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ECB chief dismisses talk of scrapping cash

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European Central Bank president Mario Draghi sought to soothe concerns on Friday that any phasing out of the 500-euro note would lead to the scrapping of cash.

[FRANKFURT] European Central Bank president Mario Draghi sought to soothe concerns on Friday that any phasing out of the 500-euro note would lead to the scrapping of cash.

The remarks in a letter come after Mr Draghi was forced on the defensive by a barrage of criticism in Germany, prompted in part by the planned phasing out of the note as well as rock-bottom interest rates.

In the letter to Fabio De Masi, a member of the European Parliament, dated April 18, Mr Draghi wrote that any possibility of ending issuance of the notes was "completely unrelated to another discussion, taking place outside the ECB, about limiting, or even abolishing, the use of cash payments".

"Let me highlight the fact that cash is the only form of legal tender within the euro area," he said.

Eurozone central bank sources have told Reuters that it is likely that the ECB will stop printing the purple 500-euro banknotes but allow those who already have them to keep them.

Germans cherish the use of cash and sometimes hoard large bills.

REUTERS