Germany Prepares Emergency Cash Delivery System in Case of Blackouts

Germany is accelerating preparations for an emergency cash delivery system to keep the economy on its feet, in case of blackouts. The plans include the Bundesbank, Germany’s central bank, to keep extra billions to cope with a surge in demand, and possible limits on withdrawals. Government officials and banks are also looking at distribution, discussing for example priority fuel access for cash transporters. The government’s efforts have accelerated in recent weeks after Russia cut off gas supplies.

The planning discussions involve the Bundesbank, its financial market regulator BaFin, and multiple financial industry associations.

The discussion show that Berlin takes the possibility of blackouts seriously, caused by either soaring energy costs or even sabotage, although German authorities have publicly played down the likelihood. They also show the affects of Moscow’s invasion of Ukraine on Germany, which relied for decades on cheap Russian energy and currently faces double digit inflation and a risk of disruption from fuel and energy shortages.

Cash is especially important for German citizens, who use it more than other European nations. Roughly 60% of everyday purchases are paid in cash, according to the Bundesbank. Germans, on average, withdrew more than €6,600 annually, mainly from ATMs.

A parliamentary report a decade ago warned of “discontent” and “aggressive altercations” in case citizens were unable to get their hands on cash in a blackout.

At the beginning of the pandemic in March 2020, Germans withdrew €20 billion more than they deposited, which was a record and worked without any problems.

But a potential blackout raises new questions about possible scenarios. If a blackout happens, one option for policymakers could be to limit the amount of cash individuals withdraw.

While the Bundesbank’s cash circulation is orderly and its massive stocks ready for any demand spike, security firms that transport money from the central bank to the ATMs and banks have been designated as a weakness by officials. Those firms are not fully covered by priority access to fuel and telecommunications during a blackout.

German financial regulators are also concerned that banks are not fully prepared for major power outages and view it as a new, previously unforeseen risk.

The issue also underscores the dependence of commerce on technology, with transactions increasingly electronic, and where most cash machines have no emergency power source.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Xi’s Loyalist Generals Could Offer Cohesion and Decisiveness on Taiwan

Chinese President Xi’s new generals are thought to be selected for their loyalty to him, but that element could serve Beijing in terms of cohesion and decisiveness if Xi decides to use the military option on Taiwan. Although any Taiwan action must ultimately be approved by the seven-member Politburo Standing Committee, the Central Military Commission would be the one executing the battle plan. Xi has appointed three new members to the top military body on Sunday after the ruling Communist Party’s five-yearly congress, where he secured a precedent breaking third term. He said during the Congress China would never promise to give up using military option to take control of Taiwan.   

BASF, France’s Eramet Nearing $2.6 Billion Indonesia Nickel Investment Deal

German chemicals giant BASF and French miner Eramet are nearing a partnership deal to invest $2.6 billion in Indonesia to process nickel for use in electric vehicle (EV) batteries. The news comes as Indonesia, home to the world’s largest nickel reserves, has been attracting global companies to produce EVs and batteries in the country. Indonesian investment ministry said the project investment would be worth around $2.6 billion. 

Scholz to Sign Hydrogen Deal, Look for LNG Supplies During Canada Trip

German Chancellor Scholz is set to sign a deal to establish hydrogen supply chain with Canada during his trip to the country next week. Germany has been looking to accelerate efforts for its energy transition to reduce dependence on Russian fossil fuels. Scholz is also expected to look for the possibility of buying LNG from Canada as fears mount that Russia could completely stop already heavily reduced gas supplies to Europe. 

Stay informed

error: This content is protected !!