【Unlocking Word Meanings】
Read the following words/expressions found in today’s article.
1. banknote / ˈbæŋk noʊt / (n.) – paper money
Example: The suitcase contained several stacks of banknotes.
2. phase out / ˈfeɪzˈaʊt / (phrasal v.) – to slowly take out or reduce something until it is no longer available
Example: The company is phasing out its old mobile phone models.
3. discontinue / ˌdɪs kənˈtɪn yu / (v.) – to stop or end something
Example: The release of the magazine was discontinued after a case was filed against its publisher.
4. in circulation / ɪn ˌsɜr kyəˈleɪ ʃən / (idiom) – available for the use of the public
Example: The special edition coins have been in circulation since last month.
5. evasion / ɪˈveɪ ʒən / (n.) – the act of avoiding or escaping something
Example: Tax evasion is punishable by law.
Read the text below.
The 500-euro banknotes are about to be phased out.
On May 4, a meeting among the members of the Governing Council of the European Central Bank (ECB) ended with the decision to discontinue the production of the said banknote. The 500-euro note, valued at approximately $550, is among the highest-valued notes currently in circulation. The council decided to phase out the said banknote because it believes that the note is being used in illegal activities.
The decision was finalized in light of high terrorist activity in Europe recently. Months prior to the decision, ECB president Mario Draghi announced that the bank is considering making changes on the 500-euro banknote for fear that it may be used by terrorists or criminals. According to the EU, the banknote can be easily used to finance criminal activities.
Due to its high value even in small numbers, criminals could easily hide great sums of money without having to put them in huge containers. While there is no actual proof that connects the banknote to criminal activity, it has been linked to crimes such as drug trade, money laundering, and tax evasion.
Germany has criticized the ECB’s decision as a move towards abolishing cash altogether in favor of electronic transactions, such as credit or debit cards. Cash transactions are more favored than electronic payments in Germany.
Because of this opposition, the ECB has decided to slowly decrease the banknote’s production until it stops fully by the end of 2018. The Central Bank emphasized, however, that 500-euro banknotes can still be used beyond this time. Thus, the bills may still be spent or exchanged at national central banks in countries that use the note.
Enjoy a discussion with your tutor.
· Do you think that ECB’s decision could really decrease the use of money in criminal activities?
· Aside from large money transactions, what are other activities that banks should closely monitor?
· Which do you think is better, cash or electronic payment? Why?
· What are the possible dangers of paying through electronic means?