As Greece'sfinancial plight worsens, an odd idea keeps popping up: aparallel currency alongside the euro that would circulate insideGreece and be used to pay for anything from taxes to food andclothing. Even German Finance Minister Wolfgang Schaeuble has saidthat Greece may need a parallel currency if talks with creditorsfail, people familiar with his views told Bloomberg.

One version of the idea calls the second currency a TAN, for taxanticipation note. Another calls it a grec, for governmentreimbursement exchange credit. There's also the TCC, for tax creditcertificate. In 2014, before becoming Greece's finance minister,Yanis Varoufakis pitched European governments on the FT-coin, where“FT” stands for “future taxes” and “coin” refers to “bitcoin.”

Details differ quite a bit, but the big idea is to free up eurosto pay foreign debts and to juice economic growth by spreading moremoney around domestically. The money would be an IOU issuedby the Greek government that could be passed from one personto another. The government could print a bunch of the newcurrency (or create electronic ledger entries if the currency isvirtual) and spend it on whatever governments buy, including civilservants' salaries. People would in theory be willing toaccept the money because it could be used to paytaxes.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.