Spain: Paying with pesetas in Salvaterra de Miño

In Fina Rodríguez's shop, Spain's former currency is welcome
In Fina Rodríguez's shop, Spain's former currency is welcome
6 January 2012 – Le Monde (Paris)

In response to the crisis, shopkeepers in Salvaterra de Miño have decided to once again accept the former national currency. And the customers, attracted by prices at the same exchange rate that applied at the launch of the euro in 2002, are flocking to the Galician village.

Only the day before, Ana Perez, a beautician in the municipality of Salvaterra de Miño in Galicia, northwestern Spain, had another customer with pockets full of pesetas. "She had 30,000, the equivalent of 180 euros. She spent 20,000 here to buy three bottles of perfume, one for herself and two give as presents," explains the delighted young woman.

On Tuesday 27 December, business was relatively slow but ever since the launch of “Operation Peseta" on 1st October, which enables people to buy virtually everything in Salvaterra with the former Spanish currency, Mrs Perez has seen customers arrive from near and far afield. She has even had visits from a few collectors. Would she happen to have some old banknotes dating from 1949?

Like Mrs Perez, local optician Sandra Ameijeira Rivas, kitchen equipment shopowner Fina Rodriguez, and formerly unemployed hairdresser Montse Ledo who now co-manages a local bar restaurant, the 50 traders participating in the scheme in Salvaterra, which is organised by the Unes association, have something to smile about.

“Operation Peseta" has brought a ray of sunshine to Salvaterra de Miño. The village, perched in the Galician mist on the banks of the River Miño, has had difficulty coping with competition from rival businesses in the pretty Portuguese town of Monçào, which is only a few hundred metres away. You only have to cross a bridge to shop in the Continente supermarket in Portugal.

A harvest of one million pesetas

For Mrs Perez, whose fiancé has been unemployed for a year, the operation which has enabled her to bring in 300,000 pesetas, has been a breath of fresh air. The salon, which she opened in June 2008, has been struggling. Formerly employed as a beautician in Vigo, the region’s large town which is some 20 kilometres away, she wanted to become her own boss, and Salvaterra de Miño seemed like an ideal place to set up shop. At least, so she thought.

The area was booming. There was talk of building a vast business park, the "industrial pentagon," which was supposed to attract companies like Mitsubishi, and PSA Peugeot Citroën from overpopulated Vigo. Buildings to house the thousands of potential workers had already begun to sprout up. After 30 years in office, Mayor Arturo Grandal Vaqueiro was convinced his dreams of grandeur would finally be realised...

But by the end of 2008, Anna noticed there was a slowdown. The crisis had begun to gnaw at Spain. The “pentagon”never evolved beyond an architect’s model on show at the mayor’s office, and there are five uncompleted buildings in the municipality. Everything has ground to halt.

Thanks to “Operation Peseta," the village has become the flavour of the month for journalists. "It has been a surprising success," explains Pablo Pino, President of the Unes association. The initiative, which was supposed to last for only a month, has already been renewed twice, and now there are plans to prolong it until 31 January.

Peseta notes and coins minted after 1940 can be exchanged for coffee or perfume, or even televisions... at the same rate of exchange that applied in 2002: one euro for 166.38 pesetas. Traders have been equipped with a software package enabling them to immediately recalculate their prices and to give change in euros.

To date Salvaterra has harvested one million pesetas —a sum that the traders explain is an additional windfall. The peseta shoppers are not regular customers: they come from Vigo or even further afield to convert notes and coins that had remained in country homes, safes, and grands-parents’piggy banks. Sometimes they were kept as souvenirs, but, as Mr Pino explains, people cannot afford to be nostalgic in the current crisis.

70% believe euro has not improved their lives

It was Miss Ameijeira Rivas, the optician, who came up with the idea for the scheme, when she remembered that the Spanish central bank had calculated that more than 1.7 billion euros worth of pesetas remain in circulation.

In Spain where no time limit was imposed when the euro was launched, it is still possible to convert old coins and notes. But the Spanish are often unaware of this fact, or they are reluctant to travel several kilometres to exchange the affectionately nicknamed "blondes" (gold-coloured peseta coins) for euros.

Against the backdrop of the crisis in the monetary union and fears that the euro will be abandoned, the initiative in Salvaterra does appear somewhat strange. According to a survey the Real Instituto Elcano and quoted by El Pais, close to 70% of Spanish citizens believe that the euro has done little or nothing to improve their lives. This leads one to wonder: does the initiative aim to draw attention to the surge in prices prompted by the introduction of the euro, which was not accompanied by an increase in salaries?

Like the other Unes traders, Miss Ameijeira Rivas is adamant that there was no malicious intention: "Our goal was to boost sales, not to have people believe that going back to the peseta would be easy or desirable." Even if, month after month, the operation has been prolonged, No one believes it will last forever. "The pesetas are not recycled, once they are returned to the Bank of Spain," points out Mr Pino.

Translated from the French by Mark McGovern

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