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Whether or not the single currency survives, trade in some Eurozone member states is already taking place using old national currencies, alternative local currencies and virtual electronic currencies

This article was first published in the February 2013 International edition of Accounting and Business magazine.

The Euro may be the currency of Spain but many of its people have retained a fondness for its predecessor, the peseta. Unlike other Eurozone countries such as France and Italy, Spain has never set an exchange deadline for pesetas. It is still possible to convert them by taking them to the Bank of Spain in the capital city of Madrid, where they were exchanged for around €14m during 2011 at the same rate that applied at the launch of the Euro in 2002: one Euro for 166.38 pesetas.

According to Bank of Spain, an estimated €1.7bn in pesetas remains unaccounted for. So in a bid to improve trade, businesses in the Galician fishing village of Mugardos decided to accept the old national currency as well as the Euro. Locals were encouraged to dig out their old pesetas and spend them, and during 2012 the initiative proved so successful that other Spanish towns including Villamayor de Santiago and Salvaterra de Miño have done the same.

‘It has been a surprising success,’ reports Pablo Pino, president of the Association de Commerçants Unes in Salvaterra de Miño. During the first few weeks of ‘Operation Peseta’, locals used more than one million pesetas to buy coffee, perfume, televisions and numerous other goods and services. All of the traders in the town were given a software package that enabled them to recalculate their prices and to give change in Euros – which simplified bookkeeping and taxation.

While initiatives such as ‘Operation Peseta’ are rare, there are many businesses across Spain that have yet to completely forsake the peseta. It is not unusual to see both the Euro price and the peseta price displayed next to goods on shelves and printed on receipts.

Spain is not the only Eurozone country to eschew the Euro. Over the past year or so, alternative local currencies have been introduced in Italy, Portugal, Germany and more than a dozen French towns and cities.

Vive la différence

Toulouse has the Sol-Violette, Villeneuve-sur-Lot has l’abeille, Romans-sur-Isère has la mesure, Finistère has the Héol and Pézenas has introduced l’occitan. ‘We have created a complementary currency parallel to the Euro that works only here, for our community,’ explains Jean-François Marques, shop owner and l’occitan founder. But elsewhere, a project is also underway to introduce an alternative currency – the ‘eusko’ –throughout the entire Basque region.

Across the Mediterranean Sea in Greece, the city of Volos has also introduced an alternative local currency, the TEM, or topiki enallaktiki monada. Like many of the other alternative currencies, the TEM is part of a membership scheme that supports a local bartering community. Some of its 1,000 or so members are unemployed while some operate local businesses; they can both buy and sell numerous goods and services using just TEMs or mixed with Euros – with one TEM equivalent to one Euro.

‘We are challenging the big system,’ says Yiannis Grigoriou, TEM co-founder and manager of social services at the Volos municipal council. Members join the system by opening a TEM account online, where TEMs are accrued or debited to reflect the transactions that take place between members. But the TEM is more than a virtual currency: the scheme uses vouchers similar to cheques and recently launched a system that allows people to pay for their purchases via SMS (text message).

Since starting the TEM, Grigoriou and other members have been asked to help set up similar networks in more than 50 other Greek towns and cities that also want to start their own barter system. The Greek parliament has also helped to support the spread of bartering by passing a law to encourage ‘alternative forms of entrepreneurship and local development’, and by giving official non-profit status for tax purposes to bartering networks such as the TEM scheme in Volos.

Tax rules

The tax rules on barter transactions vary from country to country across the world, within the European Union and in the Eurozone, and they are clearer in some jurisdictions than others. In the UK, Ireland, Spain and most European countries, all business-to-business barter transactions are liable for tax; but even in these countries the use of bartering (and online barter systems) is increasing, as it enables businesses to use stock and skills to finance purchases and conserve their cash.

Such systems can also be a route to new customers and suppliers. ‘We are seeing a lot more activity than in previous years,’ says Jaime Martínez, director of, a bartering website for the Spanish-speaking world plus Italy and Portugal. The site has expanded rapidly since the financial crisis hit: its 67,000 Spain-based users alone take part in pure barter or part-cash deals worth an average of €5,000 per transaction that add up to a total business worth nearly €10m each year.

Huge international barter sites such as Bartercard and Ormita are also expanding, as are those with a national focus, such as, which is Ireland-based. Like the more localised barter schemes spreading across Europe, most online barter platforms boast members from all sectors of business and commerce (including professional accountancy firms); many (but not all) use alternative currencies, or ‘common tender’, that are not controlled through a central bank or sovereign government.

Ormita bases trades on traditional currencies and also uses the WOCU world currency unit (a composite currency derivative based on the world’s top 20 economies), and Tradefirst has its own dedicated currency, the Trade Euro (TR€) which is tied in value to the Euro. But while this simplifies tax and accounting on transactions, it does not address thorny issues such as how the fiscal value is set for goods and services, and what can be done to ensure that it is always as close as it should be to the market price.

When this is considered, along with tax authorities’ difficulty in policing local barter schemes and their alternative currencies, there may be room for doubt about how much any of them actually benefit regional or national economies. So it remains to be seen if any of these alternative currencies can actually replace rather than supplement the Euro, or develop the long-term traction that the WIR has (see box). Panos Skotiniotis, mayor of Volos, sees the Euro and TEM co-existing: ‘We support it because it is a good way out of the economic and social crisis, not a replacement for the Euro.’

Banking on alternative currencies

The global economic crisis may have spawned numerous alternative currencies, but there is nothing new about either of these things. The Wirtschaftsring-Genossenschaft (WIR) was founded in Switzerland back in 1934 to help small and medium-sized businesses that were struggling to cope with the currency shortages and global financial instability caused by the great global depression.

The WIR ‘unofficial’ currency was used to support a bartering system, so that members of the scheme could trade with each other without using real cash. But the WIR system was such a success that it quickly spread throughout Switzerland, and the WIR Bank was given an official licence from the national authorities. So while the Swiss franc has the currency code CHF, the WIR code is CHW.

WIR began as a not-for-profit entity, but now operates as the co-operative WIR Bank Genossenschaft. It aims to ‘encourage participating members to put their buying power at each other’s disposal and keep it circulating within their ranks’, to generate additional sales volume – but it also provides its 60,000-plus members with business accounts and credit, mortgages and other ‘traditional’ banking services.

Lesley Meall, journalist

Last updated: 24 Jul 2014