Giving the Euro the Cold Shoulder

After the introduction of the euro, many Germans complained that the cost of living had gone up, because some sectors used the euro transition as an opportunity to raise prices. Indeed, real price hikes did take place in some food and service sectors, and the perception that the euro equaled less buying power has made Germans reluctant to embrace their new currency.

Since the switch to the euro, several communities in Germany have debated creating their own regional currency, but only in the Chiemgau region has the idea actually taken flight.

Not anti-euro

The "chiemgauer" is the project of a group of six teenage girls and their teacher at the private Waldorf high school in Prien. They say it's not meant as a protest against the euro, but rather as an incentive aimed at boosting local business. But with more than 50,000 chiemgauers changing hands and circulation growing at 10 percent per month, their seven-month experiment looks like a success.

One of the first merchants in Prien to start accepting the chiemgauer was Julia Kollmannsberger, owner of the Prien regional market where local farmers sell their produce. "The idea follows the same philosophy that we have here in our market," Kollmannsberger told Deutsche Welle. "The regional currency has been introduced to keep the money here in the region. Our motto is that products that grow here should also be consumed here, so there was no doubt in our mind that we should participate."

All for a good cause

Bundles of 50 chiemgauer, sorted according to their denominations of one, two, five, 10 and 20, are available to the public at the Waldorf school and several other locations in Prien. The exchange rate is one to one with the euro, so those who want to use the chiemgau pay €50 for a bundle, to spend in around 80 local businesses. Participating businesses include cafes, food markets, and clothing stores.

Students from the Waldorf school pick up the chiemgauers at the end of every business day and give the merchant a receipt. Although one chiemgauer costs one euro, when the merchants turn them in, they get only 95 cents in return. The remaining five cents is divided up between the students, who get two cents to cover the costs of printing and administrating the new currency, while three cents go into a local charity chosen by the merchant.

"It is certainly worth it because we know that the five percent benefits local institutions," says Kollmannsberger. "We're happy to contribute, and there's also a certain advertising factor when you attract customers with the chiemgauer."

Monetary experiment

Christian Gelleri, a 30-year old economics teacher at the Waldorf school in Prien came up with the idea for the chiemgau. He was always fascinated by regional and complementary currencies, and had worked out a model for a regional currency which he wanted to experiment with first hand.

"I had the idea to try out the model here with students in the school and they wanted to transfer it into practice," Gelleri told Deutsche Welle.

"The euro is an important step for Europe but it doesn't meet the needs of all the different regions here in Europe, so the idea was to create an additional instrument that fulfills those needs," he said.

Closed cycle

Gelleri doesn't want to compete with the euro -- he says he wants to find a way for money to remain in the region. So instead of buying apples from New Zealand, the locals spend chiemgauers to buy apples from the Chiemgau region. Apple growers in turn spend the chiemgauers they've earned to buy locally made sausages, and the butcher buys meat from local farms, paying in chiemgauers. It's a closed regional cycle that benefits everybody in the community, according to Gelleri.

The chiemgauer could easily have remained a high school experiment were it not for six tenth-year students in Gelleri's class at the Waldorf school. They volunteered to create and administer the new currency. "I tried to make the bills simple enough so that they would not be overly expensive to print, but complicated enough to prevent counterfeiting," said Anna Seibt, the 16-year old who designed the new bills.

The project won't die when Anna and her friends graduate. They have already recruited three apprentices to continue the project in the future. They also hope to increase the number of merchants who accept the chiemgauer as legal tender.

The next step will be convincing local banks to accept the regional currency and allow electronic money transfers in chiemgauer. And they've achieved one big breakthrough already – getting their salaries paid in their own invented currency. Each of the students receives 20 chiemgauer a month for their efforts in keeping the new currency afloat.