Vol. 25 (Issue 1) pp. 68-74

Tax-credit instruments as complementary currencies: a policy proposal for fighting the austerity while saving the euro zone

Thomas Coutrot* & Bruno Théret**

*Economist and statistician, DARES, French Ministry of Labour and Employment

** CNRS Senior Research Scholar emeritus, IRISSO – Paris Dauphine University, France


How should progressive governments respond to what seems an endless crisis of the eurozone? Most of the policy debate focuses on two equally bad options: either pursuing the current path in hope to “muddle through” or exiting the eurozone. This paper outlines an alternative strategy where the euro is preserved as the common currency used in everyday life but complemented by national means of payment, a type of quasi-money made up of low-denomination Treasury notes. Backed by future tax revenues, this means of payment would be called the euro-franc, euro-lire, euro-peseta, euro-escudo, etc. It would be kept at parity with the euro but its exchange into euros would be strictly limited and submitted to special conditions. A Member State determined to implement this policy would probably face retaliatory measures from European institutions, but it cannot be expulsed from the eurozone nor from the EU. The outcome of such a confrontation would depend, among other things, on government’s ability to win confidence of its population for the plan, to gain popular support in other European countries and to negotiate firmly with the EU institutions.  Such a step would be only one element of a broader economic policy package, including tax reform and debt restructuring. But it would be the key element, as it would make it possible to resist creditors’ blackmail and stay the course long enough to reconcile the two imperatives of any progressive strategy in Europe today: using national democratic spaces to build a European public space and redirect the European project towards more cooperation and solidarity.


Tax-credit money, complementary payment systems, eurozone, austerity policy

Article Coutrot et al.

To cite this article:

Coutrot, T and Théret, B (2021) ‘Tax-credit instrument as complementary currencies: A Policy proposal for fighting austerity while saving the Euro zone’ International Journal of Community Currency Research Volume 25 (Issue 1) 68-74; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2021.005