The Local Economy
Background and Objectives
In the development of a sustainable world economic system, the local 
economy is the arena in which many of the key decisions must be made. 
In accordance with the Green Party objectives of bringing decision 
making to the most appropriate level, and promoting self reliance 
within communities and regions, revival and support of the local 
economy is of the greatest importance. Policies are necessary to 
enable more local needs to be met by local work using local resources. 
Policies to increase local investment and the circulation of local 
finance within the community, include the development of 
democratically accountable Community Banks, designed to encourage 
local people to invest in local economic activity and empowered to 
create credit at interest rates sufficient only to cover 
administration when channelling local savings into economically and 
environmentally sound community enterprises. They should include 
removal, where necessary, of national restrictions. We will promote 
Credit Unions and skills exchange schemes, along with researching the 
best use of local currencies and encouraging their adoption. (see 
Agricultural policy) 
Local Government Finance
In a decentralised economy, most taxation will be levied, most public 
services provided, and most expenditure decisions made at local level 
by local government. Each local government must be free to decide its 
revenue and spending priorities, within the limits of regionally, 
nationally and internationally agreed resource and environment needs. 
The revenue required should be raised locally, by local taxes which 
each local community selects from an agreed range of options, or be 
created by local community (or municipal) banks to fund capital 
Monetary policy 
In a Green society the informal sector will eventually gain in 
significance so that formal transactions and money generally will have 
a lesser role than at present. There is however no reason why a 
financial system cannot be made to work in the interests of the 
community. Practical decentralisation of banking and monetary policy 
will therefore be linked with a programme of political devolution. 
Under the current banking system, money is created predominantly as 
interest-bearing debt by commercial banks and the financial 
institutions. This will gradually be replaced by one in which money is 
created interest-free for the benefit of the community. 
The place of the commercial banks in financing enterprise will 
gradually be taken by mediating, non-profit local community banks 
providing low-cost finance, both at district and regional levels. 
Phased restrictions on the powers of commercial banks and other 
institutions to create money by credit can be introduced by such means 
as reserve asset ratio requirements, special deposits, personal credit 
controls, together with more directive guidance to banks and building 
societies to limit lending. 
As money is a universally used social utility, monetary policies must 
be dominated by an understanding of their effects on all other aspects 
of the economy. The emphasis in monetary policy will be to control and 
redirect the creation of money towards socially and environmentally 
sound areas of the economy, and away from unsustainable and 
consumption-driven areas. 
The GREEN PARTY will: 
- promote and encourage a widespread network of genuinely democratic, 
financially secure and mutually owned financial institutions, 
including credit unions, building societies, co-operative banks and 
local currency groups. 
- encourage the creation of regional and local currencies within a 
properly regulated environment. 
These policies would result in multiple levels of currencies which 
would be available for use in different appropriate circumstances. 
Foreign Aid 
In the short term, policies to reduce the damaging effect of self-
serving foreign "Aid" must be adopted. These could include replacing 
interest-bearing loans by grants (gifts) and interest-free loans. 
To make progress towards a global economy which resolves inequitable 
relationships between rich and poor nations, and which eliminates the 
exploitation of global resources, the international debt crisis must 
be tackled. A programme to eliminate international debt must be 
accepted which adopts wholesale writing-off and writing-down together 
with the selective use of 'creative redemption' and limitation of the 
banks' right to create credit at high interest rates. 
Creating Jobs
Restructuring the Economy
Our current centralized monetary policy has evolved into a controlling 
and repressive force, rather than a system that serves the community 
as a medium of exchange and a store of value. People who have goods 
and services to provide have no outlet, except conventional commercial 
To foster local economic diversity and to stimulate individual 
productivity, the Green Party advocates restructuring the economy:
Encourage the development of an informal economy, including 
volunteerism. The unemployed and underemployed could participate in 
the local economy through a credit barter system. In this system, the 
medium of exchange would be individual credit-debit accounts. People 
would extend credits and collect debits from one another for the 
purchase of each other's goods and services. These credits and debits 
could then be transferred among community members, circulating much 
like a currency. Since local members would redeem the currency with 
their goods and services, this medium of exchange would have a local 
value. Changes in banking regulations would be required to support 
such a program. 

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