
Refugees arriving in Italian town given notes to be used as local currency - phantom_oracle
http://www.bbc.com/news/world-europe-36769145
======
yardie
That's actually quite crafty. Instead of government assistance being dispersed
directly where it can be sent abroad and siphoned off through services like
Western Union it's pumped directly into the local economy.

This probably can't scale. Once enough money is involved organized crime will
find a way to siphon that money out of the community. For example, WIC debit
cards can be exchanged 50 cents on the dollar for cash.

~~~
pjscott
That's nice for the local economy. Not as nice for the non-local people who
would have received money but didn't. I bet some of them really could have
used the cash.

Whether or not this is a good thing overall depends on your priorities, but
remember that the consequences of a decision include not only the things that
happen because of it but also the things that _don 't_ happen because of it --
and the former are much more visible, so it's easy to accidentally forget
about the latter.

~~~
mc32
But it's the government giving it to them, not foreign aid or remittances.
It's not like they are taking money away from them. If I were Italian. I'd
like this aspect of helping your people while helping others at the same time.
Win-win.

~~~
pjscott
If you think I was making a point about what they should do, or what they have
a right to do, then... I didn't make myself clear, and I apologize. I'm
talking about concrete physical consequences. Who eats and who doesn't; that
sort of thing.

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danielmorozoff
Historically there have been many countries / communities that have used local
currencies and private issues of money to enable spending.

[https://en.m.wikipedia.org/wiki/Local_currency](https://en.m.wikipedia.org/wiki/Local_currency)

This was especially common during times of economic hardships: wars and
famines. Ex. Russian revolution, the pogroms. Things used were food vouchers,
lottery tickets, checks and obligations all sorts of things.

~~~
danielmorozoff
To add to that there's a large interest from currency collectors.

Some interesting issues were money in Jewish ghettos / concentration camps
during wwii

~~~
zdkl
Do you have some links I could read up on, or was this just the set up to a
poor joke?

~~~
danielmorozoff
Absolutely not a joke...
[http://www.jewishvirtuallibrary.org/jsource/Holocaust/money....](http://www.jewishvirtuallibrary.org/jsource/Holocaust/money.html)

If you are interested/live in NYC there is a library with a ton of research
materials on currencies/ history from all over the world at the American
Numismatic Society's library:
[http://numismatics.org/Library/Library](http://numismatics.org/Library/Library)

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evanb
This reminds me of the Hawaii Overprint Note of US currency during WW2.
Perfectly legal---but marked so that were Hawaii to fall it would not enrich
Japan.

[https://en.wikipedia.org/wiki/Hawaii_overprint_note](https://en.wikipedia.org/wiki/Hawaii_overprint_note)

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harterrt
Is this definitely a good thing?

It seems like Rome has provided a cash stipend to immigrants, but the local
government has intervened and restricted the immigrant's purchasing choices.
For example, this could be bad for the recipients if local shopkeepers had
significantly higher prices than online retailers or if they charged a premium
for extending this credit.

I see the benefits as well, which seem to be well represented in the other
comments so far. I'd be interested to see whether this actually helps everyone
in practice.

~~~
vmarsy
From what I understood they are not providing a cash stipend:

> €35 (£29; $39) per asylum seeker per day from the central government in
> Rome. This has to cover everything, from accommodation, food and medical
> care to Italian language lessons, work placements and assistance with asylum
> bureaucracy. _It also includes a couple of euros for pocket money._

What is not clear is: do they give a migrant 35 "fake" euros and tell him to
do everything himself, or do they just do this on the food part, but still
provide housing etc.

An exploit I could think of is if a local Italian goes and buys the migrants
"food stamps" for let's say 80% of their price. The migrants would be free to
buy anything with real € but he would pay an unnecessary 20% tax to the
Italian. And the Italian would be able to buy 20% discounted food. That's not
a huge amount of money at stake: Only whatever the Italian consumes in food
over the year. And the migrant would need to be stupid/greedy to trade all of
his fake € as he also need them for food.

~~~
esac
as an italian student living on 12€/day which covers rent and bills (6€), food
(4€) coffe to study after dinner (0.5€) and unexpected expenses i wonder how
those 35€ and for the first time i understand why people are angry at
immigration.. (we didn't get scholarships for 2 years because of the lack of
money)

~~~
internaut
Logistically it makes more sense to build shelter-in-place in Africa and the
Middle East. They are easier to police and supply.

Then the applications for refugee status can be fairly processed. This way
people won't be converted into organs, thrown off boats, enslaved or otherwise
taken advantage of. It should also serve to distinguish between genuine
refugees (for non-permanent visa) from warzones and the
holidaymakers/opportunists.

The current scenario is the worst possible route. Talk of migrants obtaining
work is a shibboleth that discerns whether you have your head screwed on
properly.

Are we really supposed to believe that millions of migrants are supposed to
integrate without understanding the language, law, culture and without the
schooling of so much as a secondary school student?

It is preposterous. Inexplicably stupid.

Even with successful integration it can take up to a 100 years for it to work.
Look at how long the Italians and Irish were outsiders in the United States.
And they were whites in a country historically unusually open to migration.
And they trickled in instead of millions per year. That's the easy route and
it is not that easy.

~~~
sanswork
>And they trickled in instead of millions per year.

In 1847 New York had a population of ~375,000 and had 52,000 Irish and 53,000
German immigrants in one year.

Same year Boston with a population of ~115,000 had almost 40,000 irish
immigrants.

During that time there was Irish immigration alone equal to about 3% of the US
population(650,000 immigrants vs 17m). The current EU situation is equal to
about 0.2% of the population(1m vs 500m)

------
vmarsy
It's like Growth hacking for this city. They subsidize the immigrants, in
exchange the immigrants are _forced_ to grow the local economy. These migrants
could get this money anyways, but 1) the town hides the latency for them. and
2) they actually give more freedom to the migrants on how to spend that money.

As long as the migrants don't get robbed and are fine with living there,
they're better off with this system.

------
eximius
I think the key to success here is the credit being drawn from the local
government not the immigrants. It's brilliant, frankly.

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ocschwar
Google the Worgl Experiment about a town in Austria that did this for their
own residents to try to get out of the Great Depression.

------
blue1
Local currencies are an interesting thing, but I think that calling these
notes "euro" is a big blunder. Even if they are intended to be exchanged at
parity, they are definitely not euros. The ECB could not like this.

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chvid
This just sounds crazy.

What are the credit notes backed by? I assume the shopkeeper can change them
to euros. But does the city have enough euros cover all issued notes? Or are
they effectively running a ponzi taking the real 35 euros a day from the
government and covering the refugee obligation with a credit note.

This should not be legal (and probably is not).

~~~
jcbeard
Legalities aside, there is a long tradition of giving out "fake" money to
foreigners that can only be used in exchange for certain goods and services.
In turn, local shopkeepers can use the certificates to exchange at some fixed
rate for currency. The first time I ever heard about such a scheme was
"occupation money." I have some of the German bills around here somewhere from
my family members when they were issued them, here's a wikipedia page:
[https://en.wikipedia.org/wiki/Allied_Military_Currency](https://en.wikipedia.org/wiki/Allied_Military_Currency).
I think the best thing about these schemes is that they keep the currency
local vs. enabling refugees from (understandably) sending the money back to
relatives (who perhaps need it more).

~~~
chvid
I don't have high thoughts about schemes like this.

First off: Why plot pictures of communist leaders on the notes?

My guess is that they know what they are doing and want to put the "fog of
politics" over it.

Don't accept our "patriot dollars"? I guess you hate our freedom, damn french
person.

Think our "refugee euros" are a ponzi scheme? Nasty racist bigot.

Making sure that any discussion of the soundness of the scheme degenerates
into a discussion of divisive politics.

Secondly: The 35 euros pr. person the state gives the city to cover all
expenses of taking in refugees is probably not a windfall. It is probably too
little as it needs to cover everything from hospitals, schools, food, housing,
processing cost and so on. (And not enough to give cash handouts for the
refugees to wire back home.)

But if you are a manipulative politician you can use the cash you get from the
state to run a ponzi scheme and claim the temporary surge in activity is due
to the benifits of multiculturalism, your forward-looking leadership or
whatever.

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cronjobber
Nice and nifty, good for them.

Alas, the story illustrates a not-so-nice point some are making: a big
incentive for indefinite protraction of the European refugee crisis is the
concomitant wealth transfer from tax payers (almost everybody), savers (many),
and indigenous workers (many) to businesses (few).

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kaonashi
It isn't 'fake money' at all. It's every bit as 'money' as Euros, the only
difference is the size & scope of the respective issuers.

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Digit-Al
I'm curious as to how they prevent fraud.

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whack
Calling it "fake money" is highly misleading (to me at least). This "fake
money" system sounds a lot more similar to food stamps or vouchers.

~~~
delbel
objectively speaking, all fiat money is fake. the only "real" money would be
considered notes backed by hard assets that can be produced on demand, like
gold, silver, or other hard assets.

~~~
mark_edward
Why is shiny rock more real than pretty paper? It's all a collective
hallucination

~~~
jacalata
"hard assets" means "things that people would want even if the bank that gave
them out collapsed". People wanting shiny things is seen as a more reliable
collective hallucination than any specific economy.

