They will give interest-free credit to businesses they select. This local currency will coexist with the Euro and preferable with other currencies as they see it. Also if you want to buy a large amount they won't allow it. They don't want you to speculate with it or save it. It's for spending in the local community and preferable the whole country.

duvel

bitcoin

Need help with questions for a comparison of bitcoin and local currencies

BTW when I say LCs are usually 'backed one-to-one by the national currency' this means they usually hold one dollar/Euro in a bank for one local currency dollar/Euro. This is similar as currencies holding gold prior to becoming fiat currencies.

Do you know if this is the model that this LC will work?

Also, what do the LC proposers mean by,
>  making interest-free credit available, they create an additional cash flow (besides the Euro) that facilitates trade. This provides entrepreneurs with additional liquidity. 

Do you know how they propose to do this? The 'besides the Euro' bit confuses me - but that's sometimes easily done with me these days...