Who needs €500 bills except criminals and tax dodgers?
Interesting that Australia is questioning the future of the $100 note because it is being used by pensioners to hide savings and thus avoid benefits means testing.
It raises the question of why any country needs high-denomination currency in these days of bank transfers, debit and credit cards. In Britain we manage very well with a top denomination of £50 (US$80) and the world has not come to an end. In fact, the £50 note is a rare beast which is seldom seen, let alone used. Try palming one off on a taxi driver or waiter. We could manage perfectly well with £20 if truth be told.
Contrast this with the struggling one-size-fits-all euro. When it was introduced in a shameless exercise in empire building, Germany insisted on a top denomination of €500 because there had always been a 1,000 DM note. At the time, Germany was still largely a cash society.
Issuing €500, €200 and €100 bills has been part of the euro disaster. These big boys have been a godsend to southern nations such as Greece, Spain, Portugal and Italy. It is well known that there is lots of space under the beds in those parts. With the recent loss of confidence in banks, the beds are getting even higher and well stuffed.
Tax dodgers and criminals love the massive five-hundreder. It is so bad, in fact, that Britain banned it. It can no longer be used here, unlike in, for instance, Greece where I often see €500s and €200s spilling out of wallets while their owner is paying for a coffee.
If the euro is to be saved in its present form, which I seriously doubt, the European Central Bank (aka BCE,ECB,EZB,EKT and EKP; another part of the identity problem) should immediately withdraw all denominations over €100. Beds would be collapsing all over the south while tax revenues would rise in unison.
by Mike Evans, 27 September 2012