On Tuesday, Reuters reported German authorities are moving to acquire emergency cash deliveries to keep their economy running in the event power outages take down electronics-dependent methods of payment.
People familiar with the government plans reported that the Bundesbank, Germany’s central bank, had begun hoarding extra billions in the event there is a surge in demand for cash, or limits placed on withdrawals.
Government officials and bank authorities are also looking to secure the distribution mechanisms for the cash, giving priority fuel access to cash transporters, according to the sources. The planning sessions have also reportedly included multiple financial industry associations as well as financial market regulator BaFin.
The Reuters article noted, “Although German authorities have publicly played down the likelihood of a blackout, the discussions show both how seriously they take the threat and how they struggle to prepare for potential crippling power outages caused by soaring energy costs or even sabotage.”
The article also noted that cash is “of special concern for Germans, who value the security and, the anonymity it offers, and who tend to use it more than other Europeans,” with some Germans actually still hoarding Deutschmarks despite their having been replaced by the euro over 20 years ago.
The report pointed to a recent Bundesbank analysis which showed Germans paid cash for roughly 60% of their everyday purchases, and that Germans withdrew over €6,600 ($6,863) each year, mostly from cash machines.
The officials noted that if a blackout occurred, the government might place limits on the amount of cash Germans could withdraw. However a source explained that because the Bundesbank handles the cash moving through Germany’s stores and its economy, it maintains massive stocks which leave it well prepared for any sudden surge in demand.
Andreas Paulick, industry organization BDGW’s director, said last week during one meeting, “We must preventively tackle the realistic scenario of a blackout. It would be totally naive to not talk about this at a time like now.”
The Daily Financial Trends