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A Proposal for Economic Self-Determination
for the People of Wales

1.0         Executive Summary

Economic problems tend to be left to ‘experts’ but historically, economic expertise has not provided a monetary framework that creates wealth in a sustainable and democratic way.  Instead the gap widens not only between rich and poor – on personal, corporate and national levels - but also between cities and the countryside.

Furthermore, the opposition to financial globalisation increases and in the wake of September 11 we need to ask ourselves how come there is always enough money for war, but never for health, education, transport and community work?  For Net style explanations of Sept. 11 search for 9/11!

The monetary framework for the creation and management of national currencies is based on National Debts ever since the creation of the Bank of England in 1695.  Since that first debt of £1.2 Million, interest on the National Debt is a substantial share of every annual budget, even though the State has the right to create cash and coin free from interest.  Its share (M0) of the total money supply (M4) was 21% in 1969 and has gone down to some 3%.  The share of the budget called PSBR (Public Spending Borrowing Requirement) is thus a necessity that suits banks who make money out of money, but not tax payers who expect public expenditure to be financed. 

Besides the State borrowing money at interest, the principle of usury (lending money at interest) is applied in the daily practice of Western banks.  In Islam, however, riba (Arab for usury) is a capital sin.  The Euro is based on the same principles as Sterling but with even less State control or Parliamentary accountability.  When asked about the accountability of the European Central Bank by the Member of a House of Lords’ Select Committee, Monsieur Trichet, the Governor of the Banque de France said that the PMs are invited every 6 months to attend Council meetings…

The advent of the National Assembly for Wales has brought a new tier of political democracy to the people of Wales.  But economic democracy would mean the sovereignty to issue currency, control over the amount of money in circulation and power to increase public spending. 

The challenges of this proposal are thus multi-levelled:

1.       It is necessary to generally raise awareness of the monetary problems endemic in systems that stem from long before Internet times.  The mechanisms of money creation and supply are as little known and understood as the exponential effect of compounding interest on interest.

2.       It is required to make mental connections between monetary causes and economic effects.  Communities and the environment are affected globally and debts in bank accounts add to people’s poverty.  Economic indicators of unemployment, Gross National Product, inflation and interest rates do not reflect the suicide rates of bankrupts, the deterioration of the environment or the health of individuals and indebtedness of companies.

3.       The concept of a Currency for Wales is proposed as a solution that is not only stable and sustainable as a monetary tool but also apt for the development of sustainable agriculture, public and long-term employment.  The idea implies that a Currency for Wales

a.        Is used only as a medium of exchange, not traded as a commodity and is thus stable

b.       Is created by mutual credit (i.e. by transactions between currency users), not as fiat (i.e. issued by an authority) currency; consequently the currency is inflation-free and the money supply is unlimited

c.        Is used in parallel with the Euro, not instead of it, and thus becomes a complementary tool for trading, especially for the benefit of Small and Medium Enterprises (SMEs)

d.       Is restricted in its usage to the Principality of Wales as a mechanism for self-governance, self-regulation, economic self-determination and a model for a Europe of the Regions.

2.0         The Problems

Prof. Bernard Lietaer, former employee of the Central Bank of Belgium, co-designer of ECU, the forerunner of the Euro and author of The Future of Money, describes four reasons why the monetary and economic crises of our times have to be redressed by the creation of parallel or complementary currencies:

¨       The increasing longevity of people causing costs for pensions and care

¨       The revolution caused by information technology creating unemployment with increasing costs in social security

¨       The decreasing quality of environmental conditions requiring sustainability to extend environmental issues into the monetary domain

¨       The monetary instability and currency crises.

More information about the future of money as seen by Prof. Lietaer:

2.1           Living Longer

It is well known that many elderly people sell their homes to ensure that they are looked after.  It is equally well known that the next generation has to work for a living and cannot look after their elders.  As a result, the wealth created by one generation can not be passed on and the wisdom and life experience of an ageing population is wasted while the working generation has a hard time making ends meet. 

Scandals with pension funds are as much a sign of our troubled financial times as the loss of value of pension payments. 

In addition to costs for caring, health costs are increasing as the population is living longer.

þ A Currency for Wales would compensate for the lack of public funds by being available for the public expenditure of social costs – but only in the Principality of Wales.

2.2           Unemployment

Social security costs are an increasing part of every budget just as unemployment has become a fact of life.  But LETS (Local Exchange Trading System) groups are growing world-wide to compensate for the lack of money on a community level while commercial barter companies do the same for businesses.  These phenomena would not have arisen if there was enough money around as a medium of exchange. 

Similarly, TimeBanks address the challenge of rewarding community volunteers because there is not enough public money to spend. 

þ A Currency for Wales would combine the principles and advantages of these complementary avenues by remunerating unemployed people and volunteers thus reversing trends towards violence, drugs and depression.

2.3           The Demand for Sustainability

How many young people would love to plant trees to save our environment but can’t get paid for it?  How many rivers and beaches need cleaning but are not part of public funding programs?  And how many farmers who have lost their animals are expected to be paid to look after the countryside instead of looking after animals?  How many farmers would like to be supported to ‘go organic’ but can’t afford to do so under present market conditions?

The imbalance created by big business and transnational corporations is not in line with the Welsh traditions of healthy and organic farming and agriculture that would naturally be sustainable if it was not ‘managed’ by bureaucrats applying financial criteria and influenced by big business.

þ A Currency for Wales would compensate for the lack of money in the rural areas by operating as a tool for trading that also would pay for basic requirements such as water, energy, telephone and petrol.

2.4           Global Monetary Crises - Opportunity for Regions

Before September 11, demonstrations against financial globalisation began with the Battle of Seattle and continued in Washington, Melbourne, Prague and Genoa.  The next summit meeting will be held in Qatar and NGOs world-wide are continuing their campaigning.  Awareness of the issues varies from anti-capitalism to cancelling Third World Debts and sympathy for everybody who has no food and shelter, let alone employment.

þ Wales can ensure and model the creation of wealth in rural and urban contexts by introducing a Currency for Wales.  Thus Wales would show the world how to eliminate flaws of monetary designs and construct sustainable alternatives.  How Malaysia has done it with her conventional currency is an example of what is possible for determined politicians when they face persuasive economists and seductive bankers.  See App. 1.

2.5           Economic Effects

2.5.1      Never Enough Money – neither Public nor Private

Creating New Money is the report by Prof. Joseph Huber and James Robertson published by the New Economics Foundation. It suggests how the Government should make use of its right called ‘seigniorage’ to create money: and calculates how much money could be available for public spending. 

The fact that there is always enough money for war but never enough for health and education was already bemoaned by a Labour MP in 1944.  Since then, the rate of financial transactions per day has increased enormously, but the result is that over 90% of all transactions are part of the ‘financial economy’ rather than the ‘real economy’.

The financial economy is driven by the City whose raison d’être is to make money out of money.  In contrast, Wales is a prime example of the real economy of land, animals, plants and industries besides people willing to do meaningful work that contributes to Sustainable Development. 

þ Organised according to the best practices of all known approaches to community banking and barter currencies, a Currency for Wales would increase the money available for Public Spending, Business Start-Ups and Self-Employment and thus contribute to a major economic rejuvenation – especially in the depressed communities of the Valleys where an increase in the supply of money would lubricate the willingness of people to trade with each other and exchange services. 

þ With the introduction of a Currency for Wales for Public Expenditure, it is paramount to agree that local Municipalities accept the Currency for local taxes.  This would enable the financing of essential repairs to schools and nurseries.  Similarly, the most acute problems in the National Health Service could be financed by mutual credit between the Assembly and NHS Trusts in the Currency. 

2.5.2      Life-long Indebtedness – Personal and Corporate

The more one studies the subject of monetary reform with its associated areas of ‘bank victims’ and ‘financial casualties’, the more it becomes clear how life-long indebtedness begins with student loans, continues with mortgages and ends up with pensions that continuously decrease in value. 

There is an increasing number of companies who make money out of checking the bank accounts of people and companies and who have observed that over 80% of all company accounts have been overcharged.  See  

The ‘National Debt syndrome’ is perpetuated by municipalities being in debt and public expenditure severely curtailed.  In the US, the State and Local Government Economic Empowerment Act HR1452 is proposed so that municipalities are given interest-free loans.

In the UK, the early 90s saw some 50,000 companies go bankrupt per month.  What happened to all those company directors, their staff and the homes of the wives that often served to secure company loans?  Who acts on behalf of the young men and farmers who kill themselves because there is no hope for solving financial problems?

þ A Currency for Wales would have ‘credit control’ built in just as commercial barter companies check that their traders are not taking unduly more than they are giving.  But loans would never be recalled without any notice.  In Islam, banks are supposed to share the risks of companies by taking equity in the company, not their assets on top of interest payments.

2.6           Monetary Causes

There is not one answer, there is not one cause.  The ABC’s of Financial Capitalism (See App. 2) is an article that was presented by David Korten, author of When Corporations Rule the World, to the International Forum for Globalisation in San Francisco.  It is attached as a primer for understanding the problems endemic in a system that appears to be beyond anybody’s control.

While ‘money’ touches everybody’s life and runs it to a larger or lesser degree, ‘currency’, ‘money creation’ and ‘money supply’ are a mystery to most.  Even economists don’t know what monetary reformers have known for nearly two centuries.  For the history of ‘social credit’ see

In addition to monetary causes, the working practice of banks also varies between countries: in Switzerland interest rates are low and stable – just as they used to be in former East Germany.  Banks are supposed to compete with each other, but banks could also provide a public service instead of working for the benefit of their shareholders. 

þ JAK is a membership bank that was created in Denmark thirty years ago and has been a model for community banking and credit unions. 

3.0         A Solution for Wales

A Currency for Wales would not only be an interest-free tool for trading, but also stable because free from inflation.  This is due to the fact that it is not traded as a commodity but only used as a medium for exchange.  Thus the Currency is not susceptible to currency market prices and the ensuing change in value, nor subject to varying interest rates.  In this way, a Currency for Wales would be sustainable as a long-term and stable currency.

Agenda 21 defines Sustainable Development as “the progressive integration of the economic, social and environmental issues in the pursuit of development that is economically efficient, socially equitable and responsible and environmentally sound”.

Hazel Henderson has published Economics in the Solar Age and is well known for her Quality of Life Indicators that take health and the environment into account. 

Her principles have been applied by a team of academics at the Welsh Institute of Rural Studies within the University of Wales Aberystwyth (See Monitoring Sustainable Development in Wales: a Pilot Index of Sustainable Economic Welfare by Peter Midmore, Jon Mathhews and Michael Christie, January 2000).

þ A Currency for Wales would not only be sustainable because it would be interest- and inflation-free, but also a highly efficient economic mechanism.  Furthermore, its effects could also be measured by indicators that take sustainability into account.

3.1           Economic Results of a Currency for Wales

The concept of a Currency for Wales is designed to:

·         reflect the wealth intrinsic in the people and the country of Wales even though some are categorised as ‘deprived’ under the present system

·         encourage people in Wales to trade with each other

·         reward community work for which there are no public funds

·         pay unemployed people to work on public projects

·         provide additional purchasing power to buy local produce

·         act as a model currency and stable tool for trading.

The creation of wealth as a result of public work would be measured as much as the decrease of poverty, indebtedness, illness, suicides, divorces, pollution, unemployment and social costs.  Just as LETS and Time Banks have the power to unleash hidden talents in the community, a Currency for Wales would unleash an economic potential hitherto not realised. 

The National Assembly’s Agenda, edited by John Osmond, says that “…In fact, over 40% of the overseas enterprise in Wales are owned by American firms. And employment in overseas owned manufacturing plants in Wales only accounts for 5% of Welsh employment. … There is an acknowledged reluctance for small and medium enterprises to export…”  

The reluctance to export is a sign of natural sustainability, i.e. local produce and products serves local people, without burdening the environment with the effects of transport. 

þ The economic effects of a Currency for Wales would not be measured in terms of import/export and foreign investment, for the whole purpose of the Currency for Wales is to increase its circulation region-wide and not to respond to international capital that comes to make money and goes as soon as such chances diminish. 

3.2           Monetary Benefits of a Currency for Wales

Sustainable principles in the creation and management of a Currency for Wales would reinforce Sustainable Development more effectively than any other measure taken within the current limitations of public funds, be they in Sterling or in Euro.  Page 133 of the National Assembly Agenda says:

Sustainable Development is supposed to embrace three broad themes:

¨       Measures to improve the quality of life…

¨       Measures to ensure the health of the processes that maintain the long term stability of the biosphere…

¨       The management of our heritage… to enrich our own and future generations.

þ A Currency for Wales would have the long-term stability expected by Sustainable Development and would eliminate those principles that have been found to be limiting and restrictive while enacting those that have been found to be liberating and increasing economic productivity.

4.0         The Challenges

Before implementing a Currency for Wales, a lot of thought has to be given not only to the idea and concept but also to the launch and introduction and the day-to-day administration. 

This might include competitions

¨       to name the currency

¨       for banks to tender for this public service as a Public / Private Partnership initiative

¨       for Smart Card companies to tender for the most suitable technologies similar to the MONDEX experiment which was backed by five banks and £40 million.

þ In response to those who suggest that the Assembly is not doing enough with its powers, the creation of a Regional Currency as a territorially limited, non-tradable currency would strengthen the Assembly’s ability to deliver Anti-Poverty Strategies, Rural Development Plans and Sustainable Development.

4.1           Legal Tender

When commercial barter currencies create their ‘trade pounds’ as a parallel currency that is limited to its membership, every transaction is taxed as if it was paid for in Sterling, even though the purchasing power is obviously not the same.

As long as Wales is considered ‘deprived’ and thus eligible for European grants, it appears illogical to treat a Currency for Wales as taxable tender, since it would be valid only in the Principality of Wales. 

For Whitehall to decide that the People of Wales cannot do what their elected Assembly votes to do in terms of economic self-determination as a mechanism for devolution would hardly be tenable.

4.2           For Europe and Parallel to the Euro

Tourists are used to changing currency.  Sterling (or Euro) could be changed into Currency for Wales by the ‘Public Services Bank of Wales’ in the same way.  However, traders would have the freedom to accept 100% Welsh, 100% Sterling or any mixture. 

þ The goal is to give the people of Wales tools for trading among themselves while they can use Sterling (or Euro) for trading with the external world.

4.3           Between London and Brussels

While Nation States lose their financial power, a Europe of the Regions does not have regional monetary bases.  Meanwhile, Wales is financially and thus economically dependent on both London and Brussels. 

þ As a tool for self-determination, the Currency for Wales would add a degree of freedom hitherto impossible.

4.4           Taxes for which Coffers?

LETS currencies are currently ignored by the Tax Authorities.  In Australia, a law was passed to ensure that people who receive social benefits are not penalised.  Similar recommendations were made in the UK.

Commercial barter companies, however, need to treat their currencies as if they were Sterling, even though they do not have the same purchasing power. 

ATTAC - Association for the Taxation of Financial Transaction in Aid of Citizens –was created as a French Coalition after the article Disarm the Markets appeared in Le Monde Diplomatique in 1998.  Appendix 3 shows the Platform Statement that was signed by the founding members.  Now the coalition is represented in 26 countries. 

ATTAC is promoting the Tobin Tax, named after an American economist who suggested this tax already thirty years ago.  The Tobin Tax is now being discussed by the French and German governments as well as in Brussels.  After having been promoted most actively by War on Want and the World Development Movement in the UK, ATTAC UK will be launched on November 17th 2001. 

þ A Currency for Wales would ensure that local taxes can be paid in Currency for Wales while national taxes continue to be paid in Sterling or Euro. 

4.5           Funding from Europe

In the spirit of a Europe of the Regions and given the eligibility of areas of Wales for European funding, it would appear natural to be able to attract funds for from Brussels.

As this requires European partners, it would be strategic to select manufacturing plants that demonstrate excellence in terms of Sustainable Development such as solar panels from Germany and recycled paper from Denmark.

Instead of trying to attract foreign investment, it is recommended to ‘import’ European know-how for creating manufacturing plants that put Sustainable Development into practice. 

þ A Currency for Wales Project would outline not only the creation of manufacturing plants but also how employers use Currency for Wales to reward employees and to put Currency for Wales into local circulation. 

5.0         The Technologies

Historic precedence for local currencies abounds in the UK, e.g. the Druid Penny issued by the Anglesey Copper Co. in 1787 and the Merthyr Silver Token in 1811.  Since the 1960s Cardiff has grown in importance as a financial centre and since the move of the Royal Mint to Llantrisant in 1968 Wales has produced coins not only for the whole of Britain but also for many other countries.

For example by the financial year 1981/2 the Royal Mint was producing coins for no fewer than 57 overseas countries.  Embedded in the concept of Global Citizenship and a Europe of the Regions, a Currency for Wales could extend the use of local notes by using Smart Cards. 

The MONDEX technology for an electronic purse that was tested in Swindon has already been modified such that it can be used for ‘barter currencies’ such as the Currency for Wales would be.  It consists of a reader device that looks like a flat mobile phone for traders and an ordinary smart card for traders.  In Belgium it is customary to pay for petrol with smart cards – albeit with conventional currency. 

Appendix 4 shows the current state of the art of using simple tools and sophisticated technologies for the purpose of administering trading balances between the users of barter currencies. 

While LETS began with printing cheque books, a ‘Tauschring’ (circle of exchange) in former East Germany introduced a ‘mutual recording booklet’ that has now been introduced in Hillingdon near London.  The founder of LETS who lives in Canada is introducing on the web with server software that allows for a multiplicity of barter currencies.

Meanwhile a Tauschring in Austria is working on a clearinghouse for complementary currencies that uses time as the internal accountancy unit on the web.  This allows for intertrading between members who use different currencies in the same way as the Bank for International Settlements in Basel allows for exchanging different national currencies.

þ The Currency for Wales Project would draw on the experiences gained from eight years of South Powys LETS and its technologies.

5.1           Possible Public Projects

The idea for a Currency for Wales is profoundly ‘public’, i.e. it is meant to be run as a public service, to fund public services and to generally ‘lubricate’ the trade of products and exchange of services in the Principality of Wales.

With that intention in mind, it would be most strategic to ensure the support of

¨       local authorities to accept taxes in Currency for Wales

¨       gas, water,  electricity and telephone companies to be paid in Currency for Wales – possibly in part

¨       selected groups from the private, voluntary and community sector to be funded by Currency for Wales.

5.1.1      Global Perspectives in Adult Education

The Workers Education Association in Wales has launched a Global Perspectives project with a conference on October 19th 2001.  It offers people knowledge and skills by drawing lessons from across the world on labour and human rights, trade, debt, literacy campaigns, and local responses to global environmental problems. 

Its Project Partners and Supporters are the Wales Development Education Umbrella Group, the Department for International Development, the National Organisation for Adult Learning and the City and County of Swansea.

þ The conference organiser is familiar with LETS and the Tobin Tax and would gladly co-operate on the Currency for Wales project.

5.1.2      Recycling Paper with ‘Sustainable Wales’

This charity seeks to integrate environmental, social and cultural concerns in the spirit of Agenda 21.  With this remit it has focussed on making recycled paper a priority and would gladly ensure that Wales gets a manufacturing plant set up – following the experiences of its Danish suppliers.

This proposal would be fully in line with the Assembly’s recent draft Waste Strategy.

5.1.3      Rewarding Volunteers with ‘Groundwork Trust’

Groundwork Trust is already involved in a Community Café with Internet facilities where Hillingdon Pounds and Cuppa vouches compensate for the lack of money in a deprived area.  A proposal is currently under consideration for the use of interest-free time based currency to attract more volunteers to environmental projects in the Rhondda valley.

þ The Currency for Wales project should draw on these experiences at the design stage.

5.1.4      Remunerating Women Volunteers

þ The Currency for Wales project has been fostered by women who are supposed to shy away from money, power, politics and economics.  The Wales Assembly for Women, the Women’s International League for Peace and Freedom and Women’s Aid would be women’s organisations who would be open for co-operation due to the long-standing relationships already established.

5.1.5      Circulating Currency with the BodyShop

As a patron of Time Banks UK, Anita Roddick has recently spoken very supportively at a TimeBanks conference and it would therefore seem possible to ensure that all BodyShops in Wales would accept Currency for Wales.

þ Currency for Wales is a ‘barter currency’ that facilitates exchanges at all levels: business, voluntary and statutory.  It is only valid in the Principality of Wales and complements Sterling (or Euro) at a 1 : 1 exchange rate.

6.0         Considerations for Implementation

An interest-free currency could become for Wales what blood is for the individual: an essential medium that circulates to every organ of the body politic and so benefits all sectors: public, private, voluntary and community.  The funding methods differ between the sectors and vary from public funding to venture capital, shares and loans to non-repayable grants. 

The introduction and management of an interest- and inflation-free currency would have to take into account the following considerations

¨       An Agency set up by the Assembly requires public funding in Sterling.

¨       A “” Agency requires

o        Accountability to the Assembly of Wales

o        A Governing Council with equal representation from the public, private, voluntary and community sectors

o        An Advisory Board with expertise in monetary analysis, barter solutions, banking practices and computer technologies to ensure best practice

o        Staff to promote, oversee and monitor implementation, practice, results and effects in terms of Sustainable Development.

¨       A Managing Bank would be selected through a tendering process and would be appointed to deliver a public service at specific PR terms and financial conditions.

¨       Account holders and Smart Card traders whose mutual credit transactions are analysed and evaluated for frequency and volume of trading.

¨       Voucher users whose supply with Currency for Wales requires evaluation and monitoring.

þ In summary, just as the setting up of an Assembly for Wales was an innovative step into uncharted territories, so does the creation of a Currency for Wales offer an unknown potential.  Instead of providing short-term finance for maximum returns in a climate of scarcity, a Currency for Wales offers funding for

¨       Sustainable Economics through long-term economic mechanisms for stability

¨       Public expenditure through a careful portfolio of European, UK and self-created funds

¨       Profitable business through interest-free loans

¨       Voluntary activities through balancing Sterling (or Euro) with Currency for Wales

¨       Charitable and community activities through virtually unlimited ways of rewarding volunteers.



1         How Malaysia got away with IMF Heresy – Margaret Legum, South Africa New Economics

2         The ABCs of Financial Capitalism – David Korten, People-Centred Development Forum, USA

3         Platform Statement – ATTAC – Association for the Taxation of Financial Transaction in Aid of Citizens

4         Information Platforms for Interest-Free Currencies – Compiled by Sabine Kurjo McNeill



Richard Douthwaite - The Growth Illusion - How economic  growth has enriched the few, impoverished the many and endangered the planet 

Michel Chossudovsky - The Globalisation of Poverty - Impacts of IMF and World Bank Reforms.

Margrit Kennedy - Interest and Inflation-Free Money An exchange medium that works for everybody and protects the earth

Michael Rowbotham - The Grip of Death - A study of modern money, debt slavery and destructive economics

Bernard Lietaer - The Future of Money - a new way to create wealth, work and a wiser world

Glyn Davies, Former Chief Economic Advisor to the Secretary of State for Wales – A History of Money

More on - the site that includes the Forum for Stable Currencies with regular meetings at the House of Lords since 1998.


Key Websites:                                                    

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