Cash becomes essential for crisis preparedness in Europe

In response to various crises, including the Covid-19 pandemic and the Russian invasion of Ukraine, the European Central Bank has published a study emphasizing the importance of cash reserves for households. The study analyzed consumer behavior during these disruptive events and found a significant increase in demand for cash across Europe due to heightened uncertainties in income stability and security. The recommendation from authorities in countries like the Netherlands, Austria, and Finland suggests that households should keep between €70 ($82) and €100 ($117) per person at home to cover essential needs for approximately 72 hours. In Sweden, the advice is to maintain enough cash to afford basic necessities such as food, medicines, and fuel for at least a week. This guidance reflects a growing awareness among authorities about the practical utility of cash during moments of crisis, as physical currency is viewed as a reliable and scarce resource when electronic payment systems may fail. The pandemic highlighted the significance of cash hoarding, which often stemmed from anxieties related to income and access to resources. Similarly, the onset of the war in Ukraine resulted in a surge in consumer cash demand, particularly among nations bordering Ukraine and Russia. This response indicates that people are increasingly aware of proximity to potential crises and the need for immediate liquidity. As crisis preparedness becomes a priority for European citizens, the European Commission's guidance has advised individuals to stockpile enough food and essentials to last at least 72 hours. This proactive approach aims to equip the public with resources in the face of potential disruptions caused by geopolitical tensions, infrastructure sabotage, and unforeseen challenges such as electronic warfare. Overall, the emphasis on maintaining cash reserves underscores its critical role in ensuring personal and national resilience during crises.