PESETA OR EURO - A BALANCING ACT BETWEEN WHICH WILL WIN?
… at least for residents of Villamayor de Santiago, Cuenca. Probably better known for its famous Manchego cheese and links to Don Quijote, the small town is hitting the headlines due to an innovative economic scheme.
Faced with slumping sales in the region, Luis Miguel Campayo, head of the local merchants’ association, came up with the novel idea in order to stimulate the local economy. If people are not spending Euros, he guessed that they might have pesetas hidden away at home. Hence, 30 businesses in the municipality, from pharmacies to grocery stores, have signed up to take part in the scheme. For a period of time they will accept both pesetas and Euros in exchange for goods and services. At the end of the scheme, the money will be exchanged at the Bank of Spain in Madrid who still accept pesetas at the 2002 exchange rate.
Similar schemes have been employed in other towns around Spain prior to this one. According to news reports a million pesetas (about 6,000 Euros) has already been spent locally at the 30 businesses who are members of the enterprise. Due to its extraordinary success the scheme has been extended, at the end of which the pesetas will be exchanged at the Bank of Spain.
The Bank of Spain has estimated that over a billion pesetas have not yet been exchanged perhaps for fear that the Euro would fail. With such high unemployment, and the downgrading of Spain’s credit rating by Moodys, the success of the scheme might spur people to follow the example of the residents of Villamayor de Santiago.
Louise Mee – Culture Spain