Club of Rome report supports Deutsche ‘Geuros’ currency idea
The Club of Rome EU Chapter has issued a report proposing a set of “complementary” currency systems as the solution to the European financial crisis, lending support to the idea of a Geuro put forward by Deutsche Bank as a way to increase Greece’s competitiveness.
Money and Sustainability: The Missing Link – written by Bernard Lietaer, Christian Arnsperger, Sally Goerner and Stefan Brunnhuber – argues that monetary instability could be resolved by the creation of complementary cooperative currency systems (‘civics’) to work in parallel with conventional bank-debt money, counterbalancing its negative effects.
It comes as the report notes 145 banking crises between 1970 and 2010, 208 monetary crashes, and 72 sovereign debt crises.
Normal monetary systems invariably fail, the report argues, because of factors such as:
• Amplification of boom and bust cycles: Banks provide or withhold funding to the same sectors or countries at the same time, amplifying the boom or bust cycle
• Short-term thinking: The standard practice ‘discounted cash flow’ inevitably leads to short-term thinking
• Compulsory growth: The process of compound interest or interest on interest imposes exponential growth on the economy; unsustainable in a finite world
• Concentration of wealth: A consequence of positive interest rates, most of the wealth flows to the rich, increasing poverty rates, generating social problems and threatening the survival of democracy
• Devaluation of social capital: Measurements reveal a tendency for the erosion of cooperative and community values, particularly in industrialised countries, with money promoting selfish and non-collaborative behaviours.