Raising limits on cash payments sends the wrong signal in Italy’s fight against corruption

Many states have a limit on the size of payments that can legally be made in cash, with anything above this limit needing to be transferred via traceable methods of payment such as bank transfers or credit cards. As Andrea Lorenzo Capussela writes, Italy’s PM Matteo Renzi recently proposed an increase in the country’s €1,000 threshold for cash payments up to a €3,000 limit. He argues that the government’s measures are likely to undermine attempts to fight tax evasion and curb the informal economy, noting that while the government itself may not be complicit in illegality, the incentive structure that has led to this measure being proposed raises serious questions about Italy’s capacity to tackle corruption.