Monetary Policy

The Charity Standard

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Private local currencies emerge in Germany, reports the London Telegraph:

Anyone who prefers not to use the euro in this area of 500,000 people can buy a car, rent a room, have a haircut or do their weekly shopping by paying in Chiemgauer….[Consumers] can spend the notes, decorated with the artwork of children from local nurseries, in 550 companies across the region. Some banks allow customers to use Chiemgauer debit cards.

Fifteen other regional currencies have emerged in Germany since the first euros were printed five years ago. Christian Gelleri, a teacher, founded the Chiemgauer in the town of Rosenheim in 2003. It has become so popular that businesses are willing to bear a five per cent loss on every transaction in order to accommodate the growing number of Chiemgauer-carrying customers. Of this sum, 60 per cent goes to local charities and the rest covers administration costs.

Mr Gelleri has a strongbox containing 4,000 Chiemgauers in his office and holds the distinction of being able to print his own money. From his modest flat, he organises the design and circulation of the Chiemgauer, of which 70,000 are in use at any given time, valued at 1-1 to the euro.

Sounds like the euro is still more popular than its competitor. On the other hand, the Chiemgauer is more successful than the last private currency I wrote about. And hey: What's wrong with a little friendly competition? Says the Telegraph,

Its monthly turnover may be only £88,000, but this means that £2,600 is made available to local charities every 30 days. Using the Chiemgauer means supporting good causes and this is the single most important reason for the currency's success. "That's why I pay in Chiemgauer," said Sonya Spath, 46, in one of Rosenheim's main supermarkets. "It's a good thing to bring more money to our kindergartens and the other charities."

The Chiemgauer's official site is here. It's in German, so I have no idea what it says. I gather from the currency's Wikipedia page, though, that the project was inspired by the monetary theories of Silvio Gesell, minister of economics in the Munich Soviet of 1919.

[Via Lew Rockwell.]