Europe could break up in a new financial crisis. Sovereign money would avoid it. Because only such money is money of all citizens.

Hence our demand:

Money creation may only be carried out by the central bank.
This concerns both cash and book money as well as new digital forms of the euro.
Only these forms of money are legal tender.
Only these forms are subject to acceptance. Money creation by the commercial banks is to be ended.
The EU Commission is called upon to amend Art.128.1 of the TFEU Treaty correspondingly.

Article 128
(ex Article 106 TEC)

(1)   The European Central Bank shall have the exclusive right to authorise the issue of euro banknotes within the Union. The European Central Bank and the national central banks may issue such notes. The banknotes issued by the European Central Bank and the national central banks shall be the only such notes to have the status of legal tender within the Union.
(2)   Member States may issue euro coins subject to approval by the European Central Bank of the volume of the issue. The Council, on a proposal from the Commission and after consulting the European Parliament and the European Central Bank, may adopt measures to harmonise the denominations and technical specifications of all coins intended for circulation to the extent necessary to permit their smooth circulation within the Union.

Money creation is the sovereign’s very own right, exercised by the central bank. With the retreat of cash and the advance of book money, the power of money creation passed to the commercial banks. They thus expanded their power and influence and brought the financial and economic system into disarray through reckless speculative transactions. A correction is overdue. It cannot be achieved through more control of the banks or equity capital regulations, but only by the central bank taking over the full scope of money creation again. It must extend its right to create money to book money, which it could put into circulation debt-free. Technically, this is not only possible, but would even modernise and accelerate payment transactions.
With this measure, the monetary system would become much more transparent and harmful speculative transactions would be eliminated. At the same time, new funds would flow into the state. It would also no longer have to rescue the system with gigantic financial injections. The national debt could also be drastically reduced.

The introduction of “sovereign money” would not increase the power of the ECB. This is because the ECB would only decide on the additional money supply, but not on the use of the money.

It is up to the politicians to make a key for the distribution of the money created among the member countries and to regulate the competences between national central banks and the European Central Bank. The money created is to be distributed to the euro countries and should be used there in accordance with parliamentary decisions.

The ECB’s main task should remain focused on price stability. With full control over the money supply, the ECB could enforce its mandate much more effectively than before. In addition, it can support economic policy in the euro area more effectively than before.
The ECB’s new money, the “digital euro”, should be a complement to cash for citizens, but should be settled through accounts. In addition to preserving cash, it is demanded that it be possible to change from the current digital bank money into the new digital central bank euro without restrictions. The new digital money of the ECB is to complement cash. Citizens’ rights to protection of property and privacy must be fully safeguarded. Abuse is to be avoided through appropriate legislation.

The advantages of the sovereign money system

  • Money must serve society and the common good. The creation of book money by commercial banks unnecessarily inflates the financial system and destabilises the economy. The introduction of sovereign money serves to bring the financial system back to a reasonable level.
  • Sovereign money would make the European financial system more stable and fairer. The creation of book money by commercial banks violates the principle of equality and harms society. The state still has to bail out the banks!
  • The money created benefits the general public. The state receives additional funds from sovereign money. It can fulfil its tasks more easily.
  • Sovereign money is an effective means against inflation.
  • The sovereign money system curbs speculation on assets and real estate. It works towards distributive justice.
  • Money creation and credit are separated (separation banking system).
  • Banks are on an equal footing with other companies.
  • Citizens’ money becomes as safe as cash: it is protected from bank failures.
  • The money created by the ECB (sovereign money) is not encumbered with debt.
  • The new monetary order is simple, transparent and prevents financial crises.
  • Sovereign money strengthens democratic cohesion.