Barcelona City Hall presses ahead with local currency scheme despite warnings
Bank of Spain warns against plans, aimed at helping small businesses in Catalan capital
Barcelona City Hall has announced it is to press ahead with a pilot scheme to roll out a cashless local currency over the course of 2017 and 2018 in the working class Besòs district in the northeast of the city. The idea is for the currency to become legal tender in 2019.
The Bank of Spain has warned against the initiative, which was first mooted by Mayor Ada Colau after she won local elections in May 2015, describing it as “informal, with no legal framework, or regulator or adequate supervision.”
The idea is for local stores and residents to be able to exchange euros for this new currency
Colau, who made her name campaigning against mortgage foreclosures and home seizures, heads a left-leaning coalition. The idea is for local stores and residents to be able to exchange euros for this new currency, and use it to purchase products and services at a discount or with other kinds of advantages. Municipal workers may also receive part of their salary in the new money. The exchange rate would be one-to-one.
“This is a medium-term project, the details of which are still to be completed, it’s a work in progress,” said Jordi Via, Barcelona City Hall’s commissioner for Social and Cooperative Economy.
There are numerous precedents, both in Spain and elsewhere: the Bristol pound in Britain, the Chiemgauer in the German region of Bavaria, the sol-violette in the French city of Toulouse, the ekhi in Bilbao, the res in Girona, and the puma in Seville.
Barcelona City Hall has not said whether the new currency will be digital or physical, what it will be called, or how businesses that want to use it can sign up to the scheme, simply that the idea is to help keep the wealth generated locally in the city.
Barcelona City Hall has not said whether the new currency will be digital or physical
The scheme will be part of a €24-million initiative to introduce a minimum wage in the city using €4.8 million from EU funds, says Barcelona City Hall, which is also considering tying the currency into the creation of an energy utility whereby money saved from lower energy costs would be pumped back into the community in the form of a local currency to be spent in businesses in the area.
Colau’s administration will likely have to put next year’s budget to a vote of confidence. If it is unable to get them approved before year’s end, then the opposition will have a month to put together an alternative administration to run City Hall. If it fails to do so, then the budget will be approved automatically. It seems unlikely that the opposition, made up of the conservative Popular Party (PP), the Catalan Republican Left (ERC) and the center-right Convergence and Union (CiU), along with emerging group Ciudadanos, will be able to work together. The proposals will be put to the vote today, Tuesday.
CiU, ERC and the PP, with 18 votes, have said they will vote against the proposals; Colau and her supporters have 16 votes. Ciudadanos has five seats and the left-wing pro-independence Popular United Candidacy (CUP) has three.
English version by Nick Lyne.