European Court of Justice Delivers Judgment on Cash Acceptance Case

calendar iconFeb 5, 2021


On 26 January 2021, the Court of Justice of the European Union (CJEU) delivered its judgment in the case of German plaintiffs arguing for the right to pay their broadcasting fees in cash. It stated that yes, in principle, euro banknotes and coins are legal tender, and their acceptance as a means of payment in EU Member States is mandatory. However, Member States can also insist on payments being made by non-cash means if it’s in their public interest.

[…] the status of legal tender of those notes and coins implies, in principle, an obligation to accept those notes and coins and, on the other hand, that obligation may, in principle, be restricted by the Member States for reasons of public interest.
"JUDGMENT OF THE COURTGrand ChamberParagraph 67

Limitation of cash payment in Häring case is appropriate, say CJEU

In this specific case, the CJEU ruled that ‘the limitation on payments in cash which the legislation entails is appropriate for attaining the public interest objective pursued’, i.e. the German broadcaster Hessische Rundfunk—in light of there being approximately 46 million licence fee payers in Germany—has a right to limit cash payments in order to ensure ‘the effective recovery of the licence fee and to avoid substantial additional costs.’ (72) It still referred the ascertainment of proportionality back to the Bundesverwaltungsgericht (Federal Administrative Court), emphasising the aspect of social inclusion and pointing out that cashless options may not be ‘readily accessible to everyone liable to pay’. (77)

First ruling on cash as legal tender

The CJEU has confirmed cash in the form of banknotes and coins as legal tender in principle, which, as a consequence and according to the Recommendation 2010/191/EU, means firstly general mandatory acceptance, secondly acceptance at full face value, and thirdly, the power to discharge from payment obligations. This is the first time that physical cash, namely euro banknotes and coins, as mentioned in article 128 TFEU, has explicitly been confirmed as the only form of legal tender by a court ruling.

'Public interest' may impact acceptance of cash

At the same time, the CJEU pointed out ‘status as legal tender calls only for acceptance in principle of banknotes denominated in euro as a means of payment, not for absolute acceptance’ (55) and established a second principle according to which Member States can limit the acceptance of cash and insist on non-cash payments for ‘reasons of public interest’. (66) ‘Public interest’, according to the ruling, can be anything from ‘public policy relating to security’ to ‘the fight against crime’ to ‘ensuring the efficient organisation of payments in society’. (66)

This second principle has been qualified by the CJEU’s admonition that Member States have to always consider the proportionality of limitations on payments in cash, ‘restrictions must be proportionate to the public interest objective pursued’ (68) and can only limit cash payments when ‘other lawful means for the settlement of monetary debts are available’. (63) The interpretation of ‘reasons of public interest’ lies with Member States. It remains to be seen how this ruling will be applied.


All German citizens pay a mandatory broadcasting fee, which is levied by the respective broadcasting station in each province, and only non-cash payments are accepted. Beginning in the German courts in 2016, a case was brought by plaintiffs—led by German journalist and pro-cash activist Norbert Häring—arguing that this refusal to accept cash violated the status of euro banknotes and coins as legal tender. The German Federal Administrative Court ruled that ‘the exclusion of the possibility of paying broadcasting fees with euro banknotes violates the federal law (Bundesbank Act) and German public authorities are obliged to accept euro banknotes.’ Overall, however, they deferred a ruling on the case until the European Court of Justice ruled on three questions.

  1. Are euro Member States entitled to oblige national public authorities to accept cash as for mandatory payment obligations?
  2. Must Member States’ public authorities accept cash for obligatory payments, or are there circumstances in which they can refuse it?
  3. If they must accept cash, can national law by a Eurozone Member State which is adopted in the context of the European Union’s exclusive competence in the area of monetary policy be applied to the extent to which, and for so long as, the European Union has not made use of its competence?

Hearing in Luxemburg and Opinion of the Advocate General

At the hearing in Luxemburg on 15 June 2020, the European Central Bank sided with the plaintiffs, in line with their definition of cash as a vital payment method. The European Commission also took a position in favour of cash. Representatives of the German and French governments were against, stating that the currency to be used, the euro, falls within the context of legal tender, but not the form of payment.

The Advocate General in the case, Giovanni Pitruzella, published his opinion on 29 September, in which the status of banknotes and coins as legal tender, as defined in Article 128(1) TFEU, was confirmed, while it also allowed for Member States to ‘adopt measures’ that, if they do not ‘constitute rules on the legal tender status of the euro’, limit the use of cash for the ‘payment of […] obligations of a private or public nature’. (119) These measures, however, must take into account ‘the social inclusion element of cash for the vulnerable people’. (166)

Summary of Ruling by the Court of Justice of the European Union

The court’s ruling places a special, repeated emphasis on ‘regulatory dimension intended to guarantee the status of the euro as the single currency […] under the first indent of Article 127(2) TFEU’, (38) and the ‘exclusive competence [of the European Union] in the area of monetary policy for the Member States whose currency is the euro, according to Article 3(1)(c) TFEU’, (33) which comprises ‘three elements: a single currency (the euro), the definition and conduct of a single monetary policy, and the definition and conduct of a single exchange-rate policy’. (37) It also mentions the ‘primary objective of the European Union’s monetary policy, which is to maintain price stability’. (50)

Referring to Point 1 of the Recommendation 2010/191, the CJEU confirms ‘the common definition of “legal tender”’, i.e. that ‘where a payment obligation exists, the legal tender of euro banknotes and coins should imply, first, mandatory acceptance of those banknotes and coins; second, their acceptance at full face value; and, third, their power to discharge from payment obligations. That point therefore shows that that concept of “legal tender” encompasses, inter alia, an obligation in principle to accept banknotes and coins denominated in euro for payment purposes’. (49)

However, the CJEU then weakens this commitment to cash as legal tender, and the consequential mandatory acceptance, by stating ‘[…] it cannot be considered necessary for the use of the euro as the single currency […] and, more specifically, for the establishment of the status of legal tender of banknotes denominated in euro […] to impose an absolute obligation to accept those banknotes as a means of payment’. (55)

The CJEU goes on to declare it is within Member States’ competence to ‘regulate the procedures for settling pecuniary obligations’ (56) if it is ‘as a general rule’ (56) still possible to pay a debt in cash. ‘[…] Limitations on payments in notes and coins, established by Member States for public reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means for the settlement of monetary debts are available’. (63)

These limitations can be exercised by Member States for ‘reasons of public interest’, (66) the scope of which is rather broad, even though the CJEU invokes the law of proportionality several times to ensure limitations on cash payments will not be imposed lightly.

Last Updated: Feb 5, 2021