Spaniards used to call a 500-euro banknote a Bin Laden because most people claimed never to have seen one. Despite calls for such bills to pulled out of circulation to discourage money-laundering, Bin Ladens still abound in Spain, albeit in increasingly dwindling numbers since a booming economy built on bricks and mortar started to unravel five years ago.
According to figures released Wednesday by the Bank of Spain, the number of 500-euro banknotes in circulation in the country amounted to 85.5 million, equivalent to 42.754 billion euros, the lowest figure since August 2005. That figure was down 13.7 percent from the same month a year earlier and down 26.7 percent on 2007.
Experts estimate that the size of the black economy in Spain could amount to up to 25 percent of GDP, explaining the need for such extraordinarily large amounts of a denomination that is virtually useless for day-to-day transactions. The value of all euro banknotes in circulation in July was 60.759 billion euros, meaning that Bin Ladens accounted for over 70 percent of the total.
That could indicate that the government’s attempts to crack down on tax fraud and money-laundering are starting to have some effect, with fewer transactions designed to escape the attention of the taxman, or quite simply the fact that with the country now in its second recession in four years, the pace of both official and unofficial economic activity has slowed dramatically from the boom years in the mid-2000s when Spain was posting annual growth rates of over three percent. A 2012 law bans cash purchases in excess of 2,500 euros.
The number of 200-euro banknotes in circulation declined slightly in July from a year earlier to 13.83 million, equivalent to 2.767 billion euros, the lowest amount since February 2002. The number of 100-euro bills came to 31.45 million, the lowest level since the banknotes of the single-currency zone were introduced at the start of 2002, while the number of 50-euro notes hit a record 84.18 million.