European Union law provides, in principle, for an obligation to accept euro cash as a means of settling claims for sums of money, said Advocate General Giovanni Pitruzzella in his Opinion delivered on Tuesday 29 September (Cases C-422/19 and C-423/19).
Two German citizens are challenging the fact that the Hesse broadcaster does not accept cash payment of the licence fee, through the courts. They argue that the German Central Bank Act (BBankG), which provides that euro banknotes have unlimited legal tender status, and EU law - Article 128(1) of the Treaty on the Functioning of the EU and Regulation 974/98 on the introduction of the euro - provide for an unconditional and unlimited obligation to accept euro banknotes as a means of settling claims for sums of money.
In his Opinion, the Advocate General notes that the exclusive competence conferred on the Union in the field of monetary policy includes the powers necessary for the proper functioning of the single currency, including the framework for the status and legal tender status of banknotes and coins. Any national legislation in a euro area country regulating the legal tender status of euro banknotes encroaches on the exclusive competences of the Union and is therefore not in line with EU law.
Mr Pitruzzella points out, however, that the exclusive competence conferred on the Union does not go so far as to include a general competence to regulate the arrangements for the performance of payment obligations, under both public and private law, which remains a national competence. A Member State may therefore adopt a provision of national law which does not regulate the legal tender status of euro banknotes but obliges a public administration to accept cash payments from its citizens.
The Advocate General interprets the scope of the concept of 'legal tender status of euro banknotes'. In his view, this concept must be understood in the sense that it entails an obligation in principle to accept euro banknotes by the creditor of a payment obligation, subject to two exemptions : - when the parties to a contract agree on other means of payment ; - and where a euro area country has adopted legislation providing for restrictions on the use of euro banknotes as means of payment on grounds of public interest.
Such limitations are acceptable only if they do not lead, de jure or de facto to a complete abolition of banknotes. They must also be proportionate, i.e. not go beyond what is necessary to achieve the public interest objective being pursued.
Mr Pitruzzella also noted that the legal tender value attributed to cash could have a direct link to the exercise of fundamental rights. For vulnerable persons without access to basic electronic means of payment, cash is the only form of accessible currency. The Advocate General therefore considers that there is an obligation to adopt measures enabling such vulnerable persons to fulfil their obligations, in particular those of a public nature, without incurring additional costs.
As regards the refusal of cash payments by the Hesse Broadcasting Corporation, the Advocate General notes that such a measure provides for a seemingly absolute exclusion of euro banknotes from the payment of the broadcasting licence fee, without taking account of the social inclusion function which cash fulfils for vulnerable persons.
See the conclusions: https://bit.ly/3cEXjii (Original version in French by Mathieu Bion)