For the European Central Bank, why do we all have to have 70 to 100 euros in cash?

We talk about gold as a safe haven, but in reality, in the event of a crisis, we have not found anything better than cash to withstand crises whatever they may be, in any case that is what the European Central Bank clearly advises. Explanations

What do the Greek debt crisis of 2008, the Covid pandemic in 2020, Russia’s attack on Ukraine in February 2022, the Spanish power outage last July or, further, the computer bug feared at the time of the transition to the year 2000? All these moments of crisis, unfortunately effective or virtual, have led to a rush by households towards cash from ATMs or counters. Clearly, although nearly 60% of transactions are digitalized in France today, cash still constitutes, whatever the era, a value that reassures when the horizon darkens.

In any case, this is the observation made by two economists from the European Central Bank (ECB), and the latter drew a conclusion in the form of advice in a note with the evocative and slightly anxiety-provoking title: “ Keep calm and carry cash: keep calm and conserve cash. Clearly, in the event of an economic, political, geopolitical, technological or health crisis, to avoid riots around ATMs and possibly the “bank run”, the “rush on the banks” which would jeopardize their financial balance and all our economies along the way, the ECB recommends that we search our drawers for our old wallets.

READ ALSO: ‘Stay calm and keep cash’: European Central Bank calls for keeping cash at home”

Finland, Netherlands, Austria ahead

More seriously, the ECB advises every European to always have a few notes on hand. More precisely, she estimates that each European should have a sum in cash of between 70 and 100 euros. A sum which would make it possible, again according to the ECB, to “cover essential needs for seventy-two hours”. The ECB is undoubtedly inspired by certain countries such as the Netherlands, Austria or Finland which have already made this type of recommendation to their nationals.

In its note, the ECB further emphasizes that electronic payment systems are not “infallible”. Beyond the fact that it is not very reassuring, depending on the size of the family, this emergency nest egg represents sums of cash which, even if they are not obviously hidden under the mattresses, risk attracting burglars.

READ ALSO: Money: the French withdraw cash less often, but larger sums, according to the Banque de France

After the survival kits, the emergency piggy bank

In any case, if the Banque de France indicated at the end of July that the number of withdrawals from ATMs and bank counters had decreased in the country between 2022 and 2024 (1.1 billion withdrawals last year, or 4.3% less than in 2023 and 7.1% less than in 2022), this trend could well be reversed in view of the recommendations of the Central Bank of Central Banks.

For the record, last March, it was the European Union (EU) which advised all its nationals to stockpile a “72-hour survival kit” to deal with times of crisis and future conflicts. This kit must, according to the EU, contain around ten products such as a bottle of water, matches and a flashlight. In case the 100 euros in cash is not enough to buy them if times become really uncertain…