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The Honolulu Advertiser
Posted on: Sunday, March 11, 2007

Berlin not entirely land of the Euro

By David McHugh
Associated Press

Wine merchant Agne Petrikaite displays three pieces of alternative currency, called the Berliner, issued by a German environmental group.

FRANKA BRUNS | Associated Press

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www.regiogeld.de

www.berliner-regional.de

www.complementarycurrency.org

www.allesfliesst.de

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BERLIN — A 10-euro bill buys a fine organic Riesling at the Alles Fliesst wine shop in Berlin's bustling Kreuzberg neighborhood. Or, as some regular customers do, you can hand the cashier something else: 10 locally printed Berliners.

Same goes for a jar of cinnamon honey, 4.20 euros or 4.20 Berliners, at the organic grocery upstairs, and for an espresso, 2.30 euros or 2.30 Berliners, across the street at the Cafe V vegetarian cafe, with its red ceiling, old chandelier and pipe-smoking clientele.

The waitress even takes her tip in Berliners.

The Berliner, issued by a local environmental group, is one of around 20 local currencies that have begun circulating over the past five years in Germany. Concern about the impact of globalization and distant multinational corporations on their communities and locally owned businesses is one of the motivations behind making local money that will stay at home, community activists say.

About 10,000 Berliners have been issued — printed by the Bundesdruckerei, the privatized former state printer, which also produces euros for Germany's central bank — and they're accepted in 190 Berlin shops, many of them in Kreuzberg, a stronghold of Berlin's counterculture and the environmental Greens Party.

The Berliner is issued by the Gruene Liga, or Green League, environmental organization, at the wine shop, a cafe, a church, and a local alternative school. One Berliner costs one euro, and the League keeps the euros in the bank so shops that get Berliners from customers can turn them in for euros.

But the shops get only 95 cents back for each Berliner, with 3 percent going to local causes such as children's farm, a playground, and a church program for teens overcoming drug problems. Two percent funds a slightly better exchange rate to spur people to buy larger amounts of Berliners such as 50 or 100.

Activists have compared the slice taken by the issuer to the fees credit card companies charge — the price paid for winning the business. Berliners come only in ones, fives and tens, so uneven sums can mean change in euros.

The principle behind a neighborhood currency is that it will be spent to support locally owned businesses and strengthen the community, said Suzanne Thomas, who leads the volunteer-run Berliner project.

"My outlook would be that you should obtain as many of the things you need every day from the local region, because if I have small shops in the street where I live, this adds to the quality of life," she said. "I can walk out the door and get what I need and not drive to some super shopping center."

She said the currency isn't a protest against the euro notes and coins, which some people blame for higher prices on some goods and services after they were introduced in 2002: "We think you should have both in your pocket, euros and Berliners."

The practice of locally issuing micro-currency has been catching on in Germany since 2001, when the Roland was issued in Bremen. It has been joined by the Carlo in Karlsruhe, the Cherry Blossom in Witzenhausen, and the Chiemgauer in Bavaria's Chiemgau region; others have popped up in Switzerland and Austria.

The practice itself isn't new. Alternative or counterculture communities such as the Christiania hippie enclave in Copenhagen and the Damanhur group in outside Turin, Italy, issued their own money years ago. The Web site www.complementarycurrencies.org lists many different examples of currencies meant to be used alongside national currencies the world over.

In Germany, local notes equal to $388,000 have been issued, according to Regiogeld e.V., an association of regional currency issuers — infinitesimal compared to the amount of euros in circulation and so small that it can't affect the euro's value, the Bundesbank says.

Even multi-culti, green Kreuz-berg isn't exactly awash in Berliners. At the Cafe V, owner Inci Cemil, 25, said the cafe might take in 10 Berliners a day. "We don't get any added profit, but we wanted to take part in the project," he said.

He said the Berliner could help boost local business such as the organic grocery, a valued neighbor where the cafe gets pasta, flour and bread. "I think people in Kreuzberg tend to support each other," he said.

A key feature of the Berliner — and several other regional currencies — is that it expires after six months and can be exchanged for a new one — but minus 2 percent. That pushes people to spend it quickly and give an added kick to the local economy.

That idea, dubbed schwund-geld, or depreciation money, is based on the writings of Silvio Gesell, a German social and economic theorist who died in 1930. A 2006 analysis for the Bundesbank argued that the schwundgeld idea is seriously flawed and that the local currencies are economically inefficient.

Nonetheless, the Bundesbank said in a statement that the local notes do not violate German law so long as they are not intended to replace legal currency and don't look like a banknote.

People use the community-issued currency to support a cause, Gerhard Roesl of the Regensburg University of Applied Sciences wrote in his 63-page Bundesbank analysis. "These currencies offer a chance for the holder to demonstratively support the local region and to make a statement against globalization," he wrote.

He noted that several have appeared in German areas with low unemployment: "There, it seems, people can afford the luxury of 'disappearing money' more than in structurally weak areas."