members want to “determine democratically about the money”, “give money its homeland”, “keep money in circulation” and “money to promote dialogue and actions”, with the aim to achieve the “consciousness on the money and the economy”, “as much value creation as possible as far as they correspond to our needs and the Mother Nature allows us” and “as much donation as possible to the culture, to the education and to the art”. He showed the message by the Horst Köhler, former President of the Federal Republic of Germany, who evaluates positively Chiemgauer, as “such regional currencies allow people to see the money system as something significant of our social environment and of our homeland”, and this former head of German state underlines too the fact that people learn the origin of money and that the environmental and social sustainability should be much more easily visualized. Then he pointed out seven limits and seven chances.


• Emotionality of money (people’s fear to touch the money issue)
• Mist on the money (the lack of understanding on its true function)
• Bureaucracy and old laws
• Gap between theory and practice
• Critical mass
• Power and resources
• Infulence of the huge system (euro etc.) on the small ones


• De-emotionalisation of the money
• Demands, as customers rule
• Use of Chiemgauer “All the members live Chiemgauer”
• Partial payment of salary in regional currency
• Synchronisation of the donation with regional currencies
• Creative management of the regional currency
• Introduction of Chiemgauer in crisis-hit regions

The Day 2 (Sat, 04th May) started with the keynote speech by Dr. Prof. Margrit Kennedy, author of important books on the money, such as “Inflation and Interest-free Money”, “People Money” and “Occupy Money”. Her presentation, titled as “Euro and Chiemgauer: An almost objective comparison between two different brothers”, began with showing five unsustainable aspects of our current money system, i.e.:

• It creates economic booms and busts
• It churns out short-term-minded thoughts
• It requieres endless growth
• It concentrates the wealth
• It smashes the social capital

And then she showed six solutions for the current crisis on the basis of recently published books.

1. Canncellation of debts (such as Jubilee), by US professors Michael Hudson and David Graeber
2. Abolition of euro and restoration of money sovereignty for each Eurozone country (Prof. Joachim Starbatty)
3. Chicago Plan and “Full Money” (by International Monetary Fund and many others): to allow financial institutions to give new credits only when they have the same amount of cash reserve.
4. Complementary currencies in permanent circulation in harmony with the environment (Charles Eisenstein)
5. How can we set ourselves free from our understanding on the property and money and, among others interest (Christian Kreiß)
6. The introduction of complementary currencies can solve social, ecological and cultural issues without new taxes nor laws (Bernard Lietaer, Christian Arnspenger, Stefan Brunnhuber and Sara Goerner)

Another important fact illustrated by this professor is that, had the Article 25 of the French Law of 03rd January 1973 on the Banque de France not been put into effect, the French government would have saved 1.306 trillion euros for interest payment and that the percentage of public debt in France would be ony 8.3% of its GDP, on top of another graphic to show the correlation between the exponential growth of goods and debts in the public sector, private businesses and individuals.

Dr. Prof. Kennedy highlighted the importance to implement complementary currencies at different levels (local / regional / national / international / global) and for different goals (timebanks for the elderly care, health currency, educational currency and energy currency), telling the experiences of WIRBank (Switzerland), RES (Belgium and Catalonia (Spain)), social currency at Gent (Belgium) to help immigrants cultivate urban farms and that of Zurich (the Switzerland) for a farmers’ cooperative. She also explained the difference between the demurrage currency (a family with 6,000 € of cash at hand loses 300 € per year) and the inflation (a family with 200,000 € of saving loses 10,000 € per year in case of 5% of inflation) and she proposed the application of the Chiemgauer model to implement a national currency in countries such as Greece and Spain on the basis of euro reserve (see here the proposal) . And she concluded by showing the difference between complementary and conventional currencies:

Complementary currency / Conventional currency

  • Generates (social) utillities / Generates (monetary) profits
  • Limited use / Universal usl
  • Charges fees / Charges interests
  • Transparent creation / Not transparent creation
  • Strengthens communities / Weakens communities
  • Softens inflations / Stimulates inflations
  • Backed with services / Backed with properties
  • Benefits for everybody / Benefits for 10% of the population

Then four parallel workshops took place, i.e.: “Regional Currencies and Banks”, “Post-Growth Economy”, “Chiemgauer for Beginners” and “the Miracle of Wörgl”. I was at the Post-Growth Economy where Nico Paech, from Ossietzky Oldenburg university, criticised the general view on the Green economy which optimistically thinks that technological innovations will solve all environmental and economic issues, questioning the conventional paradigm of the obligation to the growth and suggesting the post-growth economy as that of sufficiency, subsistence, regional economy, “new” production and institutions. He also showed the fact that the need to work more hours diminished the time available for consumption (Why do you work more and earn more if you have no time to spend?) and proposed the transition from large production chains (global and commercial economy) to the subsistence (local and non-commercial economy) and to prosumers’ economy.

In the afternoon eight workshop took place, four just after the lunch and other four subsequently. The first four were titled: “Regional currency and tourism”, “The euro crisis”, “Diversity of money instead of monoculture” and “Chiemgauer for the advanced”. I was at the diversity session where Mr. Franz Jansky mapped different initiatives in Germany and some neighbouring counties (Austria, Luxembourg, Netherlands and the Switzerland). An interesting tendency was observed that in the former East Germany, impoverished regions where many Neonazis emerge, the non-euro-backed model is prevailing, perhaps due to the lack of euro while in Upper Bavaria, another affluent region with many experiences, the regional currencies tend to be backed with euro. He also warned that an adequate language should be used to avoid the misunderstanding that complementary currencies have racist goals in regions with many Neonazis.

And later other four sessions took place: “regional currency and communities”, “regional currency as a social innovation tool”, “rethink the economy for a new economic culture in businesses and society” and “Momo, Faust and Co., Vision of a better money in arts and literature”. I was at the session of social innovation where Dr. Prof. Margrit Kennedy answered different questions in this respect, such as: the crisis can stimulate the promotion of social currencies (ex.: Barter clubs in Argentina), the social bond is needed to create the trust to the social currency, it is necessary to involve appropriate stakeholders to promote social currencies and that it’s necessary to learn from experiences in other countries (Brazil, Japan and New Zealand), among others.

The conference finished with another presentation by Niko Paech which talked once again on the Post-Growth economy. He explained that the current consumerist society, based on the looting of natural resources, is unsustainable due to the time limit (today I own and later I’ll pay), to the physical limit (such an economy is possibly only because of energy waste) and to the space limit (global production chain). He underscored the importance of sufficiency (the sustainability deficit without welfare trigger impoverishment) and of subsistence (environmental damage by the external supply cannot be eliminated by its own systemic logic). He explained the obligation to grow from the supply’s viewpoint (the necessary amount of surplus increases as the specialised production chain is advanced) and from the demand’s one (the idea of freedom is quite closely related with the permanent increase of material realisation) and he showed proposals for both aspects (for the supply setup of cooperatives, monetary reform and reduction of the financial need and for the demand: soften or turn off the driver for consumption).

A very interesting fact that I’d like to highlight is the strong regional identity which seemed to have a lot to do with complementary currencies in my opinion: at Upper Bavaria (especially at the Alpine region between Munich and Salzburg) people are really attached to their land and some hotels and restaurants have employees in traditional costume. It’s true that the natural beauty if this region is impressive and it’s quite natural that locals should be proud of their land. In Spain where I currently live, Catalonia and Euskadi (“Bask Country”) have more social currencies than others, perhaps also due to people’s strong identity with the land, although culturally these places are different (Bavarians are very conservative while Catalans and Basques tend to be innovative, in my opinion).

It might be true that the identity plays an even more important role than people’s orientation for social innovation in terms of the implementation of complementary currencies: In Germany Berlin is known to be the place with many people into alternatives, but there complementary currencies don’t work because of the lack of local identity. I thought that people’s political tendency had a lot to do with the success of complementary currencies, but it seems like the local identity is more important…

A video on solidarity economy (with English subtitle)

I’ve just added the English subtitle to a video produced in 2006 in Brazil about solidarity economy.

Move the pointer to CC just below the movie and select English to read the subtitle in English.  You’ll see the basic ideas on this alternative economy…

WIRBANK: a Swiss initiative to help small businesses

Some people do misunderstand that local currency and other initiatives aren't for the business world: the WIRBANK(in German, French and Italian) in the Switzerland, founded in 1934, has been quite successful to help small businesses by offering them cheap loans in its own complementary currency called WIR("we" in German).

The bank was created precisely in times when the Swiss were still suffering from the huge impact triggered by the Great Depression. Several people who already knew Gesell's idea of "Freigeld"(free money) gathered to set up a clearing circle which later would evolve into a cooperative bank. People used WIR instead of Swiss Franc(CHF) as their means of exchange since the conventional money's circulation wasn't enough. Although WIRBANK gave up sticking to Gesell's original idea of demurrage in 1948, it still serves for trades among small businesses in the Switzerland.

As a rule only small businesses can join this cooperative. They use WIR(equivalent to CHF) in parallel with CHF on trading with other WIRBANK members(for instance, WIR 30 + CHF 70). They can also enjoy loans in WIR whose interest rate is lower than in CHF because WIRBANK can create WIR by itself while it has to borrow from the central bank with the burden of official rate, and it can offer, for instance, 2% loan in WIR and 5% in CHF in case the official rate is 3%.

Another advantage for WIRBANK members on joining WIR is the increase of their customers: those who have WIR can't spend it to non-members(huge and/or foreign companies), so WIR members have the advantage to attract other members. In this way they make up a circle in which their purchasing power stays without flowing over the border.

A survey proves that WIRBANK balances economic ups and downs, playing the complementary role to the conventional economy(to be depicted next time). WIR members trade more in WIR when the Swiss economy is staggering while they exchange less during the boom, so they are less afraid of economic recessions. More than 70 years of their history has a lot from which we can learn…

A book on WIRBANK

Chiemgauer in Germany: A new currency to regain regional economic autonomy

The globalization which enriches only a few in the world at the cost of the vast majority gives rise to a number of counter-movements and some insightful people have found out that another currency system may give a fundamental change in our socioeconomic system. This time I would like to depict an interesting initiative in a tiny community not far from the marvelous experiment in 1930s.

Prien am Chiemsee, some 80 kms to the East from Munich, is a Bavarian resort where thousands of tourists enjoy their summer vacations along the lake Chiemsee. Christian Gelleri, teacher of economics at that time at a local high school who had learned Gesell, Wörgl and other related topics, came up with the idea to hold a curriculum to run a local currency in fall 2002. Six female students showed interest in joining this project and the Chiemgauer project took off next January.

This system was conceived to create a win-win relationship among non-profits, consumers and local businesses. Each actor has the following advantage and this means of exchange promotes local production and consumption.

* non-profits: purchase 100 Chiemgauer(=€100) at €97 and resell it to consumers at €100, therefore earning €3 to be spent for their own activities

* consumers: purchase 100 Chiemgauer at €100 and spend it at local businesses at its face value, therefore donating 3% of their consumption to local non-profits without additional expenditure.

* Local businesses: accept 100 Chiemgauer and spend it for other local businesses or redeem it into €95 paying 5% of commission. The 5% commission can be regarded as an advertisement fee and they can attract more consumers who want to help their community.

* Chiemgauer office: sells 100 Chiemgauer at €97 and pays €95 on redemption. The €2 difference is spent to cover its running cost.

It has been successfully increasing Chiemgauer users as well as local businesses’ turnover in Chiemgauer. Now 700 consumers and 380 businesses join this system, recording the annual turnover of 720,000 Chiemgauer(see here for details). It is expected to grow furthermore as the smart card is introduced, receiving more and more attention all over Germany and abroad.

A local currency to revive the local economy in Austria

Gesell’s demurrage theory is hardly told without referring to the successful historic experience which took place in the middle of the Great Depression in Wörgl, Austria. This time I’d like to show you how effectively this monetary system worked to help the economic recovery of this Tyrolean community.

This small town, like everywhere else at that period, suffered from the recession: As many as 350 people were jobless in a town with the population of only 4,216 and more than 200 had already run out of their unemployment insurance in spring 1932. The tax revenue diminished and the city hall too was on the verge of bankruptcy. Then the mayor Michael Unterguggenberger decided to issue the “labor certificate” in July 1932 as a local currency to get rid of this plight.

Bills of 1, 5 and 10 Schillings were printed and paid by the city hall as a salary for construction workers. Each bill expired every month and a stamp of one hundredth of its face value was needed to keep it valid again. That means, your €10 “labor certificate” is only valid until May 31st if you receive it today(May 09) and you need to buy a €0.10 stamp to paste on this bill if you fail to spend it by the end of this month. So bearers of this local currency were encouraged to circulate these bills rather than to hoard them, reviving economic activities in Wörgl. The average money supply of only 5,490 Schillings created more than 2.5 million Schillings of transactions during merely a bit more than one year, allowing the city hall to spend more than 100,000 Schillings for its public works and decreasing the unemployment by 1/4. There were even some people who offered to pay tax in advance(would you do so even when you were rich enough?) because they were so affluent.

This boom of parallel currency, however, frightened the central authority in Vienna and Wörgl had to stop the circulation of this wonderful currency in September 1933: but this success was reported in different media and has been proving how effective Gesell’s theory is. Now the Unterguggenberger Institute has been working to collect related materials as well as promoting the contemporary local initiative “I-motion”, receiving many visits of those who work for “Regio”(regional currencies, to be presented next time) practices in Germany.

Banca Etica: a bank for social and eco-friendly projects

This blog is not only to harangue my theoretical framework which may sound like an utopian illusion to some of you: This web space will be used to show you some ongoing practices which seem to be indicating the way towards the economic democratization as well, proving that what I have in mind is not unfeasible.

Banca Etica(Ethical Bank), founded in 1999 in Padua(Padova in Italian), Italy, is a good example to pour our asset towards socially-and/or-environmentally responsible projects. It has gathered more than €400 million from more than 20,000 members to invest for more than 1,700 projects. (in Italian, English and French)

This bank was created by a group of people, for instance activists for non-profits and members of cooperatives, who were not satisfied with conventional banks(read my previous post to learn why). Savers can choose one of the four realms(social co-operation / eco-friendly projects / aid to developing countries / cultural events) their deposit will be used for and the bank analyzes the social and/or ecological impact of the project as well as whether the borrower can repay money to decide whether a loan is given or not. Here are several examples of projects which have been financed by this institution.

– Fair trade for a Honduran coffee cooperative- Reconstruction of a historic district in Riace, Southern Italy

– Organic farm by a Benedictine monastery

– Organic farming to lessen people’s dependency on the underground economy

– Support for the drug-addicted

– Health-care support system for prostitutes

– Economic aid to Albania

And another feature of this bank is that this financial cooperative is managed by its own savers, although in fact indirectly by their representatives. Transparency on all information about loans is assured and anybody involved with this agency has a clear picture on its administration. Maybe your return from Banca Etica is smaller than in other normal commercial banks, but you’ll be always proud of what your money is achieving(your contribution to the society and/or to the Mother Nature). Isn’t it a good deal for you?