Obscured by the giant smoke clouds of the Greek Euro Crisis are other serious events that almost totally evade the view of the press and, thus, many people in Europe. Only sometimes for a short amount of time do they come into light, only to disappear again when the next fatal news from Greece step make the headlines.
Almost unbeknownst to a large portion of Europeans is the fact that politicians and economists try to wage a campaign that reminds one of a covert war. This time it is not about drugs, but about another commodity many Europeans have long been used to: cash.
Cash in the Crosshairs
As a consequence of Greek savers withdrawing money en masse from ATM machines the Greek government took a very offensive step and marched openly forward in the war on cash. The flow of money was severly reduced: At first banks were told to stay closed on work days. Then people were not allowed to transfer money abroad. Next, people were not allowed to withdraw more than € 60 per day. Banks, with the help of the government basically robbed their costumers, forcing them to wait in long queues to beg to receive small morsels of what is actually their private property.
Crisis-ridden Greece appears to be an exception, where harsh times seemingly justify harsh meassures. Yet other Europeans countries are long engaged in similiar activities, slowly pushing back the use of cash payments.
There is a number of countries where the use of cash is already strictly limited. France, for example has put a ban on cash payments of more than € 1.000. Furthermore banks now have to notify the authorities if someone withdraws more than € 10.000. Italy has restrictions on cash payments, too, outlawing payments of more than € 1.000. But it is not just France and struggling Italy. There are similiar notions in seemingly succesful countries, such as Denmark and Germany. The government of Denmark has put up a notion that would remove businesses obligations to accept cash, transforming the country into a cash-less society. And even German economists, such as Peter Bofinger, call for a ban on cash payments.
Many reasons seem to exist for the growing antipathy against cash in these countries. The French government declared that limiting the use of cash will combat crime. After all, cash can not be traced, so it is a useful tool for people who are doing shady deals: tax evasion, fraud, bribery or the sale of stolen goods are easy to commit when untraceable cash is involved. Not just is the government losing money but, cash acts as a resource that enables criminal activities. Take this resource away and crime will disappear.
Another argument against the use of cash is that it is an outdated technology that is complicated and cumbersome to use. Digital transactions are less complicated for business operators and takes up less space in costumers purses than coins and notes.
Who makes the decisions?
The argument about cash being used by criminals appears to be a rather weak excuse after closer inspection. It implies that the use of cash is somehow immoral. Are little kids saving small amounts of coins criminals? Or is grandma storing her pension in her flat a criminal? Or the young man using cash to secretely buy a lewd magazine?
The second argument is just as flawed. There are numerous examples where new technologies do not work as intended. Just think of online-banking fraud, technical problems with debit cards or online transactions and other mishaps that happen to people.
In the end, both examples are about individual choices. Most people carry both cash and credit cards, since it offers more flexibility. Why does some bureaucrat think he has to crop this flexibility by declaring a certain behaviour as either suspicious or outdated? Can not individual people themselves decide which behaviour suits them best?
The arguments quoted above sound very unconvincing and it is hard to believe that these are the actual reasons for the campaigns against cash. A look at the situation in Greece shows us that these superficial explanations are nothing but smoke and mirrors. The true motives must be of economical nature. In order to reach certain economic goals politicians and bankers seem to be eager to sacrifice individual property rights by slowly discouraging the use of cash.
Return for the second part of this article to read more about what these economic goals are, what the potential consequences of these policies can be and how they might affect you one day.
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