http://www.npr.org/2012/02/12/146754766/old-money-helps-spanish-village-stay-afloat?ft=1&f=1001
Villamayor de Santiago, population 2,500, is a small village just south of Madrid, Spain.
It's famous for three Manchego cheese factories and a windmill that stopped turning decades ago. More than one-third of the town is unemployed.
After Christmas, shopkeepers decided to jump-start their economy.
"We realized there's no money here — well, no euros anyway — in the pockets of our customers," says Luis Miguel Campayo, head of the local merchants' association.
So, he floated an idea: Just for a month, do business in pesetas — a currency that hasn't been in use in 10 years. Campayo had a hunch the town's aging population might have some old currency squirreled away.
"People kept their pesetas because of this romantic attachment to the past," he says — and just in case the euro folds.
So 30 shopkeepers signed on to accept pesetas and hauled out their calculators. One of them was José María Caballero, who runs the local drugstore.
"A lot of people are coming in," he says. "Including people with big bills, for 1,000 or even 5,000 pesetas."
That's about $50 — a lot to keep stashed in your closet. Caballero says shopkeepers made the equivalent of about $8,000 in peseta sales in January, so they extended the campaign through February.
"When we finish our promotion later this month," he says, "we'll change the pesetas for euros, then hand out what everyone earned."
Unlike other eurozone countries, which set deadlines for turning in old money, the Bank of Spain in Madrid still accepts pesetas for euros — at the old 2002 rate. It estimates there are more than $2 billion worth of pesetas still out there somewhere — like in 94-year-old María Martinez's pocket.
She says the pesetas fell out of a pocket in an old skirt when she was packing up to move into the nursing home where she lives now.
The nurses there say some of their elderly residents don't realize pesetas disappeared 10 years ago, but Martinez has her wits about her.
Asked if she'll spend those pesetas now, in a shop around the corner, she says no, she'll just keep them as a souvenir.
"Nowadays things are different," she says, fumbling for some euros in her purse.
and.with Rube Goldberg schemes like the one below , one can see how this could gain traction fast.....
EFSF may tackle growing debt needs Eurogroup to examine the redistribution of the Greek package 
The Eurogroup’s preparation council of national finance ministry officials, known as the Euro Working Group, is on Tuesday expected to examine the possibility of redistributing the resources already approved for the second bailout package to Greece, amounting to 130 billion euros. Ahead of Wednesday’s Eurogroup meeting of eurozone finance ministers, the bloc’s governments are considering how they can cover the likely increase in Greece’s needs for financing its debt without upping the amount they will provide. That does not affect the certainty that the Eurogroup will tomorrow approve the release of the package to Athens. After the 50 percent haircut on the nominal value of the existing Greek bonds, creditors are destined to receive new bonds for the remaining 50 percent of their value, with 15 percent coming from the European Financial Stability Facility (EFSF) -- amounting to 30 billion euros -- and 35 percent from the Greek state. Bank sources say that one of the proposals on the table concerns the reduction of the EFSF participation to just 10 percent, with the remaining 40 percent covered by new Greek bonds. This means some 10 billion euros will be released for the EFSF to be able to cover the Greek deficit if that is deemed necessary. On the other hand, that would entail a larger burden on the Greek debt than was originally calculated. The decision regarding such a shift would depend on two crucial factors. The first is the International Monetary Fund’s latest Debt Sustainability Analysis (DSA), which is used for decision-making regarding the funding programs for Greece. For the DSA to be completed, the full terms of the debt swap process must be made clear, which is why the eurozone will tomorrow approve the start of the official private sector involvement (PSI) process. The aim is for Athens to make the official PSI proposal by Friday. The other factor is the possible participation of the European Central Bank in the restructuring of the Greek debt. That could lift an additional 13 billion euros off Greece’s back. |
and Ireland wants a debt deal too !
http://www.irishtimes.com/newspaper/finance/2012/0213/1224311683195.html
EU obliged to do deal on bank debt, says Varadkar
RUADHÁN Mac CORMAIC in Paris and STEPHEN COLLINS, Political Editor
ANOTHER MINISTER has joined the calls on the EU to show solidarity with Ireland by agreeing to a deal on the country’s bank debt.
Speaking in Paris at the weekend, Minister for Transport Leo Varadkar said Europe had an obligation to do a deal on the Anglo Irish Bank promissory notes in recognition of Ireland having “stood in the breach” when the global financial crisis struck.
In the past few days Minister for Communications Pat Rabbitte and former Fine Gael leader Alan Dukes have called for a reduction in the burden on Ireland arising from the banking crisis.
Mr Varadkar said this country would have been able to pursue very different policies to deal with the crisis had it not been for its membership of the euro zone and “the constraints that go with it”.
“We would certainly have devalued our currency, giving us an unfair competitive advantage over our neighbours.
“Without the backing and restraints of the ECB, we would certainly have had to embark on more aggressive bank resolution policies which would have meant passing on major losses to financial institutions here in Paris and elsewhere.”
For Ireland to emerge quickly from its EU-IMF bailout programme it would need to find a new arrangement to replace the Anglo Irish Bank promissory notes, as well as support for its plans to reinvest the proceeds from the sale of State assets into the economy.
Ireland’s European counterparts had a moral obligation to help Ireland achieve this, Mr Varadkar suggested.
“When the global financial crisis crossed the Atlantic to Europe and landed on Irish shores, we stood in the breach. We guarded the bearna baoil for all of Europe, and in the months ahead we will need Europe to stand behind us.”
The Government wants a deal to reduce the debt burden of Anglo Irish Bank promissory notes, or State IOUs, which are being used to fund the cost of nationalised Anglo Irish Bank.
Mr Varadkar was guest speaker this weekend at the Ireland Fund of France’s biennial ball in Paris.
During his visit to the French capital he also met French environment minister Nathalie Kosciusko-Morizet and tourism officials in the city.
On the EU fiscal treaty, Mr Varadkar said he did not expect the Attorney General to give her advice to the Government for “a few weeks” on whether a referendum was required. He believed a referendum could be carried if the debate remained focused on the provisions of the treaty for better stability, co-ordination and governance in the euro zone.
“If it becomes clouded by other European issues, or even local issues, then it could be problematic. That’s the challenge for the Government – not to allow the Opposition to try to turn it into a referendum on austerity, which they’re trying at the moment,” he told The Irish Times.
“Anyone who understands anything knows that we’re going to have austerity either way. We have it anyway. France and Germany have recently reiterated their desire to see faster progress towards a common corporate tax base in the euro zone, a project Taoiseach Enda Kenny once dismissed as a ‘back door’ route to tax harmonisation,” Mr Varadkar said.
Alan Dukes, chairman of the Irish Bank Resolution Corporation, formerly Anglo Irish Bank, has said there was a good possibility the Government would succeed in reaching agreement on reducing the cost to the State of promissory notes which were being used to bail out the bank.
Mr Rabbitte told the Wall Street Journal that a deal on the promissory notes being used to bail out the former Anglo Irish Bank would be struck “in the next few weeks”.
No comments:
Post a Comment