Production 500 Euro stops – Financieele Dagblad

Germany, but the purple note of € 500 still disappears. The European Central Bank on Wednesday decided to stop production of the banknote with the most value.

The average consumer never actually gets the letter owned, but in the underworld, the bill attractive. A 500 euro even got the name “Bin Laden” because it usually remains well hidden and would be ideal for money laundering and other criminal activities.

€ 500 banknote (Photo: HH)

Interest

But according to abolish opponents also means that citizens less likely to take their savings, even though the interest rate drops even further. Already the ECB rate negative and savings accounts are likely to get interest rates below zero percent.

It is therefore attractive to to pick up and lay at home in a safe money from the bank. That’s difficult when large bills disappear. so wait with the abolition of the interest rate is positive again, says the German research institute Ifo.

reprinting

Within the EU a decade abolish discussed. Only Germany – where cash payments are very common – vehemently opposed to abolition. The country had for the introduction of the euro also has a denomination of 1,000 German marks, approximately the same value as the euro hit now in disgrace.

the ECB will stop at the end of 2018 with the printing of the 500 euro note. The notes will then decay slowly but surely getting out of circulation.

The advantage is that there is no need new design to qualify for the denomination. Notes from € 5, € 10 and € 20 are replaced and also for the larger denominations is now needed a more modern design. ‘Banknote € 500 always retains its value, “the ECB.

Cost

abolishing costs money because the ECB printing press much more notes of € 50, € 100 and € 200 to press. There is now some € 300 billion to 500 euro notes in circulation, almost a third of all cash. All major denominations replaced by smaller denominations plus transport would together € 500 million could cost as calculated in the Frankfurter Allgemeine Zeitung recently.

In addition, at the ECB step citizens can turn to more often paying with their debit card. While the image of the currency union is already not so good.

“It undermines confidence,” said the German Clemens Fuest, head the Ifo institute. “This will inevitably give the impression that the ECB is doing this in order to further reduce interest rates.