Connect with us

Hi, what are you looking for?

European Union

Germany steps up emergency cash plans to cope in blackout



Four people familiar with the matter say that German authorities have increased preparations for emergency cash delivery in the event of an economic blackout. As the country prepares to face possible power cuts due to the conflict in Ukraine, this is happening.

One person claimed that the plans included the Bundesbank (Germany’s central bank), hoarding billions of dollars to meet increased demand and limit withdrawals.

Banks and officials are also looking at distribution. They also discuss priority fuel access for cash-transporters. This is due to Russia’s recent reductions in gas supplies.

People claim that the central bank, BaFin (the financial market regulator) and several financial industry associations were involved in the planning discussions. Because of confidential plans still in flux, some spoke on condition of anonymity.

Advertisement


While the German authorities are not denying the possibility of a blackout, these conversations reveal how serious they take this threat and how difficult it is to plan for potential crippling power outages due either to rising energy prices or sabotage.

These are just a few of the wider ramifications of the Ukraine war on Germany. Germany, which has relied heavily upon Russian energy for decades, now faces an inflation rate of double-digits as well as the threat of disruption from fuel and energy scarcities.

Cash access is a major concern for Germans. They are more concerned about cash access security and anonymity than other Europeans and use it more frequently. Some people still hold Deutschmarks, which were replaced by euros more than two decades ago.


Advertisement


A Bundesbank study found that roughly 60% of daily cash purchases are in cash. According to the study, more than 6600 euros is withdrawn each year by Germans, mostly from cash machines.

A decade ago, a parliament report warned about “discontented and aggressive altercations” when citizens couldn’t get money during a blackout.

There was an immediate need for cash at the time of the pandemic’s outbreak in March 2020. Germans took out 20 million euros more than they had deposit. This record was set without any problems.

A possible blackout raises concerns about the possibility of such a situation. As winter draws near, officials are reviewing the issue and as the energy crisis in Europe’s largest country gets worse.

One person stated that policymakers could limit cash withdrawals in the event of a blackout.

The Bundesbank processes cash flows through Germany’s economy, shops and banks. It is also responsible for removing counterfeits from circulation and keeping it orderly. This person claims that its large stocks enable it to be prepared for any spike in demand.

NO JUMPING THE LIE

One weakness in planning was the transport of money between ATMs and banks by security firms.

According to the industry association BDGW this industry includes Loomis and Brinks.

Andreas Paulick, director of BDGW, stated that there are many “big loopholes”. He stated that armoured vehicles would have to line up at petrol stations like all other vehicles.

The organization met with legislators and central bank officials last week to promote its case.

Paulick stated that “We must preventively deal with the realistic scenario for an outage.” It would be foolish not to speak of it now.

Funke Mediengruppe released a survey last Wednesday that revealed more than 40% of Germans are worried about a blackout in the next six months.

Germany’s disaster bureau recommends that everyone keep cash at home in the event of an emergency.

According to a source who has direct knowledge, German financial regulators worry that banks are not prepared for major power disruptions.

Deutsche Kreditwirtschaft, the umbrella organization for financial sector banks, considers a complete blackout “improbable”. Banks are in touch with the relevant ministries and authorities to plan ahead for such an event.

Finance should be considered critical infrastructure if energy is not rationed.

Sometimes politics can get in the way of planning.

Frankfurt’s city council member suggested that the blackout plan be presented no later than 17th November in Germany’s banking capital.

Markus Fuchs is a right-wing politician and member of the AfD party. He said it would be irresponsible not to plan for one. Fuchs and his party were accused of inciting panic.

Fuchs later stated in a telephone interview, that he would not accept a solution for world peace if one was found.

This issue also highlights our dependence on technology in commerce. Transactions are becoming increasingly electronic, and cash machines don’t have an emergency power supply.

According to Thomas Leitert (chief executive of KomRe), cash would be the only acceptable official payment method. He advises cities on how to plan for blackouts and other disasters.

“How else could the ravioli cans and candles be purchased?” Leitert said.

He said that he had warned authorities for years about blackout dangers, but that his planning was inadequate.

German finance with a focus on big banks and insurance companies. Financial crime regulation and past experience at Wall Street Journal Europe or Asia.

This article is shared:

You May Also Like

World

For many years we have seen how the Soft Power used by the Kremlin works exclusively through culture, exhibitions, musical groups presentations, etc. It...

European Union

After a Russian-occupied Zaporizhzhia nuclear plant in Ukraine was detained, U.N. nuclear watchdog chief Rafael Grossi announced that the man responsible has been released....

Featured

Yesterday (8th June)  Gotham City media outlet reported that on 21 March Russian businessman Vladislav Klyushin was arrested in Switzerland at the request of...

World

The Azerbaijani diaspora, which numbers some 60 million people around the world has entered the virtual social media battle being waged between Armenia and...