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18 Nov, 2022 15:18

Germany hoarding cash to deal with blackouts – Reuters

The measure is part on an emergency plan in case of crisis
Germany hoarding cash to deal with blackouts – Reuters

German authorities are stepping up preparations for emergency cash deliveries in case of power outages to keep the economy running, Reuters reported on Tuesday, citing its sources.

People involved in the plans told the media outlet that Germany’s central bank, the Bundesbank, is hoarding extra billions to cope with a surge in demand, and possible limits on withdrawals.

Officials and banks are reportedly also looking at distribution, as well as priority fuel access for cash transporters, the sources said. The planning discussions also involve financial market regulator BaFin, and multiple financial industry associations.

“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,” Reuters wrote.

The report indicated that access to cash is “of special concern for Germans, who value the security and anonymity it offers, and who tend to use it more than other Europeans,” with some still hoarding Deutschmarks replaced by euro more than two decades ago.

It cited a recent Bundesbank study showing that roughly 60% of everyday purchases in Germany are paid for in cash, with Germans on average withdrawing more than €6,600 ($6,863) annually mostly from cash machines.

If a blackout struck, one option for policymakers could be to limit the amount of cash individuals can withdraw, one of the sources said. The Bundesbank processes cash moving through Germany’s shops and economy, so its massive stocks make it ready for any spike in demand, the person explained.

Last week, industry organization BDGW’s director Andreas Paulick said during a meeting with central bank officials and lawmakers: “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.”

For more stories on economy & finance visit RT's business section

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