Old Money Helps Spanish Village Stay Afloat

Villamayor de Santiago, population 2,500, is a small village just south of Madrid, Spain.

It's famous for three Manchego cheese factories and a windmill that stopped turning decades ago. More than one-third of the town is unemployed.

After Christmas, shopkeepers decided to jump-start their economy.

"We realized there's no money here — well, no euros anyway — in the pockets of our customers," says Luis Miguel Campayo, head of the local merchants' association.

So, he floated an idea: Just for a month, do business in pesetas — a currency that hasn't been in use in 10 years. Campayo had a hunch the town's aging population might have some old currency squirreled away.

"People kept their pesetas because of this romantic attachment to the past," he says — and just in case the euro folds.

So 30 shopkeepers signed on to accept pesetas and hauled out their calculators. One of them was José María Caballero, who runs the local drugstore.

"A lot of people are coming in," he says. "Including people with big bills, for 1,000 or even 5,000 pesetas."

That's about $50 — a lot to keep stashed in your closet. Caballero says shopkeepers made the equivalent of about $8,000 in peseta sales in January, so they extended the campaign through February.

"When we finish our promotion later this month," he says, "we'll change the pesetas for euros, then hand out what everyone earned."

Unlike other eurozone countries, which set deadlines for turning in old money, the Bank of Spain in Madrid still accepts pesetas for euros — at the old 2002 rate. It estimates there are more than $2 billion worth of pesetas still out there somewhere — like in 94-year-old María Martinez's pocket.

She says the pesetas fell out of a pocket in an old skirt when she was packing up to move into the nursing home where she lives now.

The nurses there say some of their elderly residents don't realize pesetas disappeared 10 years ago, but Martinez has her wits about her.

Asked if she'll spend those pesetas now, in a shop around the corner, she says no, she'll just keep them as a souvenir.

"Nowadays things are different," she says, fumbling for some euros in her purse.