European Central Bank freezes on 500-Euro notes

Baku. 2 May. REPORT.AZ/ European Central Bank policy makers discuss the fate of the 500-euro note this week, they may want to consider the case of Fabio Rizzi.

Report informs referring to the Russian media, after the local politician in the Italian region of Lombardy was arrested on corruption charges in February, police found more than 17,000 euros ($19,500) including 500- and 200-euro bank notes stashed in his home, according to the arrest warrant. Some of the cash had been hidden in Rizzi’s freezer, press reports confirmed by his lawyer Monica Alberti said.

While holding large amounts of cash is itself not a crime and Rizzi has not yet been convicted of one, the case strengthens the image already present in policy circles that large-denomination notes are used only by those up to no good. The European Central Bank may decide as soon as Wednesday to start phasing the 500 out, even though it faces suspicion in German-speaking countries that by doing so officials are trying to abolish cash altogether.

“The whole debate has a certain taste to it. The argument that it is used in the shadow economy won’t cut it, as you can easily find substitutes,” said Stefan Schneider, chief international economist at Deutsche Bank AG in Frankfurt. “And in Germany, at a time when trust in the ECB is at record lows, it will certainly be seen as a further step in the direction of the removal of cash.”