Thought the Spanish peseta had bitten the dust? Well think again

Thought the Spanish peseta had bitten the dust? Well think again. In just the last year several Spanish villages and towns have been quietly re-introducing the defunct currency alongside the euro as unemployment and a stagnant economy grip the country.

Some Spaniards are calling for the return of the peseta

Last year Mugardos in northwestern Spain began the trend for accepting pesetas when canny inhabitants realised that the Bank of Spain in Madrid had set no time limit for exchanging the old currency. Since then several other villages such asSalvaterra in the north have followed its example, with the latest being Villamayor de Santiago in Castile-La Mancha, the old hunting ground of the fictional hero, Don Quixote.

At least 30 businesses in the village of 3000 residents have begun accepting the outmoded coins and notes and the initiative has proven a great success with €6000 worth of pesetas having been spent to date. Villamayor de Santiago has suffered badly from unemployment and almost a third of residents are without work. Now, hard-up locals are only too happy to unearth pesetas squirrelled away when the euro was introduced a decade ago.

The guild of local merchants has been administering the scheme and in an effort to keep costs to a minimum is gathering the pesetas traded and exchanging them at the Bank of Spain in Madrid-150 kilometres away-on behalf of all the villagers.

Local traders in villages such as Salvaterra have welcomed back the peseta

For his part, new president, Mariano Rajoy, has tried to ease the pain of Spanish businesses by introducing a wide range of labour reforms. At the same time the European Union is demanding that austerity measures are swiftly imposed in the country to ease the deficit and prevent the need for a bail out similar to Portugal and Greece.

The electorate, already wary of the European Union’s demands, has been further outraged to learn from consumer association, OCU that in the last ten years since the introduction of the euro in Spain, prices have soared. Essential goods have risen by 43 percent, with the price of food products such as a loaf of bread increasing by 49 per cent and potatoes 113 per cent. An average family grocery bill for the year is estimated at €6,800, representing an increase of 48 per cent in the last ten years.

It is therefore no wonder that disillusioned Spaniards are resorting to the comfort of their erstwhile currency. Whether their efforts will act as a catalyst,  triggering a Europe wide movement to scuper the euro, is anybody’s guess. 

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