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CREATION OF NATIONAL COMPLEMENTARY MONEYS: A solution for the Euro problem and reactivation of European economies in recession.

CREATION OF NATIONAL COMPLEMENTARY MONEYS: A solution for the Euro problem and reactivation of European economies in recession.


The Comprehensive Economic Theory (1) provides a practical, and relatively easy to implement, solution to countries affected by high fiscal deficit (such as Spain, Greece, Italy, Portugal, etc.). This solution also alleviates the difficulty to reactivate their economies, mainly due to their inability to control the Euro currency, and the high costs associated to its access (the spread associated with the ‘country risk’)


Clearly, these countries must be kept in the Euro area, considering thattheir exit would imply a huge cost in terms of their integration into the global market. Consequently, they must continue honoring their financial commitments, paying the high contracted debts, and reducing their high public and commercial deficit.


How is possible to face these challenges, without being forced to promote further adjustment policies, public budget cuts and tax increases, which have lead them to a vicious cycle without way out?


The solution, clearly displayed in the 'comprehensive economic theory' , is thatNATIONAL COMPLEMENTARY CURRENCIES have to be created and put into circulation, while keeping theEuro area, and the Euro. The Eurowould continue to be the main currency in the area. This solution is especially critical in those countries that require resources, and lower funding costs to reactivate their internal economies.


The Lira in Italy, Peseta in Spain, Drachma in Greece, etc., may be issued as national circulation currencies by their respective central banks, in controlled amounts, and offered to governments and enterprises through the normal financial system.But, it is necessary to introduce controls and regulations to prevent these currencies from speculative attacks, or high risk transactions.


This 'complementary currency' (parallel to the Euro) would allowStates, public institutions , productive, and commercial sectors to operate for the internal market.This currency would produce sufficient resources to reactivate production, employment and internal consumption. Moreover, a regulatory framework may impose that a portion of pensions, public employees’ salaries, public works, or any kind of investment that requires internal factors could be financed and paid (at least partially) with this ‘complementary national currency’. This policy would increase the supply of Euros for public and private financial external debt, especially for the aforementioned countries.


The success of a 'complementary national currency',as proposed, will obviouslydepend on theappropriate technical management of the volumes emitted, the benchmark interest rate, the (flexible) 'exchange rate' with respect to the Euro, and the strict control of speculative operations.


The implementationof these national complementary currencies in European countries is relatively simple. However, it requires a sovereign political will, with enough resolution, and supported by the population, to overcome the expected resistance from countries currently beneficiating by the financial control of the Euro System. These countries have access to financial markets at much lower costs, and consequently, they are slowly, progressively, and concealedly appropriating the economies of the (unfortunately) so-called periphery of Europe.


Luis Razeto Migliaro

Santiago, Chile, 02.24.2013


(1) See Luis Razeto Migliaro, Fundamentos para una Teoría Económica Comprensiva, Ediciones UNIVERSITAS Nueva Civilización, Third Edition, Santiago, Chile, 2013. and


Luis Razeto Migliaro, Desarrollo, Transformación y Perfeccionamiento de Economía en el Tiempo, Ediciones UNIVERSITAS New Civilization, Second Edition, Santiago, Chile, 2013.