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Frustrated by the Euro, Greece Turns to Alternative Currencies

Leonidas Ntilsizian

Wooden and tables and chairs offered in kaereti prices.  Credit:  Leonidas Ntilsizian/IPS

Wooden and tables and chairs offered in kaereti prices. Credit: Leonidas Ntilsizian/IPS

IERAPETRA, Greece, Mar 14 2012 (IPS) - “Watch out! The caustic soda is dangerous,” shouts Rea Pigiaki, while she blends the soda with lavender to prepare her scented soaps, which are very famous in Ierapetra, a small town in Southeast Crete.

Pigiaki, a mother of three, offers her homemade products to fellow members of the Ierapetra Alternative Currency Network. She charges 1.5 kaereti – Ierapetra’s local, digital and so-called “social” currency – for each bar of soap and usually receives local honey and oranges in exchange for her products.

“There are no euros in our wallets any more. Kaereti seems to be an answer to what is going on in the Greek economy,” she told IPS.

All network exchanges are recorded in a central computer, where members post whatever they can offer, covering a very broad variety of both products and services.

Members note down which products and services they need. When two members agree on a product exchange, they each refill the other’s account with the agreed amount of kaereti. The key point is that no euro or other official currency is in circulation and all exchanges are made exclusively in kaereti.

The word “kaereti” belongs to the local dialect and means, “I offer a short help to someone in need, without expecting a benefit.”

Fresh fish, wine, the famous raki of Crete, Arabic coffee, local agricultural products, wooden furniture, handmade gifts, biological soaps, essential oils, homemade chocolate, jewellery – whatever you can imagine – are being offered and rapidly exchanged through the digital network.

The network of tangible goods is complemented by a great number of services and a well-equipped workforce ready at every turn to offer its skills: electricians, plumbers, tailors, oil-painters, gardeners, graphic artists, legal advisers, accountants, teachers of foreign languages, dance and music, the list is endless.

The most unusual item seems to be a member who “offers his studies in marine architecture,” notes Alexis Machairas, a founding member of the network. Basically, the Ierapetra network is fully self- sufficient and professional.

“The local currency was founded in August 2011 and so far more than 300 members of the local society participate,” Machairas explains. “Especially in the last weeks –when Greece’s economy has shown a (marked decline) – the number of members and transactions has rapidly increased. In the last month the network increased its membership by one third and at least one transaction is recorded per day.”

Transparency in the local monetary system is certainly a great advantage. All members have access to the main table which shows the time of the exchange, the prices and the number of exchanges made every moment. One kaereti is equal in value to one euro but euros are not allowed within the network.

“Alternative currencies are (primarily directed) towards poor people,” notes George Stathakis, professor of political economy and vice chancellor of the Univeristy of Crete. “All alternative networks are a very serious basis to overcoming obstacles the poorest layers of society face.”

In that way, old activities reemerge and take on a new value, while simultaneously generating employment.

“All exchanges are based on trust, transparency and simplicity. Today, 26 different exchange networks function in Greece (though) kaereti is the (most) ambitious one,” pointed out Stathakis.

“By the end of the year, there will be around 100 (such) networks in Greece. Those who count themselves among a network’s 300-1000 members have a good perspective on how to succeed in local society and will certainly receive great benefits.”

However, though the so-called “social coin” gives hope to the poor it does not solve Greece’s macro- economic problems, since it lacks an institutional or state-wide base.

“At any time networks can be at the mercy of the internal revenue centre. That is why there is an immediate need for legal regulation,” remarked Stathakis.

“The kaereti is not a substitute for the euro,” he added. “It works parallel to the regular economy.”

Moreover, the exchange economy has deep roots in the region. Until 1960, the barter system still regulated Crete’s agricultural sector.

“My mother remembers that until 1959 when my family had been renting a home in Chania the rent had been paid just in oil,” the professor reminisced.

The exchange economy allows participants to make mutual profits. For instance, Kostas, a member of the kaereti network, organises summer excursions on his boat and during the winter he cultivates his field, which enables him to offer oil and olives to the network.

On the other hand, Dimitris, another member, is an insurer who is providing car insurance services to Kostas in exchange for olive oil.

“We will both make a profit,” they say.

“In normal conditions, the trader charges 1.80 euros for a single litre of olive oil and a customer at the supermarket usually buys the same quantity for 5 euros. We now both made an agreement for 2.5 kaereti for the one liter of olive oil and no middleman intervenes between us.” Dimitris explains.

The exchange will be immediately recorded in the network, Kostas will add more kaereti in his account and, after a few months of selling his oil, he will ask Dimitris to provide him his annual car insurance.

Today, in Ierapetra, “members of the network pay the bills for elderly people, offer lifts to other locals and even babysit,” said Ioanna, a social officer in the network.

“Strong bonds between members strengthen each day. The members take into account the real needs of their fellows. In addition, every one can show their own personal skills. There are members who can repair wooden chairs and now feel useful and productive.”

With the absence of the euro opening the door to solidarity between people the “kaereti coin” represents an effective path out of an economic crisis born and bred of financial speculation.

Kaereti members often quote the Nobel prize-winning Greek poet Giorgos Seferis, who said, “In our gradually shrinking world, everyone is in need of all the others.”

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