Spain town reintroduces peseta to boost economy.

[Guest]

EDIT

[UndercoverElephant]

A small town in northern Spain has decided to reintroduce the old Spanish currency - the peseta - alongside the euro to give the local economy a lift.

http://www.bbc.co.uk/news/world-europe-12657225

This is the start of the breakup of the euro, I think.

[Prono 007]

Maybe they're opting for the Transition Towns economic philosophy of using local currencies.

[UndercoverElephant]

Maybe they're opting for the Transition Towns economic philosophy of using local currencies.

Yes, except in this case the "local" currency in question is national. What is to stop every small town in Spain doing the same thing, with the same currency?

[kenneal - lagger]

A small town in northern Spain has decided to reintroduce the old Spanish currency - the peseta - alongside the euro to give the local economy a lift.

http://www.bbc.co.uk/news/world-europe-12657225

This is the start of the breakup of the euro, I think.

Most Germans will be breathing a sigh of relief.

[rue_d_etropal]

There is only a finite amout of the old money, and assuming the shops take it into banks then it will be lost in system.
I immediately thought Transition and local currency, and some enterprising people in these towns could bring in alternative local currencies which remain local.
Maybe in some towns instead of paying old money into bank it could be recirculated ans actually used as a proper local currency, Transition style.

[adam2]

How will they control the amount in circulation ?
Might it not increase uncontrollably, if lots of people have kept a few of the old notes as a keapsake, but now start useing them ?
Or might the amount in circulation decline as notes wear out or are lost ?
At least with a new local currency one knows how much has been printed.

[UndercoverElephant]

There is only a finite amout of the old money, and assuming the shops take it into banks then it will be lost in system.

Why would shops take it into banks? Why would the banks take it? How would they decide what it was worth?

[DominicJ]

Old currencies are still convertable into Euros at the original rate.

Out of circulation sterling notes are accepted by the BoE for all time

That cash can still be converted today, but only at the Bank of Spain itself,

Banks dont "like" taking notes after the date, but they do, for business users anyway.