War on Cash: ECB scraps €500 notes

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The European Central Bank has stopped producing €500 notes, in a move it depicts as a crackdown on crime but which critics in German-speaking countries say is part of an onslaught on cash and savings.

Top eurozone officials argue that the €500 bill, the euro’s highest denomination note, is the banknote of choice for the darkest parts of the black economy, because it allows drug dealers and terrorists to carry large amounts of cash – according to an article in the FT.

Although the bill accounts for just 2.3% of banknotes in the single currency area, it represents almost 30% of their value.

As well as ending production, the ECB said on Wednesday it had decided to stop issuing the €500 around the end of 2018, “taking into account concerns that this banknote could facilitate illicit activities”. It added that “in view of the international role of the euro and the widespread trust in its banknotes, the €500 will remain legal tender and . . . will always retain its value”.

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