Coining New Currencies

At first sight it seems a little absurd to create new currencies in Europe in 2004.

But participants at a recent conference on alternative and supplemental currencies see things differently.

"You need lots of currencies," Michael Linton of the London Open Money Project, who has been working on alternative currencies for two decades, told Deutsche Welle. "You need neighborhood and culture currencies, you need them for young people, for gay, for women, for ethnic communities."

Linton's not alone in thinking that alternative monetary systems are advantageous.

Many experts, including representatives from German banks, agree that there's at least a few cases, where supplemental currencies make sense.

Regional vs. sector systems

There are two different kinds of such systems, both of which are usually created by private individuals: On the one hand, there are regional exchange systems, which exist in Bremen and the Bavarian Chiemgau region.

The other kind allows people to buy things in a specific business sector -- the Japanese, for example, have introduced a successful, nationwide exchange system that allows people to "buy" and "sell" caretaker time for the sick and elderly.

The biggest difference between such systems and regular currencies is that people cannot use the former anywhere they want. Some see this as an advantage, however, because it keeps the "money" inside a closed circle: It cannot leave a specific region or business sector.

That's why more and more of these systems begin to emerge, according to Joachim Sikora, who organized the conference.

Helping to create more jobs?

The draining of money from its origin to so-called high interest rate zones such as South-East Asia, China and Taiwan is one of the reasons why supplemental currencies work, Sikora said.

"Another reason is that there are a lot of people who would like to work and can't find a job," he added. "We have to create and finance new areas of employment and that means we have to generate income. Supplemental currencies can help with that."

It's not a new idea: Experiments with regional monetary systems already existed in Germany and Austria in the 1920s. The most famous example was that of Wörgl, a small town in Austria's Tyrol region.

Wörgl was suffering from high levels of unemployment, but the town had no money to fund public works projects such as building a new Ski ramp.

"That's when the mayor thought about handing out vouchers," Sikora said, adding that the system worked well. "Unemployment levels went down tremendously and the town was starting to take in money again. It raised taxes, but then the Austrian Central Bank put a stop to it."

A role model for regional development?

Gernot Schmidt from Sparkasse savings bank in Delitzsch in the eastern German state of Saxony said he and his colleagues also hope to stem the flight of capital and manpower that's been hurting the area.

The bank supports an exchange system, where people can offer each other goods and services for payment, Schmidt said. He added that the bank is also hoping to link other, private exchange systems to the program.

But other than in Wörgl, people in Delitzsch will be able to use an electronic card to pay. Schmidt and his colleagues also don't worry that their project will be ruled illegal: State politicians in Saxony are supporting the idea, which they hope could become a role model for regional development.