Mixed emotions in Germany as 500-euro note bows out

FRANKFURT AM MAIN (AFP) – As the European Central Bank (ECB) takes the final step in phasing out the 500-euro note, few are expected to mourn a bill favoured by criminals but rarely seen in daily life.

Except perhaps in cash-loving Germany.

From last Sunday, central banks in 17 of the 19 eurozone countries will stop issuing the violet-coloured banknotes.

Only the German and Austrian central banks are clinging on a while longer, until April 26, to “ensure a smooth transition”, the ECB said in a statement.

Medical technician Rolf, from the German town of Marburg, said he found the demise of the single currency’s highest-denomination note “hard to accept”.

Standing a stone’s throw from Frankfurt’s blue-and-yellow euro sculpture after a meeting in the city, the 61-year-old said he had made a point of paying for his car in 500s.

“I prefer using cash for large payments, it doesn’t mean I’m involved in anything dodgy,” Rolf said, declining to give his last name.

The ECB decision to end the note’s issuance will lead to fewer and fewer circulating as commercial banks gradually return them to their countries’ central banks, where they will be replaced by lower-denomination bills.

But anyone hoarding 500s under their mattress needn’t worry, as all existing bills remain legal tender.

“They can continue to be used to spend or to save, and they will always retain their value,” said ECB spokeswoman Eva Taylor.

The 500-euro bill accounted for just 2.3 per cent of all euro notes in circulation last month.

The banknote’s death warrant was signed in 2016 when the ECB formally ended its production over concerns it could “facilitate illegal activities” after research linked its use to money laundering, tax evasion and terrorism financing.

A million euros in 500-euro notes weighs just 2.2 kilogrammes, fitting easily into a laptop bag.

The same sum in USD100 bills, the United States (US) currency’s highest denomination, would weigh almost six times as much and require a much larger case.

While the plan to slowly kill off the 500 made few waves abroad, it sparked an emotional debate in Germany where many feared it was a prelude to abolishing cash altogether.

Among the fiercest opponents was Chief of Germany’s powerful Bundesbank central bank Jens Weidmann, who said scrapping the note would do little to combat crime but could “damage trust” in the single currency.