Local German currency could be a model for Greece

Mon Nov 7, 2011 10:56am EST
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By Natalia Drozdiak

BERLIN (Reuters) - An alternative currency introduced in a wealthy German region as a school project eight years ago has turned into a hot commodity thanks in part to the euro zone crisis with 600 businesses and 3,000 people trading 'Chiemgauers' instead of euros.

The 'Chiemgauer' -- named after the southern Bavaria region around Rosenheim -- comes in paper notes with face values of 1 to 50. The notes are convertible at local shops and have a fixed exchange rate of 1:1 with the euro.

A total of 6 million 'Chiemgauers' have exchanged hands this year in the most rural region near the Austrian border, a 33-percent increase from 2009, according to Christian Gelleri who created the parallel currency in 2003 as a project to promote regional businesses.

That is up from 70,000 'Chiemgauers' that were exchanged by 130 people in the first year 2003 when only a handful of local businesses accepted the euro alternative.

"The basic idea is to link money to the real economy and our aim was to keep money circulating locally," Gelleri, a high school economics teacher, said in a recent interview with ARD television.

"We wanted to help people pay attention to small businesses, the average consumers and keep the money flowing locally. Our idea is that money should serve people and not the other way around," added the teacher who has become a minor celebrity on German TV talk shows this year.

Gelleri's 'Chiemgauer' -- there are now 540,000 notes in circulation -- is just one of 24 alternative currencies that have been set up in German regions.

They pose no threat to replace the euro -- Europe's single currency -- but the increasing popularity of the regional parallel currencies reflects fears among Germans about the stability of the currency that replaced their Deutsche mark in 2002.   Continued...