GE Note: You think we very behind this here in the US? Think again.
Capital Controls Hit Spain: Government Laws Prohibit Cash Transactions Over €2,500; Minimum Fine of €10,000 for Failure to Report Foreign Accounts
If Spain is seeking further instability, a new law on financial transactions is sure to do just that. Via Google Translate, Spain passes a law limiting cash payments to 2,500 euros.
- Minimum fine of €10,000 for taxpayers who do not report their foreign accounts.\
- Fine of €5,000 for each additional account
- Cash transactions greater than €2,500 prohibited
- Cash transaction restrictions apply to individuals and businesses
The US requires reporting of foreign accounts as well, supposedly for the same reason, preventing tax fraud.
In Spain however, consumers and businesses are already very nervous (and rightfully so), of a Spain exit from the euro with a return to the Spanish peseta accompanied by an immediate devaluation.
In that context, these controls are only going to make consumers and businesses even more nervous, if not outright suspicious about what is going on.