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the issuance of a Citizen Smart Card that can be used as an ID card, in the Health System, as well as for gaining access to the food stamp program etc.

I just picked this up on re-reading. This amounts to the electronic infrastructure that could support the roll-out of an under-the-radar alternative currency. Food stamps, tax credits, income support...

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Tue Feb 24th, 2015 at 02:11:52 PM EST
[ Parent ]
See also:
Reform VAT policy, administration and enforcement. Robust efforts will be made to improve collection and fight evasion making full use of electronic means and other technological innovations.
[Public finance] Payment procedures will be modernised and accelerated while providing a higher degree of financial and budgetary flexibility and accountability for independent and/or regulatory entities.
* Devise and implement a strategy on the clearance of arrears, tax refunds and pension claims.
Establish a transparent, electronic, real time institutional framework for public tenders/procurement - re-establishing DIAVGEIA (a side-lined online public registry of activities relating to public procurement)
Improve swiftly, in agreement with the institutions, the legislation for repayments of tax and social security arrears
Step up enforcement methods and procedures, including the legal framework for collecting unpaid taxes and effectively implement collection tools
issuance of a Citizen Smart Card that can be used as an ID card, in the Health System, as well as for gaining access to the food stamp program etc


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Feb 24th, 2015 at 03:28:55 PM EST
[ Parent ]
It's not like Varoufakis doesn't play with open cards...

Can a Bitcoin-style virtual currency solve the Greek financial crisis? | Comment is free | The Guardian

If things go badly for Greece, finance minister Yanis Varoufakis has said he would consider creating a parallel digital currency, using Bitcoin's digital security and transparency, but doing the exact opposite of what the money fundamentalists intend.
by generic on Tue Feb 24th, 2015 at 03:51:09 PM EST
[ Parent ]
This reminds me of the old tally stick system in use up until the 19th century in the UK as well as in much of Europe during the middle ages. It also combines some of the features of Tax Anticipation Notes as advocated by Warren Mosler. Perhaps Greece could create enough Digital Euros to cover existing tax arrears. Even a fraction of that amount would constitute a serious stimulus when injected into the Greek economy. A further advantage is that this new money would be more likely to stay in Greece, where there is an assured use for it as payment of taxes.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 24th, 2015 at 04:00:20 PM EST
[ Parent ]
But, to create electronic money, don't you first need electronics?
by Upstate NY on Wed Feb 25th, 2015 at 09:34:52 AM EST
[ Parent ]
the issuance of a Citizen Smart Card that can be used as an ID card, in the Health System, as well as for gaining access to the food stamp program etc.

It's in the program...

You hand out smart cards to the entire population. They are initially intended for accessing the health system, and for food stamps. Every citizen has an account created by the government. Retailers and health providers need terminals, obviously.

Then, some time later, ta-daa, you roll out Citizen Smart Card 2.0. It's the card you already have, but now you have an "Air Miles" account, with an initial free allocation on it. You can use your Air Miles to pay your tax. Retailers who accept food stamps will accept them for payment too, using them for their own tax liabilities, and exchanging them with other companies (all companies can have an Air Miles account too). Government income support would also be paid through the system, perhaps pensions...

Pretty quickly you have critical mass for a purely electronic currency -- I don't see any immediate need for physical scrip.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Feb 25th, 2015 at 10:27:29 AM EST
[ Parent ]
And you need to wire up all stores anyway since you want to collect VAT effectively. Who can object to that.
by generic on Wed Feb 25th, 2015 at 10:38:19 AM EST
[ Parent ]
Can't wait to see the face of the Eurogroup chairman in June...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Feb 25th, 2015 at 10:45:12 AM EST
[ Parent ]
Still this presupposes that they make it to June. They'll have to fight the notTroika every step of the way. Have they even gotten a single cent yet? Of course it doesn't get easier to provoke a crisis once the can is bouncing down the road and the ECB governing council will probably be less hostile to Greece in another rotation. When was the timing for those rotations decided anyway?
by generic on Wed Feb 25th, 2015 at 11:12:38 AM EST
[ Parent ]
Also we shouldn't forget that the Eurogroup's record of keeping to its commitments is less than stellar.
by generic on Wed Feb 25th, 2015 at 11:21:44 AM EST
[ Parent ]
The rotation was decided in September.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Feb 25th, 2015 at 11:27:35 AM EST
[ Parent ]
Democracy is great isn't it?
by generic on Wed Feb 25th, 2015 at 11:30:16 AM EST
[ Parent ]
Who says June says April. The first order of business is to get past the liquidity crunch in mid-March. But they can already start legislating and implementing parts of their program. It will be interesting to see which are the first parts of the agreement that they implement.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Feb 25th, 2015 at 11:29:32 AM EST
[ Parent ]
Or rather this:

BITCOIN: A flawed currency blueprint with a potentially useful application for the Eurozone | Yanis Varoufakis

BITCOIN: A flawed currency blueprint with a potentially useful application for the Eurozone
by generic on Tue Feb 24th, 2015 at 03:52:55 PM EST
[ Parent ]
I must say I don't remember reading this before. Which sadly doesn't men I didn't.

YV's FT coins are pretty different from the proposals for tax anticipation notes we had so far. First their face value is greater than 1 when held for a certain time and used to extinguish tax liabilities. Secondly they can be exchanged to € at will. Finally he envisioned people buying them on their own initiative.

On the face of it I don't really see the upside here. Since the Greece has only limited hard Euro funding there is some risk here of a bank run. Then there is the distributional effect of and opportunity cost for what amounts to a tax break for people with savings.

Still, it's a year old, not a complete proposal and he wasn't a minister at the time.

by generic on Tue Feb 24th, 2015 at 06:28:57 PM EST
[ Parent ]
But it constitutes a savings for any who use the currency 'at maturity' to pay taxes. Probably the financial sector, if this comes to pass, will find a way to have some sort of convertible instrument/swap that earns interest as euros and then is convertible back to its digital form to pay taxes. If so the 'loanable funds' nuts will be ecstatic, and, given that the ECB is not really a central bank and the Euro is not really a sovereign currency, this might actually be true for this case. It might increase 'loanable funds' from Greek banks. The Greek central bank might treat it differently than the ECB with regard to regulations. Others could say better than I.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 25th, 2015 at 01:47:16 AM EST
[ Parent ]
...opportunity cost for what amounts to a tax break for people with savings.

For Greeks able to save or invest, with an interest in both activities, and a need to pay taxes, the Greek CB could structure these digital euros like one year treasury notes, accept them for 'repo' payable in another euro pegged non-interest bearing, domestic only currency which could be digital, and then say: "Look! Loanable funds!" This would then create, through further repo, a la Repo 101, additional loan capacity equal to the total of such initial 1% interest bearing bitcoins divided by the haircut. If some of this new money leaked out of Greece as payments for imports, so long as those accepting them clearly understood what they were, where is the harm to Greece? It would fix a lot, leave the hawks with another dilemma and provide another opportunity for the Eurogroup to show its revealed preference between Grexit and reasonable economic behavior. Were it working well in Greece by next fall it could become a major problem for EPP in the next election cycle.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 25th, 2015 at 11:16:49 AM EST
[ Parent ]

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