Frankfurt: Euro banknotes will remain paper, the European Central Bank said yesterday, choosing to fight counterfeiting with new security measures but resisting a move to plastic money.
The ECB also has no plans to do away with the 500-euro notes favoured by some criminals, Executive Board member Yves Mersch said.
Polymer notes were first adopted by Australia in 1988 and are now used in over 20 countries, with Britain due to make the shift in 2016 and become the largest economy to use them. But the ECB will continue to make euros from cotton-based paper.
“We have seen with great interest what the Bank of England does and also what other central banks have been doing around the world, and we are studying their experiences,” Mersch told a news conference when presenting the new 10-euro note.
“The outcome of our studies was that we would remain with … the current series,” he said.
Mersch said the ECB thought this was the most cost-conscious option, balancing security and costs, but declined to estimates on savings. The new notes will have a protective coating, extending their lifetime.
The BoE has estimated that the plastic banknotes will save Britain £100m ($164.85m) over a decade.
The ECB also said that the number of counterfeit euro banknotes withdrawn from circulation in the second half of last year rose by 11.4 percent from the first half to 353,000. It was the highest level since late 2010, although with 15 billion banknotes in circulation the number of fakes remains very low in percentage terms.
The new 10-euro banknote would help it stay ahead of counterfeiters, the ECB said. The 20- and 50-euro notes remain counterfeiters’ favourites, however, accounting for more than three quarters of fake bills.
Mersch also defended the 500-euro banknote, one of the highest value singled notes of any currency, fending off suggestions that their existence could increase the size of the black market.
“It is obvious that … criminals prefer big German cars. That is no reason to forbid the production of those cars.” Reuters