France's Basque Region Creates Its Own Currency | Hacker News Reader

France's Basque Region Creates Its Own Currency

bbc.com

171 pointsrmason67 comments

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"creates" => "has created 6 years ago"

It's perfectly legal and there is a lot of them : https://fr.wikipedia.org/wiki/Liste_des_monnaies_locales_com...

Personally I found this useless but it makes some people happy so why not ?

Hey, we have a few of them in the US, too:

https://en.wikipedia.org/wiki/List_of_community_currencies_i...

The best-known might be Ithaca HOURS:

https://en.wikipedia.org/wiki/Ithaca_Hours

Funny thing, I read about Ithaca Hours before I went to college and found it fascinating.

Then I went to Cornell, and I have never, ever seen them in my four years there.

Although as a teaching assistant I did get paid approximately $10 an hour.

This is as useless as art, which is to say it appeals to a need not readily apparent to people not familiar with the culture.

This is ignorant of the difference that The Basques want their own state. A currency and a language are part of what it takes to hold the idea through time.

Seems like the Basques are kind of dropping their language for French instead, based on this article.

I hiked across the entire region. Lots of Basque, written and spoken commonly.

Only French basques.

> This is ignorant of the difference

This is not ignorant of anything, it was just not the subject of the discussion.

> Basques want their own state

Don't generalize to everybody the desire of some people.

How is VAT paid? How is it accounted for when a business pays it's tax? Are taxes on revenue in the local currency due in the national currency?

The only article I could find (in French) suggests that payment in these local currencies bypass the French VAT. https://www.europe1.fr/economie/Les-monnaies-locales-c-est-l...

It it lets local business circumvent VAT, it not surprising that they quickly become popular.

Where I live they bound the local currency to the Euro and 1lc=1euro so you trade in whatever you want but pay your taxes in Euro. So it means you better have faith in the local currency because if somehow the experience fails it'll be people, artisans and reseller who'll pay the tab. Although here I think there's something like "the group that printed the money keep euros and will trade it for 1 loc anytime".

Since you seem to speak french, here's the faq/doc for my city's local currency http://www.mpcliege.be/assets/2c762a54-5ea1-4417-8b8c-9cfb20...

It's ridiculous that there are not clear and unambiguous financial artifacts on their site!

I can gather from [1] (in French):

+ That is seems to be pegged 1:1 to the Euro

And from [2]

+ That it may just be an 'alt format' - i.e. each 'Eusko' is backed by a Euro.

Meaning this is really just about names and bill colours. It's de-facto just Euros.

I don't gather there's a central bank or monetary policy persey, but I could be wrong, I would hope someone chimes in with answers.

It might be 'liked' by the local business as a means to avoid transparency, would be a cynical take, but this is money, those are common money problems.

There are all sorts of neat ramifications to this, but considerably more if it were truly it's own currency with central bank, policy and not pegged to the Euro.

[1] http://www.euskalmoneta.org/comment_ca_marche/ [2] http://www.euskalmoneta.org/eusko_numerique/

There’s a 5% tariff to convert to euros, so there is an incentive to trade with businesses that accept eusko, whenever economically feasible. That’s the whole point - to encourage local commerce.

> Meaning this is really just about names and bill colours

In other words, it’s about identity, not economics.

Wasn't that the point all along? It's not like they were hiding it. They want french Basques to be proud of their heritage

Absolutely. It’s clearly symbolic and not economic. That was the point of my comment. :)

I’m not sure but it seems there are no bills anymore and you have to use a debit card. Quite dangerous because if there is any substantial amount of fraud the system collapses and all the ‘money’ is worthless.

> It's de-facto just Euros.

Not really, because you'll have a very tough time getting them to be accepted outside of the region.

Of course not, but my point is, there's no new monetary policy: this isn't some kind of fancy new currency.

It's just monopoly money backed 1:1 with Euros, or rather 'pretty chits that are just Euros'.

Obviously there are consequences ... but nobody is printing money, issuing credit/new debt.

As someone mentioned above, with a 5% trade cost ... that's a lot.

This is a very interesting experiment worth possibly repeating.

> ... Their aim was to reinvigorate enthusiasm for their cultural and linguistic roots and keep money within the French-Basque region by supporting local businesses. ...

Adding friction to financial transactions for the sake of cultural reinvigoration seems like a desperate move. Anyone passionate enough about the cause will want to spend locally anyway, so it's not clear that this experiment is the best way to achieve the goal.

In fact it's extremely effective. Just look at what the French have been able to do in Quebec with all their various laws. This appeal to liberty and choice never actually works, it's just a rhetorical technique to quell dissent. People can't buy themselves out of bad corporate behavior. People can't choose their preferred language. People are lazy and do what is convenient. If you make anything less convenient they will prefer the convenient. For instance take K-cups, marginal benefit and marginal convenience... massive adoption.

Considering the historical political violence associated with Basque nationalism, it seems far from a desperate move to me.

There are a lot of micro-currency in Western Europe. Personally I believe it's a step back because it reeks of protectionism but it's all the rage among my leftist friends (am a leftist too, but not pro micro-currency).

Not just protectionism, but a sort of micro-nationalism that Americans haven't seen, because we don't have much history. For example, Spain calls itself a nation, but Catalonia recently tried to secede, and if you visit, you'll hear most people speaking Catalan. The Basques were recently blowing things up (ETA). And Leon resents Castile enough that you will see road signs spray-painted with "solo Leon" (only Leon), because "Castilla y Leon" was made into a single province.

Europe is an old place, for better and worse. I question this stuff, but I won't judge it.

In Barcelona, capital of Catalunya, most of what you'll hear is Spanish, not Catalan. That does happen in some smaller cities or towns, though.

" In Barcelona, capital of Catalunya, most of what you'll hear is Spanish, not Catalan."

Sorry if I may seem pedantic, but there is no such thing as "Spanish" language (at least not inside Spain).

The language you are talking about is actually called "castellano" (Castilian).

Spanish language is Castilian spoken by non-castilian people.

Thanks for the correction. Most of my time in Catalunya was in the Pyrenees, which would explain my bias.

While the Basque conflict was mostly about identity, and the Catalonian one is half about identity and half about economics, the Leon conflict is sheer economics.

The region took an economic hit during the 80s as the country transitioned to a tertiary-sector-heavy economy, which lumped together with the lack of investments from the new regional government and their inability to perform any sort of industrial restructuring quickly turned Leon from one of the most prosperous regions in the country to one of the least.

Basically the same issues and politics you see in coal country in the States.

Small correction: Castilla y Leon is not a single province, it is an autonomous community that consists of nine provinces, one of which is Leon.

While that is factually correct, the reference in the name of the autonomous community isn't to the city or the province, but to the Leon region [0], which expands to the south of the province, following old demarcations, and older language areas and finally the borders of the Kingdom of Leon [1].

[0] https://en.wikipedia.org/wiki/Le%C3%B3n_(historical_region) [1] https://en.wikipedia.org/wiki/Kingdom_of_Le%C3%B3n

Thanks. That sort of proves my point: when you have millenia of history, things are complicated.

Castile and Leon is an autonomous community, not a province.

I don't know if you're from Castile or from Leon, but I clearly screwed up by calling it a province instead of an autonomous community (or "nation," "mini-nation," or "sub-nation"?). As I wrote above, we (mostly) depopulated and repopulated a continent only a few centuries ago, so our history weighs much less than yours.

>micro-nationalism

Isn't that called regionalism?

It is, but in Spain's case it is sometimes nationalism too, as the Spanish Crown rules over several different old independent kingdoms which have cultural differences and languages that stem directly from Latin (ex. Euskera).

I don't know where academics put the bar, but in my mind any area that has its own non-dialect language or was once an independent entity for a good while can claim to be a nation. Though not sure what the claim would mean in practice.

That said, I'd rather see all these things die down and have a strong EU of federated states of whichever size helps democratic and economic progress. Tall order, I know.

>languages that stem directly from Latin (ex. Euskera).

Euskara is a language isolate. It is is unrelated to any other known living language.

>in my mind any area that has its own non-dialect language or was once an independent entity for a good while can claim to be a nation.

Dialect vs language is often a political decision, so even that criteria is subjective.

Interesting, I'd have thought it would be a more conservative thing. Keeping money local, protecting local businesses. Maybe that's why they're moderately popular? They cross the political divide.

Looking forward to a sustainable economy requires some protectionism against globalism. That's how the left became protectionist in many European countries.

Here I am hoping anyone still cares about federated, democratized powers and people having the right to control their own money supply.

The Fed can print 4 trillion dollars for Wall St and people don't care. That's getting pretty close to half of GDP for one year (at the time). Hundreds of millions of people's work product...

If they're going to print money like that at least inject it into the economy by buying stuff like free healthcare or education.

Can you tell me when people have been able to control their own money supply at any point in history and have it be worth anything? It has always been in the hands of a mint of some sort of shackled to the base metal if done by weight.

Lincoln authorized congress to do it and it proved to be a success and improvement. It helped the North win the war.

When were leftists NOT protectionists? Protectionism is anti-liberal and anti-free-market? It was always left-wing.

There are plenty of examples of leftists not being protectionist. The Girondins of revolutionary France were very pro free market, something that lost them a lot of support among the starving sans culottes. The more radical Mountain factions appear to have mostly supported protectionist measures, namely maximum prices, largely out of the need to stop the mobs of Paris from literally storming the legislative halls. The moment the parisians believed that the maximum didn’t work, they were dropped.

actual communism and socialism was internationalist at its core.

Internationalist yes, but not pro-free-trade. And in practice it was always almost always the opposite of that. In Europe all the hard-left parties were anti-EU precisely because they were opposed to free trade and wanted to protect the local markets.

Currently in the United States the liberal party is the party of free trade while the right-wing president calls himself the Tarriff Man.

Kind of an outlier, though, because the Republicans typically cheer free trade (but then put tarrifs on shoes, cheese, tires, etc, etc, and of course subsidize big agribusineess, Wall St., etc).

> the Republicans typically cheer free trade

These affinities have shifted many times in American political history. For example, Lincoln was a Republican.

1. The Democrats are not leftists. Liberals are not leftists. 2. Ideologically speaking both US Republicans and US Democrats are Liberals and pro-free trade, Trump is an exception.

Language changes, and in American English at least, the definition of liberal has changed. If you use the word liberal to describe what we might refer to as "classical liberal", you will needlessly confuse people.

It is 'cozy' and 'underdog' in a way that fits the memetic zeitgeist essentially - not something sensible in itself. Like 'buy local', food miles, and other fallacies that disregard production efficiency entirely.

Currencies are a simple market based solution to the problem of trade imbalances. The appreciation/depreciation mechanism automatically makes it cheaper to import from countries that import a lot more than they export and expensive to import from countries that export a lot more than they import. This allows poorer countries to grow faster than richer countries because it is cheaper to invest there.

If you have a single currency over a single large economy then you have to do correct these imbalances manually via transfer payments that manually redistribute the wealth from the wealthiest regions to the poorest. There are a lot of things that can go wrong here. The size of the transfer payments may not be large enough to have any effect and it is not politically acceptable to increase it. (One of many small reasons for Brexit) Of course they are right because it is their wealth but this kind of solidarity is necessary to reduce inequality between countries that share the same currency. Then you need to make the decision which countries receive the transfer payments and which countries pay them. Again this is a problem that could be easily avoided by having multiple currencies.

>There are several security features, including fluorescent orange ink, a metal strip and, like government-printed currencies, a measure that is kept secret from the public to further thwart forgery.

I suspect they won't be as successful at stopping forgery if for no other reason than the fact that if someone is unfamiliar with this "currency" they won't know it's security properties. (Especially one that's kept secret)

Hmmm, the "notes" shown in those pictures look very reproducible without much effort.

Wonder if they have a counterfeiting problem? :/

I'm curious about how this is legal in the EU. Is this because regions like the Basque have that autonomy financially? This kind of thing is not an option in the US, right? Is there a good write up anywhere that specifies when and where this kind of thing could happen?

I was kind of hoping this was about the entire basque region using it's own cryptocurrency ;)

Nah, it's something people can actually use :). gentle /s

the article mentions how monopoly-esque the notes feel. i assume they're easier to forge than euro notes. maybe some cryptographic signature on the notes would allow instantaneous verification of banknote authenticity, using eg. only a cell phone?

How would that alone prevent copying ? Unless the actual note/id is linked to some user (and then it has become way more complicated and expensive) ?

Never use that word here or you will be automatically down voted by Luddites.

yeah, people have been flocking to them because many nations will jail centralized issuers

I guess France doesn't care!

> many nations will jail centralized issuers

Central banks (and the related monetary presses) are “centralised issuers.” Nobody is jailing them.

Moreover, creating a private currency is legal in most states. (It usually takes the form of IOUs.) People don’t do this because it’s unprofitable. You need additional motivations, like cultural preservation, to counterbalance the economic cost.

and where banks get settlements for non-compliance, non-banks get jail.

its not usually because of the private currency, its the compliance, the crowd that flocks to them, the contents of the server, with the sanctioning being almost exclusively on the issuer.

permissionless distributed ones don't have this issue

I was wondering how they funded it, in this case with upfront fees.

See the "miracle of Wor"gl" https://en.m.wikipedia.org/wiki/W%C3%B6rgl for a different way they addressed the problem.

Instead of brexit, Basque-it

Some fraction of the Basque population has been aiming for an independent state for a very long time, neither France nor Spain are in love with the idea.

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