Monetary policy in the eurozone is the ECB’s exclusive competence.
The European Central Bank (ECB) is not very pleased with Slovakia’s constitutional amendment from last year that grants the right to people to pay for goods and services in cash.
The amendment wasn’t consulted with the ECB, according to the bank.
“The ECB respectfully suggests that the provision of the constitution is outside of the competence of a member state whose currency is the euro,” the bank’s president Christine Lagarde writes in the bank’s opinion from January 11.
Slovakia joined the eurozone in 2009.
Although the central bank adds that it welcomes Slovakia’s effort to strengthen the availability of cash in Slovakia, it explains that monetary policy questions in the eurozone fall within the ECB’s scope, not a member state’s, and are dealt with in EU legislation.
Up to 111 Slovak MPs in the 150-seat parliament backed the amendment last June. It was the Sme Rodina movement that initiated the change, arguing that the cancellation of cash payments would, for example, put low-income households in danger.
At that time, disinformation that the EU wanted to ban cash was circulating in Slovakia.
The bank’s president says that the Court of Justice of the European Union has already ruled that cash payments cannot generally be refused.
“In the light of the above, the ECB recommends that the provisions guaranteeing the issuance of cash as legal tender and the right to make a payments in cash should either be deleted or, alternatively, amended to merely refer to the relevant provisions of Union law,” the bank thinks.
At the same time, Lagarde recommends that Slovakia clarify the wording that concerns the right to perform cash transactions at banks. She notes that it is not very clear which operations would, for example, fall under the scope of the cash transactions.
