Localities in Hungary issue own currencies – paper

Budapest, February 3 (MTI) – Local patriots in several areas throughout Hungary are making plans to introduce local currencies to boost economic development in their regions, business weekly HVG said on Thursday.

The “Soproni kekfrank”, introduced last May, has served as an example to the cities of Debrecen in the east, Veszprem in west-central and Szombathely in the west to devise plans for their own local currencies.

    The Rabakoz microregion’s rural development association has already announced plans to launch the “Rabakozi taller” this summer. A Baranya County representative of the radical nationalist Jobbik party, Norbert Szocs, presented a study on the planned introduction of the “Pecs korona” at an assembly meeting earlier this year.

    Local currencies are expected to boost their region’s economy by creating a direct link between local production and consumption, promoting the use of local resources and helping local economic product stay in place, the paper said.

    Circulation is accelerated because these money-substitutes are not worth saving up since they do not pay interest. Additionally, they can only be spent within the region that boosts the turnover of regional companies.

    The only existing example for local money in Hungary so far is the Sopron kekfrank which is practically a voucher-based system, with the main difference being that kekfrank does not have to be withdrawn from circulation once it’s been used for payment. Unlike the official currency, the Soproni kekfrank is not compulsory to accept, so it is only used by a network of partners.

    Tamas Perkovatz, president of the When We Join Forces European Cooperative, the issuer of kekfrank, told HVG there are currently some 400 partners that accept the local currency. However, since the National Bank of Hungary does not recognise the kekfrank, should holders of the currency want to get their forints back, they must change it with the cooperative at a hefty commission of 2 percent plus VAT, the paper said.

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