The
introduction, according to the ECU-ERM, of ‘National Currency-Units (NCU’s)’
alongside the already existing ‘Euro-Currency-Unit (ECU)’ perhaps looks like,
but is NOT the same as introduction of ‘parallel currencies’ alongside
the Euro.
There
are clear and important advantages of the ‘parallel currency-units’ model of
the ECU-ERM compared to the ‘parallel currencies’ model. The world of the
ECU-ERM is different, better ….and more beautiful.
In
the enumeration underneath these differences (advantages) will be made clear in
comparison with the well known ‘Geuro’ proposal (May, 2012, click
here) of Dr. Thomas Mayer (Center for Financial Studies der
Goethe Universität Frankfurt and Deutsche Bank),
whose proposal involves the introduction of a new ‘national currency’ alongside
the Euro for Greece
 |
- With the implementation of the ECU-ERM there
will be no ‘second rate’ Euro (zone) member states. So there will be no
division in the Euro zone of any kind.
- Let’s Keep It Simple (KIS). For the
implementation of the ECU-ERM, there is no need for new physical national coins
and banknotes. After a simple adaptation of the relevant software systems of
the monetary authorities and financial markets, the ECU-ERM could be introduced
on a very short notice.
- For the implementation of the ECU-ERM, an
EU-Treaty change is not needed. In full compliance with article 128 TFEU, the
ECB-issued Euro remains the only legal tender in all Euro countries.
- ‘Gresham
- The ECU-ERM is managed by the independent
ECB, on the basis of objective economic fundamentals. Thus there will be no
unfair (overshooting) devaluations. And the necessary ECU-ERM devaluations will
therefore also be immune for (national) political pressures.
- The ECU-ERM excludes ‘currency speculation’.
And when the ECB executes its new tasks properly and promptly, there will as
well be no ‘NCU speculation’.
- Because
not a national authority but the ECB controls the money supply, ‘sustainable
price stability’ is guaranteed in every Euro country.
- ‘Last
but not least’, the ECU-ERM will be integrated within the Euro Pact.
So there will be no competitive/hostile
monetary system alongside the Euro Pact. Thus the ECU-ERM should be acceptable
for the Euro zone (monetary) authorities and pro-Euro politicians.
 |
| Ten Dam in conversation with Dr. Thomas Mayer and Prof. Ulrich Brasche at the ’BVMW Euro-crisis Conference’ in |
Interestingly, after he became familiar with the ‘parallel currency-unit’ concept of Ten Dam, in the Summer of 2012, Mayer adopted this concept (which Mayer calls ‘virtual currencies’) … together with several other idea’s of TMS……in his views about the future of EMU and the Euro.
See for instance Mayer’s ‘lecture’ (click here) at the ‘London School
“….We need to define the new architecture for EMU…EMU needs to be
based on politically neutral money and national fiscal sovereignty coupled with
national liability…. When the destination is clear it is easier to map out the
route to get there….parallel currency can be virtual only, the Euro can
remain cash currency…”
Obviously and according to a full and
correct understanding of the functions of money theory, Mayer should have more
precisely stated that “…..the
Euro can remain the only currency (means of payment) for cash and electronic
payment….”.
