Cash is crucial, Germany’s economy minister said overnight, defending the role of notes and coins in a debate in Europe about the merits of limiting cash payments to counter terrorism.
The European Commission is weighing stricter rules on the use of cash to cut terrorists’ funding, and Germany’s finance ministry led by conservative Wolfgang Schaeuble has said Berlin could imagine talking about a ceiling of 5000 euros ($7653).
Such a prospect is unwelcome to many Germans, who are renowned for their love of cash. The Bundesbank, Germany’s central bank, said they carry an average of 103 euros on their person.
“Cash must remain an important means of payment,” Economy Minister Brigitte Zypries, a Social Democrat, said.
“Even in the era of digitisation, it is valid,” she added, echoing a similar message from European Central Bank President Mario Draghi at the launch of a new 50-euro note yesterday.
Draghi said three-quarters of euro zone payments are made in cash, and that it remains essential for the economy despite the rise of digital payments.
The Bundesbank has warned that an upper limit on cash payments could lead to a loss of faith in the euro as a currency .
The ECB’s decision last year to phase out the 500-euro banknote irritated some at Germany’s central bank, who feared people’s freedom to store their savings in cash was being curtailed.