In the years since the 2008 financial crisis, Italy had seen European central bankers effect a regime-change in its national government in order to enforce a brutal austerity in the name of paying back its creditors, resulting in a 5% contraction in its national economy and unemployment soaring to 11.1%.
In the absence of money, credit and jobs, regional and municipal alternative currencies have sprung up, accounting for hundreds of millions of euros' worth of off-the-books economic activity that ranges from citizens being given tax breaks for doing municipal labor to businesses buying products from one another through an elaborate barter system.
Some businesses in Rome and Naples also use SCEC, a free voucher system that lets customers buy goods at a discount at select outlets, which in turn buy marked-down goods from participating suppliers.
The success of these alternative means of trade remains debatable, experts say. If uptake is low, it can be hard to find a counterpart to accept the credit or currency. In the end, economists say, the systems can only spread as far as members of the local business community are willing to trust each other’s debts.
“It can stimulate a sense of belonging and solidarity,” said Giorgio di Giorgio, a professor in monetary theory at LUISS, a university in Rome. “But its success very much depends on how widespread [the currency] is.”
Both former Prime Minister Silvio Berlusconi, who is running in next year’s national election, and the antiestablishment 5 Star Movement have come out in favor of parallel currencies, which are generally considered vote-getters.
Many Italians expect alternative currencies to have a lasting legacy, even as the economy begins to improve. Growth was 0.4 percentage points in the second quarter, its best performance since 2010, according to the Organization for Economic Cooperation and Development.
A Tax Cut for Cleaning? Italians Take Up Bartering in Stagnant Economy [Donato Paolo Mancini/Wall Street Journal]
(via Naked Capitalism)