The 500-Euro Note Is Being Retired, and the Story of Its Design Shows an EU Anxious About Its Own Future

The euro's problem is the EU's problem

About 150 billion banknotes come off the presses every year, printed on paper or plastic, mostly to replace worn-out old ones. Among them are dozens of new designs appearing for the first time, usually meant to stay a step ahead of counterfeiters.

Some notes also disappear. This year one of them is the "bin Laden note" — the 500-euro bill, withdrawn for good.

A single 500-euro note is simply worth too much: $582, or 3,723 yuan. Ordinary people almost never handle one, and legitimate companies do not settle their business in cash. When the European Central Bank decided to retire the note in 2016, its stated reason was that the bill fed the underground cash trade of crime and terrorism — which is where the "bin Laden note" nickname came from.

The money about to leave circulation is a large sum: 300 billion euros, to be exact. Those notes are only 2.3% of all euro notes in circulation, yet a third of the total value. Central banks still argue over whether high-denomination notes should be abolished, but one thing is certain: not many people will miss the way the euro looks.

The world has produced plenty of beautiful banknotes, a good number of them in Europe: the Dutch guilder, full of the natural world; the German mark, with its pianist and its bacteriologist; or the franc, printed on paper so thin that the images on its two sides lined up back to back.

The euro's design, by contrast, most often gets one verdict: boring. The front carries buildings nobody recognizes, drawn in plain outline, standing for the EU's core spirit of "openness and cooperation"; the back carries bridges nobody recognizes, standing for "communication between the people of Europe and the rest of the world." The 12 stars, meanwhile, represent "the vitality and harmony of contemporary Europe." You could not call it ugly. But it leaves almost no impression at all.

The paper a banknote is printed on is worth nothing in itself. Its value lies in people's trust in the bank and the government standing behind the currency — the belief that this piece of paper can still be exchanged, in full, for something else later on. By that logic, a banknote could be nothing more than a blank sheet marked with a number, plus a security thread or a hologram, replaced on the customary international cycle of eight to ten years.

In practice, designers on government payrolls give banknotes a far more seductive look. Famous faces, buildings, animals, flags, colors — there is a great deal of meaning packed into banknote design, and it is one way governments transmit their values.

Seen from that angle, every year's new notes are a nation's effort to shore up that trust. Only rarely do people design new money because trust has collapsed — a change of regime (from pounds to dollars, say), or a bout of inflation. Among the notes issued by China's four major banks in the Republican era, the Bank of China's Republic Commemorative One-Yuan exchange note used a roaring lion, standing for the awakening of democracy and of society, while the Bank of Communications mostly chose modern transport: steamships, trains, airplanes. Another example: in the spring of 2009, at the depth of the American recession, the designer Richard Smith started the Dollar ReDe$ign project, inviting anyone to submit ideas to "redesign the American economy."

The euro is unlike anything else in the world's monetary system. No currency had ever served as legal tender across 11 sovereign countries (extended to 19 EU member states in 2015). It was also the first common currency Europe had known since the Roman Empire.

A currency that unusual carried an unusual mission: to pull the EU's member states closer together and push European political and economic integration forward.

You could say the euro's birth was the EU's dream made solid. Across countries with different cultures, economies and politics, it asked everyone to trust a single system, and designing it was the process of granting that system authority.

So the euro's most important design principle became pleasing everyone. Pleasing everyone is impossible, and it ended up as offending no one — a product of compromise after compromise.

When the ECB commissioned 15 printers to produce euros in 1999, G+D printed the largest volume of them. On its website the company writes today: "Studies show that people generally do not trust abstract, unfamiliar shapes."

The images on the euro were not what its designer wanted. Robert Kalina first proposed showing real buildings: the Rialto Bridge in Venice on the 50, the Pont de Neuilly on the Seine in Paris on the 100, the Pont de Normandie as the model for the 500.

Designers had not even confined themselves to architecture. When the work began in 1995, the 18 candidate themes included Europe's plants and animals, its familiar legends and myths, its great figures, its poetry, its maps.

None of that was what the EU wanted. In the end the Council of the European Monetary Institute — the ECB's predecessor — picked architecture, and told Kalina to make sure no building on the notes matched any real one, in case it started an argument.

That made the process extraordinarily complicated — perhaps the most heavily resourced design project ever undertaken. Research ran to hundreds of separate questions, including how big wallets were in each country. In a survey by the Dutch central bank in 2004, the euro's third year, 94% of respondents said the height of the 20-euro note (72 mm) was "exactly right."

The euro's 15 denominations were also a compromise, reached after weighing the gap in wealth between EU countries.

Before the switch, the largest national notes in six eurozone countries — among them Belgium, Germany, Italy, Luxembourg and the Netherlands — were worth between $200 and $500. By 2000, demand for the 1,000-mark note was 15 times what it had been in 1975, and those notes made up 34% of the total value of marks in circulation.

For Germans, the mark stood for the country's economic recovery after the Second World War. People felt an unusual pride in it, and were reluctant to let it go. Jens Weidmann, president of the Bundesbank, noted at an event marking the euro's tenth anniversary that in 2012 more than $8 billion worth of marks were still in circulation, much of it hoarded as savings.

Three other EU countries — Greece, Italy and Austria — had been using notes worth less than 2 euros before they converted.

To accommodate everyone, the designers set the highest note at 500 euros and the lowest at 5, seven denominations in all. Coins ran from 2 euros down to 1 cent, eight in all. In 2015 the average monthly income in Greece was 600 euros, and many Greeks had never seen a 500-euro note.

The EMI Council settled the denominations in November 1994 and planned for the notes to circulate from 2002. Then came the design.

The most common design on the world's banknotes is still a portrait. Queen Elizabeth II's portrait has appeared on notes on every continent but Antarctica; since her accession in 1952, 31 different images of her, young and old, have appeared on money around the world.

Leaving politicians aside, the person on the greatest number of banknotes is Columbus: nine countries have printed his head on their money, including the one-dollar note issued by the First Bank of the United States in 1874. One commentator remarked that America seemed to be claiming Columbus for itself, announcing its designs on Central and South America.

Seven denominations meant seven portrait slots, which could never cover every EU country. So most of the 18 themes proposed by the original euro design working group — historians and art historians, psychologists, designers — were unworkable. "Europe's collective memory and culture" was too abstract. "Europe's achievements" would inevitably require people. Plants, animals and landscapes vary from country to country. The EMI Council cut the list to two: "Ages and styles of Europe," and "abstract or modern design."

The first theme came with a further rule, an architectural style assigned to each denomination:

• 5 euros: classical
• 10 euros: Romanesque
• 20 euros: Gothic
• 50 euros: Renaissance
• 100 euros: Baroque and Rococo
• 200 euros: 19th-century iron and glass
• 500 euros: 20th-century modern

Which is more or less the history of Europe.

The Council also fixed the notes' colors, their sizes, the text on them (the abbreviations of Europe's central banks) and the flag. Only designers nominated by the governors of the EU's national central banks could compete, and each could pick either theme. By September 13, 1996, 29 designers and teams had submitted 44 proposals: 27 for "ages and styles of Europe," 17 for "abstract or modern design."

In the opinion polls, the series drawn by the Belgian designer Maryke Degryse won the most votes, 35%. Only 23% of respondents said they liked the traditional painterly style of the Austrian designer Robert Kalina — but most of those who did, 76%, thought his notes expressed the idea of "Europe" better. His was the proposal the Council chose.

All the proposals were later put on public display. Almost every rejected design carried a portrait of a famous European or a drawing of a plant or an animal — or else it was one of the entries by Roger Pfund and the Jünger team, which the polls judged too abstract, more artwork than money.

The euro coins drew far less criticism, because they kept Europe's plurality: one side a common EU design, the other whatever the country chose. The Netherlands used the profile of Queen Beatrix; the back of the French 10-cent coin carries the Sower, the figure that never left the franc; the back of the Austrian 1-euro coin has Mozart looking straight at you. American state quarters work the same way.

But euro notes came in large denominations, and to make sure as many people as possible knew what they looked like and to cut the risk of forgery, the EMI never considered letting each country use its own images.

The euro, in the end, became political correctness carried to its limit.

Set aside the advance of anti-counterfeiting technology, and the heart of banknote design is to sum up and reinforce what the people about to use it hold in common. Here the euro failed. Michel Prieur, a numismatist in Paris, said the notes were full of "sterile architectural blueprints." "If you don't start from identity, you can't create a currency that gets into people's hearts and minds. The history of the franc is a million times more interesting. They should have picked some European geniuses — Leonardo da Vinci, or Mozart."

The euro's design happens to expose the fatal weakness of European identity. As Anthony Smith, a sociologist at the London School of Economics, put it: "For the inhabitants of the modern European continent, there seem to be no shared European myths and symbols, meaningful and effective, capable of uniting them."

On the euro's tenth anniversary, a report in The New York Times noted that ECB officials treated the date with a quiet very different from a decade earlier: in Brussels there was no ceremony and no press conference. When the euro launched at the turn of the century, advertisements reading "the EURO, OUR money" went up across the EU, along with lessons on telling a real note from a fake — feel, look, tilt. Laurent Fabius, then France's finance minister, praised it this way: "Thanks to the euro, our wallets will soon be full of tangible proof of European identity."

More to the point, the euro has become a small model of the EU's own difficulties. The Nobel laureate economist Joseph Stiglitz has argued in print that "the problem with Europe is the euro".

The euro was a political project from birth, and never only a question of circulating money. It was made to carry an enormous load: deepening exchange and cooperation among member states, creating economies of scale, strengthening Europe's political and economic stability.

It is the main piece of the EU's ideal put into practice. In theory it advances political integration and binds together a continent whose history is a history of war.

But behind one currency and one exchange rate sits a system of financial supervision that lacks control and works badly. Slowing growth, unemployment, terrorism, the migration crisis, the rise of the far right — compared with the EU's founding, Europe today is more divided, not less.

Europe's problems will not be solved soon, and now Britain is leaving. The euro's boring design, at least, can still be salvaged.

In April 2017 the EU issued a redesigned 50-euro note. Beyond some updated security features, the important change was a face: Europa, the Phoenician princess of Greek myth.

The person who helped push that design through was David Eagleman, a neuroscientist at Stanford. But the ECB staff who came to him were not trying to strengthen European identity. They were trying, again, to deal with forgery.

Since the euro's launch, the EU has seized thousands of counterfeit notes a year, mostly 20s and 50s. Plenty of security features are already there — tilt the note slightly and the ink changes color; hold it to the light and a building appears as a watermark; and more that the eye cannot see at all, readable only by bank machines. The trouble is that nobody pays attention to them. People making everyday purchases do not inspect their money that closely, and fakes usually surface only at the bank.

Eagleman's advice was to put a face rather than a building in the watermark. "The human brain is specialized for faces, but it has no dedicated neural real estate for buildings. Because counterfeit watermarks are usually drawn by hand, people spot the flaws in a face more easily than in an invented building."

That reopened the argument over who could represent 19 countries and 338 million EU citizens. The honor went to Europa, Zeus's lover, a fictional figure from Greek myth, the first human being of Europe. "Europa" also became the name of the ECB's second series of notes.

The conservative choice avoided touching any real-world question of values.

The opposite case came in March this year, when the Bank of Canada unveiled a new 10-dollar note: on the front, the Black Canadian civil rights campaigner Viola Desmond; on the back, the Canadian Museum for Human Rights. The government was making its position clear.

The euro replaced a great many exquisite European notes — among them a set of three guilders issued in the Netherlands between 1977 and 1986, the work of the Dutch master Oxenaar. Many collectors consider them the most beautiful paper money in the world. They show a sunflower, a snipe and a lighthouse.

Oxenaar (Robert Deodaat Emile Oxenaar) was one of the few designers of his era invited to design banknotes as an independent. He had nothing like the huge panel of experts the euro would get, and he told Creative Review that the work was still long and complicated. Each denomination took three years; by the time the last one entered circulation, exactly 30 years had passed since he took the job. "Before I drew a line, I was given a book as thick as a phone directory, listing everything about security: the paper, the watermark, every aspect of it. When you finish reading it, you think you can never meet the requirements."

Oxenaar kept in touch with the president of the Dutch central bank by telephone and was paid by bank transfer. He also worked personal details into the notes, hidden until the guilders had been printed in bulk. He put his own fingerprint into the 1,000, and on the 250 with the lighthouse he wrote the names of the "three important women" in his life. These designs, to the resignation of the central bank's president, were printed day and night for 30 years, until the euro arrived.

News that the 500-euro note was going set off two quite different conversations. The first came from press reports linking the weight of cash to crime. The BBC wrote: "A million pounds weighs more than 50 kg, but the same amount in 500-euro notes weighs just 2 kg."

Lawrence Summers, the former US Treasury secretary, promptly published an article urging America to follow the EU and abolish the $100 bill, to make life harder for the crime and terrorism that run on cash.

On the other side, the Financial Times argued that large-denomination cash serves a basic function as a store of value, a defense against governments imposing negative interest rates without restraint. And the Swiss central bank, which issues the world's highest-value note, the 1,000-franc bill, said immediately that Switzerland would keep it, portrait of the 19th-century cultural historian Jacob Burckhardt and all.

The Swiss love cash. According to the Bank for International Settlements, in 2015 each Swiss resident held $9,214 in cash; the American figure was $4,433 and the eurozone average $3,571. At current rates, 1,000 Swiss francs is 866 euros or $1,010 — second only to Singapore's 10,000-dollar note, whose withdrawal was announced in 2014.

"The Swiss find banknotes very practical, and the Swiss have always had high expectations of privacy," said Silvia Oppliger, a spokesperson for the Swiss National Bank. "Paying in cash is one expression of that. Its popularity does not imply illegal use."

The Swiss love of banknotes takes in beauty too. The International Bank Note Society's banknote of the year for 2016 and 2017 went to the new Swiss 50-franc and 10-franc notes, drawn by the Swiss artist Manuela Pfrunder: dandelion seeds and paragliders on one, tunnels, clocks and the globe on the other, matched to the romantic themes of "wind" and "time."

The IBNS was founded more than 50 years ago by a group of avid banknote collectors; membership has since grown past 2,000 people in more than 90 countries. In their eyes, using modern technology to defeat forgery is only the baseline. What they care about more is whether a note has "artistic beauty and imagination in its design."

"Banks want notes to be as secure and reliable as possible, but the public will look at the overall design, the color and the distinctive features," said Jonathan Callaway, the society's UK director. "If you ask what makes a successful banknote design, you get very different answers from the public, from collectors, from central banks and from printers." And for collectors, the stranger a note's story, the better.

The new Swiss francs satisfy every one of those wishes. Pfrunder broke with the portraits of the two previous series, using gestures, shapes and landmarks to show the many sides of Switzerland. Two soft, finely rendered hands look almost real; look closely and they turn out to be built from countless tiny four-square grids that double as security features. The text on the laser foil lists the names and lengths of more than twenty Swiss tunnels.

The new notes are not made from the usual pure cotton fiber but from a cleaner hybrid polymer — a plastic banknote, in plain terms. The material gives designers a wider range of color, lasts longer, and reportedly never fades.

Australia, Britain, Hong Kong and Singapore have all issued plastic notes. But as technology advances, whether paper money needs to exist at all has become an open question.

The World Payments Report published in October 2017 by Capgemini and BNP Paribas found that non-cash transactions grew 11.2% in 2014-2015, the fastest in a decade. A 2018 report from Boston Consulting Group expects non-cash payment, led by electronic payment, to account for 20% of global transaction volume by 2020.

Even in cash-loving Switzerland, cash use has been falling since 1990, from 90% to 60% in 2015. Credit cards, mobile payments — all these new things are steadily leaving less room for cash.

Governments are going with the trend. Less cash solves the forgery problem once and for all, and makes it easier to collect tax, track the movement of money, and fight crime and terrorism.

But once cash is replaced by accounts at banks or internet companies, every transaction can be analyzed by the company that handles it, and the little privacy you had gets smaller.

The end of the 500-euro note has sharpened a worry that has nothing directly to do with the reason it was abolished: whether governments taking back cash is now a trend, meant to collect tax more efficiently and to push further into citizens' privacy. And there is a second question: once the monetary system moves onto a virtual network, what is left for design to do?

Bitcoin, once hoped to be the privacy savior of the digital age, has become an instrument for speculators. The financial institutions it set out to overthrow are becoming its investors, taking their profit from its roller-coaster swings.

"Design" matters much less in a system that has lost its physical medium. When Mastercard launched its own digital payment app, it updated its visual identity, and the logo was reduced to two overlapping circles.

In the move from precious metals to paper, people built trust in cash transactions out of modern banks and financial regulators, fine artistic design and rigorous anti-counterfeiting technology. Now that money is increasingly reduced to symbols — $, €, ¥ — moving through wireless networks. We have gained convenience, and what we have lost is more than beautiful design.

Cover image from Pixabay