Residents of Spanish Village Go Back to Peseta as Euro Crisis Takes Hold
A desperate Spanish village has turned back time and reintroduced the peseta in a bid to kick-start its ailing local economy.
Residents in Villamayor de Santiago, 80 miles south-east of Madrid, initially held onto the old money for fear the euro would fold.
In recent months their prediction, made when their national currency was phased out ten years ago, has inched closer to coming true.
Bring back the peseta: The Spanish village of Villamayor de Santiago has re-introduced the peseta. Pictured is a poster from villages on the border with Portugal which are also campaigning for a permanent return
They have been hit with spiralling unemployment - one third of the village’s 2,500 residents are out of work - and a nationwide dwindling of confidence in the single currency.
The price of basic foodstuffs has also risen by a staggering 43 per cent since 2002 and there are fears Spain may have to be bailed out by the eurozone.
Shopkeepers in the village took the drastic step of going back to the peseta in the hope that some residents would still have old coins and notes left lying around their homes.
And their gamble seems to have worked - with 6,000 euros worth of pesetas being spent since 30 businesses started accepting it in January.
And the village now believes it could spark a nationwide clamour by citizens estimated to still have 1.7billion euros worth of pesetas.
This is because, unlike other eurozone countries, pesetas can still be exchanged for euros at the Bank of Spain in Madrid where a deadline for turning in old money was never set.
Luis Miguel Campayo, head of Villamayor’s merchants’ association, came up with the idea after realising sceptical residents had held on to their pesetas ‘just in case the euro folds’.