Wednesday, February 3, 2016

This 5,000 Euro Limit Talk

It's come out in the last day or two....that the SPD Party (coalition partner to the CDU in the German government).....suggested a new economic policy.  They want a law that says you can only barter cash money up to 5,000 Euro for a cash transaction (to buy something).  After have to use a bank transfer or credit card.

Their public comment is that this would hinder terrorism.

Yeah.....that's pretty much all that they suggested in their public commentary.

I sat and pondered upon this scheme.  No one in the CDU said a word, and it seems this was a shock suggestion which they weren't expecting.  Commentary from journalists?  Almost none except a few said it'd be practically impossible to enforce.

After many years of viewing how Germans do business....I've come to realize that a vast underground economy does exist.  Some guys will talk up a massive house renovation project, which goes way beyond their 15,000 Euro budget. So, they find this guy who is willing to do the project on weekends and under the table.  A 25,000 project gets accomplished by settling upon cash, and no paperwork.  This cuts out the government, and the added pension tax or medical insurance.

Deals are often swung on used RVs where you look at the guy's 10,000 Euro asking price, and simply offer 8,800 Euro in cash.  It's enough to entice a guy into accepting the deal.  He takes the cash and quietly moves it later to some Luxembourg account (illegal if he doesn't report the account to the Germans).

Buying a car in cash?  Typically....if you were talking about a'll be a bank transfer required.  But you run into various private characters now who have a three-year old vehicle which the blue-book might suggest 12,000 Euro, and they will swing the deal 11,500 Euro (in cash).  They don't want the income to show up.

I would take a guess that roughly ten percent of German adults will absolutely be against this limit of cash transaction.  It'll mean that the German government is continually in on the deal made and you risk a lot if you go around this 5,000 Euro cash situation.  Course.....nothing exists to say that you conclude this deal in Austria, France, or Poland....thus avoiding the effect of the law.

Another ten-percent of the public will ask stupid questions over the necessity of this and why it has to be some German law.

The odds of the CDU agreeing to something like this?  That's the thing about it.....they've said mostly nothing and usually.....they won't come around to agreeing to something like this until months have passed and they want something of equal they trade passage of "a" to get "b".  This passing the legality test with the German supreme court?  That's something that I suspect will come up and perhaps even the EU court might step in to say it's not a binding EU standard.

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