2024-01-20 23:55:53
Lhe European Central Bank (ECB) and the European Commission are actively trying to thwart EU member states’ efforts to constitutionally guarantee the right to use cash. This initiative, reported by Nick Corbishley on 19 January 2024, could mark a significant turning point in the management of monetary policies within the Union, indicating a potential change in the landscape of monetary control.
In stark contrast to this trend, there is a positive movement in the United States: Local and state authorities are gradually introducing regulations that prohibit businesses from declining cash payments. Florida recently joined this list, becoming a symbol of resistance in the global battle against the decline in the use of cash. Similarly, similar movements are forming in Europe, but at a national level. Countries such as Switzerland and Austria, known for their preference for cash transactions, are considering adopting laws to protect cash as a payment method.
Slovakia stood out in Europe for being among the first to take this direction. Last year, the Slovak government made an amendment to its constitution to ensure the right to cash payments. This law was passed unanimously by the National Council of the Slovak Republic, reflecting a conscious concern about the repercussions of a cashless society on low-income groups and charitable organizations.
However, this expression of sovereignty has been questioned by the ECB, led by Christine Lagarde. In a letter dated January 13, Lagarde highlighted that the ECB was not consulted before the approval of the Slovak law and reiterated that no member of the Eurozone has the authority to introduce measures in the field of monetary policy, which is the exclusive competence of the EU.
This position was further strengthened by a 2021 ruling from the European Court of Justice (ECJ), issued following a case brought by German journalists Norbert Häring and Johannes Dietrich. The ECJ ruled that only the EU has the competence to define the legal tender status of euro banknotes and coins, while recognizing that member states can impose restrictions for reasons of public interest.
The ECB’s recent communication to Slovakia implies that, although EU member states can legislate to limit the use of cash, they do not have the right to take legislative measures to protect it. This position aligns with the interests of many EU governments and financial entities that benefit from reducing the use of cash.
Austria, an ardent supporter of the use of cash, has also faced opposition from the EU. The proposal of the Austrian Chancellor Karl Nehammer to insert the right to use cash in the Austrian constitution was greeted with skepticism by Martin Selmayr, former secretary general of the European Commission, and by Paolo Gentiloni, European Commissioner for the Economy, who underlined the EU’s exclusive competence in matters of monetary policy.
We are faced with a paradox in which the ECB and the Commission, while promoting a digital euro, are simultaneously pushing for a ban on unilateral cash exclusions by businesses in the Euro area. This dynamic raises concerns about the future of cash and the economic rights of citizens in the Euro area, especially considering the ECB’s past attempt to reduce the use of cash in the EU.
The outcome of this power struggle between national governments and EU institutions will be decisive in determining how much economic sovereignty will be retained by Eurozone member states and what rights their citizens will have in choosing their own methods of preferred payment, obviously not equal given that the digital euro lends itself perfectly to social control.
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