Gereon Janzing, geobotánico y etnobotánico
Gereon Janzing, geobotánico y etnobotánico

The Successful Complementary Currency on Ibiza

(This article was published in German in the newspaper "Ibiza Kurier", and a publication in some magazines is still to come.)

In many places people experiment with it but in few places it works as well as on Ibiza: an alternative local currency, a complementary currency. Why is it so successful on Ibiza? We will come to that question later. First a bit of a historical background.

A wellknown example is the Austrian town Wörgl, which back in 1932 issued a free currency with an assured circulation in order to counteract the economical crisis and the local unemployment. The stunning success became widely known and experts of economy travelled from far to learn from this success. After 14 months in 1933, a law court forbade the free currency due to a lawsuit of the national bank

In many places people experiment with it but in few places it works as well as on Ibiza: an alternative local currency, a complementary currency. Why is it so successful on Ibiza? We will come to that question later. First a bit of a historical background.

A wellknown example is the Austrian town Wörgl, which back in 1932 issued a free currency with an assured circulation in order to counteract the economical crisis and the local unemployment. The stunning success became widely known and experts of economy travelled from far to learn from this success. After 14 months in 1933, a law court forbade the free currency due to a lawsuit of the national bank.

The idea behind a local currency is that a greater part of the money spent locally stays in the place and is to the benefit of the people. The taxes for the money transfer, too, stay at the place and benefit the local community instead of ending up in distant and intransparent state businesses.

As this currency does not produce interest, it does not make much sense to accumulate it and to speculate with it. That way the money stays moving. In Wörgl, that was also assured by labels which had to be bought monthly to be stuck on the banknotes in order that they remained valid. That is not handled the same way on Ibiza, there are no coins and banknotes, only book money. That can be as well in the negative range as in the positive one without the payability of debit interest. Since the total sum of all account balances is zero, negative balances are as normal as are positive ones. And the fact that someone always stays in the positive numbers, is viewed with the same suspicion as staying always in the negative numbers.

The designation complementary currency already reveals it: The money is not meant to replace the official currency, in this country the euro, but to complement it. Wares and services from far away usually keep being payed in euros, although an exchange between different local currencies also exists. The local currency only works within a limited surrounding and is based on a certain mutual confidence.

On Ibiza, as well as in some other regions in Spain, especially in Catalonia, for example in the Alt Congost, the local currency is called eco. An eco has the paying power of a euro so that the conversion is the easiest possible. A wellknown showcase currency is the puma of Sevilla. On Ibiza the eco has been around since September 2012. It was initiated by the Cooperativa Integral d'Eivissa. A flyer of that group with the title  "El ECO, la Moneda Social d’Eivissa“ ("The ECO, Ibiza's social currency") informs about the advantages of this local currency. It says: "... when we speak of a social currency, we mean by it that behind it there exists a project or strategy of local, environmentally friendly, sustainable, solidary economical development directed towards a social cohesion."

Why could the local currency get established so well on Ibiza? One reason for sure is that in Spain more than in Germany people speak of a crisis and therefore there exists a stronger need to try something new.

Roberto García, one of those who built up that project, tells us an important reason: "This currency is not an end in itself but it's a means for an end." From the beginning there were offered basic human needs in ecos, especially food. That way the currency became attractive for many people. It began with a natural food store where the purchase price had to be payed in euros whereas the added value could be payed in ecos. That made the product cheaper in euros for the final consumer.

A result for many participants is that they can afford many a thing they would not be able to afford in euros or only after severe deliberation. The mentioned flyer says about the eco: "It permits you to enjoy products and services that you could not afford in the capitalist system". That might not be perspicuous at first sight if you have to work the same for 10 ecos as for 10 euros. However, let's remember that the currency is meant for local use, which has the consequence that it is often easier to find someone to pay you 10 ecos than sopmeone who pays you 10 euros for the same work. These are two different economies; who is short of money in one of them, can still be well-off in the other.

And practice shows it is really like that: Many a person who would hardly ever afford a cake in a restaurant if they had to pay in euros, can do it now and then if paying in ecos.

On Ibiza for example the Chill Café in the Vía Púnica has joined the local currency. You cannot pay just anything offered there in ecos, the café also needs euros for its purchases. But some bills, like those for freshly squeezed juices and part of the cakes, can be met in ecos. The menu can be payed half in ecos. For the café, joining the eco pays off, and not only ideally: The sale has risen, new customers have been gained. And it carries part of the purchases out in ecos, for example from the organic farm Ca na Berri. "Moreover, people come into the Chill Café to get informed about the eco, so we gain new customers", explains a young woman who works there.

There is one thing that deserves improvement: There is not yet much offer to stimulate peasants to participate in order to allow the purchase of products like fresh milk, goats' cheese and sobrassada in ecos.

The group that promotes the currency on Ibiza, is the Cooperativa Integral d'Eivissa. Thanks to that cooperative there are available in ecos products like seasonal fruits and vegetables, a considerable selection of wholemeal breads, yoghurt and home-made jams. Also services like lessons and different repair works, for example plumbing or bicycle mechanics can be received with payment in ecos.

External Link:

The Cooperativa Integral d'Eivissa (in Spanish)