Wednesday, May 4, 2016

ECB: 2018 Stop the issue of the 500 euro note but remains legal – Il Sole 24 Ore

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This article was published on May 4, 2016 at 13:31 hours.
the last change is the 4 May 2016 at 19:16.

The superbancanota 500 Euros is ready to say goodbye. The Governing Council of the ECB, which today met for a summit not monetary policy, has decided to stop the production of the banknote, the issuance of which will stop “around the end of 2018″. This was announced by the central bank, speaking of “concerns that this note could facilitate illegal activities.” “The 500 euro banknote – the ECB precise – will always retain its value and can be exchanged at the Eurosystem central banks for an unlimited period of time.” The bill can then be used again as a means of payment with no time limits, but since you will not be printed is inevitable A gradual exhaustion.

In a context of increasing global pressure to limit the use of cash in transactions between individuals and businesses, Francoforteha therefore decided to stop printing the purple note. The reason is that a cut of that value facilitates illegal activities such as money laundering and terrorist financing and can push through boundaries and controls large sums contained in a modest-sized briefcase.

Some countries, such as Germany, were on the eve of the decision, however, skeptical about the effectiveness of the measure, preferring the classic tax controls on capital and also the control of the current accounts abroad. The German tax authorities have recently purchased the files containing the names of alleged German tax evaders with accounts in Switzerland by forcing them to pay the amounts processed at home.

“Such cuts are the preferred payment mechanism of who carries out illegal activities, given the anonymity and lack of traceability of the transaction that guarantee, “says a recent study by the university of Harvard, so that the black market in the bill would be sold at prices higher than its face value. “The 500 card is used more to hide the things to buy them,” he had supported the French finance minister, Michel Sapin, last month, “is used more to facilitate dishonest transactions that allow you to buy from me and eat”.

Just as France has been targeted by terrorists in recent bombings in Paris, it is among the major eurozone countries, what brought more to retire the ticket, which counts for only 3% of the circulating banknotes but for 28% of the total value of the euro in circulation. Was Germany when the euro was created, to push for the introduction of the 500 cut to replace the bill thousand marks in a country where the use of cash is still widespread. In fact it is quite common to use the banknote of 500 Euros in Germany.

Other critics have argued, then, that collect the 500 euro ticket to the market would not help fight terrorisno but to increase the control of the authorities on economic transactions which, on the electronic circuits, become easily traceable. “Organized crime is not stupid, ‘says Professor Friedrich Schneider, a leading expert of the University of Linz shadow economy,” most of the money is laundered through screen cashless society. ” Even the president of the Ifo, Clemens Fuest expressed opposition because “the abolition of the 500-euro banknotes could damage confidence in the central bank and would inevitably create the impression that the main reason to remove the bill is to push rates negative farther down. ” According Fuest negative rates have no impact on cash in hand to the banks while they on electronic bank accounts.

The former Minister of Finance Giulio Tremonti, had proposed the establishment of a euro banknote in line with what exists in the United States of America with a dollar bill to help make people understand Italians the value of the euro, but was stopped by Germany, which instead was used to using pennies because one mark was worth precisely 100 pfennig. The decision to stop printing the 500-euro note, but keeping it in life with no time limit seems a compromise between the German demands and those of other countries including France.



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