The fundamental prescription on Euro crsis


Greece economic crisis has faced with extreme circumstances, and there is the possibility of default. Korean Conservative Party attributed it to the excess of welfare. On the contrary, progressive party argued that it was because of shortage of welfare. Who is right? In fact both parties' arguments are justifying their interest, but they do not know the primal cause of it.

It is not only with Greece that the national debts are gradually increasing and the rate of unemployment is going up, it is the same with Spain, Italy, France and so on. It is the problem of whole Eurozone and it is the problem of Euro.

Euro was made for the purpose of unifying Europe politically and economically, but what is the result? Europe is suffering a lot of conflicts and split up.

Greece economic crisis is the case which shows what happens if hoarding money in a country is extended to an international scale. Money is hoarded in a few countries and not circulated, and it is the problem.

Euro crisis was inevitable from the day the currencies of Eurozon countries were unified by Euro. If face value of the currency is not changed, it can not be circulated evenly in its realm and is concentrated into a few economic agents which is destined to make periodic crisis. From the outset, Eurozon countries must have nationalized not all of their money, but a part of it (especially a part of an international trade - see Silvio Gesell's IVA.) Right now, what is the fundamental prescription? Do they have to abolish Euro and go back to their own currency and make international currency to mediate exchange between each Eurozon countries?. No, there is a better way. Change Euro to Free-Money (aging currency: the currency that its face value depreciated regularly) proposed by Silvio Gesell, and we can solve the problem without any other political approach.

Free-Money is subject to the compulsion to circulate it. It never can be hoarded. If we convert Euro to Free-Money, all of the surpluses will flow to the point of crisis because hoarding money means loss. If Euro circulates, crisis will disappear, and Eurozon countries will be able to stop the conflict and will be one as they wanted.

ECB has applied negative interest policy. I guess ECB confused negative interest and Free-Money by Silvio Gesell. Free-Money means that the face value of all of money depreciated regularly; whereas negative interest is applied only to the money in bank, and it is  different. Free-Money is not negative interest, but to abolish interest, and it must not be confused; a similar concept is most dangerous to public. Negative interest cannot solve the problem. If money's face value is not depreciated regularly, money is still superior to goods and labor which costs for storage and maintenance. Therefore, money can ask interest as a tribute; no interest, no exchange. No exchange means crisis. We have to focus on that Eurozon economy not recovered even after negative interest policy. Finally, ECB added QE to it. We cannot guarantee the effect of it. We must understand what Gesell means accurately and practise it.

If we fix, that all of money's face value are depreciated regularly, we depend on the order and offer our money to exchange for goods and services of others. It is the same with the other's money; so, it is fair. "In everything, therefore, treat people the same way you want them to treat you, for this is the Law and the Prophets." Money circulation will become constant, steady and regular, and economy of Eurozon will be recovered and will thrive.

If we convert Euro to Free-money, ECB can tune demand to supply, and prices will be stable at last, but exchange rate will be fluctuated as of now. It would be not because of Free-Money but because of the other country's money and the fluctuation of prices resulted from them, and at that time, Eurozon can hold other countries responsible, and and they will watch the recovery of Eurozon and follow it. They will introduce Free-Money too. On the condition, we can make International Valuta Association by Silvio Gesell, and it will make exchange rate stable. Some might be afraid the possibility that Euro(Free-Money) holder change Euro to foreign money, but it is not matter. Euro as Free-money must come back home, because it cannot be hoarded. Its holders have no choice but to change it for Eurozon goods or services and offer their surplus as loan money. Thus, it is impossible that non-Eurozon countries hoard it and misuse it for speculative purposes. Loss by the fluctuation of exchange rate belongs to non-Eurozon countries until they introduce Free-Money.

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