Local currency

A regional currency (including regional allowance) is a local complementary currency that is used within the regional currency area as a payment, investment and donation funds between consumers, providers and associations.

• 2.1 Advantages 2.1.1 regionality / Space Education / Fair Trade
• 2.1.2 Negative Interest / circulation assurance / liquidity fee

• 3.1 History
• 3.2 presence
• 3.3 conventions

Operation

Features

Typical of regional funds are six characteristics:

• Regional binding of the tender: The national use is not or in advanced systems limited.
• Complementary legal tender without the assumption of commitment on the part of companies
• Competition with other payment media, such as cash, checking, Credit Card, Gift Card, Loyalty Card
• The local currency is usually a reference framework for the measurement ( eg 1 Region = 1 Euro ), are in the case of high inflation discussed alternatives and tested in individual cases
• Monetary policy controls both the emitted quantity and velocity of circulation of money Regio with the help of tools such as negative interest rate, expiration date, or social control.
• Low sales compared to the sales that are made in the region with the local currency.

Cover

In order to give regions a money value, they are covered by deposited currency or by promise. Most regions monies held in Germany are covered by € ( regional funds in Switzerland by Swiss francs) or by promise. The emission takes place by exchange of euros in a 1:1 ratio. The redemption is at a fixed price (usually about 95 %) guaranteed. Recent regional funds are covered by guarantees of performance or acceptance obligations of the participating companies. In these, the emission occurs in connection with the contractual obligation to acceptance of the Regio money. The issue therefore is similar to a common edition voucher by the company. With the regional money can buy by all participants performance. The redemption price in euros can not be guaranteed and develops the market. Covered power Regio funds are clearing systems on the basis of mutual credit. Functionally they thus correspond to partially known Bartersystemen, but does not usually sales charge.

Legal

In Germany the legal admissibility of regional currency is not fully understood. The freedom of contract, after the contractor, the characteristics of their agreements can freely is led to the issue of regional money, for example by establishing an appropriate club to put on a private law basis. However, the protection of contractual freedom ends when laws are broken by the agreements.

Sales in Regiogeld subject to VAT, where they go beyond the narrow circle of acquaintances, comparable to the revenue ( in the euro area ) of amounts in U.S. dollars or Czech crowns.

The non- removal of the sales tax, however, is not attributable to the issuer of the Regio money. He breaks the currency monopoly, a monopoly to issue bank notes, on which the European Central Bank and the German Bundesbank have under the Treaty.

Assessment

Benefits

The goal of regional money systems is to promote the regional economy and stabilize. Due to the small room in which the regional currency is used, the purchasing power so that transactions carried out in the region remains rather migrate abroad or in financial markets. This is the relocation of jobs to be counteracted abroad.

The monetary system is an important part of the social environment of the people. To influence the conditions of that environment in its essential aspects within manageable as possible structures themselves, is an essential condition for democratic engagement. In this sense, regional monetary systems comply with the principle of subsidiarity. They are contrary to the assertion of the political alternatives and to refute the claim of global fiscal constraints within the meaning of Thatcherism by expanding the democratic freedom of action of the people.

By strengthening the regional networking and more direct contact between manufacturers and retailers to the proponents hope, moreover:

• A lower transport volume, which helps the environment and reduces the volume of traffic.
• Better visibility and control of production conditions in terms of environmental and social standards.
• Maintaining and promoting typical features especially for food and crafts.
• Consideration to the specific regional and local needs.
• An improvement in payment behavior between the participants, as resulted from the retention of the Regio money no benefits.
• Strengthening individual responsibility for social and regional structures
• Increased regional added value by generating regional circulations
• Increase the degree of utilization of the region, improved use of skills and talents in the region
• Awareness of the economic structure of their own environment and for regional cycles
• Strengthen the identification with the region
• Formation of regional networks and social capital
• Promotion of charitable and non-profit projects and creative approach to giving and pins
• Positive environment for the development of innovations
• Increased maturity in dealing with money and in the design of the monetary system

Regionality / Space Education / Fair Trade

According to the slogan of Leopold Kohr " Small is beautiful" try Regiogeld initiatives to form regions with manageable and transparent cash flows. What one can perceive from the highest mountain peaks in the area, for men to speak to shop, invest and enjoy life. The global exchange of goods will be reduced to what is necessary, Meaningful and Special on a reasonable balance between globalization and regionalization in accordance with the motto " laptops and lederhosen ". Instead of money in inscrutable channels of corporations and markets disappears into anonymity and incomprehensible, it brings together in its regionalized form consumers, savers and entrepreneurs. The supra-regional exchange is viewed positively by Regiogeld supporters and explicitly promoted if the production and trading conditions are environmentally, socially and fair. The possible value added of the region, experts estimate at least 50%. Where the exact optimum between quantitative scale effects to the globalization and regionalization of the qualitative value effects are depends according to the proponents on the specific conditions in the region and the advantages and disadvantages of free trade.

Theory covers: Leopold Kohr, Ernst Friedrich Schumacher, Paul A. Samuelson, Niko Paech

Negative interest rate / circulation assurance / liquidity fee

If the real interest rate over the real growth rate, fears a part of the regional money advocates the cumulative effects of financial assets. To prevent the excessive concentration of financial wealth in fewer hands, apply a part of the initiatives to a negative interest rate on the emitted Regiogeld. The negative interest rate counteracts the hoarding and speculation in financial markets. If in the regional currency system, a functioning financial market with savings, credit and investment opportunities out forms, according to this approach, low-interest loans are to be expected. Assuming that there are two percent real interest rate and zero growth a Regiogeld credit would thus two percent below the market rate for euro loans. Proponents argue that sustainable investments can reach the area of profitability by minimizing interest in renewable energies, climate protection and the like. The negative interest on money is seen as a building block to minimize inherent in the financial system growth pressure.

Theory covers: Silvio Gesell, John Maynard Keynes, Irving Fisher, Willem Buiter, Taylor rule

Disadvantages

Both the regional limitation of money in circulation and the circulation safeguard fee also be seen critically:

With Regiogeld can products that come from outside the currency area, not be paid. In order to sell their own products in other regions or to pay for goods imported from outside can, a complementary currency is either necessary or an opportunity for exchange between different currencies - for example, via inter-regional clearing (clearing houses). However, this causes transaction costs and thus acts as a customs duty on products from outside the region "imported". This is precisely the sense of regional money, but brings the usual negative effects inches ( eg in the trade limit, decrease of producer and consumer surplus ) with itself.

Is this Regiogeld designed as a complementary currency, these disadvantages are mitigated for extra- regional companies. However, the question then arises about the meaning of regional monetary system. For citizens, the regional currency offers then that less benefit than the supra- regional money as you can pay with both currencies regional suppliers, but good only the supra- regional money as payment for supra- regional suppliers. Thus, it is likely that the regional currency is mainly in demand by those households that would strengthen regional suppliers anyway.

Also, the benefits of circulation safeguard fee will be scrutinized. The aim of the circulation safeguard fee is compared with the function to strengthen the function of money as means of payment as a store of value - ie to favor consumption over saving. On the one hand, this represents according to critics, a restriction of the action and resolution of freedom of economic agents dar. Secondly, the accumulation of money is braked by the circulation safeguard fee, mainly burdened small savers, since the accumulation of capital in the form of investments, such as in securities or real estate, not of the circulation safeguard fee is concerned.

On the other hand, critics of regional money systems (even within the movement, there is a discourse on the subject, mainly between an economic and a political point of view ) that these do not contribute through the circulation safeguard fee against the actual intention to limiting criticized quantitative growth. Focus here is again the preference for consumption over saving. According to the neoclassical growth theory, consumer demand are primarily short-term growth momentum, while for a sustainable long -term growth, the saving is essential. According to the Keynesian theory, however, short-term increases in demand can have long-term welfare effects.

Furthermore, the use of regional money does not necessarily lead to a greener economy: although reduced by the regional production, transport volumes and the associated environmental impacts. However, this can be more than offset by lower production efficiency of regional and small businesses. Thus the import of apples from New Zealand or South Africa in July, for example, is more environmentally friendly than the production in small German firms with subsequent cooling.

Practice

History

The following historical free cash experiments were being adopted, regional funds and partly models for the modern regional currencies:

• The best known was the free money from Wörgl in Austria at the initiative of the Mayor Michael Unterguggenberger in 1932 / 33rd By using free money as a second currency managed to boost the regional economy and thus to mitigate the effects of the global economic crisis significantly. It was based on output from the community work vouchers, which were covered with stored Schilling and provided with a monthly circulation safeguard fee of 1 percent, or 12 percent a year. It was banned after a short time, under pressure from the Austrian National Bank.

• . Wära Vouchers Erfurt, Publisher: Society Erfurt Exchange 1931 Denomination 0.5; 1; 2, 5 and 10 Wära. Circulation safeguard fee of also 12 percent annually. (Photography by Wära vouchers at the German Historical Museum (DHM ) - front Bauhaus-style designed )
• Wara in Schwanenkirchen in Deggendorf, in the Bavarian Forest. Initiator was the mining engineer Max Hebecker.

• Wara in Ulm ( 1931). Brand money with an annual depreciation of about 6 percent. Figure: DHM

• Gera exchanger ( 1931). Table money with an annual depreciation of about 20 percent. Figure: DHM

• Wära experiment in North ( East Frisia) and on Norderney. Initiators of this project were the Norderneyer spa doctor Anton Nordwall and his friend, the artist Hans Trimborn

• Depositary receipts in Medias, Romania ( 1933). Table money with a monthly depreciation of 2 percent.

• Bracteates were from the mid-12th century to the 14th century, almost the entire German-speaking world ( with the exception of the Rhineland, Westphalia and the Middle Rhine area ) the prevailing regional coin. In some regions, Bracteates were disreputable at regular intervals ( in Magdeburg in the 12th century, several times a year ), so had to be exchanged for new Brakteatengeld. Here, for example, three new were to move against four old coins. The withheld 4 coin was called a blow money and was often the only tax revenue of the minting authority ( Renovatio Monetae )

Presence

Congresses

Three Regiogeld congresses took from 2003 to 2005 in Prien am Chiemsee instead. With the rapid creation of new regional currency initiatives and a common regional currency Association, the idea of ​​a "wandering Congress " was born.

In addition:

• Complementary currencies in Europe from 19 to 22 July 2004 at the Catholic Social Institute in Bad Honnef
• International Monetary Regional Congress was held from 18 to 21 August, 2005 Schrems in the Waldviertel ( Austria )
• Second money Congress from 30 to 31 October, 2006 St. Arbogast (Vorarlberg, Austria )
• Networking meeting of the Austrian complementary currency initiatives: April 21, 2007 and 20 April, 2008 St. Virgil, Salzburg
• Money Congress in March 2012 in Köthen (Anhalt)