Another day, another way to illustrate the dismal state of some European economies. Which is to say that while the headlines focused on Spanish economy minister Luis de Guindos’ comments regarding his expectation that Spain will tap $75 billion in bailout funds promised by European finance ministers earlier this summer, or Europe’s renewed focus on Greece, our attention wandered to a Wall Street Journal article on a local currency called the puma.
The currency, which has more than 20 users, was designed by some 30-something residents of this sun-seared town as a homemade response to Spain’s crushing youth unemployment crisis. Users essentially start off with a revolving credit line, able to take on up to 100 pumas in debt. They earn money by selling goods or providing services to other users, tracking their balances in account booklets along the way.
Nor was the puma the only upstart:
Last month, promoters of a host of local currency projects got together to discuss the challenging environment at a conference in the town of Vilanova i la Geltru. In what seemed like some funky financial bazaar, the mostly youthful participants were flashing bills or ledgers from fledgling currencies with names like the zoquito, the gita, the minuto and the BilboDiru.
Some of the currencies were convertible to the euro, but one was pegged to the price of a cup of coffee. Some imposed penalties—a 2% loss of value—if users hung onto the currency for more than a few months. The idea is to force people to spend.
This is not a new phenomenon—hundreds of local currencies emerged during Argentina’s economic crisis of the 1990s, The Journal notes. And it is perhaps less splashy than recent Bloombergian efforts to sex up the Spanish sovereign debt crisis. But it’s enough to serve as our daily reminder that beyond the seemingly endless cycle of rising borrowing costs, rescue deals and austerity programs, people are struggling.
And that no intrepid reporter has yet turned up the bathtub ouzo trend piece for which we’re thirsting.