The parallel payment system that Greece's government proposed in 2015 would have bolstered the eurozone. By contrast, the Italian government's planned "mini-Treasury bills" would lead to the single currency's demise.Sounds like the Italian plan is far superior.
Considering the modern state perhaps we should add that it also needs to have the right to create its own currency....
To many this will seem to exclude Eurozone countries as modern states. But in the video (below) Warren Mosler is surely correct when he suggests that any country unhappy with the Euro should not exit it at all but should simply introduce a parallel currrency (which is entirely legal), and which the national government would accept in taxes. New government spending in the parallel currency would ensure that it entered into the economy quickly.…
Indeed, I consider that with local authorities in the UK facing their worst ever budget cuts, they should be doing something similar – preferably through the Local Government Association so that it has national importance.Progressive Pulse
Two things came up this week that I thought were interesting but only require a noting by way of blog entry. The first was a report about a mini-Job Guarantee type program in the New Mexico city of Albuquerque, which is demonstrating that public job creation programs can change peoples’ lives for the better when there is no hope and no other opportunities. The second story I read that was interesting was the Wolf Street Report (October 24, 2015) – Barcelona Threatens to Print Parallel Currency, Madrid Seethes – which discussed the plan by “Barcelona’s left-wing city council plans to roll out a cash-less local currency that has the potential to become the largest of its kind in the world”…Bill Mitchell – billy blog
There is a third solution in store for Greece, it could have two currencies in parallel that would stabilize the economy, Bernard Lietaer, co-designer of the European currency, told RT.
“Greece could be participant in the euro for tourism and shipping which are the largest sectors of the economy. At the same time it could have some new drachma which is playing by different rules and which is providing capacity to reanimate the economy at the grassroots level,” he said.
There have already been precedents of countries having two currencies, according to Lietaer....RT
Greece has stockpiled enough reserves of fuel and pharmaceutical supplies to withstand a long siege, and has set aside emergency funding to cover all the country's vitally-needed food imports.
Yanis Varoufakis, the Greek finance minister, said the left-Wing Syriza government is still working on the assumption that Europe's creditor powers will return to the negotiating table if the Greek people don't agree to their austerity demands in a referendum on Sunday.
"Luckily we have six months stocks of oil and four months stocks of pharmaceuticals," he told The Telegraph.
Mr Varoufakis said a special five-man committee from the Greek treasury, the Bank of Greece, the trade unions and the private banks is working feverishly in a "war room" near his office allocating precious reserves for top priorities.
Food has been exempted from an import freeze since capital controls were introduced last weekend. Grains, meats, dairy products, and other foodstuffs should be able to enter the country freely, averting a potential disaster as the full tourist season kicks off....
Businesses in Thessaloniki and other parts of the country are already creating parallel private currencies to keep trade alive and alleviate an acute shortage of liquidity....This would be funny if it weren't pathetic.
The Greek crisis is likely to come to a head one way or another soon after the referendum. The European Central Bank is expected to restore emergency liquidity for the Greek banking system almost immediately if there is a "yes", an outcome likely to trigger the downfall of the Syriza government and the creation of a national unity administration.The Telegraph
The ECB has given strong hints that it will tighten the tourniquet yet further if there is a "no" vote - probably by raising collateral requirement - pushing Greek banks that it also regulates towards the abyss. This is a legal minefield since the ECB has a treaty duty to uphold financial stability. Syriza has said it will consider legal action at the European Court of Justice if this occurs....
According to several recent media reports, both the Greek government and the ECB are taking into consideration the possibility (for Greece) to issue a parallel domestic currency to pay for government expenditures, including civil servant salaries, pensions, etc. This could happen in the coming weeks as Greece faces a severe shortage of euros.
It is important to stress that the introduction of a Greek parallel currency could take place in at least two ways, with deeply different implications. The first avenue would be for Greece to issue IOUs, i.e., promises to pay to the bearer euros upon a future time expiration. Basically, these IOUs would be euro denominated debt obligations issued and used to replace euros to pay salaries, pensions, etc.
The second avenue would be to issue Tax Credit Certificates (TCC) and assign them to workers and enterprises at no charge.[1] TCC would entitle the bearer to a tax reduction of an equivalent amount maturing in, say, two years after issuance. Such entitlements could be liquidated in exchange for euros and used for spending purposes. Liquidation of TCC would take place against purchases of TCC by those who would provide euros in exchange for the right to the future tax cuts.….The first involves borrowing in a currency that Greece does not control. Increases indebtedness in euro and kicks the can down the road. Bad idea.
The TCC avenue would clearly be a superior solution, and would allow Greece to stay in the Eurozone, while stimulating demand by increasing citizens’ purchasing power, reducing domestic labor costs, and significantly increasing GDP. This would also generate, in due course, higher gross tax receipts (which would offset the shortfall in euro fiscal revenue due to TCC issuance).Economonitor
