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EURO-BONUS : a post-covid inclusive medium of exchange

The initial finding
The Covid crisis, following the financial crisis of 2008, has reinforced awareness of the limits of our socio-economic system. Serious problems remain unresolved : the extension of precariousness, the very great difficulty of the States to redistribute wealth and to accelerate the necessary energy and ecological transition. The current economic system values citizens' contributions imperfectly and does not encourage specifically virtuous behaviour. Many sectors are left out or under pressure because considered as "unprofitable». Among the possible solutions, a radical change in the tax system is often mentioned, but it is slow to be implemented. The problems are planetary and taxation is a prerogative of the States, which are already struggling to balance their budgets. The Green New deal projects are ambitious but, based on a policy of reorientation of supply, they risk not meeting the real needs, which are also cultural and social. In the end, it is the monetary value system itself that is being challenged and becomes extremely delicate to manage, to save...

Innovation is underway
On a local scale, multiple experiences with complementary currencies aimed at enhancing the value of the local products and services, a more responsible consumption, have been set up. They generally concern an already informed audience and their impact remains rather marginal. On the other hand, alternative electronic currencies or crowdfunding platforms are experiencing a growing success! The concept of LETS, based on the model initiated by Michael Linton near Vancouver, Canada in 1983, has spread to more than 300 other locations and for about 30,000 participants. After the success of the WIR in Switzerland, a complementary currency that has been in use since 1934, it has been proven that it is also possible to spread an innovative experience in B2B. In B2C, it is also possible to broaden the scale of the experiences carried out, as as was demonstrated by the Coopek in France, which has brought together a set of local paper currencies around a common electronic money system. The June is another recently created currency, free and 100% electronic, based on the principle of the universal dividend. Experiments with basic unconditional income are being attempted in Finland, France, Scotland, ... and also in Germany where the association "Mein Grundeinkommen" is now supported and monitored by the economic institute DIW, which advises the German government, to test a basic income of 1200 euros on 120 people for three years.

The Euro-bonus project
By using the potential of alternative electronic currencies the project aims to create a system of exchange including both consumers and professionals. This system is more specifically designed to offer complementary means to those who need them most. It is a question of recognising a right to sufficient livelihood for every human being and not just for human doing.

The principle
A non-convertible exchange currency complementary to the euro is created each month on the basis of a quota allocated to each citizen (to reach an income level corresponding to the "poverty line"). This "currency" can only be spent on purchases from professionals who adhere to the system. These may also use this system among themselves or even to allocate, with their agreement, a supplement of income to their employees. The quota is not automatically paid to each person every month but is made available like a credit line. The sums actually used for expenses will be considered as taxable income. The people who already have a sufficient income can also participate in the system but only to make donations (and not for extra expenses). As the currency is not convertible it remains completely confined within the system. A negative interest rate can be recorded monthly in order to encourage the circulation of currency and discourage its accumulation (no savings or reserve function) and, for the economical sustainability of the system, a commission is levied on each transaction, at the same level as used in local currency systems.

In practice
Each user has a mastercard or visa type card that allows him/her to either spend money with the system's members up to a maximum monthly quota and with technical limitations (e.g. 160 euros per transaction and every two days), to collect payments as a professional or to make donations via a web platform.  The online services can also be used for B2B transactions. Each user has an account in the currency whose only use remains confined to the system (no convertibility). However, it is possible to provide for payments or transfers partly in Euro-bonus and partly in euros (in particular for the part intended to cover social and fiscal levies).

Governance
The main structure (association, cooperative or foundation) works in a decentralised way with partner sub-structures in each country involved in the system. Each of them is composed of three colleges: an economic college in charge of monitoring the system at both macro and micro economic level, a technical college in charge of setting up and monitoring the technological and legal framework, and finally a citizens' college in charge of the societal and sustainable vision.  The members of the colleges are involved in a personal capacity.  These colleges are coordinated and guide the work of operational teams made up largely of independent external resources and partners.  Partnership agreements are concluded in particular with associations and actors active in social aid, inclusion and sustainable development at local, national and international level.

Pilot phase
The first stage will involve 1 000 professionals and 10 000 consumers in about 10 European countries (out of the 19 in the euro zone). Each consumer has a Euro-bonus quota of less than 1600 per month (depending on the poverty line in his or her country of residence) and limits on use are set (e.g. €160 per transaction and every two days).  Working capital requirements in EUROS for transactions via payment cards (mastercard or visa) amount to a maximum of 10,000 x 160 euros = 1.6 M. This is a minimum target of funds to be collected in EUROS from donors to launch the system.  Then, the fees charged on the transactions cover the operational costs.

Further developments
Like the WIR, LETS or others, this system is not intended to replace existing economic frameworks but rather to complement or challenge them.  The system can therefore either develop, both sociologically and geographically, in the euro area or elsewhere, or evolve in a modest way.  The project aims to develop a more active and equitable culture of solidarity, social and economic inclusion, and to inspire more ambitious public policies in terms of social impact and sustainability.

Contact : Goéric Timmermans + 32 473 75 09 29

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