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Tuesday, August 22, 2017

EU Commission wants to ban cash

by Megan Morris (writer), , April 18, 2017

The EU recently released its plan for an initiative on restricting cash payments, rumbling discontent in many countries.

After eradicating the Euro 500 note, this new charge towards the utopian dream of a cashless society is not well received across Europe where citizens are fearing for their basic rights and for their savings.

Does being allowed to pay in cash constitute a fundamental right? The question is today being asked all across Europe. Technically, no article of the EU Charter of Fundamental Rights makes payments in cash a right for European citizens. However, when looking at the reasons brought up by the EU to push for a cashless society, ‘anonymity’ is often mentioned.

For the EU, anonymity on payments represents a problem. What is anonymous, by definition, is difficult to control and with this initiative the EU is about to control its citizens more and more.

The Article 7 of the Charter does guarantee the right to privacy and it is precisely privacy that is at stake when we talk about the ban on cash.

The Commission published on February 2nd a Communication to the Council and the Parliament on an Action Plan to further step up the fight against the financing of terrorism. The Action Plan builds on existing EU rules to adapt to new threats and aims at updating EU policies in line with international standards. In the context of the Commission's action, it aims at extending the scope of the Regulation on the controls of cash entering or leaving the Community.

The Action Plan states that "Payments in cash are widely used in the financing of terrorist activities... In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold."

Across Europe, groups of citizens have started protesting against the ‘war on cash’. The initiative is also perceived differently among the Union. While Spain seems happy about capping cash transactions, Germany stands in strong opposition because today, roughly 80% of all its transactions are conducted in cash. The Nordics have already begun the transition, spreading massive discontentment. Some European countries haven’t yet realized the impact of such drastic change in policy. Italy has even seen the Commission’s decision as a protection against their government’s fiscal policies before realizing they would lose all anonymity on their purchase from their smallest slice of pizza to their cars, and they don’t like that.

In India, after Prime Minister Modi announced the ban of the 500 and 1,000 rupee notes, thousands of people have demonstrated in a number of Indian cities, the states of Keral and Tripura saw a near total shutdown. "We are protesting against the undeclared financial emergency imposed by the government and the hardships people across the country are facing because of this illegal decision," Manish Tiwari of the Congress party told the AFP news agency (1). "The decision to demonetize high-value currency was done without any authority and legislation and is clearly illegal’’ he added.

The Indian situation could be a preview of what is going to happen in Europe in the next future. The scenes were chaotic with thousands of people spending hours queuing outside banks and ATMs which all ran out of money. Since then, the move has been called a ‘monumental mismanagement’ and has spread fear to many countries who didn’t see what cashless measure could trigger.

It seems like all these cashless resolutions and EU’ Initiative decision were made at the World Economic Forum in Davos in June of last year. ‘Immediately after the conference, there was a big acceleration toward a cashless society’, explained Giambruno, the Senior Editor of Casey Research’s International Man periodical, ‘beginning with the elimination of high-denomination currency notes’.

Publications such as Bloomberg and the Financial Times called for a cashless society. “A flood of articles from The New York Times, The Economist, and other publications picked up on this.” It seems that both the media and several European governments have made the cashless measures more acceptable or even a fatality. In fact, it isn’t, and the future doesn’t necessarily have to be cashless. When looking at the European citizens’ basic rights it appears that cash should remain an option and that people should keep the right to choose which payment method they prefer.

If the EU’ initiative was to be put in place we could very well face in Europe the scenes that we are seeing today across the world, as people aren’t ready to say goodbye to their banknotes.

(1) India rupee ban: Sporadic ‘day of rage’ protests against cash ban, BBC news, November 28th 2016



About the Writer

Megan Morris is a writer for BrooWaha. For more information, visit the writer's website.
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