By James Bryce

AN enterprising Spanish village is reintroducing the peseta in a bid to boost the local economy.

Residents in cash-strapped Villamayor de Santiago, south-east of Madrid, have spent 6,000 euros-worth of the old currency since businesses began accepting it in January.

Once the scheme ends, in February, they will take the accumulated amount to Madrid and exchange them for euros, before returning the share to each of the 30 firms taking part.

Luis Miguel Campayo, head of Villamayor’s merchants’ association, came up with the idea after realising residents had held onto pesetas.

“We realised there’s no money here – well, no euros anyway – in the pockets of our customers.”

The village’s jobless rate is above the national average, with a third of the 2,500 population currently out of work.

Spain is estimated to have saved 1.7 billion euros in pesetas since the old currency stopped being used 10 years ago.

Pesetas can still be exchanged for euros at the Bank of Spain in Madrid because a deadline for turning in old money was never set.

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