€500 banknote still legal tender

WHEN the concept of introducing a euro zone currency was first muted, each member state was invited to join and to confirm what denomination of coins and bank notes they wanted.

Initially there were just 11 countries who wanted to join the common currency and these were Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain.

At that time Germany, supported by Austria didn’t want to see large notes disappear as many transactions in those two countries were carried out in cash and as Germany had a 500 Deutschmark note, it was agreed that there should be a €500 note.

As time passed and the membership expanded to 20 (with more to come in the future) so did the fear that many countries had that a €500 note was ideal for money launderers and smugglers.

It was calculated that if they wanted to move €1 million anywhere around the world, the weight when using €500 notes was 2.2 kilos as opposed to 20 kilos if using €50 notes and obviously the packages were much smaller as well.

When new bank note designs were being considered, the European Central Bank confirmed that with effect from the end of 2018, no new €500 bank notes would be printed, except in Austria and Germany where they would continue for a further three months.

Many people in Spain are of the opinion that the €500 note has been withdrawn completely but in fact they are legal tender across the Euro Zone and may be used legally for transactions in Spain although there are rules concerning the amount of cash that may be tendered when settling an invoice.

It is estimated that there are still around 300 million of these notes in circulation, so with €150 billion still skulking around, that’s a lot of 2.2 kilo parcels still to be made and of course, no one knows how many counterfeit notes have passed into circulation.