Germany to push for EU-wide cash limit to curb terrorism funding

German Finance Minister Wolfgang Schaeuble was due Friday to push for the introduction of an EU-wide upper limit to cash payments, at talks on efforts to curb terrorists' access to financing and crack down on corruption.

The relative ease of moving money across borders within the eurozone makes it harder for national authorities to track financial trails and restrict funding for suspicious activities. The issue took on new urgency after the November 13 terrorist attacks in Paris.

The European Commission has already proposed limiting the anonymous use of virtual currencies and pre-paid cards, but cash payments are the simplest way of transferring money anonymously.

The German government has floated plans to limit cash payments to 5,000 euros (5,565 dollars), meaning that any larger amount would have to be transferred electronically. France, which has already introduced an upper limit of 1,000 euros, is also on board.

"The first method of [terrorist] financing is cash," French Finance Minister Michel Sapin said ahead of the talks in Brussels with his 27 EU counterparts.

The debate has also turned to the question of banning the 500-euro banknote, which is the currency's largest denomination. The issue could prove controversial, as the use of cash varies from state to state.

"The 500-euro banknote is used more to dissimulate than to purchase, used more to facilitate transactions that are not honest than for you and me to buy food," Sapin noted.

But his Austrian counterpart Hans Joerg Schelling said he was in favour of keeping the 500-euro banknote, arguing that withdrawing it from circulation would make little difference.

"If you look at the normal situation in shops or petrol stations, nobody accepts it anyway for security reasons," he said.

Luxembourg Finance Minister Pierre Gramegna said the issue should be discussed in the context of the fight on terrorism and corruption, noting that 500-euro notes make it "easier to pass by the laws."

The question will be put to the European Central Bank, said Dutch Finance Minister Jeroen Dijsselbloem, whose country holds the EU's rotating presidency. It is the job of the Frankfurt-based bank to decide on currency denominations and circulation.

The ministers are due to discuss a broader package of measures to crack down on terrorist financing, proposed earlier this month by the European Commission. No decision is expected.

Last update: Fri, 24/06/2016 - 08:49
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