Cash is King: Austria’s Chancellor Looks to Amend the Country’s Constitution to Protect the Use of Cash

By Kaitlyn Harries

In the name of credit cards and Apple Pay, the importance of cash may be enshrined in Austria’s Constitution with Chancellor Karl Nehammer’s declaration to protect citizen’s use of cash in the country’s constitution.[1] This declaration comes on the heels of the Austrian Freedom Party accusing the current government of conspiring to ban cash as a means to track citizens through cashless payment.[2]

Under the plan proposed by Nehammer, the right to use cash would be protected in the constitution, businesses would be required to allow cash payment for goods and services, and the national bank would be required to provide adequate cash flow with banks located at reasonable proximities to citizens.[3] This proposal comes as fears among Austrian citizens mount with potential European Union (“E.U.”) caps on the amount a person can pay in cash for goods or services.[4] In March 2023, the Members of European Parliament (“MEP”) of the Economic and Monetary Affairs, and Civil Liberties, Justice and Home Affairs Committees drafted and proposed legislation that would put a €7,000 cash cap on the amount a person could accept for goods and services in an effort to curb the practice of money laundering.[5] However, for a country like Austria, where the government reports that €47,000,000,000 are withdrawn every year, citizens worry that the cap on cash transactions is a stepping stone to banning the use of cash all together.[6]

In a 2022 referendum petition signed by 530,000 Austrians, the signers called for the right to use cash payments to be protected in the country’s constitution.[7] While the referendum was not binding, in a country with a population of 8.6 million people, at that time, the number of signatories demonstrated widespread support for the measure.[8] The petition was the thirteenth most popular referendum in the country’s history.[9] This protection has long been a demand by the Austrian Freedom Party, a far-right wing party gaining traction over the past few years appealing to desires people associate with being “free”.[10] While the petition had widespread support, the Austrian government refused to proceed with the protection of cash, until Nehammer announced on August 4, 2023, that the Austrian government would seek to protect cash in the constitution.[11] The tipping point of government action seems to follow the most recent accusation by the Austrian Freedom Party against the current government of conspiring to ban cash for the purpose of tracking citizens through their credit card usage.[12]

Picture of euros. Image courtesy of PXFuel.com

Austria’s constitution is comprised of a core constitutional document and various constitutional acts and provisions.[13] The core document contains 150 articles, each with detailed sub-articles and provisions, while the additional provisions are more dynamic and influenced by the Constitutional Court.[14] The Constitutional Court has distinguished two levels of constitutional law: ordinary constitutional law and basic principles of the constitution.[15]

Depending on the proposed change, there are two potential ways to amend Austria’s Constitution. When a change is minor or not fundamental to the constitution itself, a two-thirds majority in the Nation Council is required.[16] If the change is deemed fundamental to the Constitution, the required process includes a public referendum, a two-thirds majority vote by the National Council, followed by a dissolution of the National Council, a new election, and another two-thirds majority vote by the newly elected National Council.[17] For a proposal to be deemed a substantial change to the Constitution, the change must affect one of the following principles: the democratic principle, the principle of the separation of powers, the principle of the rule of law, the republican principle, or the liberal principle.[18] The last time a fundamental change to the Austrian Constitution occurred was when Austria joined the E.U. in 1995.[19] Since Austria joined the E.U., the laws of the E.U. are supreme to those of the Austrian Constitution, and the regional constitutions of Austria are subservient to the national Austrian Constitution.[20]

In this case, Nehammer is attempting to protect the use of cash via the national Constitution. Amending the national Austrian Constitution to include cash will realistically proceed through the “minor change” route, solely requiring a two-thirds majority vote of the National Council.[21] The National Council is responsible for the introduction, preliminary deliberation and adoption of laws, and the control of the federal government.[22] This council works in conjunction with the Federal Council to create federal legislation.[23] The National Council is elected by the people and acts as a check on the government, with the power to withdraw confidences from the entire government or individual government members, forcing them to step down.[24]

Nehammer assigned to the Finance Minister, Magnus Brunner, the responsibility of putting together a proposal using a roundtable with the affected ministries concerned, finance industry representatives, and the central bank in September.[25] This roundtable will aim to determine the best way to protect the use of cash as the far-right Freedom Party and Nehammer, a center-right Austrian People’s Party member, campaign for the protection to be enshrined in the constitution, while the center-left Social Democrats believe the best way to protect the use of cash is through increasing access to ATMs across the country.[26] Once the roundtable takes place, the path for the protection of cash will become clearer.

[1] Diego Lasarte, The Right to Pay Anonymously has Become Part of an EU Culture War, Quartz, Aug. 4, 2023, https://qz.com/the-right-to-pay-anonymously-has-become-part-of-an-eu-c-1850708074.

[2] Id.

[3] Laura Hulsemann, Austria Chancellor: Right to Use Cash Should Be in Constitution, Politico, Aug. 4, 2023, https://www.politico.eu/article/austria-chancellor-karl-nehammer-cash-use-constitution/.

[4] European Commission Press Release, New EU Measures Against Money Laundering and Terrorist Financing (March 3, 2023), https://www.europarl.europa.eu/news/en/press-room/20230327IPR78511/new-eu-measures-against-money-laundering-and-terrorist-financing.

[5] Id.

[6] Geir Moulson, Austrian Leader Proposes Enshrining the Use of Cash in his Country’s Constitution, AP News, Aug. 4, 2023, https://apnews.com/article/austria-cash-constitution-proposal-e63078b1682b375a84d0132857374e43.

[7] John Cody, Cash is Printed Freedom, REMix, May 31, 2023, https://rmx.news/crime/cash-is-printed-freedom-530000-austrians-demanded-right-to-cash-payments-be-added-to-constitution-but-they-are-being-betrayed-says-fpo/.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Lasarte, supra note 1.

[13] Konrad Lachmayer, The Constitution of Austria in International Constitutional Networks: Pluralism, Dialogues, and Diversity, National Consts. in Eur. and Glob. Governance, May 30, 2019, https://link.springer.com/chapter/10.1007/978-94-6265-273-6_27#Sec7

[14] Id.

[15] Id.

[16] Helmut Weichsel, Update: A Brief Overview of the Austrian Legal System and Laws, Hauser Global Law School Program, Aug. 2021, https://www.nyulawglobal.org/globalex/Austria1.html.

[17] Id.

[18] Id.

[19] Lachmayer, supra note 12.

[20] Weichsel, supra note 15.

[21] Id.

[22] The National Council, Parliament Austria, https://www.parlament.gv.at/en/explore/members-and-entities/the-national-council.

[23] Id.

[24] Id.

[25] CBS News, Austria’s Leader Wants to Make Paying with Cash a Constitutional Right, CBS News, Aug. 4, 2023, https://www.cbsnews.com/news/austria-cash-payment-right-constitution-proposal-chancellor-karl-nehammer/.

[26] Nick Gallagher, Is Cash a Human Right? Austria Seeks to Enshrine Cash Payments in Constitution, MSN, Aug. 4, 2023, https://www.msn.com/en-us/news/world/is-cash-a-human-right-austria-seeks-to-enshrine-cash-payments-in-constitution/ar-AA1eNUeH.