500-Euro Note Draws Scrutiny of European Finance Ministers

  • Large notes and cash amounts can be used to finance terrorism
  • Bank of England stopped distributing large notes in 2010

European Union finance ministers meeting in Brussels on Friday took aim at large-denomination bank notes as a way to curb terrorism financing and asked the EU’s executive arm to address the issue with the European Central Bank.

“There are risks that large notes and large cash amounts will be used and can be easily used for terrorist financing,” Dutch Finance Minister Jeroen Dijsselbloem told reporters before a gathering with his EU counterparts. “We also asked the commission to engage with the ECB to consider possible measures regarding high-denomination notes, particularly the 500 euro,” he said at the conclusion of the meeting.

ECB President Mario Draghi told European lawmakers earlier this month that the institution is reviewing its policies on issuing 500-euro notes. He said the bank’s board had been considering the matter “for some time” and that technical work was under way to study the issuance of such banknotes.

U.K. officials decided they had enough evidence some time ago. In 2010, British banks and money-exchange services stopped distributing 500-euro notes after a report showed that 90 percent of demand for them came from criminals. A Bank of Italy study the previous year described how such bills were accumulated by mafia money launderers, terrorists and tax dodgers because they’re easy to hide and transport.

“The 500-euro note is used more often than not to hide rather than to buy,” French Finance Minister Michel Sapin said on Friday. The note is “used more often to facilitate transactions that aren’t honest than to allow you and I to buy what we need to eat.”

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