The governing council of the European Central Bank (ECB) decided today that by the end of 2018 will cease to issue banknotes of 500 euros. Those who are currently in circulation will be gradually phased. Its high value made were almost useless for citizens and a weapon for illegal activities. The ECB said banknotes retain their value while they are in circulation.
The ECB President Mario Draghi , was published in 2009, when he was governor of the Central Bank of Italy a report in which he claimed that major users of 500 euro notes were the mafia and drug dealers .
the ECB explained that his studies estimated that 56 % of European citizens had never seen a 500 euro note, which companies refused to accept them and that the rules were approving European countries prohibit cash payments above certain amounts.
500 euro last were issued in 2011 by the Central Bank of Austria. Older euro banknotes will be from now the 100 and 200. Citizens with 500 euro notes and want to get rid of them may make them indefinitely in the offices of the central banks of the 19 countries that share the euro.
“Bin Laden” as they were known colloquially because many people knew what they were but few had seen, were introduced when the euro as a concession to Germany was created because its value was equivalent to the old ticket DM 1,000 .
the French minister Michel Sapin Finance had said earlier this year it had to end with 500 euro notes because “used to hide more things to buy things.” The 500 euro, according to the ECB itself, were in 2015 3% of euro banknotes in circulation, but accounted for 30% of its value.
A study by Harvard University found that are “the preferred payment mechanism for those involved in illegal activities, by the anonymity they offer and the relative ease to move large amounts of money.” Europol ensures a million euros in 500 euro weighs two kilos. 100 euro bills up to 22 kilos.
Spain showed during the years preceding the crisis -during real estate financing boom that would use the black economy. In January 2007, 26.68% of all 500 euro notes circulating in Europe did in Spain, whose economy is around 10% of the Eurozone. With these notes many real estate transactions were paid without a trace. Since the outbreak of the crisis circulation fell more than 40%.
Among the major currencies is comparable only to bill 1,000 Swiss francs. The biggest US Dollar is 100 and the British pound 50, which made the 500 euro was the most appreciated by illegal activities and to keep black money under the bed away from the eyes of tax inspectors . Singapore has a bill of $ 10,000, equivalent to more than 65,000 euros.
Critics of the ECB’s decision ensures that in times of very low interest rates negative or, as now in the eurozone and with European countries dancing on the edge of deflation, saving cash is a solution not to lose savings.
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