E.U. Picks Up Speed in the War on Cash*
The central authorities in Europe just launched their most important offensive to date in their multiyear War on Cash. The new move comes directly from the European Union’s executive branch, the European Commission, which just announced its intention to “explore the relevance of potential upper limits to cash payments,” with a view to implementing cross-regional measures in 2018.
Maximum limits on cash transactions already exist in most European countries, and the general trend is downward. Last year, Spain joined France in placing a €1,000 maximum on cash payments. Greece went one better, dropping its cap for cash transactions from €1,500 to €500. In simple terms, any legal purchase of a good or service over €500 will need to be done with plastic or mobile money.
In some countries, the maximum cash limit is significantly higher. For example, in Europe’s biggest economy, Germany, recent attempts by the government to set a threshold of €5,000 triggered a fierce public backlash. The German tabloid Bild published a scathing open letter titled “Hands Off Our Cash,” while a broad spectrum of political parties condemned the proposed measures as an attack on data protection and privacy.
“Cash allows us to remain anonymous during day-to-day transactions. In a constitutional democracy, that is a freedom that has to be defended,” tweeted the Green MP Konstantin von Notz. Even Bunderbank President Jens Weidmann criticized the government’s proposals, telling Bild (emphasis added):
“It would be fatal if citizens got the impression that cash is being gradually taken away from them.”
Germany’s neighbor to the south, Austria, has similar reservations about the E.U.’s plans to suppress cash. The Deputy Economy Minister Harald Mahrer said that Austrians should have the constitutional right to protect their privacy.
“We don’t want someone to be able to track digitally what we buy, eat and drink, what books we read and what movies we watch,” Mahrer said on Austrian public radio station Oe1.
“We will fight everywhere against rules” including caps on cash purchases, he said.
In other words, any attempt by the European Commission to set a mandatory continent-wide limit is likely to be met with fierce resistance — at least from some countries. Others are already so far down the path toward a cashless society that they’ll barely notice the difference.
Six Seconds to Hack a Credit Card*