By Chrysostomos Tsoufis

The abolition of the use of cash on buying and selling real estate it is now the law of the state, but the ECB expresses serious reservations and issues several yellow cards in its opinion on this regulation.

THE Frankfurt expressly states that:

It is difficult to assess whether the measure included in the amendment of the bill is suitable for achieving the public interest objectives pursued or if it goes beyond what is necessary to achieve these objectives, especially given the vague description of these objectives in the explanatory statement and the absence of a specific assessment of the expected effects of the measure.

The bill states that the aim is to combat tax evasion, to stabilize the real estate market and at the same time to strengthen the banking system. In addition, the regulation would help authorities uncover money laundering cases.

But for the ECB:

– It is not proven that the purchase of real estate, regardless of their value, is used for tax evasion or money laundering

– It is not clear how the measure helps to prevent shadow economy phenomena and disclosure of tax evasion cases.

– It is not sufficiently explained why if a transaction in cash the supervisory authorities cannot establish whether or not tax evasion is hidden even if the number of checks is increased.

– The Greek side also does not state to what extent alternative measures could be adopted.

Continuing its argument, the ECB states that some small-sized properties such as warehouses and parking spaces or properties such as plots of land and farmhouses have a very low price and are located – especially the second category – in areas where citizens have limited access to either banks or digital payment services. Her explanatory note Greek government it does not address the social impact or risk of economic exclusion that could result from a cash ban.

In addition, the ECB also refers to the possibility – as the experience within the eurozone has mostly shown – that a cashless payment is temporarily not possible due to technical failures.

In a separate paragraph of the opinion, a number of reasons for the importance of cash are mentioned, such as the immediacy and guarantee of confidentiality, their use does not have the risk of imposing a fee or limits as is the case with digital transactions, they contribute to the limitation of cybercrimes and the inclusion of all social groups in economic activity.

He also notes that the elderly, the disabled, immigrants and the socio-economically vulnerable may not be able to negotiate except with cash. Cash also does not require the investment of resources in technical infrastructure.

The ECB’s text also reveals the intention of the Ministry of Finance to reduce the limit for the possibility of using cash between businesses from €500 to €300 with effect from 2024, but it eventually backtracked. The general increase of the fine for transactions worth more than €500 with cash from €100 to double the transaction was chosen.