A few months back The Guardian ran an article stating that “Swedes are blazing a trail in Europe, with banks, buses, street vendors and even churches expecting plastic or virtual payment” as if the cashless society was something to be celebrated by modern society.
“I don’t use cash any more, for anything,” said Louise Henriksson, 26, a teaching assistant. “You just don’t need it. Shops don’t want it; lots of banks don’t even have it. Even for a candy bar or a paper, you use a card or phone.”
Cash transactions are already outdated in Sweden. According to central bank the ‘Riksbank’, cash transactions will make up up barely 0.5% of the value of all payments made in Sweden by 2020.
Likewise and according to The Independent, Denmark has moved one step closer to becoming the world’s first cashless society, as the government proposes scrapping the obligation for retailers to accept cash as payment – because, as they say, its to do with the “burden of managing change and notes.”
Strange then that all this is happening in an environment where EUR bank note circulation is still rising.
The European Payments Council (EPC), a subdivision of the European Central Bank, are taking steps in their quest to fully eliminate all cash. The reason is not to lift the burden off retailers or to make transactions more convenient but in reality to raise desperately needed taxes.
Highly respected ‘ArmstrongEconomics‘ reports that the EPC are going full steam ahead to enable immediate payment systems throughout not just the Eurozone but the entire European Union. The Single European Payments Area (SEPA) has been devised with the ultimate goal of eliminating ATM cash machines and force everyone to use their mobile phones or plastic cards, the project starting as early as November 2017.
In the absence of confirmed information on this point, it is likely that tourists and business people will be forced to pre-pay Euro’s onto an App if they come from a country outside the eurozone, currently made up of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
The final goal of the EU Commission is best described in their own words: “The Single Euro Payments Area (or “SEPA” for short) is where more than 500 million citizens, over 20 million businesses and European public authorities can make and receive payments in euro. SEPA also means better banking services for all: transparent pricing, valuable guarantees ensuring that your payments are received promptly and in full, and banks assuming responsibility if something goes wrong with your payment.”
This year, meetings and conferences called “Towards a cashless society” were started to get the information transfer across to the infrastructure, supported very heavily by the banks.
It looks as though the initial battleground for banning cash will be … Greece.
From KeepTalkingGreece (27/11/16) – “Greek banks propose a series of measures to combat tax evasion, strengthen the electronic transactions and limit the use of cash in the economy. One of the measures proposed is a special tax on cash withdrawals. Bankers reportedly stress that cash money can easily and largely be channeled in the black economy. Therefore, a tax on cash withdrawals will drastically reduce cash transactions and by extension the black economy.”
The proposal includes reforming the tax system by introducing a revenue-expenditure system. Households and/or workers will only be taxed on the amount of income that is has not been spent. In this way, people will have a strong incentive to seek receipts for any expenditure in order to increase their expenditure and reduce the tax amount they will have to pay. There will also be an obligation for all businesses and regardless of their size to pay electronically every salary and wage.
There is another tactic in play to push the cashless society even quicker. As Sratfor Global Intelligence reports: “The eurozone has found a new scapegoat for international crime: the 500-euro note. The Continent’s leaders are seriously discussing decommissioning the euro’s highest denomination, which is favored by crime groups for transferring massive sums across international borders. Eliminating the bank note could help temper criminal activity, but in reality the implications are much broader. The idea is just the most recent step in an ongoing process moving Europe, and indeed the world, closer to an entirely cashless economy.”
None of this will go down well in both Germany and Austria who experienced periods of extreme hyperinflation after the world wars. This, along with life under dictatorships and in high-surveillance societies, has given both populations a fierce desire to protect their privacy (please note) — something that is afforded by the anonymity of using cash — and to keep wealth in physical form to avoid relying on systemic institutions.
There is another more sinister reason for forcing a cashless society. TruePublica reported last September that a deal had been signed by the administrations of the US, UK and EU when it comes to bank depositors. We said that “procedures in the event of the failure of a systemically important bank clearly states that depositors are to be protected – that is, until options have ceased to exist. Next time, the state will be last in line, not first. Depositor bail-in schemes are now a reality.” In other words, if a big bank fails you will be unable to cause a run on a bank by withdrawing your cash.
Indeed, the rescue of Italy’s Banca Monte dei Paschi di Siena, reported by all the press as imminent has one other thing in common, none of them are sure if this will be full or partial nationalisation, state bail-out or a depositor bail-in.
What the authorities want to do is avoid this nightmare scenario that happened on Britain’s streets: The Economist (Sept 2007 just before the full blown financial crisis erupted) – The queues that formed outside Northern Rock, the country’s fifth-biggest mortgage lender, represented the first bank run in Britain since 1866. The panic was prompted by the very announcement designed to prevent it. Only when the Bank of England said that it would stand by the stricken Northern Rock did depositors start to run for the exit. Attempts by Alistair Darling, the chancellor of the exchequer, to reassure savers served only to lengthen the queues of people outside branches demanding their money. The run did not stop until Mr Darling gave a taxpayer-backed guarantee on September 17th that, for the time being, all the existing deposits at Northern Rock were safe.
In addition to all of this, the use of negative interest rates, never implemented in 5,000 years since the invention of money, is designed to force money out of the banks and into the economy which can be manipulated simply by changing the rate when required. The holy grail of economic measurement is rising GDP, which has eluded the ECB policymakers since the financial crash reared its ugly head leaving wave after wave of social crisis. Its answer was to print money and push 50% more into the economy and yet achieved an inflation rate barely above zero. Taxing cash at ATM’s or forcing it out of banks via punitive interest will be the norm in a few years.
Finally, with all money moving electronically the banks and government have another distinct advantage over you. Eighteen months ago, there was a run on the banks in Greece so the central bank imposed capital controls, highly restricting the amount of cash that could be withdrawn daily. In the few weeks prior to those controls ¢45billion was withdrawn and stuffed under mattresses. This won’t happen again if there are no ATM’s and cash transfers have all but been eliminated.
One way to the other – in the end, you are not going to be in control of your own money in a cashless society, that’s for sure.