European Commission wants restrictions on cash?

In order to combat terrorism and money laundering, the use of cash must be restricted at European level. This is stated in a new document of the European Commission that was recently released. At present, several Member States already have a maximum amount for cash payments, but these limits vary greatly from country to country. Also, there are still many countries that do not impose any restrictions on the use of cash at all.

In order to discourage the use of cash for large transactions, the European Commission believes that serious consideration should be given to new European regulations so that all Member States of the European Union apply the same limits on cash in the future. Money laundering and tax evasion can be better tackled in this way, because then it is no longer worthwhile to move money flows to European countries that have a fairly lenient policy with regard to anonymous payments. We have translated a passage from the document:

The absence of European restrictions and controls on cash facilitates terrorism and other criminal activities, as the anonymity of this type of transaction is still guaranteed in many Member States. This hinders prevention, investigation and adjudication. As long as these inconsistent practices persist, terrorists and criminals have leeway to organise their financial transactions in such a way that they can take advantage of the fact that some Member States have no or lower restrictions.

Security vs. Privacy

The European Commission acknowledges that the complete abolition of cash violates the right to privacy, as enshrined in the Charter of Fundamental Rights of the European Union. But under the moment of security and freedom , the European Commission still sees opportunities to impose restrictions on the use of cash. This can be done either by setting a limit,  or by obliging everyone to register cash transactions above a certain amount.

 Moreover, prohibiting  cash payments above a certain limit would not be contrary to the European regulations in that area. It states that restrictions on the use of coins and banknotes do not conflict with legal tender status, as long as there are other legal methods of settling debts, the latter of course referring to all electronic payment options.

Financial repression

Restricting the use of cash is defensible to a certain extent, because this means of payment can be used for criminal transactions and tax evasion due to its anonymous nature . But there are also legitimate reasons to use cash, for example if you are concerned about the security of electronic payments or the soundness of the banking sector.

As we wrote earlier, more and more measures are being taken under the guise of security to intensify the state's control over its citizens. In addition, the government also wants to gain more and more insight into all money flows and assets, so that they can be taxed even more effectively.

European Commission wants restrictions on cash?