13 Jul 2015

Euros, N-Euros and Complementary Currencies

The Eurozone is in crisis. The feuding between the 19 members has now come out into the open, and the longterm prospects are looking grim, despite the apparent agreement signed overnight by the Eurozone ministers.

Personally, I'm actually a big fan of Euros, so I would be sad to see them disappear. I love being able to go to any of 19 countries in Europe, and make payments with a universally recognized currency. I pay €100 for a restaurant bill in Germany, Italy or Spain, and my bank account is debited by €100 - not €100 minus the exchange rate and the 2.5% "international charge" imposed by nearly all credit cards.  I see the Euro as something not unlike the International Bancor currency proposed by John Maynard Keynes during the second world war.

But even if I like the idea of a transnational currency like the Euro, does this mean that Euros should be the only official currency for the 19 countries? My answer to that is a clear No.

I see no reason why we should not have Euros for international trading, but some other Euro-pegged currency at the national level. And that is precisely where I think that the N-Euro proposal makes so much sense. Governments should be able to produce their own National N-Euros electronically, and debt-free. Those N-Euros can be used to pay public sector workers and pensions locally, and also  used to pay local taxes. However, they would have no validity for making international payments. This is important, because it means that Germans should not be able to object if the Greek government produces N-Euros locally. There is no way that Greek N-Euros could possibly devalue the value of the International Euro, or the ones used in Germany (if the German government decides not to have its own N-Euro system).

The fact is that these government-backed N-Euros would lie somewhere between the International Euro and the huge number of complementary currencies that have sprung up in the past couple of decades. I was interested to see that the list of complementary currencies has now expanded to 280. The Complementary Currency website keeps a track of them.

However, when I looked at the nature of these different Complementary Currencies, I was unable to find any where they had the official backing needed to give the currency true value.  Here is a table of the different types of currency (some are not included), but there is no sign of that critical government backing, anywhere.
There's probably a very good reason why no government has yet been able to back one of these complementary currencies. As soon as they did, it would immediately become clear that the use of the "official" currencies like the Dollar, the Euro and the Pound Sterling, all produced by Commercial Banks as interest-bearing debt, was a complete scam. There is simply  no reason why governments should be forced to borrow "money" from commercial banks, money that those banks create out of thin air, forcing taxpayers to pay literally trillions in interest charges. Remember that 86% of all European Government borrowing over the past 20 years has been used to pay interest charges on public sector debt. Keeping that gravy train on the rails will motivate the Bankers and complicit politicians, journalists and economists to do everything in their power to keep the status quo, even it is obviously a total disaster for 99% of the population.

The introduction of an N-Euro system, or an equivalent, would put an end to this insanity. I don't expect this to be easy. But there is a chance that, following the decisive vote in last week's Greek referendum, and the humiliation of the Greek people by the Bankers friends among the Eurozone finance ministers, there may be enough anger to get the system changed. I'm keeping my fingers crossed.

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