Elimination of 500-euro Note Close At Hand

12/02/2016 15:00

The European Central Bank (ECB) is making preparations to remove the most valuable European banknote - the €500 note - from circulation. The bills too often serve illicit purposes, says the bank. "We are actively considering the issue and will take a decision soon," said member of the ECB board Benoît Coeuré in French newspaper Le Parisien. "The competent authorities increasingly suspect that the notes are used for illicit objectives. We can no longer ignore this argument, given the importance of combatting money laundering and terrorist financing." Dutch Minister of Finance Jeroen Dijsselbloem is also an advocate of eliminating the note. "The European Commission has added to the urgency of prohibiting the use of 500-euro notes due to terrorism financing. Several Member States are now considering it," he told the Dutch Parliament. The European ministers of Finance and Economic Affairs are due to meet to prepare its elimination, though the final decision is for the ECB.

Eliminating the 500-euro note has been on the European table for some time now. ECB figures show that in recent years the number of 500-euro notes has increased significantly. Since its introduction in 2002, the number has risen from 61 million to 613 million last year. The German Social Democratic Party, among others, has been a requesting party for removing the note from circulation for some time now. The ECB would not be the first central bank to eliminate a high-denomination bill. The United States removed such bills some time ago. Canada as well removed its 1,000 dollar note from circulation after complaints from those combatting corruption and crime.