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European Countries to Lower Limit on Cash Payments in Bold Move to Cashless Society

European Countries to Lower Limit on Cash Payments in Bold Move to Cashless Society

European Countries to Lower Limit on Cash Payments in Bold Move to Cashless Society
February 06
18:19 2017

Things Just Got Serious in Europe’s War on Cash

 

by Don Quijones • Jan 28, 2017

To protect citizens from threats as defined by apparatchiks in Brussels.

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 EU’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.

The financial consultancy AT Kearney predicts that by 2022 there will be more cashless transactions in Europe than those using cash. According to a report by Fung Global Retail & Technology, nine of the top 15 “most digital-ready” countries are in Europe. Sweden is hotly tipped to become the world’s first completely cashless economy. It could happen as soon as 2030.

Yet even Sweden has seen an enthusiasm gap emerge, mostly along demographic lines, as the Guardian reports:

Older people in the rural north, tending to be the least tech-savvy, resent the economic power of Stockholm and Gothenburg, now almost entirely cash-free urban zones. The National Pensioners Organisation is a key player in the “Cash Uprising” coalition now campaigning to make sure older Swedes can still deposit and remove cash from banks.

Some experts fear the emergence of a dystopic “two-tier urban realm” in which the poorest become cut off from mainstream commercial life by their continued dependence on traditional forms of currency and are only able to trade among themselves. As financial writer Dominic Frisby explains, “the beauty of cash is that it’s a direct and simple transaction between all kinds of different people, no matter how rich or poor.”

What’s more, there’s no middleman involved. One party pays the other party in mutually accepted currency and not a single middleman gets to wet his beak. And to all intents and purposes, it’s untraceable. Is it any wonder that banks, fin tech firms, credit card companies, central banks, national and regional governments and UN agencies want to pull the plug on physical currency?

They already have vital technological and generational trends firmly on their side, as a result of which cash’s days as a commonly used payment method may well be numbered anyway. They also have the added bonus of widespread public ignorance, apathy, and disinterest. But they still want to hurry the process along, primarily by introducing incremental legislation that makes it harder and harder for law-abiding citizens to pay with cash.

For now, the pretext most often wheeled out for this escalating assault on physical currency is the War on Terror, but there are also the familiar bugbears like organized crime, tax evasion and the informal economy.

These justifications merely serve to obscure the real ultimate goal: the complete — or near-complete — technocratic control over the money supply. In a world where every transaction must be electronic (i.e. traceable) and where biometric authentication systems have become the norm, the influence of big banks, corporations, tech firms and governments over our lives will be virtually unlimited.

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