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France and Greece take further measures to restrict cash usage

Categories : Cash is available to all users, Cash is the first step of financial inclusion
November 19, 2019
Tags : Access to cash, Europe, France, Greece, Regulation
An increasing number of countries are taking a close look at the evolution of their cash infrastructure to ensure the future continuity of cash services, particularly as commercial banks optimise their branch and ATM networks. Other countries are taking measures to restrict cash usage.
Guillaume Lepecq

This post is also available in: Spanish

In France, asylum seekers will no longer have access to cash

In France, the government is changing the payment card which is granted to asylum seekers. Since November, the card is exclusively a payment card and can no longer be used to withdraw cash. For the government, the aim of the reform is to ensure that the benefits are used solely to support the livelihoods of the asylum seekers and not to fuel the informal economy.

For non-governmental organisations, the measure will cause further hardship for asylum seekers who are already in a precarious state. The allowance is meant to support the recipients as their applications are being processed which can take 6 to 18 months. The amount is €6.80 per day. For Florent Guéguen, Director of the Federation of actors of solidarity, the measure constitutes a “restriction to the free use of the allowance which limits access to a normal way of life during the asylum-seeking process.” The payment card is not adapted for asylum seekers, who often make small purchases, which cannot be paid by card.  The card also seems to be riddled with design flaws. The number of free transactions is limited to 25 per month; beyond the limit, a €0.50 fee kicks in. To access their account information, the only option is to call a toll number.

Similar controversies arose in Australia in 2017, when a cashless welfare card was introduced.

In Greece, cash payments will be limited to €300

In Greece, the new draft tax bill published for consultation last week, proposes to lower the limit for cash transactions from €500 to €300. Purchases exceeding the limit can be paid exclusively through electronic payments. According to the government, the measure is designed to combat tax evasion. In 2018, after a two-year consultation on the issue, the European Commission decided not to impose EU wide limitations on cash payments and concluded that “While tax fraud and the use of cash are often associated, the study demonstrates that the relationship between the two is not always clear-cut.”

At the same time, the FT warns that Greece is viewed as backtracking on money laundering. A recent change to the country’s penal code allows for people suspected of criminal fraud and money laundering to recover assets frozen by the court, if they are not brought to trial within 18 months. It normally takes three to five years in Greece for a criminal case to move from a preliminary investigation to a full court hearing, according to members of the Athens Bar Association, while the appeal process may take equally long. The amendment is at odds with international anti-money laundering practices, to which Greece subscribes.

Other countries which are considering measures to restrict cash usage include Italy, Mexico and Nigeria.



This post is also available in: Spanish