February 12, 2016
High denomination banknotes have long been seen as a problem, but it took a solid security argument – the financing of terrorism – to galvanise the EU into action.
At a time when the United States, Canada and the United Kingdom have all taken their biggest banknotes out of circulation to help combat organised crime, the continued existence of the €200 and €500 notes is something of a throwback.
The origin of these notes, a surprising number of which come from Luxembourg, can give a clue as to how they are used.
This small country prints mountains of banknotes every year to respond to the needs of its large banking sector. While most countries print about 10% of their national wealth in banknotes each year, Luxembourg printed double the value of its GDP in cash in 2014 alone.