Four people familiar with the matter said that German authorities have increased their preparations for emergency cash delivery in the event of an economic blackout. This is in response to the possibility of power outages resulting from the conflict in Ukraine.
One person said that the plans included the Bundesbank, Germany’s central bank, hoarding additional billions to deal with an increase in demand and possibly limiting withdrawals.
Officials and banks are also examining distribution. They discuss for example priority fuel access for cash transporters. This is in response to Russia’s recent gas supply cuts.
According to the people, the central bank, BaFin, the financial market regulator, and several financial industry associations are involved in the planning discussions. Some spoke under condition of anonymity because of plans that are confidential and still in flux.
Although the German authorities have not publicly dismissed the possibility of a blackout occurring, these discussions reveal how serious they take the threat as well as how difficult it is for them to plan for possible crippling power outages due to soaring energy prices or sabotage.
These also highlight the broader ramifications that the Ukraine war has on Germany.
Germany, which for decades has relied on cheap Russian energy, now faces inflation of double-digits and the threat of disruption due to fuel and energy shortages.
Germans are particularly concerned about cash access. They value its anonymity and security and tend to use it more often than other Europeans. Some still have Deutschmarks that were replaced by euros over two decades ago.
According to a Bundesbank study, roughly 60% of daily purchases are made in cash. The study found that the majority of Germans withdraw more than 6,600 euros each year, mainly from cash machines.
A decade ago, a parliamentary report warned of “discontent and aggressive altercations” if citizens couldn’t get cash during a blackout.
At the outbreak of the pandemic, in March 2020, there was a rush to cash. Germans drew 20 million more euros than they had deposited. This was a record and it went without a hitch.
However, a possible blackout raises questions about the possibility of a situation. Officials are reexamining the issue as winter approaches and the energy crisis in Europe’s largest country deepens.
One person said that policymakers might limit cash withdrawals if there is a blackout.
The Bundesbank is responsible for processing cash flowing through Germany’s economy and shops. It also removes fakes from circulation and keeps them orderly. According to this person, its huge stocks allow it to be ready for any surge in demand.
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