According to representatives of the European Central Bank, the decision was dictated by “concerns that the €500 banknote simplifies illegal activities.” Instead, the ECB intends to focus on issuing a second series of banknotes, called “Europe”, in denominations of €100 and €200. The current banknotes in denominations ranging from €5 to €200 will also continue to be issued.
The Europa series of banknotes is being introduced gradually. The first €5 banknote of this series appeared in circulation in 2013, followed by new €10 banknotes in 2014 and €20 banknotes in 2015.
Soft exchange
As for the 500-euro banknotes, according to the decision of the ECB, their issue will be completely discontinued until the end of 2018, when the “Europe” banknotes will finally be put into circulation. At the same time, the circulation time of the withdrawn 500-euro banknotes will not be limited in any way. At least that's what the ECB says in its message. “The €500 note will remain an official currency and can be used as a means of payment. Its value, like that of other euro banknotes, remains unchanged and can be exchanged at any national central bank within the euro area for an unlimited period of time,” the ECB said.
Pre-planned event
Information that the ECB intends to get rid of €500 banknotes appeared some time ago. Moreover, as the German publication Die Welt reported, based on a report from the European Central Bank on the circulation of euro banknotes with the highest denomination, the ECB began withdrawing 500-euro notes from circulation even before the corresponding official statement.
Thus, German journalists drew attention to the fact that, according to published ECB statistics, over the last three months the number of €500 banknotes has decreased by almost 20 million pieces - from 613,559,542 to 59,441,7006. It is assumed that in this way the European Central Bank could have withdrawn large banknotes in advance a total amount of approximately €10 billion.
As noted above, the main motivation for the ECC was the assumption that €500 banknotes are widely used for payments in criminal business, in particular in money laundering. According to representatives of the regulator, the use of banknotes with a lower denomination will significantly complicate their use for criminal purposes.
© wikipedia.org
Everything has already happened
The ECB is not the only central bank that refuses banknotes that do not have the proper degree of security or could be used in criminal business.
For example, the US Federal Reserve was forced to abandon the issuance of 1000 dollar bills used in interbank settlements. In addition, since the late 90s, the American Central Bank has carried out a complete change in the design of banknotes issued.
Whether this helped reduce the criminal use of American currency is unknown, however, it is known that in the same 90s, the update of banknote design conceived by the Fed caused a real shock among holders of dollar (primarily hundred-dollar) bills in other countries, including Russia.
Expanse for scammers
Frightened first by the “Pavlovsk” reform of the early 90s, and then by the default of 98, Russians could not believe that the banknotes they had in their hands could be sold without problems or used as a means of payment. For this reason, in 1998, in the wake of panic, real estate transactions quite often fell through.
Let us recall that in those years the main form of payment in this market was cash currency, namely the US dollar. With news of the discontinuation of the old $100 bills, sellers were afraid to accept payment for square meters sold in old bills. This, in turn, put buyers in a hopeless position, since most of them simply did not have the opportunity to get new banknotes somewhere. There were also cases of fraudulent “exchange” of old hundred-dollar bills for outright fakes, since not everyone knew what the new bills looked like.
Should we expect such a stir around the upcoming €500 banknotes?
Apparently, some anxiety among individuals who hold such banknotes cannot be avoided. On the one hand, in cash circulation the euro, especially in such large denominations, is not as common in Russia as the dollar. On the other hand, it is large banknotes that are most often used to store savings in cash. At the same time, the very fact of even a deeply potential threat to these very savings can throw some people out of psychological balance.
It cannot be ruled out that, as in the late 90s, scammers will try to take advantage of this situation, offering to exchange the old five hundred for “new” ones. Although, such cases will most likely be infrequent.
What to do with a 500 euro banknote in Russia if it is already being confiscated in Europe?
There are no problems. In addition, stores have hundreds to give you change. It’s just that such large bills are often used by drug dealers and other bad guys, so they’ve been talking for years about the banknote going out of circulation.
You can easily spend such a bill in the same Duty Free, the price tag there is now quite high. You can put it in a foreign currency account at the bank, they are obliged to exchange it for you.
The release of a banknote is like the discontinuation of a car - they talk about it for 3 years, and then the cars themselves and their spare parts are still in circulation for 10 years. Don’t worry and spend it to your heart’s content, it’s just better in a duty shop or a large supermarket rather than a souvenir shop at a hotel.
The topic of withdrawing the 500 euro banknote from circulation is not new. It has been discussed since at least 2013. I read about the problems with paying with a 500 euro bill in a store or at a gas station on German websites in a discussion back in 2009.
In any case, the 500 euros does not become invalid. We read the official press release dated May 4, 2016 on the website of the European Central Bank. 500 euros are no longer issued in 2018, but they retain their nominal value and are subject to exchange in national central banks in for an unlimited time.
Officially in Russia, not a single bank has yet declared that it will exchange 500 euros with any commission. (And I think it would be outright robbery if they introduce it).
How you can protect yourself:
1) Put euros on a deposit or just a foreign currency account on demand (in a reliable bank) - withdraw after some time in the bills that are needed.
2) Put euros on the card (if not, open it) and withdraw from an ATM.
3) Theoretically, it is possible to exchange it at a bank abroad, but I think you need to be prepared to confirm the origin of this money... (if the amount is large)
It seems to me that the best thing to do is to look for friends who travel to Europe and give them to exchange while they are there. I did this when banks refused to accept 500 euro banknotes, on which strange stains were revealed during inspection. In Italy, acquaintances exchanged them quite normally. So I think they can exchange it for you without any problems.
If something begins to be deliberately confiscated, then this item becomes rare and its price rises. Same with the 500 euro bill. There are already advertisements for the purchase of banknotes higher than their face value. After some time, you can offer this money on EBAY and make money.
According to publicly available information, 500 euro banknotes have ceased to be issued and will be gradually withdrawn from circulation. However, those banknotes that the population now has in their hands have an unlimited (at the moment) validity period. That is, these banknotes can be returned or deposited in a bank.
Here, someone is deliberately raising a panic around 500-euro banknotes. The official release from the European Bank reads:
Which translates literally like this:
The ECB has decided to cease production and issuance of 500 banknotes.
The European series of euro banknotes will not include 500 notes.
500 bill remains legal tender and will always retain its value.
Given the international role of the euro and the widespread confidence in its banknotes, the 500 note will remain legal tender and can therefore continue to be used as a means of payment and store of value.
The 500 note, like other denominations of euro banknotes, will always retain its value and can be exchanged for national currencies at Eurosystem central banks within unlimited period of time.
The point of inciting panic is to extract as many banknotes of this denomination from the population as possible. They are really convenient for mafia payments.
Option - foreign, special case:
I’ll answer what I did with my 500 euro bill, which they gave me at Sberbank before my trip three years ago (thrifty trips allowed me not to spend it during this time). I don’t know what kind of money, but I didn’t want to lose even one bill, which, you know, are not lying around on the road at today’s exchange rate of 70-80 rubles - that’s practically 1-2 salaries in the country, depending on the region of residence.
It’s just that on my next voyage to Spain (well, I can’t help it, I love this country!), when paying for excursions, I gave a banknote in denominations of 500 euros, receiving the rest - change in money of 100 and 50 euros. Those. I didn’t spend my reserves, the money I took with other pieces of paper (I can’t travel with 500 hundred rubles alone, right?), but simply exchanged them with the guide. Just in a store, it’s unlikely that they would have found me change, although I think that the Spaniards would have found it, but somehow it doesn’t seem entirely acceptable to buy a bottle of wine for 5-6 euros (very tasty) or water for 1 euro to get the rest - change from 500-)
Domestic option - Russian
A work colleague had the same problem with a 500-cent bill. She did it easier, she simply asked her accountant to exchange the banknote for smaller bills on her next trip to the bank. It turned out to be more convenient for her to carry out this ritual without costs, through acquaintance-)
According to German sources, the European Central Bank does not exclude the possibility of abandoning the circulation of 500 euro notes. The reason is the special love for this denomination on the part of criminal structures. And as a sad consequence - the counterfeit and active use of five hundred by criminals to finance illegal activities, including terrorist activities.
As it turns out, the issue of withdrawing 500 euro banknotes from circulation has been under consideration at the request of the European Commission since February. The final decision has not yet been made. But most likely, the situation will develop in this way: first, the printing and distribution of these banknotes at cash points and bank branches will be stopped (tentatively, this will happen in 2018). And then the complete withdrawal of the disgraced banknotes of the largest denomination from circulation.
Most likely, a decision on the future of the 500 euro banknote will be made in May. In his favor is the fact that in 2015, almost 900 thousand counterfeit euro bills were seized, 1.3% of which were 500 euro bills - and this is a significant amount. The downside is that this action, according to experts, could cost the European Union 500 million euros. And times now, as we know, are not easy.
In any case, if the decision to confiscate the Euro-five hundred is made, then there is no doubt: for Europeans it will be carried out in the most gentle manner possible. But what will happen to Russians who usually keep their savings “under their mattresses” in euros of just this denomination? And, above all, is it time to urgently rush to banks or exchange offices to get rid of the dubious currency?
“It’s definitely not worth it,” Nikolai Vardul assured MK. “Firstly, if such a decision is made, 500 euro notes will not be canceled starting next Monday - there will definitely be a transition period, and quite a long one at that.”
From a macroeconomic perspective, the decision to abolish large denominations is an indication that Europe is suffering from the threat of deflation, while the introduction of increasingly larger denomination notes indicates rising inflation. Figuratively speaking, if our country suffers from diarrhea, then Europe suffers from constipation: well, their prices are not rising, and as a result, the economy is not growing! Therefore, large bills are not needed.
As for the individual European, for law-abiding people and, in particular, those engaged in legal business, 500 euro notes are really not needed. And it’s not smart for our people to keep their savings in such banknotes at home. True, if they are stored solely so that at the right time you can go and exchange them for rubles at an exchanger, then there is no problem. But trying to pay with such banknotes somewhere in Europe is a sure way to attract attention and arouse serious suspicions. In such a situation, it is probably best to exchange these banknotes or sell them, but only after waiting for a good exchange rate. Now the euro should not be sold, but bought.
Greetings, Readers! Anyone who has been to Europe knows that having a 500 euro banknote in your hands is not so easy to spend. Why do they refuse to accept 500 euro notes in Europe? Find out why! Read below.
According to the European Central Bank, they are suspending the printing of €500 banknotes and will stop printing them altogether by 2018. At the same time, banking structures withdraw banknotes with a face value of 500 euros from circulation for their own banking turnover.
Banknotes with a face value of 500 euros remaining in the hands of citizens will only be accepted in banks! In some EU countries, even with 200 euros they can’t always give you change. An example of this is Montenegro, where the minimum wage is about 360 euros, which is significantly less than five hundred.
Large banknotes are easier to handle during illegal activities
The main criterion for removing large banknotes from use was illegal activity in which it is convenient to handle the largest banknotes. Currently, the largest banknotes in the world are 500 and 200 euros.
The average salary of a European is 500 euros
An additional criterion for removing 500 euro notes from circulation was the average monthly salary of Europeans, which is at the level of 1,000 euros. As we understand, it is good to receive a salary in two banknotes for saving, but for everyday purchases, such banknotes are too large.
In young EU countries, wages can be below five hundred euros.
When planning a trip to Europe, do not take 500 euro bills. Exchange them immediately for small ones, with a denomination of no more than 100 euros. The optimal solution would be fifty euro bills.
If you expect to get easy change at the supermarket from 500 euros, then you don’t even have to think about it! No one will accept such bills except banks or the guide.
In conclusion of the review, we recommend that tourists, before their trip, look at the banknotes that they plan to take with them to Europe. It might be worth taking it with you, since you can withdraw the required amount of money from it in Europe anywhere. We wish everyone good luck!
Short answer: get rid of it, but without panic.
Long answer.
In the middle of the May holidays, the European Central Bank published a press release about the imminent cessation of the issuance of 500 euro banknotes and their withdrawal from circulation. The details of the decision and the procedure are still unknown, but the ECB promises that there will be no one-time exchange with subsequent zeroing of the value of banknotes, everything will happen smoothly, until the end of 2018. But even after this period, the banknotes will retain their value for some time. True, most likely, starting from 2019, they will only have to be handed over to the bank, because... they will be withdrawn from trade.
What should Russians who keep their savings (or part of them) in cash 500-euro notes do now?
Firstly, do not panic. You have at least another year and a half to resolve this issue without much difficulty.
Secondly, still, don’t slow down too much and, if possible, get rid of “too much” money. What is the best way to do this with minimal losses?
If you don’t have enough 500 euro bills (several pieces), and you are going to a eurozone country in the foreseeable future, take them with you and try to “sell them” in the usual way - in stores, cash registers, etc. This is not very simple - many sellers do not accept large bills for payment, you will have to look for an option. A small life hack: try to pay with five hundred in tourist places and in government or near-government organizations. For example, at the box office of popular museums, local transport companies, etc. Tourists with large bills are much more common than local residents, and the cashiers of such organizations are not so important what the client pays. Another option is shopping for the rich. There’s definitely no point in going to regular supermarkets;
If you intend to spend foreign currency savings in the coming year, first of all sell five hundred. But do not forget that the further you go, the more difficult it will be to hand them over to an exchanger or a bank;
If you are ready to lose 1-2% of the amount of 500-euro bills for peace of mind, sell them for rubles at an exchanger or bank and immediately buy euros at another exchanger with the most favorable rate. This advice is relevant for Moscow and several large cities with a large selection of exchange offices and rates; in the provinces the losses will be too large;
If you are not afraid to show your savings to the state, open a euro account and deposit five hundred rubles into it. If desired, after some time the account can be closed and the euro cash can be withdrawn with other banknotes. There is a risk that the bank will ask you to prove the legal origin of the money, but for a relatively small amount (up to 500-600 thousand rubles in conversion) this risk is not very great. If you deposit tens of thousands of euros, the requirement for a certificate at one stage or another of the relationship with the bank is almost inevitable;
A large amount of cash can be deposited into an account in a foreign bank, but to do this you will have to choose the most “exotic” country possible, most likely not part of the euro zone. In large European countries, banks are very wary of depositing money into an account in cash in general, and especially with five hundred. The combination “new client - Russian - a lot of cash - five hundred euros” in Germany or Finland is no less suspicious than if Bin Laden personally came to the bank (if he were still alive). In the Czech Republic you can try to negotiate with the bank manager; in the Balkans, everything will probably be even simpler. But there are risks. And don’t forget that you will have to report to the Russian tax office about opening an account and the movement of money through it.
The closer the deadline for circulation of 500-euro bills is, the more offers to exchange them will appear from more or less shady individuals. Starting from anonymous “dealers” on the Internet, ending with completely legal exchangers with an “exchange service” for a few percent of the amount. You should not fall for such offers: they will probably either deceive you or take money for an operation that you can carry out yourself. Therefore, take your time, monitor the situation and calmly use the option that suits you best when the opportunity arises.
PS If you have questions about personal finance, investing and banking, ask in the comments. I will try to answer them as detailed and clear as possible.