Johannes Beermann has been on the board of directors of the Deutsche Bundesbank for eight years and has published a book about the future of our money. In an interview with FOCUS online, he explains why cash will never die out and how he sees inflation in Germany.
As a board member of the Deutsche Bundesbank, he is the master of money. Johannes Beermann – in eight years at the central bank, he was responsible for cash, construction and employees, among other things, and thus for around 10,000 employees. With his book “20 Years of the Euro: The Future of Our Money” he provides answers to one of the most important questions of our time: What will become of our money?
FOCUS online: Nine percent inflation in Germany – how worried are you?
dr Beermann: Inflation in Germany was higher in October than it has been in over 70 years. This is of course very worrying for us. The main drivers of inflation are the sharp rise in energy and food prices. Not least responsible for this is Russia’s war against Ukraine.
What does the war in Ukraine mean for the euro?
dr Beermann: The Russian attack on Ukraine at times led to uncertainty and increasing risk aversion on the financial markets. This is one of the reasons why the euro has been depreciating against the US dollar for months. The uncertainty about Europe’s energy supply in winter also had a negative effect. After the situation here has fortunately eased somewhat, the value of the euro has recently risen again somewhat.
dr Johannes Beermann is a lawyer and has been a member of the Executive Board of the Deutsche Bundesbank since 2015.
How long will we still be able to pay with cash?
dr Beermann: I’m not worried that at some point we won’t be able to pay with banknotes and coins anymore. Six out of ten purchases at the till are paid for in cash. And unlike other means of payment, cash can always be used without a technical platform.
Will cash ever be abolished?
dr Berman: No. Cash is very popular in Germany and is used extensively. It protects the privacy of its users, offers a good overview of spending and, in emergencies and crises, is the only means of payment that also works without electricity. I don’t think we want to give up these benefits.
“On the future of our money”, by Johannes Beermann.
At the end of last year, Germany had the second largest state gold reserves in the world at around 3,359 tons. That’s about 268,000 bars. Why this crowd?
dr Beermann: Gold has symbolic value as an anchor of stability that helps to secure trust in a currency. The Bundesbank’s large gold holdings are due, among other things, to the historic Bretton Woods system, under which, among other things, US dollar surpluses were exchanged for gold. Due to the German economic miracle of the post-war years, we received such large amounts of gold.
Gold reserves were stored in New York and Paris. What was the reason why the reserves were brought back to Germany?
dr Beermann: The most important functions of the gold reserves are confidence-building in Germany and the possibility of being able to exchange the gold for foreign currencies at short notice at gold trading centers abroad. Since the common currency made it unnecessary to store part of the gold reserves in France, the depository in Paris was dissolved. Almost half of the German gold is still stored in New York and London.
How does the Bundesbank board invest its money privately?
dr Beermann: Mainly in the future of the next generation, namely in the education of my children.
How many “fake fifty” are in circulation?
The €50 banknote is the most frequently counterfeited note: the Bundesbank removed 8,350 counterfeit “Fuffziger” from circulation in the first half of 2022; Across all denominations, there were 19,789 notes in the same period. That may sound like a lot, but it’s a microscopic fraction compared to the banknotes in circulation.
How are the certificates checked?
Citizens can check the authenticity of banknotes by touch, sight and tilt. The Bundesbank itself uses the most modern banknote processing machines: highly sensitive sensors check over 30 banknotes per second to see whether they have the required security features. If false suspicious bills are noticed, they will be examined closely by our trained experts. Counterfeit money doesn’t stand a chance.
How are the euro coins different?
While euro banknotes have a uniform design, the backs of euro coins show different national motifs depending on the country of origin. For consumers, however, this makes no difference in everyday life: after all, a German euro coin is worth just as much as one from another country when making payments.
Where does the name euro come from?
The euro should first be called the ECU. ECU is the abbreviation of “European Currency Unit” and was the official unit of account of the European Union until the introduction of the euro. The original idea of adopting the name ECU for the European common currency was not well received in Germany : For the then Federal Chancellor Helmut Kohl, the name was too similar to the word “cow”. The German finance minister at the time, Theo Waigel, then proposed “euro”.
What does the euro have to do with locomotives?
Before the introduction of the euro, there was a political debate about the right time to introduce a common currency. The supporters of the “coronation theory” took the view that a common currency should only come at the end of a political integration process in Europe. Others supported the “locomotive theory”: They saw a common currency as an accelerator for a successful European integration process and finally prevailed.
Why was the euro born two years ago?
The euro was introduced for the first time 23 years ago, namely on January 1, 1999. At first it was only available as book money. It was used for electronic payments, but customers continued to pay with Deutschmarks and Pfennigs at the tills. From January 1, 2002, euro cash could officially be used.
Can cash transmit Corona?
Fortunately, there is no need to worry: scientific studies show that cash does not pose a particular risk of infection.
The book 20 years of the euro: The future of our money, edited by Johannes Beermann for the Bundesbank, has been published by Siedler Verlag and is available in bookshops (ISBN: 978-3-8275-0165-3).
